Stellus Capital Investment Corporation Reports Results for its Second Fiscal Quarter Ended June 30, 2024
Stellus Capital Investment (NYSE:SCM) reported financial results for Q2 2024 ended June 30. Key highlights include:
- Net investment income of $0.48 per share
- Core net investment income of $0.50 per share
- Net asset value of $13.36 per share
- New investments of $66.3 million
- Repayments of $40.7 million
- Declared distributions of $0.40 per share
The loan portfolio yield was 11.7% as of June 30, 2024. SCM completed over 11 years of operations, with investors receiving $262 million in total distributions ($15.75 per share). The company had $169.4 million outstanding under its credit facility as of June 30, 2024.
Stellus Capital Investment (NYSE:SCM) ha riportato i risultati finanziari per il secondo trimestre del 2024 chiuso il 30 giugno. I punti salienti includono:
- Reddito netto da investimenti di $0.48 per azione
- Reddito netto da investimenti core di $0.50 per azione
- Valore netto degli attivi di $13.36 per azione
- Nuovi investimenti di $66.3 milioni
- Rimborso di $40.7 milioni
- Distribuzioni dichiarate di $0.40 per azione
Il rendimento del portafoglio prestiti era dell'11.7% al 30 giugno 2024. SCM ha completato oltre 11 anni di operazioni, con gli investitori che hanno ricevuto $262 milioni in totale distribuzioni ($15.75 per azione). L'azienda aveva $169.4 milioni in sospeso sotto la sua linea di credito al 30 giugno 2024.
Stellus Capital Investment (NYSE:SCM) reportó resultados financieros para el segundo trimestre de 2024 que terminó el 30 de junio. Los aspectos más destacados incluyen:
- Ingresos netos por inversiones de $0.48 por acción
- Ingresos netos por inversiones básicas de $0.50 por acción
- Valor neto de los activos de $13.36 por acción
- Nuevas inversiones de $66.3 millones
- Reembolsos de $40.7 millones
- Distribuciones declaradas de $0.40 por acción
El rendimiento de la cartera de préstamos fue del 11.7% hasta el 30 de junio de 2024. SCM completó más de 11 años de operaciones, con los inversores recibiendo $262 millones en distribuciones totales ($15.75 por acción). La empresa tenía $169.4 millones pendientes bajo su línea de crédito hasta el 30 de junio de 2024.
스텔러스 캐피탈 인베스트먼트 (NYSE:SCM)는 2024년 6월 30일 종료된 2분기 재무 결과를 발표했습니다. 주요 내용은 다음과 같습니다:
- 주당 순투자수익 $0.48
- 주당 핵심 순투자수익 $0.50
- 주당 순자산가치 $13.36
- 신규 투자 $66.3 백만
- 상환 $40.7 백만
- 선언된 배당금 주당 $0.40
대출 포트폴리오 수익률은 2024년 6월 30일 기준 11.7%였습니다. SCM은 11년 이상의 운영을 마치고 투자자들에게 총 $262 백만 ($15.75 주당)의 배당금을 지급했습니다. 회사는 2024년 6월 30일 기준으로 신용 한도 아래에 $169.4 백만이 미결제 상태였습니다.
Stellus Capital Investment (NYSE:SCM) a publié ses résultats financiers pour le deuxième trimestre 2024 clos le 30 juin. Les points clés incluent:
- Revenu net d'investissement de 0,48 $ par action
- Revenu net d'investissement de base de 0,50 $ par action
- Valeur nette des actifs de 13,36 $ par action
- Nouveaux investissements de 66,3 millions $
- Remboursements de 40,7 millions $
- Distributions déclarées de 0,40 $ par action
Le rendement du portefeuille de prêts était de 11,7 % au 30 juin 2024. SCM a complété plus de 11 ans d'opérations, avec des investisseurs recevant 262 millions $ en distributions totales (15,75 $ par action). L'entreprise avait 169,4 millions $ en suspens sous sa ligne de crédit au 30 juin 2024.
Stellus Capital Investment (NYSE:SCM) hat die finanziellen Ergebnisse für das zweite Quartal 2024, das am 30. Juni endete, bekannt gegeben. Die wichtigsten Punkte sind:
- Nettoinvestitionseinkommen von $0,48 pro Aktie
- Kern-Nettoinvestitionseinkommen von $0,50 pro Aktie
- Nettovermögen von $13,36 pro Aktie
- Neue Investitionen von $66,3 Millionen
- Rückzahlungen von $40,7 Millionen
- Erklärte Ausschüttungen von $0,40 pro Aktie
Die Rendite des Kreditportfolios betrug zum 30. Juni 2024 11,7%. SCM hat über 11 Jahre Betrieb abgeschlossen, wobei die Investoren insgesamt $262 Millionen an Ausschüttungen ($15,75 pro Aktie) erhalten haben. Das Unternehmen hatte zum 30. Juni 2024 $169,4 Millionen ausstehend unter seiner Kreditlinie.
- Net investment income of $0.48 per share and core net investment income of $0.50 per share covered the $0.40 per share dividend
- New investments of $66.3 million exceeded repayments of $40.7 million, indicating portfolio growth
- Loan portfolio yield of 11.7% as of June 30, 2024
- Net asset value increased to $13.36 per share from $13.26 at year-end 2023
- Net investment income per share decreased slightly from $0.49 in Q2 2023 to $0.48 in Q2 2024
- Core net investment income per share decreased from $0.51 in Q2 2023 to $0.50 in Q2 2024
- Total weighted average yield on investments decreased from 11.1% at year-end 2023 to 10.9% as of June 30, 2024
Insights
Stellus Capital Investment 's Q2 2024 results show solid performance with some positive indicators:
- Core net investment income of
$0.50 per share exceeded the$0.40 regular dividend, indicating good dividend coverage. - Net asset value increased slightly to
$13.36 per share from$13.26 at year-end 2023. - The loan portfolio yield remains healthy at
11.7% , supporting income generation.
However, there are some potential concerns:
- Net investment income per share declined slightly year-over-year from
$0.49 to$0.48 . - Unrealized depreciation of
$5.58 million on investments may indicate some portfolio stress.
Overall, Stellus appears to be managing well in a challenging environment, but investors should monitor portfolio quality and yield trends closely.
Stellus' investment activity in Q2 2024 demonstrates a proactive approach to portfolio management:
- New investments of
$66.3 million outpaced repayments of$40.7 million , indicating net portfolio growth. - The number of portfolio companies increased from 93 to 100, suggesting improved diversification.
- Several new investments were made across various industries, including specialty coffee, landscaping services and robotics, showing sector diversification.
However, the slight decrease in weighted average yield on total investments from
Stellus' capital management strategy shows prudent leveraging and liquidity management:
- The company increased its credit facility utilization to
$169.4 million , up from$160.1 million at year-end, supporting portfolio growth. - Successful issuance of 1,855,356 shares through the ATM program, raising
$25.8 million at an average price of$13.89 per share, which was above NAV. - Maintained a stable distribution of
$0.40 per share for the quarter.
The ability to raise equity capital above NAV is a positive sign, indicating market confidence. However, investors should monitor the balance between equity issuance and leverage to ensure optimal capital structure. The company's capacity to access both debt and equity markets provides flexibility for future growth opportunities.
Robert T. Ladd, Chief Executive Officer of Stellus, stated, "I am pleased to report solid operating results for the quarter ended June 30, 2024, in which
FINANCIAL HIGHLIGHTS ($ in millions, except data relating to per share amounts and shares outstanding) | |||||||||||
Three Months Ended | Six Months Ended | ||||||||||
June 30, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | ||||||||
Amount | Per Share | Amount | Per Share | Amount | Per Share | Amount | Per Share | ||||
Net investment income | |||||||||||
Core net investment income(1) | 12.37 | 0.50 | 10.79 | 0.51 | 22.97 | 0.94 | 19.66 | 0.96 | |||
Net realized gain (loss) on investments | 1.99 | 0.07 | (0.31) | (0.01) | (18.39) | (0.75) | (0.28) | (0.02) | |||
Net realized loss on foreign currency translation | (0.03) | — | (0.01) | — | (0.05) | — | (0.05) | — | |||
Total realized income(2) | |||||||||||
Distributions | (10.05) | (0.41) | (8.66) | (0.41) | (19.70) | (0.81) | (16.61) | (0.81) | |||
Net unrealized change in (depreciation) appreciation on investments | (5.58) | (0.22) | (6.30) | (0.31) | 17.92 | 0.73 | (10.54) | (0.51) | |||
Net unrealized change in depreciation on foreign currency translation | (0.01) | — | (0.01) | — | (0.01) | — | (0.02) | — | |||
Benefit (provision) for taxes on unrealized depreciation (appreciation) on investments in taxable subsidiaries | 0.38 | 0.02 | (0.07) | — | 0.19 | 0.01 | (0.14) | (0.01) | |||
Net increase in net assets resulting from operations | |||||||||||
Weighted average shares outstanding | 24,733,966 | 21,231,979 | 24,429,804 | 20,509,995 | |||||||
(1) | Core net investment income, as presented, excludes the impact of capital gains incentive fees (reversal) and income taxes, the majority of which are excise taxes. The Company believes presenting core net investment income and the related per share amount is a useful supplemental disclosure for analyzing its financial performance. However, core net investment income is a non- |
(2) | Total realized income is the sum of net investment income, net realized gains (losses) on investments, net realized gains (losses) on foreign currency, and loss on debt extinguishment; all |
PORTFOLIO ACTIVITY ($ in millions, except data relating to per share amounts and number of portfolio companies) | ||||||||
As of | As of | |||||||
June 30, 2024 | December 31, 2023 | |||||||
Investments at fair value | ||||||||
Total assets | ||||||||
Net assets | ||||||||
Shares outstanding | 25,980,998 | 24,125,642 | ||||||
Net asset value per share | ||||||||
Three Months Ended | Six Months Ended | |||||||
June 30, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | |||||
New investments | ||||||||
Repayments of investments | (40.7) | (38.4) | (71.8) | (44.3) | ||||
Net activity | ||||||||
As of | As of | |||||||
June 30, 2024 | December 31, 2023 | |||||||
Number of portfolio company investments | 100 | 93 | ||||||
Number of debt investments | 87 | 81 | ||||||
Weighted average yield of debt and other income producing investments (3) | ||||||||
Cash | 11.0 % | 11.0 % | ||||||
Payment-in-kind ("PIK") | 0.3 % | 0.5 % | ||||||
Fee amortization | 0.4 % | 0.4 % | ||||||
Total | 11.7 % | 11.9 % | ||||||
Weighted average yield on total investments (4) | ||||||||
Cash | 10.2 % | 10.3 % | ||||||
Payment-in-kind ("PIK") | 0.3 % | 0.5 % | ||||||
Fee amortization | 0.4 % | 0.3 % | ||||||
Total | 10.9 % | 11.1 % | ||||||
(3) | The dollar-weighted average annualized effective yield is computed using the effective interest rate for our debt investments and other income producing investments, including cash and PIK interest, as well as the accretion of deferred fees. The individual investment yields are then weighted by the respective cost of the investments (as of the date presented) in calculating the weighted average effective yield of the portfolio. The dollar-weighted average annualized yield on the Company's investments for a given period will generally be higher than what investors in the Company's common stock would realize in a return over the same period because the dollar-weighted average annualized yield does not reflect the Company's expenses or any sales load that may be paid by investors. |
(4) | The dollar-weighted average yield on total investments takes the same yields as calculated in the footnote above but weights them to determine the weighted average effective yield as a percentage of the Company's total investments, including non-income producing loans and equity. |
Results of Operations
Investment income for both the three months ended June 30, 2024 and 2023 totaled
Gross operating expenses for the three months ended June 30, 2024 and 2023, totaled
Net investment income was
For the three months ended June 30, 2024 and 2023, the Company's investment portfolio had a net change in unrealized depreciation of
Net increase in net assets resulting from operations totaled
Liquidity and Capital Resources
As of June 30, 2024, the Company's amended senior secured revolving credit agreement with certain bank lenders and Zions Bancorporation, N.A. dba Amegy Bank, as administrative agent (as amended from time to time, the "Credit Facility") provided for borrowings in an aggregate amount of up to
As of June 30, 2024 and December 31, 2023, the Company had
The Company issued 1,855,356 shares during the three months ended June 30, 2024 under the At-the-Market Program ("ATM Program"), for gross proceeds of
Distributions
During the three months ended June 30, 2024 and 2023, the Company declared aggregate distributions of
Recent Portfolio Activity
The Company invested in the following portfolio companies during the three months ended June 30, 2024:
Activity Type | Date | Company Name | Company Description | Investment Amount | Instrument Type | ||||||
New Investment | April 1, 2024 | FairWave Holdings, LLC | Specialty coffee platform | $ | 7,615,265 | Senior Secured – First Lien | |||||
$ | 2,665,343 | Delayed Draw Term Loan Commitment | |||||||||
$ | 1,142,290 | Revolver Commitment | |||||||||
$ | 285,572 | Equity | |||||||||
New Investment | April 11, 2024 | WER Holdings, LLC | Regional provider of commercial landscaping services | $ | 2,704,164 | Senior Secured – First Lien | |||||
$ | 1,338,695 | Delayed Draw Term Loan Commitment | |||||||||
$ | 401,609 | Revolver Commitment | |||||||||
$ | 180,300 | Equity | |||||||||
Add-On Investment | April 16, 2024 | Impact Home Services LLC* | Residential garage door, electrical, and plumbing services provider | $ | 8,932 | Equity | |||||
Add-On Investment | April 22, 2024 | Exacta Land Surveyors, LLC* | Provider of land survey and field management services to facilitate real estate transactions | $ | 90,773 | Unsecured | |||||
$ | 2,164 | Equity | |||||||||
New Investment | May 10, 2024 | Luxium Solutions, LLC | Manufacturer and distributor of high-performance advanced materials and assemblies | $ | 8,293,730 | Senior Secured – First Lien | |||||
$ | 1,200,250 | Delayed Draw Term Loan Commitment | |||||||||
Add-On Investment | May 16, 2024 | Impact Home Services LLC* | Residential garage door, electrical, and plumbing services provider | $ | 4,466 | Equity | |||||
New Investment | May 24, 2024 | Teckrez, LLC | Distributor of tackifier resins and acrylic monomers | $ | 4,315,846 | Senior Secured – First Lien | |||||
$ | 1,442,221 | Revolver Commitment | |||||||||
$ | 90,139 | Equity | |||||||||
Add-On Investment | May 24, 2024 | ADS Group Opco, LLC* | Designer and supplier of impulse products and merchandising | $ | 90,582 | Equity | |||||
New Investment | May 28, 2024 | FiscalNote Boards LLC* | Facilitator of executive-level in-person events and remote peer-to-peer industry insights | $ | 190,382 | Equity | |||||
New Investment | May 31, 2024 | TriplePoint MEP Holdings, LLC | Provider of HVAC, plumbing, and other mechanical and industrial services | $ | 5,356,491 | Senior Secured – First Lien | |||||
$ | 1,339,123 | Delayed Draw Term Loan Commitment | |||||||||
$ | 743,957 | Revolver Commitment | |||||||||
$ | 557,968 | Equity | |||||||||
New Investment | June 6, 2024 | Monarch Behavioral Therapy, LLC | Provider of center-based applied behavioral analysis therapy | $ | 6,764,635 | Senior Secured – First Lien | |||||
$ | 1,084,076 | Delayed Draw Term Loan Commitment | |||||||||
$ | 722,717 | Revolver Commitment | |||||||||
$ | 428,571 | Equity | |||||||||
Add-On Investment | June 6, 2024 | Infolinks Media Buyco, LLC* | Advertising placement partner for small to mid-sized publishers | $ | 2,558,672 | Senior Secured – First Lien | |||||
Add-On Investment | June 6, 2024 | Impact Home Services LLC* | Residential garage door, electrical, and plumbing services provider | $ | 2,233 | Equity | |||||
Add-On Investment | June 10, 2024 | Reseller of CPAP machines and accessories | $ | 36,415 | Equity | ||||||
Add-On Investment | June 12, 2024 | Unicat Catalyst Holdings, LLC* | Global formulator and distributor of heterogeneous, consumable catalyst products primarily serving the refinery, petrochemical, and other end markets | $ | 10,547 | Equity | |||||
New Investment | June 13, 2024 | Said Differently Consulting, LLC | Digital transformation consulting firm | $ | 7,480,519 | Senior Secured – First Lien | |||||
$ | 1,168,831 | Revolver Commitment | |||||||||
$ | 350,649 | Equity | |||||||||
New Investment | June 24, 2024 | AGT Robotics, Inc. | Manufacturer of robotic welding solutions for metal fabrication | $ | 10,726,931 | Senior Secured – First Lien | |||||
$ | 1,526,600 | Revolver Commitment | |||||||||
*Existing portfolio company | |||||||||||
The Company realized investments in the following portfolio companies during the three months ended June 30, 2024:
Activity Type | Date | Company Name | Company Description | Proceeds Received | Realized Gain | Instrument Type | ||||||||
Full Repayment | May 1, 2024 | Nutritional Medicinals, LLC* | Manufacturer and distributor of | $ | 11,421,291 | $ | - | Senior Secured – First Lien | ||||||
Full Realization | $ | 2,950,529 | $ | 1,977,726 | Equity | |||||||||
Full Repayment | June 4, 2024 | Jurassic Acquisition Corp.* | Producer and distributor of air-float | $ | 16,581,250 | $ | - | Senior Secured – First Lien | ||||||
*Existing portfolio company | ||||||||||||||
Events Subsequent to June 30, 2024
The Company's management has evaluated subsequent events through August 7, 2024. There have been no subsequent events that require recognition or disclosure except for the following described below.
Investment Portfolio
The Company invested in the following portfolio companies subsequent to June 30, 2024:
Activity Type | Date | Company Name | Company Description | Investment Amount | Instrument Type | ||||||
Add-On Investment | July 31, 2024 | PCS Software, Inc.* | Provider of integrated transportation management | $ | 9,995 | Equity | |||||
*Existing portfolio company | |||||||||||
The Company realized investments in the following portfolio company subsequent to June 30, 2024:
Activity Type | Date | Company Name | Company Description | Proceeds Received | Realized Gain | Instrument Type | ||||||||
Full Realization | August 1, 2024 | ICD Holdings, LLC* | Financial company that connects | $ | 2,593,039 | $ | 2,155,185 | Equity | ||||||
*Existing portfolio company | ||||||||||||||
Credit Facility
The outstanding balance under the Credit Facility as of August 7, 2024 was
Distributions Declared
On July 10, 2024, our Board of Directors declared a regular monthly distribution for each of July, August, and September 2024, as follows:
Ex-Dividend | Record | Payment | Amount per | ||||||
Declared | Date | Date | Date | Share | |||||
7/10/2024 | 7/31/2024 | 7/31/2024 | 8/15/2024 | $ | 0.1333 | ||||
7/10/2024 | 8/30/2024 | 8/30/2024 | 9/13/2024 | $ | 0.1333 | ||||
7/10/2024 | 9/30/2024 | 9/30/2024 | 10/15/2024 | $ | 0.1333 | ||||
Conference Call Information
Stellus Capital Investment Corporation will host a conference call to discuss these results on Thursday, August 8, 2024 at 11:00 AM, Central Time. The conference call will be led by Robert T. Ladd, Chief Executive Officer, and W. Todd Huskinson, Chief Financial Officer, Chief Compliance Officer, Treasurer, and Secretary.
For those wishing to participate by telephone, please dial (888) 506-0062. Use passcode 302036. Starting approximately two hours after the conclusion of the call, a replay will be available through Thursday, August 22, 2024 by dialing (877) 481-4010 and entering passcode 51014. The replay will also be available on the Company's website.
For those wishing to participate via Live Webcast, connect via the Public (SCIC) section of our website at www.stelluscapital.com, under the Events tab. A replay of the conference will be available on our website for approximately 90 days.
About Stellus Capital Investment Corporation
The Company is an externally-managed, closed-end, non-diversified investment management company that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. The Company's investment objective is to maximize the total return to its stockholders in the form of current income and capital appreciation by investing primarily in private middle-market companies (typically those with
Forward-Looking Statements
Statements included herein may contain "forward-looking statements" which relate to future performance or financial condition. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of assumptions, risks and uncertainties, which change over time. Actual results may differ materially from those anticipated in any forward-looking statements as a result of a number of factors, including those described from time to time in filings by the Company with the Securities and Exchange Commission including the final prospectus that will be filed with the Securities and Exchange Commission. The Company undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release.
Contacts
Stellus Capital Investment Corporation
W. Todd Huskinson, Chief Financial Officer
(713) 292-5414
thuskinson@stelluscapital.com
STELLUS CAPITAL INVESTMENT CORPORATION CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES | |||||||
June 30, 2024 | |||||||
(unaudited) | December 31, 2023 | ||||||
ASSETS | |||||||
Controlled investments at fair value (amortized cost of | $ | 7,500,423 | $ | 6,175,994 | |||
Non-controlled, non-affiliated investments, at fair value (amortized cost of | 892,178,026 | 868,284,689 | |||||
Cash and cash equivalents | 35,867,781 | 26,125,741 | |||||
Receivable for sales and repayments of investments | 574,015 | 371,877 | |||||
Interest receivable | 7,663,147 | 4,882,338 | |||||
Income tax receivable | 2,174,449 | 1,588,708 | |||||
Other receivables | 135,666 | 42,995 | |||||
Deferred offering costs | — | 7,312 | |||||
Prepaid expenses | 412,737 | 606,674 | |||||
Total Assets | $ | 946,506,244 | $ | 908,086,328 | |||
LIABILITIES | |||||||
Notes Payable | $ | 99,219,159 | $ | 98,996,412 | |||
Credit Facility payable | 166,396,015 | 156,564,776 | |||||
SBA-guaranteed debentures | 320,823,417 | 320,273,358 | |||||
Dividends payable | 3,463,267 | — | |||||
Management fees payable | 852,233 | 2,918,536 | |||||
Income incentive fees payable | 1,435,084 | 2,885,180 | |||||
Interest payable | 5,248,420 | 5,241,164 | |||||
Related party payable | 337,500 | — | |||||
Unearned revenue | 572,243 | 397,725 | |||||
Administrative services payable | 426,174 | 402,151 | |||||
Deferred tax liability | — | 188,893 | |||||
Other accrued expenses and liabilities | 547,239 | 278,345 | |||||
Total Liabilities | $ | 599,320,751 | $ | 588,146,540 | |||
Commitments and contingencies (Note 7) | |||||||
Net Assets | $ | 347,185,493 | $ | 319,939,788 | |||
NET ASSETS | |||||||
Common stock, par value | $ | 25,981 | $ | 24,125 | |||
Paid-in capital | 361,167,004 | 335,918,984 | |||||
Total distributable loss | (14,007,492) | (16,003,321) | |||||
Net Assets | $ | 347,185,493 | $ | 319,939,788 | |||
Total Liabilities and Net Assets | $ | 946,506,244 | $ | 908,086,328 | |||
Net Asset Value Per Share | $ | 13.36 | $ | 13.26 | |||
STELLUS CAPITAL INVESTMENT CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) | |||||||||||||
For the three months ended | For the six months ended | ||||||||||||
June 30, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | ||||||||||
INVESTMENT INCOME | |||||||||||||
From controlled investments: | |||||||||||||
Interest income | $ | — | $ | — | $ | 81,636 | $ | — | |||||
From non-controlled, non-affiliated investments | |||||||||||||
Interest income | 25,164,944 | 25,662,895 | 50,121,795 | 49,071,499 | |||||||||
Other income | 1,461,255 | 922,122 | 2,419,517 | 1,588,865 | |||||||||
Total Investment Income | $ | 26,626,199 | $ | 26,585,017 | $ | 52,622,948 | $ | 50,660,364 | |||||
OPERATING EXPENSES | |||||||||||||
Management fees | $ | 3,852,233 | $ | 3,865,588 | $ | 7,704,466 | $ | 7,600,690 | |||||
Valuation fees | 35,711 | 46,422 | 192,218 | 193,495 | |||||||||
Administrative services expenses | 481,261 | 466,378 | 972,162 | 928,342 | |||||||||
Income incentive fees | 2,542,530 | 2,603,004 | 5,051,640 | 4,727,839 | |||||||||
Capital gains incentive fee | — | — | — | (569,528) | |||||||||
Professional fees | 196,205 | 169,836 | 535,832 | 600,684 | |||||||||
Directors' fees | 114,250 | 93,250 | 222,500 | 210,500 | |||||||||
Insurance expense | 125,489 | 121,885 | 250,478 | 242,431 | |||||||||
Interest expense and other fees | 8,116,497 | 8,101,975 | 15,884,070 | 15,988,399 | |||||||||
Income tax expense | 574,037 | 371,786 | 944,756 | 746,549 | |||||||||
Other general and administrative expenses | 417,867 | 331,649 | 663,142 | 510,099 | |||||||||
Total Operating Expenses | $ | 16,456,080 | $ | 16,171,773 | $ | 32,421,264 | $ | 31,179,500 | |||||
Income incentive fee waiver | (1,622,542) | — | (1,826,893) | — | |||||||||
Total Operating Expenses, net of fee waivers | $ | 14,833,538 | $ | 16,171,773 | $ | 30,594,371 | $ | 31,179,500 | |||||
Net Investment Income | $ | 11,792,661 | $ | 10,413,244 | $ | 22,028,577 | $ | 19,480,864 | |||||
Net realized gain (loss) on non-controlled, non-affiliated investments | $ | 1,992,482 | $ | (310,588) | $ | (18,392,249) | $ | (275,621) | |||||
Net realized loss on foreign currency translations | (29,789) | (10,704) | (54,895) | (50,616) | |||||||||
Net change in unrealized appreciation on controlled investments | 138,189 | — | 674,759 | — | |||||||||
Net change in unrealized (depreciation) appreciation on non-controlled, non-affiliated investments | (5,724,870) | (6,295,233) | 17,257,150 | (10,544,875) | |||||||||
Net change in unrealized depreciation on foreign currency translations | (5,887) | (20,323) | (9,489) | (18,449) | |||||||||
Benefit (provision) for taxes on net unrealized depreciation (appreciation) on investments | 381,500 | (65,353) | 188,893 | (144,113) | |||||||||
Net Increase in Net Assets Resulting from Operations | $ | 8,544,286 | $ | 3,711,043 | $ | 21,692,746 | $ | 8,447,190 | |||||
Net Investment Income Per Share—basic and diluted | $ | 0.48 | $ | 0.49 | $ | 0.90 | $ | 0.95 | |||||
Net Increase in Net Assets Resulting from Operations Per Share – basic and diluted | $ | 0.35 | $ | 0.17 | $ | 0.89 | $ | 0.41 | |||||
Weighted Average Shares of Common Stock Outstanding—basic and diluted | 24,733,966 | 21,231,979 | 24,429,804 | 20,509,995 | |||||||||
Distributions Per Share—basic and diluted | $ | 0.41 | $ | 0.41 | $ | 0.81 | $ | 0.81 | |||||
STELLUS CAPITAL INVESTMENT CORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS (unaudited) | ||||||||||||||
Common Stock | Total | |||||||||||||
Number | Par | Paid-in | distributable | |||||||||||
of shares | value | capital | earnings (loss) | Net Assets | ||||||||||
Balances at December 31, 2022 | 19,666,769 | $ | 19,667 | $ | 275,114,720 | $ | 642,226 | $ | 275,776,613 | |||||
Net investment income | — | — | — | 9,067,620 | 9,067,620 | |||||||||
Net realized gain on investments | — | — | — | 34,967 | 34,967 | |||||||||
Net realized loss on foreign currency translations | — | — | — | (39,912) | (39,912) | |||||||||
Net change in unrealized depreciation on investments | — | — | — | (4,249,642) | (4,249,642) | |||||||||
Net change in unrealized appreciation on foreign currency translations | — | — | — | 1,874 | 1,874 | |||||||||
Provision for taxes on unrealized appreciation on investments | — | — | — | (78,760) | (78,760) | |||||||||
Distributions from net investment income | — | — | — | (7,951,284) | (7,951,284) | |||||||||
Issuance of common stock, net of offering costs(1) | 581,614 | 581 | 8,289,988 | — | 8,290,569 | |||||||||
Balances at March 31, 2023 | 20,248,383 | $ | 20,248 | $ | 283,404,708 | $ | (2,572,911) | $ | 280,852,045 | |||||
Net investment income | — | — | — | 10,413,244 | 10,413,244 | |||||||||
Net realized loss on non-controlled, non-affiliated investments | — | — | — | (310,588) | (310,588) | |||||||||
Net realized loss on foreign currency translation | — | — | — | (10,704) | (10,704) | |||||||||
Net change in unrealized depreciation on non-controlled, non-affiliated investments | — | — | — | (6,295,233) | (6,295,233) | |||||||||
Net change in unrealized depreciation on foreign currency translations | — | — | — | (20,323) | (20,323) | |||||||||
Provision for taxes on unrealized appreciation on investments | — | — | — | (65,353) | (65,353) | |||||||||
Distributions from net investment income | — | — | — | (8,659,144) | (8,659,144) | |||||||||
Issuance of common stock, net of offering costs(1) | 2,309,521 | 2,310 | 32,418,774 | — | 32,421,084 | |||||||||
Balances at June 30, 2023 | 22,557,904 | $ | 22,558 | $ | 315,823,482 | $ | (7,521,012) | $ | 308,325,028 | |||||
Balances at December 31, 2023 | 24,125,642 | $ | 24,125 | $ | 335,918,984 | $ | (16,003,321) | $ | 319,939,788 | |||||
Net investment income | — | — | — | 10,235,916 | 10,235,916 | |||||||||
Net realized loss on investments | — | — | — | (20,384,731) | (20,384,731) | |||||||||
Net realized loss on foreign currency translations | — | — | — | (25,106) | (25,106) | |||||||||
Net change in unrealized appreciation on investments | — | — | — | 23,518,590 | 23,518,590 | |||||||||
Net change in unrealized depreciation on foreign currency translations | — | — | — | (3,602) | (3,602) | |||||||||
Provision for taxes on unrealized appreciation on investments | — | — | — | (192,607) | (192,607) | |||||||||
Distributions from net investment income | — | — | — | (9,647,844) | (9,647,844) | |||||||||
Balances at March 31, 2024 | 24,125,642 | $ | 24,125 | $ | 335,918,984 | $ | (12,502,705) | $ | 323,440,404 | |||||
Net investment income | — | — | — | 11,792,661 | 11,792,661 | |||||||||
Net realized gain on investments | — | — | — | 1,992,482 | 1,992,482 | |||||||||
Net realized loss on foreign currency translations | — | — | — | (29,789) | (29,789) | |||||||||
Net change in unrealized depreciation on investments | — | — | — | (5,586,681) | (5,586,681) | |||||||||
Net change in unrealized depreciation on foreign currency translations | — | — | — | (5,887) | (5,887) | |||||||||
Benefit for taxes on unrealized depreciation on investments | — | — | — | 381,500 | 381,500 | |||||||||
Distributions from net investment income | — | — | — | (10,049,073) | (10,049,073) | |||||||||
Issuance of common stock, net of offering costs(1) | 1,855,356 | 1,856 | 25,248,020 | — | 25,249,876 | |||||||||
Balances at June 30, 2024 | 25,980,998 | $ | 25,981 | $ | 361,167,004 | $ | (14,007,492) | $ | 347,185,493 | |||||
(1) | See Note 4 to the Consolidated Financial Statements on Form 10-Q filed with the Securities and Exchange Commission on August 7, 2024 for more information on offering costs. | ||||||
STELLUS CAPITAL INVESTMENT CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) | ||||||
For six months ended | ||||||
June 30, 2024 | June 30, 2023 | |||||
Cash flows from operating activities | ||||||
Net increase in net assets resulting from operations | $ | 21,692,746 | $ | 8,447,190 | ||
Adjustments to reconcile net increase in net assets from operations to net cash used in operating activities: | ||||||
Purchases of investments | (94,854,139) | (87,741,479) | ||||
Proceeds from sales and repayments of investments | 71,824,905 | 44,269,661 | ||||
Net change in unrealized (appreciation) depreciation on investments | (17,931,909) | 10,544,875 | ||||
Net change in unrealized depreciation on foreign currency translations | 9,490 | 18,306 | ||||
Increase in investments due to PIK | (1,555,868) | (1,904,853) | ||||
Amortization of premium and accretion of discount, net | (1,383,624) | (1,360,629) | ||||
Deferred tax (benefit) provision | (188,893) | 144,113 | ||||
Amortization of loan structure fees | 544,379 | 289,243 | ||||
Amortization of deferred financing costs | 222,747 | 221,524 | ||||
Amortization of loan fees on SBA-guaranteed debentures | 550,059 | 624,358 | ||||
Net realized loss on investments | 18,392,249 | 275,621 | ||||
Changes in other assets and liabilities | ||||||
Increase in interest receivable | (2,780,809) | (654,240) | ||||
Increase in income tax receivable | (585,741) | — | ||||
(Increase) decrease in other receivables | (92,671) | 8,876 | ||||
Increase in related party receivables | — | (883) | ||||
Decrease in prepaid expenses | 193,937 | 357,520 | ||||
Decrease in management fees payable | (2,066,303) | (5,284,818) | ||||
(Decrease) increase in income incentive fees payable | (1,450,096) | 711,987 | ||||
Decrease in capital gains incentive fees payable | — | (569,528) | ||||
Increase in administrative services payable | 24,023 | 50,346 | ||||
Increase in interest payable | 7,256 | 142,257 | ||||
Increase (decrease) in related party payable | 337,500 | (284,527) | ||||
Increase (decrease) in unearned revenue | 174,518 | (98,964) | ||||
Decrease in income tax payable | — | (393,015) | ||||
Increase in other accrued expenses and liabilities | 268,894 | 226,618 | ||||
Net Cash Used in Operating Activities | $ | (8,647,350) | $ | (31,960,441) | ||
Cash flows from Financing Activities | ||||||
Proceeds from the issuance of common stock | $ | 25,777,185 | $ | 41,448,945 | ||
Sales load for common stock issued | (386,987) | (614,721) | ||||
Offering costs paid for common stock issued | (133,010) | (121,471) | ||||
Stockholder distributions paid | (16,233,650) | (13,603,459) | ||||
Financing costs paid on Credit Facility | (66,348) | — | ||||
Borrowings under Credit Facility | 104,400,000 | 37,000,000 | ||||
Repayments of Credit Facility | (94,967,800) | (65,267,800) | ||||
Net Cash Provided (Used) by Financing Activities | $ | 18,389,390 | $ | (1,158,506) | ||
Net Increase (Decrease) in Cash and Cash Equivalents | $ | 9,742,040 | $ | (33,118,947) | ||
Cash and Cash Equivalents Balance at Beginning of Period | $ | 26,125,741 | $ | 48,043,329 | ||
Cash and Cash Equivalents Balance at End of Period | $ | 35,867,781 | $ | 14,924,382 | ||
Supplemental and Non-Cash Activities | ||||||
Cash paid for interest expense | $ | 14,559,629 | $ | 14,711,017 | ||
Income and excise tax paid | 1,530,497 | 1,139,564 | ||||
Increase in distributions payable | 3,463,267 | 3,006,969 | ||||
Decrease in deferred offering costs | (7,312) | (1,100) | ||||
Reconciliation of Core Net Investment Income (1) (Unaudited) | ||||
Three Months Ended | ||||
June 30, 2024 | June 30, 2023 | |||
Net investment income | ||||
Income tax expense | 574,037 | 371,786 | ||
Core net investment income | ||||
Per share amounts: | ||||
Net investment income per share | ||||
Core net investment income per share | ||||
Reconciliation of Realized Net Investment Income (2) (Unaudited) | ||||
Three Months Ended | ||||
June 30, 2024 | June 30, 2023 | |||
Net investment income | ||||
Net realized gain (loss) on investments | 1,992,482 | (310,588) | ||
Net realized loss on foreign currency translation | (29,789) | (10,704) | ||
Total Realized Net Investment Income | ||||
Per share amounts: | ||||
Net investment income per share | ||||
Realized net investment income per share | ||||
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SOURCE Stellus Capital Investment Corporation
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