ICMB Investcorp Credit Management BDC Inc

Investcorp Credit Management BDC, Inc. (NASDAQ: ICMB) (“ICMB” or the “Company”) announced its financial results today for its fiscal third quarter ended March 31, 2024.

HIGHLIGHTS

• On April 12, 2024, the Company’s Board of Directors (the “Board”) declared a distribution of $0.12 per share for the quarter ending June 30, 2024, payable in cash on June 14, 2024, to stockholders of record as of May 26, 2024 and a supplemental distribution of $0.03 per share, payable on June 14, 2024, to stockholders of record as of May 26, 2024.
• During the quarter, ICMB made investments in no new portfolio companies and four existing portfolio companies. These investments totaled $8.9 million, at cost. The weighted average yield (at origination) of debt investments made in the quarter was 12.49%.
• ICMB fully realized its investments in six portfolio companies during the quarter, totaling $21.2 million in proceeds. The internal rate of return on these investments was 17.09%.
• During the quarter, the Company had net repayments of $3.8 million on its existing delayed draw and revolving credit commitments to portfolio companies.
• The weighted average yield on debt investments, at cost, for the quarter ended March 31, 2024, was 12.36%, compared to 11.46% for the quarter ended December 31, 2023.
• Net asset value increased $0.01 per share to $5.49, compared to $5.48 as of December 31, 2023. Net assets increased by $0.3 million, or 0.33%, during the quarter ended March 31, 2024 compared to December 31, 2023.

Portfolio results, as of and for the three months ended March 31, 2024:

Total assets

$210.0mm

Investment portfolio, at fair value

$192.2mm

Net assets

$79.1mm

Weighted average yield on debt investments, at cost (1)

12.36%

Net asset value per share

$5.49

Portfolio activity in the current quarter:

 

Number of investments in new portfolio companies during the period

0

Number of portfolio companies invested in, end of period

40

Total capital invested in existing portfolio companies (2)

$10.2mm

Total proceeds from repayments, sales, and amortization (3)

$26.7mm

Net investment income (NII)

$2.1mm

Net investment income per share

$0.14

Net increase in net assets from operations

$2.4mm

Net increase in net assets from operations per share

$0.17

Quarterly per share distribution paid on March 31, 2024

$0.15

(1) Represents weighted average yield on total debt investments for the three months ended March 31, 2024. Weighted average yield on total debt investments is the annualized rate of interest income recognized during the period divided by the average amortized cost of debt investments in the portfolio during the period. The weighted average yield on total debt investments reflected above does not represent actual investment returns to the Company’s stockholders. (2) Includes gross advances to existing revolving credit commitments to portfolio companies and PIK interest (3) Includes gross repayments on existing delayed draw and revolving credit commitments to portfolio companies

Mr. Suhail A. Shaikh said "As of yesterday, I have been appointed as Chief Executive Officer of ICMB, effective immediately, and will now serve as the sole Chief Investment Officer of the advisor. It is in honor to be named CEO at this time where the current lending environment favors alternative lenders such as business development companies, and we are well positioned to execute our business strategy in the current market. I want to thank Mike Mauer and am grateful to have him as a partner. Mike will continue to serve as Chairman of ICMB and will become Vice Chairman of the advisor's private credit business. Mike will continue to serve on the investment committee of the advisor to provide his guidance and experience for the next chapter of our business. I look forward to working with Mike and the rest of the team to create shareholder value."

The Company’s dividend framework provides a quarterly base dividend and may be supplemented, at the discretion of the Board, by additional dividends as determined to be available by the Company’s net investment income and performance during the quarter.

On April 12, 2024, the Board declared a distribution for the quarter ended June 30, 2024 of $0.12 per share payable on June 14, 2024 to stockholders of record as of May 26, 2024 and a supplemental distribution of $0.03 per share, payable on June 14, 2024, to stockholders of record as of May 26, 2024.

This distribution represents a 19.29% yield on the Company’s $3.11 share price as of market close on March 28, 2024. Distributions may include net investment income, capital gains and/or return of capital, however, the Company does not expect the dividend for the quarter ending March 31, 2024, to be comprised of a return of capital. The Company’s investment adviser monitors available taxable earnings, including net investment income and realized capital gains, to determine if a return of capital may occur for the year. The Company estimates the source of its distributions as required by Section 19(a) of the Investment Company Act of 1940 to determine whether payment of dividends are expected to be paid from any other source other than net investment income accrued for the current period or certain cumulative periods, but the Company will not be able to determine whether any specific distribution will be treated as taxable earnings or as a return of capital until after at the end of the taxable year.

Portfolio and Investment Activities

During the quarter, the Company made investments in no new portfolio companies and four existing portfolio companies. The aggregate capital invested during the quarter totaled $8.9 million, at cost, and the debt investments were made at a weighted average yield of 12.49%.

The Company received proceeds of $26.7 million from repayments, sales and amortization during the quarter, primarily related to the realization of Evergreen North America Acquisitions, LLC, AMCP Clean Acquisition Company LLC, Amerequip, LLC, AHF Parent Holding, Inc., LSF9 Atlantis Holdings LLC (Victra) and 1888 Industrial Services, LLC.

During the quarter, the Company had net repayments of $3.8 million on its existing delayed draw and revolving credit commitment to portfolio companies.

The Company’s net realized, and unrealized gains and losses accounted for an increase in the Company’s net investments of approximately $0.3 million, or $0.02 per share. The total net increase in net assets resulting from operations for the quarter was $2.4 million, or $0.17 per share.

As of March 31, 2024, the Company’s investment portfolio consisted of investments in 40 portfolio companies, of which 83.82% were first lien investments and 16.18% were equity, warrants, and other investments. The Company’s debt portfolio consisted of 99.6% floating rate investments and 0.4% fixed rate investments.

Capital Resources

As of March 31, 2024, the Company had $12.9 million in cash, of which $10.2 million was restricted cash, and $42.5 million of unused and available capacity under its revolving credit facility with Capital One, N.A.

Subsequent Events

From April 1, 2024 through May 14, 2024, the Company invested $10.5 million in two new portfolio companies and one existing portfolio company and received approximately $13.8 million from the repayment of two positions.

Investcorp Credit Management BDC, Inc. and Subsidiaries

Consolidated Statements of Assets and Liabilities

 

 

 

March 31, 2024

 

 

 

 

 

 

 

(Unaudited)

 

 

June 30, 2023

 

Assets

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments, at fair value (amortized cost of $195,540,865 and $219,319,251, respectively)

 

$

 

186,948,019

 

 

$

 

210,150,018

 

Affiliated investments, at fair value (amortized cost of $15,129,208 and $23,979,565, respectively)

 

 

 

5,255,262

 

 

 

 

9,961,311

 

Total investments, at fair value (amortized cost of $210,670,073 and $243,298,816, respectively)

 

 

 

192,203,281

 

 

 

 

220,111,329

 

Cash

 

 

 

2,728,347

 

 

 

 

1,093,758

 

Cash, restricted

 

 

 

10,161,162

 

 

 

 

8,057,458

 

Receivable for investments sold

 

 

 

1,972,100

 

 

 

 

—

 

Principal receivable

 

 

 

47,692

 

 

 

 

93,581

 

Interest receivable

 

 

 

1,304,722

 

 

 

 

2,041,877

 

Payment-in-kind interest receivable

 

 

 

59,166

 

 

 

 

46,088

 

Due from affiliate

 

 

 

175,916

 

 

 

 

—

 

Long-term receivable

 

 

 

618,772

 

 

 

 

—

 

Escrow receivable

 

 

 

95,190

 

 

 

 

—

 

Other receivables

 

 

 

—

 

 

 

 

1,050

 

Prepaid expenses and other assets

 

 

 

604,201

 

 

 

 

361,719

 

Total Assets

 

$

 

209,970,549

 

 

$

 

231,806,860

 

Liabilities

 

 

 

 

 

 

 

 

Notes payable:

 

 

 

 

 

 

 

 

Revolving credit facility

 

$

 

57,500,000

 

 

$

 

71,900,000

 

2026 Notes payable

 

 

 

65,000,000

 

 

 

 

65,000,000

 

Deferred debt issuance costs

 

 

 

(1,807,459

)

 

 

 

(1,220,556

)

Unamortized discount

 

 

 

(142,220

)

 

 

 

(195,553

)

Notes payable, net

 

 

 

120,550,321

 

 

 

 

135,483,891

 

Payable for investments purchased

 

 

 

3,487,533

 

 

 

 

1,795,297

 

Dividend payable

 

 

 

2,159,568

 

 

 

 

2,590,520

 

Income-based incentive fees payable

 

 

 

128,876

 

 

 

 

576,023

 

Base management fees payable

 

 

 

854,328

 

 

 

 

906,218

 

Interest payable

 

 

 

2,972,954

 

 

 

 

2,293,766

 

Directors' fees payable

 

 

 

—

 

 

 

 

15,755

 

Accrued expenses and other liabilities

 

 

 

716,004

 

 

 

 

445,082

 

Total Liabilities

 

 

 

130,869,584

 

 

 

 

144,106,552

 

Net Assets

 

 

 

 

 

 

 

 

Common stock, par value $0.001 per share (100,000,000 shares authorized 14,397,121 and 14,391,775 shares issued and outstanding, respectively)

 

 

 

14,397

 

 

 

 

14,392

 

Additional paid-in capital

 

 

 

203,346,421

 

 

 

 

203,327,714

 

Distributable earnings (loss)

 

 

 

(124,259,853

)

 

 

 

(115,641,798

)

Total Net Assets

 

 

 

79,100,965

 

 

 

 

87,700,308

 

Total Liabilities and Net Assets

 

$

 

209,970,549

 

 

$

 

231,806,860

 

Net Asset Value Per Share

 

$

 

5.49

 

 

$

 

6.09

 

 

Investcorp Credit Management BDC, Inc. and Subsidiaries

Consolidated Statements of Operations (unaudited)

 

 

 

For the three months ended March 31,

 

 

For the nine months ended March 31,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Investment Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

$

 

5,561,333

 

 

$

 

6,314,620

 

 

$

 

16,180,220

 

 

$

 

18,184,247

 

Affiliated investments

 

 

 

28,830

 

 

 

 

—

 

 

 

 

29,370

 

 

 

 

(20,611

)

Total interest income

 

 

 

5,590,163

 

 

 

 

6,314,620

 

 

 

 

16,209,590

 

 

 

 

18,163,636

 

Payment in-kind interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

 

 

613,765

 

 

 

 

401,978

 

 

 

 

1,281,265

 

 

 

 

584,645

 

Affiliated investments

 

 

 

19,553

 

 

 

 

17,491

 

 

 

 

57,633

 

 

 

 

51,938

 

Total payment-in-kind interest income

 

 

 

633,318

 

 

 

 

419,469

 

 

 

 

1,338,898

 

 

 

 

636,583

 

Dividend income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

 

 

54,138

 

 

 

 

—

 

 

 

 

54,138

 

 

 

 

101,755

 

Affiliated investments

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

Total dividend income

 

 

 

54,138

 

 

 

 

—

 

 

 

 

54,138

 

 

 

 

101,755

 

Payment in-kind dividend income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

 

 

198,123

 

 

 

 

173,253

 

 

 

 

580,556

 

 

 

 

511,395

 

Affiliated investments

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

Total payment-in-kind dividend income

 

 

 

198,123

 

 

 

 

173,253

 

 

 

 

580,556

 

 

 

 

511,395

 

Other fee income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

 

 

142,347

 

 

 

 

98,498

 

 

 

 

575,801

 

 

 

 

670,926

 

Affiliated investments

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

Total other fee income

 

 

 

142,347

 

 

 

 

98,498

 

 

 

 

575,801

 

 

 

 

670,926

 

Total investment income

 

 

 

6,618,089

 

 

 

 

7,005,840

 

 

 

 

18,758,983

 

 

 

 

20,084,295

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 

2,174,195

 

 

 

 

2,166,739

 

 

 

 

6,649,314

 

 

 

 

6,119,083

 

Base management fees

 

 

 

951,799

 

 

 

 

1,043,306

 

 

 

 

2,910,978

 

 

 

 

3,204,391

 

Income-based incentive fees

 

 

 

—

 

 

 

 

—

 

 

 

 

(72,942

)

 

 

 

(147,145

)

Provision for tax expense

 

 

 

111,646

 

 

 

 

77,575

 

 

 

 

321,890

 

 

 

 

187,763

 

Professional fees

 

 

 

354,934

 

 

 

 

271,784

 

 

 

 

981,322

 

 

 

 

815,347

 

Allocation of administrative costs from Adviser

 

 

 

225,856

 

 

 

 

375,900

 

 

 

 

1,118,276

 

 

 

 

1,127,700

 

Amortization of deferred debt issuance costs

 

 

 

152,591

 

 

 

 

173,333

 

 

 

 

423,885

 

 

 

 

520,000

 

Amortization of original issue discount - 2026 Notes

 

 

 

17,777

 

 

 

 

17,777

 

 

 

 

53,332

 

 

 

 

53,332

 

Insurance expense

 

 

 

125,766

 

 

 

 

120,093

 

 

 

 

351,734

 

 

 

 

395,734

 

Directors' fees

 

 

 

75,157

 

 

 

 

75,625

 

 

 

 

221,407

 

 

 

 

226,875

 

Custodian and administrator fees

 

 

 

68,031

 

 

 

 

74,397

 

 

 

 

214,892

 

 

 

 

217,913

 

Other expenses

 

 

 

379,406

 

 

 

 

151,093

 

 

 

 

595,233

 

 

 

 

426,908

 

Total expenses

 

 

 

4,637,158

 

 

 

 

4,547,622

 

 

 

 

13,769,321

 

 

 

 

13,147,901

 

Waiver of base management fees

 

 

 

(97,431

)

 

 

 

(89,939

)

 

 

 

(292,326

)

 

 

 

(296,566

)

Waiver of income-based incentive fees

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

Net expenses

 

 

 

4,539,727

 

 

 

 

4,457,683

 

 

 

 

13,476,995

 

 

 

 

12,851,335

 

Net investment income

 

 

 

2,078,362

 

 

 

 

2,548,157

 

 

 

 

5,281,988

 

 

 

 

7,232,960

 

Net realized and unrealized gain/(loss) on investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net realized gain (loss) from investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

 

 

(31,984

)

 

 

 

(26,890,095

)

 

 

 

(5,903,023

)

 

 

 

(26,890,095

)

Affiliated investments

 

 

 

(6,239,984

)

 

 

 

—

 

 

 

 

(6,239,984

)

 

 

 

—

 

Net realized gain (loss) from investments

 

 

 

(6,271,968

)

 

 

 

(26,890,095

)

 

 

 

(12,143,007

)

 

 

 

(26,890,095

)

Net change in unrealized appreciation (depreciation) in value of investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

 

 

1,089,608

 

 

 

 

24,505,471

 

 

 

 

576,387

 

 

 

 

22,391,835

 

Affiliated investments

 

 

 

5,515,738

 

 

 

 

(1,267,677

)

 

 

 

4,144,308

 

 

 

 

(1,564,478

)

Net change in unrealized appreciation (depreciation) on investments

 

 

 

6,605,346

 

 

 

 

23,237,794

 

 

 

 

4,720,695

 

 

 

 

20,827,357

 

Total realized gain (loss) and change in unrealized appreciation (depreciation) on investments

 

 

 

333,378

 

 

 

 

(3,652,301

)

 

 

 

(7,422,312

)

 

 

 

(6,062,738

)

Net increase (decrease) in net assets resulting from operations

 

$

 

2,411,740

 

 

$

 

(1,104,144

)

 

$

 

(2,140,324

)

 

$

 

1,170,222

 

Basic and diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income per share

 

$

 

0.14

 

 

$

 

0.18

 

 

$

 

0.37

 

 

$

 

0.50

 

Earnings per share

 

$

 

0.17

 

 

$

 

(0.08

)

 

$

 

(0.15

)

 

$

 

0.08

 

Weighted average shares of common stock outstanding

 

 

 

14,396,951

 

 

 

 

14,389,868

 

 

 

 

14,394,574

 

 

 

 

14,388,295

 

Distributions paid per common share

 

$

 

0.15

 

 

$

 

0.15

 

 

$

 

0.45

 

 

$

 

0.45

 

About Investcorp Credit Management BDC, Inc.

The Company is an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940. The Company’s investment objective is to maximize the total return to its stockholders in the form of current income and capital appreciation through debt and related equity investments by targeting investment opportunities with favorable risk-adjusted returns. The Company seeks to invest primarily in middle-market companies that have annual revenues of at least $50 million and earnings before interest, taxes, depreciation, and amortization of at least $15 million. The Company’s investment activities are managed by its investment adviser, CM Investment Partners LLC. To learn more about Investcorp Credit Management BDC, Inc., please visit www.icmbdc.com.

Forward-Looking Statements

Statements included in this press release and made on the earnings call for the quarter ended December 31, 2023, may contain “forward-looking statements,” which relate to future performance, operating results, events and/or financial condition. Words such as “anticipates,” “expects,” “intends,” “plans,” “will,” “may,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “should,” “targets,” “projects,” and variations of these words and similar expressions are intended to identify forward-looking statements. Any forward-looking statements, including statements other than statements of historical facts, included in this press release or made on the earnings call are based upon current expectations, are inherently uncertain, and involve a number of assumptions and substantial risks and uncertainties, many of which are difficult to predict and are generally beyond the Company’s control.

Investors are cautioned not to place undue reliance on these forward-looking statements. Any such statements are likely to be affected by other unknowable future events and conditions, which the Company may or may not have considered, including, without limitation, changes in base interest rates and the effects of significant market volatility on our business, our portfolio companies, our industry and the global economy. Accordingly, such statements cannot be guarantees or assurances of any aspect of future performance or events. Actual results may differ materially from those anticipated in any forward-looking statements as a result of a number of factors and risks. More information on these risks and other potential factors that could affect actual events and the Company’s performance and financial results, including important factors that could cause actual results to differ materially from plans, estimates or expectations included herein or discussed on the earnings call, is or will be included in the Company’s filings with the Securities and Exchange Commission, including in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. All forward-looking statements speak only as of the date they are made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240514603623/en/

Investcorp Credit Management BDC, Inc. Investor Relations Email: icmbinvestorrelations@investcorp.com Phone:(646) 690-5047