Stellus Capital Investment Corporation Reports Results for its Third Fiscal Quarter Ended September 30, 2024

Rhea-AI Summary

Stellus Capital Investment (NYSE:SCM) reported financial results for Q3 2024, achieving net investment income of $0.39 per share and core net investment income of $0.40 per share, fully covering the declared dividend of $0.40 per share. Net asset value increased by $0.19 per share from the previous quarter. The company expanded its Credit Facility by $55 million to $315 million after quarter-end. Investment income totaled $26.5 million, with total investments at fair value reaching $908.7 million across 99 portfolio companies. The weighted average yield on total investments was 10.3%, and the company declared monthly distributions of $0.1333 per share for October, November, and December 2024.

Positive

• Net asset value increased by $0.19 per share quarter-over-quarter
• Core net investment income of $0.40 per share fully covered the dividend
• Credit Facility expanded by $55 million to $315 million
• Portfolio grew to 99 companies from 93 at year-end 2023
• Total investments at fair value increased to $908.7 million from $874.5 million

Negative

• Net investment income decreased to $0.39 per share from $0.47 year-over-year
• Investment income declined to $26.5 million from $27.2 million year-over-year
• Weighted average yield on total investments decreased to 10.3% from 11.1%

Insights

Financial Analyst

The Q3 2024 results show mixed performance for Stellus Capital. Core net investment income of $0.40 per share fully covered the quarterly dividend but declined from $0.49 in Q3 2023. Net asset value improved by $0.19 per share quarter-over-quarter to $13.55.

Notable developments include a significant credit facility expansion by $55 million to $315 million, enhancing investment capacity. The portfolio grew to 99 companies with $908.7 million in fair value investments. However, yield metrics declined, with weighted average yield on total investments dropping to 10.3% from 11.1% at year-end 2023.

The $3.3 million realized loss was offset by $8.5 million in unrealized appreciation, resulting in a net increase in assets of $15.46 million for the quarter. The company maintains stable dividend coverage while growing its asset base through strategic investments and ATM equity raises.

HOUSTON, Nov. 7, 2024 /PRNewswire/ -- Stellus Capital Investment Corporation (NYSE:SCM) ("Stellus", "we", or the "Company") today announced financial results for its fiscal quarter ended September 30, 2024.

Robert T. Ladd, Chief Executive Officer of Stellus, stated, "I am pleased to report solid operating results for the quarter ended September 30, 2024, in which we earned U.S. GAAP net investment income of $0.39 per share and core net investment income of $0.40 per share, which covered the regular dividend declared of $0.40 per share. Net asset value per share increased by $0.19 per share from the prior quarter end. Subsequent to the quarter end, we increased our capital base by $55 million through the upsizing of our Credit Facility to $315 million. As we celebrate the completion of twelve years of operations, I'm also pleased to report that our investors have received a total of $273 million in distributions, equivalent to $16.28 per share, since we began operations."

FINANCIAL HIGHLIGHTS
($ in millions, except data relating to per share amounts and shares outstanding)

	Three Months Ended						Nine Months Ended
	September 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023
	Amount	Per Share		Amount	Per Share		Amount	Per Share		Amount	Per Share
Net investment income	$10.26	$0.39		$10.82	$0.47		$32.29	$1.29		$30.30	$1.42
Core net investment income(1)	10.62	0.40		11.16	0.49		33.59	1.34		30.81	1.45
Net realized (loss) gain on investments	(3.30)	(0.13)		0.60	0.03		(21.69)	(0.87)		0.32	0.01
Net realized loss on foreign currency translation	(0.02)	—		(0.02)	—		(0.08)	—		(0.07)	—
Total realized income(2)	$6.94	$0.26		$11.40	$0.50		$10.52	$0.42		$30.55	$1.43
Distributions	(10.63)	(0.40)		(9.27)	(0.41)		(30.32)	(1.21)		(25.88)	(1.22)
Net unrealized change in appreciation (depreciation) on investments	8.51	0.33		(13.80)	(0.61)		26.44	1.05		(24.34)	(1.14)
Net unrealized change in appreciation (depreciation) on foreign currency translation	0.01	—		—	—		—	—		(0.02)	—
Benefit (provision) for taxes on unrealized depreciation (appreciation) on investments in taxable subsidiaries	—	—		—	—		0.19	0.01		(0.14)	(0.01)
Net increase (decrease) in net assets resulting from operations	$15.46	$0.59		($2.40)	($0.11)		$37.15	$1.48		$6.05	$0.28
Weighted average shares outstanding		26,326,426			22,824,221			25,066,626			21,289,880

(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-U.S. generally accepted accounting principles ("U.S. GAAP") measure and should not be considered as a replacement for net investment income and other earnings measures presented in accordance with U.S. GAAP. A reconciliation of net investment income in accordance with U.S. GAAP to core net investment income is presented in the table below the financial statements.
(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 U.S. GAAP measures.

PORTFOLIO ACTIVITY
($ in millions, except data relating to per share amounts and number of portfolio companies)

		As of		As of
		September 30, 2024		December 31, 2023
Investments at fair value		$908.7		$874.5
Total assets		$957.1		$908.1
Net assets		$366.3		$319.9
Shares outstanding		27,039,364		24,125,642
Net asset value per share		$13.55		$13.26
		Three Months Ended				Nine Months Ended
		September 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
New investments		$17.8		$51.9		$112.6		$139.7
Repayments of investments		(15.5)		(34.8)		(87.3)		(79.1)
Net activity		$2.3		$17.1		$25.3		$60.6
		As of		As of
		September 30, 2024		December 31, 2023
Number of portfolio company investments		99		93
Number of debt investments		86		81
Weighted average yield of debt and other income producing investments (3)
Cash		10.2 %		11.0 %
Payment-in-kind ("PIK")		0.4 %		0.5 %
Fee amortization		0.4 %		0.4 %
Total		11.0 %		11.9 %
Weighted average yield on total investments (4)
Cash		9.5 %		10.3 %
PIK		0.4 %		0.5 %
Fee amortization		0.4 %		0.3 %
Total		10.3 %		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 the three months ended September 30, 2024 and 2023 totaled $26.5 million and $27.2 million, respectively, most of which was interest income from portfolio investments.

Gross operating expenses for the three months ended September 30, 2024 and 2023 totaled $16.2 million and $16.3 million, respectively. For the same respective periods, base management fees totaled $3.9 million for both periods, income incentive fees totaled $2.6 million and $2.7 million, fees and expenses related to our borrowings totaled $8.0 million for both periods (including interest and amortization of deferred financing costs), administrative expenses totaled $0.5 million for both periods, income tax totaled $0.4 million and $0.3 million and other expenses totaled $0.8 million and $0.9 million.

Net investment income was $10.3 million and $10.8 million, or $0.39 and $0.47 per common share based on weighted average common shares outstanding of 26,326,426 and 22,824,221 for the three months ended September 30, 2024 and 2023, respectively. Core net investment income, which is a non-U.S. GAAP measure that excludes the capital gains incentive fee (reversal) and income tax expense accruals, for the three months ended September 30, 2024 and 2023 was $10.6 million and $11.2 million, or $0.40 and $0.49 per share, respectively.

For the three months ended September 30, 2024 and 2023, the Company's investment portfolio had a net change in unrealized appreciation (depreciation) of $8.5 million and ($13.8) million, respectively, and the Company had net realized (losses) gains of ($3.3) million and $0.6 million, respectively.

Net increase (decrease) in net assets resulting from operations totaled $15.5 million and ($2.4) million, or $0.59 and ($0.11) per common share, based on weighted average common shares outstanding of 26,326,426 and 22,824,221 for the three months ended September 30, 2024 and 2023, respectively.

Liquidity and Capital Resources

As of September 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 $260.0 million on a committed basis. As of September 30, 2024 and December 31, 2023, the Credit Facility had an accordion feature which allowed for potential future expansion of the facility size up to $350.0 million.

As of September 30, 2024 and December 31, 2023, the Company had $157.4 million and $160.1 million in outstanding borrowings under the Credit Facility, respectively.

The Company issued 1,058,366 shares during the three months ended September 30, 2024 under the At-the-Market Program ("ATM Program") for gross proceeds of $14.6 million. The average per share offering price of shares issued under the ATM Program during the three months ended September 30, 2024 was $13.79. Stellus Capital Management, LLC, the Company's investment adviser (the "Advisor"), agreed to reimburse the Company for underwriting fees to the extent the per share price of the shares to the public, less underwriting fees, was less then net asset value per share. For the three months ended September 30, 2024, the Advisor was not required to reimburse underwriting fees as all shares were issued at a premium to net asset value.

Distributions

For the three months ended September 30, 2024 and 2023, the Company declared aggregate distributions of $0.40 per share for both periods ($10.6 million and $9.3 million in the aggregate, respectively). Tax characteristics of all distributions will be reported to stockholders on Form 1099-DIV after the end of the calendar year. None of these dividends are expected to include a return of capital.

Recent Portfolio Activity

The Company invested in the following portfolio companies during the three months ended September 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 software for the inland trucking industry		$	9,995		Equity
Add-On Investment		August 12, 2024		Trade Education Acquisition, L.L.C.*		Online education platform for retail investors		$	80,000		Revolver Commitment
New Investment		August 16, 2024		Bart & Associates, LLC		Provides IT modernization services for federal customers		$	8,942,723		Senior Secured – First Lien
								$	1,733,387		Delayed Draw Term Loan Commitment
								$	1,046,677		Revolver Commitment
								$	418,671		Equity
Add-On Investment		August 26, 2024		Impact Home Services LLC*		Residential garage door, electrical, and plumbing services provider		$	1,571,984		Delayed Draw Term Loan Commitment
Add-On Investment		September 11, 2024		Service Minds Company, LLC*		Provider of residential electrical services		$	20,000		Revolver Commitment
Add-On Investment		September 30, 2024		The Hardenbergh Group, Inc. *		Provider of temporary professional staffing of medical services professionals, external peer review, consulting and physician leadership solutions		$	804,031		Senior Secured – First Lien
Add-On Investment		September 30, 2024		Monitorus Holding, LLC*		Provider of media monitoring and evaluation services		$	11,629		Unsecured Convertible Bond
Add-On Investment		September 30, 2024		ADS Group Opco, LLC*		Full-service manufacturer for OEMs, prime contractors, and Tier I suppliers across the defense, space, and aerospace industries		$	69,453		Revolver Commitment

*Existing portfolio company

The Company realized investments in the following portfolio companies during the three months ended September 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 corporate treasury departments with money market and short duration bond funds		$	2,599,378		$	2,192,411		Equity
Full Repayment		September 27, 2024		EHI Buyer, Inc.*		Provider of design, engineering, installation, and maintenance services for building management systems		$	6,050,229		$	—		Senior Secured – First Lien
								$	2,322,310		$	—		Delayed Draw Term Loan

*Existing portfolio company

Events Subsequent to September 30, 2024

The Company's management has evaluated subsequent events through November 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 September 30, 2024:

Activity Type		Date		Company Name		Company Description		Investment Amount			Instrument Type
Add-On Investment		October 18, 2024		Compost 360 Investments, LLC*		Organic waste recycler and producer of compost, mulch, and engineered soils		$	49,280		Equity
New Investment		October 31, 2024		Norplex Micarta Acquisition, Inc.		Manufacturer of thermoset composite laminates		$	13,000,000		Senior Secured – First Lien
								$	500,000		Revolver Commitment
								$	739,804		Equity
Add-On Investment		November 7, 2024		Green Intermediateco II, Inc.*		Cyber-security focused value-added reseller and associated service provider		$	1,300,000		Senior Secured – First Lien

*Existing portfolio company

The Company realized an investment in the following portfolio company subsequent to September 30, 2024:

Activity Type

Date

Company Name

Company Description

Proceeds Received

Realized Gain

Instrument Type

Full Repayment

November 4, 2024

Baker Manufacturing Company, LLC*

Manufacturer of water well equipment, specialized filtration pumps, and custom castings

$

12,738,093

$

—

Senior Secured – First Lien

Full Realization

November 5, 2024

Health Monitor Holdings, LLC*

Provider of point-of-care patient engagement and marketing solutions for pharmaceutical companies

$

1,704,298

$

651,379

Equity

*Existing portfolio company

Credit Facility

On October 30, 2024, the Company entered into an Increase Agreement to the Credit Facility which, among other things, amends the Credit Facility to increase the total available commitments under the Credit Facility from $260.0 million to $315.0 million on a committed basis.

The outstanding balance under the Credit Facility as of November 7, 2024 was $158.0 million.

Distributions Declared

On October 10, 2024, our Board of Directors declared a regular monthly distribution for each of October, November, and December 2024, as follows:

		Ex-Dividend		Record		Payment		Amount per
Declared		Date		Date		Date		Share
10/10/2024		10/31/2024		10/31/2024		11/15/2024		$	0.1333
10/10/2024		11/29/2024		11/29/2024		12/13/2024		$	0.1333
10/10/2024		12/31/2024		12/31/2024		1/15/2024		$	0.1333

Conference Call Information

Stellus Capital Investment Corporation will host a conference call to discuss these results on Friday, November 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 122799. Starting approximately two hours after the conclusion of the call, a replay will be available through Friday, November 22, 2024 by dialing (877) 481-4010 and entering passcode 51477. 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 $5.0 million to $50.0 million of EBITDA (earnings before interest, taxes, depreciation and amortization)) through first lien (including unitranche) loans, second lien loans and unsecured debt financing, with corresponding equity co-investments. The Company's investment activities are managed by its investment adviser, Stellus Capital Management. To learn more about Stellus Capital Investment Corporation, visit www.stelluscapital.com under the "Public (SCIC)" tab.

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
		September 30, 2024
		(unaudited)			December 31, 2023
ASSETS
Controlled investments at fair value (amortized cost of $17,934,808 and $17,285,138, respectively)		$	7,749,169		$	6,175,994
Non-controlled, non-affiliated investments, at fair value (amortized cost of $891,385,080 and $884,858,412, respectively)			900,969,724			868,284,689
Cash and cash equivalents			38,580,261			26,125,741
Receivable for sales and repayments of investments			1,358,421			371,877
Interest receivable			6,272,194			4,882,338
Income tax receivable			1,817,371			1,588,708
Other receivables			67,995			42,995
Deferred offering costs			—			7,312
Prepaid expenses			256,724			606,674
Total Assets		$	957,071,859		$	908,086,328
LIABILITIES
Notes Payable		$	99,331,757		$	98,996,412
Credit Facility payable			154,578,467			156,564,776
SBA-guaranteed debentures			321,058,121			320,273,358
Dividends payable			3,604,347			—
Management fees payable			3,959,554			2,918,536
Income incentive fees payable			3,154,576			2,885,180
Interest payable			1,253,031			5,241,164
Related party payable			1,898,854			—
Unearned revenue			550,348			397,725
Administrative services payable			401,033			402,151
Deferred tax liability			—			188,893
Other accrued expenses and liabilities			996,484			278,345
Total Liabilities		$	590,786,572		$	588,146,540
Commitments and contingencies (Note 7)
Net Assets		$	366,285,287		$	319,939,788
NET ASSETS
Common stock, par value $0.001 per share (100,000,000 shares authorized; 27,039,364 and 24,125,642 issued and outstanding, respectively)		$	27,039		$	24,125
Paid-in capital			375,430,445			335,918,984
Total distributable loss			(9,172,197)			(16,003,321)
Net Assets		$	366,285,287		$	319,939,788
Total Liabilities and Net Assets		$	957,071,859		$	908,086,328
Net Asset Value Per Share		$	13.55		$	13.26

 

STELLUS CAPITAL INVESTMENT CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
		For the three months ended						For the nine months ended
		September 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023
INVESTMENT INCOME
From controlled investments:
Interest income		$	—		$	—		$	81,636		$	—
From non-controlled, non-affiliated investments
Interest income			25,338,361			26,223,986			75,460,156			75,295,485
Other income			1,159,898			941,040			3,579,415			2,529,905
Total Investment Income		$	26,498,259		$	27,165,026		$	79,121,207		$	77,825,390
OPERATING EXPENSES
Management fees		$	3,959,554		$	3,933,121		$	11,664,020		$	11,533,811
Valuation fees			151,535			139,267			343,753			332,762
Administrative services expenses			469,274			470,846			1,441,436			1,399,188
Income incentive fees			2,564,922			2,705,200			7,616,562			7,433,039
Capital gains incentive fee reversal			—			—			—			(569,528)
Professional fees			312,034			276,592			847,866			877,276
Directors' fees			93,250			93,250			315,750			303,750
Insurance expense			126,362			123,725			376,840			366,156
Interest expense and other fees			7,956,403			8,049,063			23,840,473			24,037,462
Income tax expense			360,192			335,508			1,304,948			1,082,057
Other general and administrative expenses			245,043			217,655			908,185			727,754
Total Operating Expenses		$	16,238,569		$	16,344,227		$	48,659,833		$	47,523,727
Income incentive fee waiver			—			—			(1,826,893)			—
Total Operating Expenses, net of fee waivers		$	16,238,569		$	16,344,227		$	46,832,940		$	47,523,727
Net Investment Income		$	10,259,690		$	10,820,799		$	32,288,267		$	30,301,663
Net realized (loss) gain on non-controlled, non-affiliated investments		$	(3,297,615)		$	600,403		$	(21,689,864)		$	324,782
Net realized loss on foreign currency translations			(22,095)			(22,166)			(76,990)			(72,782)
Net change in unrealized appreciation on controlled investments			248,746			—			923,505			—
Net change in unrealized appreciation (depreciation) on non-controlled, non-affiliated investments			8,255,272			(13,793,320)			25,512,422			(24,338,195)
Net change in unrealized appreciation (depreciation) on foreign currency translations			14,588			(2,794)			5,099			(21,243)
(Provision) benefit for taxes on net unrealized (appreciation) depreciation on investments			—			(312)			188,893			(144,425)
Benefit for taxes on net realized loss on investments			2,221			—			2,221			—
Net Increase (Decrease) in Net Assets Resulting from Operations		$	15,460,807		$	(2,397,390)		$	37,153,553		$	6,049,800
Net Investment Income Per Share—basic and diluted		$	0.39		$	0.47		$	1.29		$	1.42
Net Increase (Decrease) in Net Assets Resulting from Operations Per Share – basic and diluted		$	0.59		$	(0.11)		$	1.48		$	0.28
Weighted Average Shares of Common Stock Outstanding—basic and diluted			26,326,426			22,824,221			25,066,626			21,289,880
Distributions Per Share—basic and diluted		$	0.40		$	0.41		$	1.21		$	1.22

 

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
Net investment income		—			—			—			10,820,799			10,820,799
Net realized gain on investments		—			—			—			600,403			600,403
Net realized loss on foreign currency translation		—			—			—			(22,166)			(22,166)
Net change in unrealized depreciation on investments		—			—			—			(13,793,320)			(13,793,320)
Net change in unrealized depreciation on foreign currency translations		—			—			—			(2,794)			(2,794)
Provision for taxes on unrealized appreciation on investments		—			—			—			(312)			(312)
Distributions from net investment income		—			—			—			(9,269,208)			(9,269,208)
Issuance of common stock, net of offering costs(1)		1,567,738			1,567			21,465,783			—			21,467,350
Balances at September 30, 2023		24,125,642		$	24,125		$	337,289,265		$	(19,187,610)		$	318,125,780
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
Net investment income		—			—			—			10,259,690			10,259,690
Net realized loss on investments		—			—			—			(3,297,615)			(3,297,615)
Net realized loss on foreign currency translation		—			—			—			(22,095)			(22,095)
Net change in unrealized appreciation on investments		—			—			—			8,504,018			8,504,018
Net change in unrealized appreciation on foreign currency translations		—			—			—			14,588			14,588
Benefit for taxes on net realized loss on investments		—			—			—			2,221			2,221
Distributions from net investment income		—			—			—			(10,625,512)			(10,625,512)
Issuance of common stock, net of offering costs(1)		1,058,366			1,058			14,263,441			—			14,264,499
Balances at September 30, 2024		27,039,364		$	27,039		$	375,430,445		$	(9,172,197)		$	366,285,287

(1)	See Note 4 to the Consolidated Financial Statements on Form 10-Q filed with the Securities and Exchange Commission on November 7, 2024 for more information on offering costs.

 

STELLUS CAPITAL INVESTMENT CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
		For nine months ended
		September 30, 2024			September 30, 2023
Cash flows from operating activities
Net increase in net assets resulting from operations		$	37,153,553		$	6,049,800
Adjustments to reconcile net increase in net assets from operations to net cash used in operating activities:
Purchases of investments			(112,624,812)			(139,650,422)
Proceeds from sales and repayments of investments			87,308,914			79,053,967
Net change in unrealized (appreciation) depreciation on investments			(26,435,927)			24,338,195
Net change in unrealized (appreciation) depreciation on foreign currency translations			(5,099)			21,087
Increase in investments due to PIK			(2,490,856)			(2,732,530)
Amortization of premium and accretion of discount, net			(2,045,992)			(2,078,183)
Deferred tax (benefit) provision			(188,893)			144,425
Amortization of loan structure fees			825,891			436,257
Amortization of deferred financing costs			335,345			334,122
Amortization of loan fees on SBA-guaranteed debentures			784,763			938,247
Net realized loss (gain) on investments			21,689,864			(324,782)
Changes in other assets and liabilities
Increase in interest receivable			(1,389,856)			(1,615,612)
Increase in income tax receivable			(228,663)			—
Increase in other receivables			(25,000)			(26,250)
Decrease in prepaid expenses			349,950			517,512
Increase (decrease) in management fees payable			1,041,018			(3,217,286)
Increase in income incentive fees payable			269,396			594,142
Decrease in capital gains incentive fees payable			—			(569,528)
(Decrease) increase in administrative services payable			(1,118)			45,708
Decrease in interest payable			(3,988,133)			(3,324,507)
Increase (decrease) in related party payable			1,898,854			(1,060,321)
Increase in unearned revenue			152,623			22,535
Decrease in income tax payable			—			(59,004)
Increase (decrease) in other accrued expenses and liabilities			718,139			(272,305)
Net Cash Provided (Used) in Operating Activities		$	3,103,961		$	(42,434,733)
Cash flows from Financing Activities
Proceeds from the issuance of common stock		$	40,370,901		$	63,348,436
Sales load for common stock issued			(606,145)			(943,248)
Offering costs paid for common stock issued			(243,067)			(225,085)
Stockholder distributions paid			(26,718,082)			(22,663,688)
Proceeds from SBA-guaranteed debentures			—			11,400,000
Financing costs paid on SBA-guaranteed debentures			—			(277,590)
Financing costs paid on Credit Facility			(101,348)			(35,000)
Borrowings under Credit Facility			122,400,000			79,700,000
Repayments of Credit Facility			(125,751,700)			(116,701,700)
Net Cash Provided by Financing Activities		$	9,350,559		$	13,602,125
Net Increase (Decrease) in Cash and Cash Equivalents		$	12,454,520		$	(28,832,608)
Cash and Cash Equivalents Balance at Beginning of Period		$	26,125,741		$	48,043,329
Cash and Cash Equivalents Balance at End of Period		$	38,580,261		$	19,210,721
Supplemental and Non-Cash Activities
Cash paid for interest expense		$	25,882,607		$	25,653,343
Income and excise tax paid			1,533,611			1,141,061
Increase in distributions payable			3,604,347			3,215,948
Decrease in deferred offering costs			(7,312)			(1,100)

 

Reconciliation of Core Net Investment Income (1) (Unaudited)
		Three Months Ended
		September 30, 2024		September 30, 2023
Net investment income		$10,259,690		$10,820,799
Income tax expense		360,192		335,508
Core net investment income		$10,619,882		$11,156,307
Per share amounts:
Net investment income per share		$0.39		$0.47
Core net investment income per share		$0.40		$0.49

 

Reconciliation of Realized Net Investment Income (2) (Unaudited)
		Three Months Ended
		September 30, 2024		September 30, 2023
Net investment income		$10,259,690		$10,820,799
Net realized loss on investments		(3,297,615)		600,403
Net realized loss on foreign currency translation		(22,095)		(22,166)
Total Realized Net Investment Income		$6,939,980		$11,399,036
Per share amounts:
Net investment income per share		$0.39		$0.47
Realized net investment income per share		$0.25		$0.50

 

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SOURCE Stellus Capital Investment Corporation

FAQ

What was Stellus Capital's (SCM) net investment income per share in Q3 2024?

Stellus Capital reported net investment income of $0.39 per share in Q3 2024.

How much did Stellus Capital (SCM) declare in dividends for Q4 2024?

Stellus Capital declared monthly distributions of $0.1333 per share for October, November, and December 2024, totaling $0.40 per share for the quarter.

What was SCM's net asset value per share as of September 30, 2024?

Stellus Capital's net asset value per share was $13.55 as of September 30, 2024.

How many portfolio companies did Stellus Capital (SCM) have as of Q3 2024?

Stellus Capital had investments in 99 portfolio companies as of September 30, 2024.