Texas
Stellus Capital Investment Corporation Reports Results for its first fiscal quarter ended March 31, 2022
HOUSTON, May 11, 2022 /PRNewswire/ -- Stellus Capital Investment Corporation (NYSE: SCM) ("Stellus" or "the Company") today announced financial results for its first fiscal quarter ended March 31, 2022.
Robert T. Ladd, Chief Executive Officer of Stellus, stated, "I am pleased to report solid results in the first quarter in which we grew our investment portfolio, maintained net asset value, covered the dividend, and generated $3.4 million of realized gains. In particular, core and GAAP net investment income covered our first quarter regular dividend of $0.28 per share. In April, in addition to our regular dividend of $0.28 per quarter in the aggregate, our Board of Directors declared an additional aggregate dividend of $0.06 for the second quarter. These dividends total $0.34 per share in the aggregate for the second quarter and are payable in increments of $0.1133 for each of May, June and July. Our portfolio at fair value increased by $65 million, ending the quarter at $838 million."
FINANCIAL HIGHLIGHTS | |||||||
($ in millions, except data relating to per share amounts and shares outstanding) | |||||||
Quarter Ended | Quarter Ended | ||||||
Q1-22 | Q1-21 | ||||||
Amount | Per Share | Amount | Per Share | ||||
Net investment income | $5.51 | $0.28 | $5.06 | $0.26 | |||
Core net investment income (1) | 5.75 | 0.29 | 5.38 | 0.28 | |||
Net realized gains on investments | 3.46 | 0.18 | 0.46 | 0.02 | |||
Net realized loss on foreign currency | (0.01) | (0.00) | - | - | |||
Loss on debt extinguishment | - | - | (0.54) | (0.03) | |||
Total realized income(2) | 8.96 | 0.46 | 4.98 | 0.25 | |||
Distributions | (5.46) | (0.28) | (4.87) | (0.25) | |||
Net unrealized (depreciation) | |||||||
appreciation on investments | (3.72) | (0.19) | 0.12 | 0.01 | |||
Provision for taxes on unrealized appreciation | |||||||
on investments in taxable subsidiaries | (0.02) | (0.00) | (0.17) | (0.01) | |||
Net increase in net assets resulting | |||||||
from operations | $5.22 | 0.27 | $4.94 | 0.25 | |||
Weighted average shares outstanding | 19,517,761 | 19,486,003 | |||||
(1) | Core net investment income, as presented, excludes the impact of capital gains incentive fees and income taxes, the majority of which are excise taxes. The company believes presenting core net investment income and the related per share amount is a useful supplemental disclosure for analyzing its financial performance. However, core net investment income is a non-U.S GAAP measure and should not be considered as a replacement for net investment income and other earnings measures presented in accordance with U.S GAAP. A reconciliation of net investment income in accordance with U.S GAAP to core net investment income is presented in the table below the financial statements. |
(2) | Total realized income is the sum of net investment income, net realized gains (losses) on investments, net realized gains (losses) on foreign currency, and loss on debt extinguishment; all U.S GAAP measures. |
PORTFOLIO ACTIVITY | ||||||||||||
($ in millions, except data relating to per share amounts and number of portfolio companies) | ||||||||||||
As of | As of | |||||||||||
March 31, | December 31, | |||||||||||
2022 | 2021 | |||||||||||
Investments at fair value | $838.0 | $772.9 | ||||||||||
Total assets | $866.7 | $821.3 | ||||||||||
Net assets | $285.0 | $285.1 | ||||||||||
Shares outstanding | 19,532,519 | 19,517,595 | ||||||||||
Net asset value per share | $14.59 | $14.61 | ||||||||||
Quarter Ended | Quarter Ended | |||||||||||
March 31, | March 31, | |||||||||||
2022 | 2021 | |||||||||||
New investments | $74.5 | $93.4 | ||||||||||
Repayments of investments | (10.0) | (33.6) | ||||||||||
Net activity | $64.5 | $59.8 | ||||||||||
As of | As of | |||||||||||
March 31, | December 31, | |||||||||||
2022 | 2021 | |||||||||||
Number of portfolio company investments | 78 | 73 | ||||||||||
Number of debt investments | 64 | 55 | ||||||||||
Weight average yield of debt and other income producing investments (3) | ||||||||||||
Cash | 7.4% | 7.4% | ||||||||||
Payment-in-kind ("PIK') | 0.2% | 0.2% | ||||||||||
Fee amortization | 0.4% | 0.4% | ||||||||||
Total | 8.0% | 8.0% | ||||||||||
Weighted average yield on total investments (4) | ||||||||||||
Cash | 6.9% | 6.9% | ||||||||||
Payment-in-kind ("PIK') | 0.2% | 0.2% | ||||||||||
Fee amortization | 0.4% | 0.4% | ||||||||||
Total | 7.5% | 7.5% | ||||||||||
(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 of our common stock would realize in a return over the same period because the dollar-weighted average annualized yield does not reflect the Company's expense 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 March 31, 2022 and 2021 totaled $15.5 million and $14.0 million, respectively, most of which was interest income from portfolio investments.
Operating expenses for the three months ended March 31, 2022 and 2021, totaled $10.0 million and $8.9 million, respectively. For the same respective periods, base management fees totaled $3.5 million and $3.0 million, there were no income incentive fees for both periods, capital gains incentive fees (reversal) totaled ($0.0) million and $0.1 million, fees and expenses related to our borrowings totaled $4.9 million and $4.3 million (including interest and amortization of deferred financing costs), administrative expenses totaled $0.5 million for both periods, income tax totaled $0.3 million and $0.2 million and other expenses totaled $0.8 million for both periods.
Net investment income was $5.5 million and $5.1 million, or $0.28 and $0.26 per common share based on weighted average common shares outstanding for the three months ended March 31, 2022 and 2021 of 19,517,761 and 19,486,003, respectively.
The capital gains incentive fee reversal of ($0.0) million for the three months ended March 31, 2022 was accrued for GAAP purposes due to the decrease in net realized and unrealized gains over the quarter. Such fees, as calculated and accrued, would not necessarily be payable under the investment advisory agreement, and may never be paid based upon the computation of incentive fees in subsequent periods. The income tax expense accrual of $0.3 million for the three months ended March 31, 2022 was accrued based on estimates of undistributed taxable income, which was generated largely from capital gains. Core net investment income, which is a non-U.S GAAP measure that excludes these accruals, for the three months ended March 31, 2022 was $5.8 million, or $0.29 per share; and for the three months ended March 31, 2021 was $5.4 million, or $0.28 per share.
The Company's investment portfolio had a net change in unrealized (depreciation) appreciation for the three months ended March 31, 2022 and 2021, of ($3.7) million and $0.1 million, respectively. For the three months ended March 31, 2022 and 2021, the Company had realized gains of $3.5 million and $0.5 million, respectively.
Net increase in net assets resulting from operations totaled $5.2 million and $4.9 million, or $0.27 and $0.25 per common share, based on weighted average common shares outstanding for the three months ended March 31, 2022 and 2021 of 19,517,761 and 19,486,003, respectively.
Liquidity and Capital Resources
As of March 31, 2022, our amended and restated 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 $250.0 million on a committed basis. As of March 31, 2022 and 2021, our credit facility had an accordion feature which allowed for potential future expansion of the facility size to $280.0 million. As of March 31, 2022 and December 31, 2021, we had $205.5 million and $177.3 million in outstanding borrowings under the credit facility, respectively.
For the three months ended March 31, 2022, our operating activities used cash of $62.9 million primarily in connection with purchases and origination of portfolio investments, which was slightly offset by repayments of our investments. For the same period, our financing activities provided cash of $43.4 million, primarily from proceeds from SBA-guaranteed debentures and net borrowings on our Credit Facility.
For the three months ended March 31, 2021, our operating activities used cash of $57.1 million, primarily in connection with the purchase and origination of new portfolio investments, which was slightly offset by repayments of our investments. For the same period, our financing activities provided cash of $69.0 million, due to the issuance of our 4.875% fixed-rate notes due 2026 offset by the repayment of our 5.75% fixed-rate notes due 2022 and net repayments on our Credit Facility.
Distributions
During the three months ended March 31, 2022 and 2021, we declared aggregate distributions of $0.28 per share and $0.25 per share ($5.5 million and $4.9 million, respectively) for each quarter. 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
On January 5, 2022, we invested $0.1 million in the equity of Tower Arch Infolinks Media, LP, an existing portfolio company. On March 31, 2022, we invested an additional $0.1 million in the equity of the company.
On February 1, 2022, we invested $6.2 million in the first lien term loan and committed $0.1 million in the unfunded revolver of BLP Buyer, Inc., a distributor of lifting solutions. Additionally, we invested $0.8 million in the equity of the company.
On February 7, 2022, we invested $5.4 million in the first lien term loan and committed $0.1 million in the unfunded revolver and $0.1 million in the unfunded delayed draw term loan of Service Minds Company, LLC, a provider of residential electrical services.
On February 10, 2022, we invested $1.0 million in the first lien term loan of NuSource Financial, LLC, an existing portfolio company.
On February 15, 2022, we invested £10.0 million pounds sterling ($13.5 million dollars) in the first lien term loan and committed $0.1 million in the unfunded delayed draw term loan and $0.1 million in the unfunded revolver of a provider of Oracle-focused IT services. Additionally, we invested $0.8 million in the equity of the company.
On February 24, 2022, we invested $13.5 million in the first lien term loan and committed $0.1 million in the unfunded revolver of BDS Solutions Intermediateco, LLC, a leading provider of outsourced marketing services.
On March 1, 2022, we received $3.9 million in full realization on the equity of Mobile Acquisition Holdings, LP, resulting in a $3.4 million realized gain.
On March 16, 2022, we invested $9.1 million in the first lien term loan and committed $0.1 million in the unfunded revolver and $0.1 million in the unfunded delayed draw term loan of Exigo, LLC, a software platform for direct selling organizations. Additionally, we invested $0.4 million in the equity of the company.
On March 22, 2022, we invested $5.0 million in the second lien term loan of TFH Reliability, LLC, an existing portfolio company.
On March 22, 2022, we invested $12.0 million in the first lien term loan and committed $0.1 million in the unfunded revolver and $0.1 million in the unfunded delayed draw term loan of Axis Portable Air, LLC, an air conditioning, heating, and air quality equipment rental company. Additionally, we invested $0.4 million in the preferred equity of the company.
On March 31, 2022, we invested $7.5 million in the first lien term loan of Credit Connection, LLC, an existing portfolio company.
On March 31, 2022, we invested $0.1 million in the convertible term loan of Venbrook Holdings, LLC, an existing portfolio company.
Events Subsequent to March 31, 2022
On April 1, 2022, we invested $0.1 million in the first lien term loan and committed $0.1 million in the revolver of Cancos Tile & Stone LLC, a regional distributor, seller, and custom fabricator of high-end ceramic and stone tile products and accessories. Additionally, we invested $0.1 million in the equity of the company.
On April 1, 2022, we invested $0.1 million in the first lien term loan and committed $0.1 million in the revolver of Tilley Chemical Company, Inc., a distributor of specialty chemicals, oils, and lubricants into the food & beverage, lubricants, flavor and fragrances, personal care, and other chemicals end-markets.
On April 4, 2022, we invested $11.3 million in the first lien term loan and committed $0.1 million in the revolver of Microbe Formulas LLC, a provider of dietary supplements and other natural solutions for detox and gut health.
On April 7, 2022, we received $1.3 million in full realization on the equity of Energy Labs Holding Corp., resulting in a $0.7 million realized gain.
On April 15, 2022, we invested $6.6 million in the first lien term loan of Anne Lewis Strategies, LLC, an existing portfolio company.
On April 15, 2022, we invested $0.1 million in the equity of Pure TopCo, LLC, an existing portfolio company.
On April 25, 2022 we received full repayment on the first lien term loan of SQAD, LLC for total proceeds of $14.1 million. We also received $2.4 million in full realization on the equity of the company, resulting in a $2.1 million realized gain.
On April 29, 2022, we invested $10.0 million in the first lien term loan and committed $0.1 million in the revolver and $0.1 million in the delayed draw term loan of Florachem Holdings, LLC, a distiller and supplier of natural citrus, pine, and specialty inputs. Additionally, we invested $0.4 million in the equity of the company.
Credit Facility
The outstanding balance under the credit facility as of May 11, 2022 was $204.1 million.
SBA-guaranteed Debentures
The total balance of SBA-guaranteed debentures outstanding as of May 11, 2022 was $290.0 million.
ATM Program
Since March 31, 2022, the Company issued 13,416 shares under the ATM Program, for gross proceeds of $0.2 million and underwriting and other expenses of less than $0.1 million. The average per share offering price of shares issued in the ATM Program subsequent to March 31, 2022 was $14.01. The Advisor agreed to reimburse the Company for underwriting fees and expenses to the extent the issuance of shares would be dilutive in nature. As such, the Advisor reimbursed the Company less than $0.1 which resulted in net proceeds of $0.2 million, or $14.61 per share.
Distributions Declared
On April 19, 2022, our board of directors declared a regular monthly distribution for each of April 2022, May 2022 and June 2022 as follows:
Declared | Ex-Dividend Date | Record Date | Payment Date | Amount per Share | |||||
4/19/2022 | 4/28/2022 | 4/29/2022 | 5/13/2022 | $ | 0.0933 | ||||
4/19/2022 | 5/26/2022 | 5/27/2022 | 6/15/2022 | $ | 0.0933 | ||||
4/19/2022 | 6/29/2022 | 6/30/2022 | 7/15/2022 | $ | 0.0933 | ||||
On April 19, 2022, our board of directors declared a supplemental monthly distribution for each of April 2022, May 2022 and June 2022 as follows:
Declared | Ex-Dividend Date | Record Date | Payment Date | Amount per Share | |||||
4/19/2022 | 4/28/2022 | 4/29/2022 | 5/13/2022 | $ | 0.02 | ||||
4/19/2022 | 5/26/2022 | 5/27/2022 | 6/15/2022 | $ | 0.02 | ||||
4/19/2022 | 6/29/2022 | 6/30/2022 | 7/15/2022 | $ | 0.02 | ||||
Conference Call Information
Stellus Capital Investment Corporation will host a conference call to discuss these results on Thursday, May 12, 2022 at 10:00 AM, Central Daylight 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) 220-8451 (domestic). Use passcode 2120806. Starting approximately two hours after the conclusion of the call, a replay will be available through Friday, May 20, 2022 by dialing (888) 203-1112 and entering passcode 2120806. The replay will also be available on the company's website.
For those wishing to participate via Live Webcast, connect via the Public Company (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, including statements about COVID-19 and its impacts, 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
[email protected]
PART I FINANCIAL INFORMATION | |||||||
STELLUS CAPITAL INVESTMENT CORPORATION | |||||||
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES | |||||||
March 31, | |||||||
2022 | December 31, | ||||||
(Unaudited) | 2021 | ||||||
ASSETS | |||||||
Non-controlled, non-affiliated investments, at fair value | |||||||
(amortized cost of $853,845,723 and $785,005,957, respectively) | $ | 837,991,490 | $ | 772,873,326 | |||
Cash and cash equivalents | 24,630,783 | 44,174,856 | |||||
Receivable for sales and repayments of investments | 558,621 | 536,105 | |||||
Interest receivable | 2,764,672 | 2,944,599 | |||||
Other receivables | 50,495 | 54,752 | |||||
Deferred tax asset | 130,121 | 151,278 | |||||
Deferred offering costs | 41,369 | 14,888 | |||||
Prepaid expenses | 502,255 | 512,214 | |||||
Total Assets | $ | 866,669,806 | $ | 821,262,018 | |||
LIABILITIES | |||||||
Notes payable | $ | 98,213,123 | $ | 98,102,973 | |||
Credit Facility payable | 203,707,297 | 175,451,116 | |||||
SBA-guaranteed debentures | 264,412,047 | 244,615,903 | |||||
Dividends payable | 2,213,037 | 1,171,059 | |||||
Management fees payable | 3,946,938 | 3,454,225 | |||||
Income incentive fees payable | 749,130 | 1,749,130 | |||||
Capital gains incentive fees payable | 3,345,934 | 3,388,151 | |||||
Interest payable | 838,418 | 3,693,662 | |||||
Unearned revenue | 466,995 | 529,726 | |||||
Administrative services payable | 404,688 | 386,368 | |||||
Income tax payable | 2,514,202 | 3,269,514 | |||||
Other accrued expenses and liabilities | 821,596 | 338,958 | |||||
Total Liabilities | $ | 581,633,405 | $ | 536,150,785 | |||
Commitments and contingencies (Note 7) | |||||||
Net Assets | $ | 285,036,401 | $ | 285,111,233 | |||
NET ASSETS | |||||||
Common stock, par value $0.001 per share (100,000,000 shares | |||||||
authorized; 19,532,519 and 19,517,595 issued and outstanding, | |||||||
respectively) | $ | 19,533 | $ | 19,518 | |||
Paid-in capital | 274,726,776 | 274,559,121 | |||||
Accumulated undistributed surplus | 10,290,092 | 10,532,594 | |||||
Net Assets | $ | 285,036,401 | $ | 285,111,233 | |||
Total Liabilities and Net Assets | $ | 866,669,806 | $ | 821,262,018 | |||
Net Asset Value Per Share | $ | 14.59 | $ | 14.61 | |||
STELLUS CAPITAL INVESTMENT CORPORATION | ||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) | ||||||||
For the | For the | |||||||
three | three | |||||||
months ended | months ended | |||||||
March 31, | March 31, | |||||||
2022 | 2021 | |||||||
INVESTMENT INCOME | ||||||||
Interest income | $ | 15,116,951 | $ | 13,512,777 | ||||
Other income | 377,453 | 475,087 | ||||||
Total Investment Income | $ | 15,494,404 | $ | 13,987,864 | ||||
OPERATING EXPENSES | ||||||||
Management fees | $ | 3,492,713 | $ | 2,963,861 | ||||
Valuation fees | 139,588 | 128,353 | ||||||
Administrative services expenses | 474,318 | 453,389 | ||||||
Capital gains incentive (reversal) fees | (42,217) | 83,281 | ||||||
Professional fees | 312,062 | 268,965 | ||||||
Directors' fees | 96,500 | 91,500 | ||||||
Insurance expense | 124,507 | 117,507 | ||||||
Interest expense and other fees | 4,891,597 | 4,323,478 | ||||||
Income tax expense | 279,417 | 239,981 | ||||||
Other general and administrative expenses | 211,736 | 256,918 | ||||||
Total Operating Expenses | $ | 9,980,221 | $ | 8,927,233 | ||||
Net Investment Income | $ | 5,514,183 | $ | 5,060,631 | ||||
Net realized gain on non-controlled, non-affiliated | ||||||||
investments | $ | 3,458,090 | $ | 462,228 | ||||
Net realized loss on foreign currency translation | $ | (7,350) | $ | | ||||
Loss on debt extinguishment | $ | | $ | (539,250) | ||||
Net change in unrealized (depreciation) appreciation | ||||||||
on non-controlled, non-affiliated investments | $ | (3,721,602) | $ | 121,983 | ||||
Provision for taxes on net unrealized appreciation | ||||||||
on investments | $ | (21,157) | $ | (167,804) | ||||
Net Increase in Net Assets | ||||||||
Resulting from Operations | $ | 5,222,164 | $ | 4,937,788 | ||||
Net Investment Income Per Sharebasic and diluted | $ | 0.28 | $ | 0.26 | ||||
Net Increase in Net Assets Resulting | ||||||||
from Operations Per Sharebasic and diluted | $ | 0.27 | $ | 0.25 | ||||
Weighted Average Shares of Common Stock | ||||||||
Outstandingbasic and diluted | 19,517,761 | 19,486,003 | ||||||
Distributions Per Sharebasic and diluted | $ | 0.28 | $ | 0.25 | ||||
STELLUS CAPITAL INVESTMENT CORPORATION | ||||||||||||||
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS | ||||||||||||||
Common Stock | Accumulated | |||||||||||||
Number | Par | Paid-in | undistributed | |||||||||||
of shares | value | capital | surplus (deficit) | Net Assets | ||||||||||
Balances at December 31, 2020 | 19,486,003 | $ | 19,486 | $ | 276,026,667 | $ | (2,685,504) | $ | 273,360,649 | |||||
Net investment income | - | - | - | 5,060,631 | 5,060,631 | |||||||||
Net realized gain on non-controlled, | ||||||||||||||
non-affiliated investments | - | - | - | 462,228 | 462,228 | |||||||||
Loss on debt extinguishment | (539,250) | (539,250) | ||||||||||||
Net change in unrealized appreciation on | ||||||||||||||
non-controlled, non-affiliated investments | - | - | - | 121,983 | 121,983 | |||||||||
Provision for taxes on unrealized appreciation | ||||||||||||||
on investments | - | - | - | (167,804) | (167,804) | |||||||||
Distributions from net investment income | - | - | - | (4,869,552) | (4,869,552) | |||||||||
Balances at March 31, 2021 | 19,486,003 | $ | 19,486 | $ | 276,026,667 | $ | (2,617,268) | $ | 273,428,885 | |||||
Balances at December 31, 2021 | 19,517,595 | $ | 19,518 | $ | 274,559,121 | $ | 10,532,594 | $ | 285,111,233 | |||||
Net investment income | - | - | - | 5,514,183 | 5,514,183 | |||||||||
Net realized gain on non-controlled, | ||||||||||||||
non-affiliated investments | - | - | - | 3,458,090 | 3,458,090 | |||||||||
Net realized loss on foreign currency translation | - | - | - | (7,350) | (7,350) | |||||||||
Net change in unrealized depreciation on | ||||||||||||||
non-controlled, non-affiliated investments | - | - | - | (3,721,602) | (3,721,602) | |||||||||
Provision for taxes on unrealized appreciation | ||||||||||||||
on investments | - | - | - | (21,157) | (21,157) | |||||||||
Distributions from net investment income | - | - | - | (5,464,666) | (5,464,666) | |||||||||
Issuance of common stock, net of offering costs | 14,924 | 15 | 167,655 | - | 167,670 | |||||||||
Balances at March 31, 2022 | 19,532,519 | $ | 19,533 | $ | 274,726,776 | $ | 10,290,092 | $ | 285,036,401 | |||||
STELLUS CAPITAL INVESTMENT CORPORATION | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) | ||||||||
For the | For the | |||||||
three | three | |||||||
months ended | months ended | |||||||
March 31, | March 31, | |||||||
2022 | 2021 | |||||||
Cash flows from operating activities | ||||||||
Net increase in net assets resulting from operations | $ | 5,222,164 | $ | 4,937,788 | ||||
Adjustments to reconcile net increase in net assets | ||||||||
from operations to net cash used in operating activities: | ||||||||
Purchases of investments | (74,535,403) | (93,290,837) | ||||||
Proceeds from sales and repayments of investments | 10,008,127 | 33,473,269 | ||||||
Net change in unrealized depreciation (appreciation) on investments | 3,721,602 | (121,983) | ||||||
Increase in investments due to PIK | (330,111) | (118,329) | ||||||
Amortization of premium and accretion of discount, net | (546,806) | (521,051) | ||||||
Deferred tax provision | 21,157 | 167,804 | ||||||
Amortization of loan structure fees | 133,262 | 114,583 | ||||||
Amortization of deferred financing costs | 83,670 | 122,460 | ||||||
Amortization of loan fees on SBA-guaranteed debentures | 283,144 | 233,814 | ||||||
Net realized gain on investments | (3,458,090) | (455,560) | ||||||
Loss on debt extinguishment | | 539,250 | ||||||
Changes in other assets and liabilities | ||||||||
Increase in interest receivable | 179,927 | 37,231 | ||||||
Increase in other receivables | 4,257 | | ||||||
Increase in prepaid expenses | 9,959 | 30,873 | ||||||
Increase (decrease) in management fees payable | 492,713 | (861,461) | ||||||
Decrease in income incentive fees payable | (1,000,000) | (559,161) | ||||||
(Decrease) increase in capital gains incentive fees payable | (42,217) | 83,281 | ||||||
Increase (decrease) in administrative services payable | 18,320 | (2,486) | ||||||
Decrease in interest payable | (2,855,244) | (318,658) | ||||||
Decrease in unearned revenue | (62,731) | (48,202) | ||||||
Decrease in income tax payable | (755,312) | (632,039) | ||||||
Increase in other accrued expenses and liabilities | 482,638 | 137,090 | ||||||
Net Cash Used In Operating Activities | $ | (62,924,974) | $ | (57,052,324) | ||||
Cash flows from Financing Activities | ||||||||
Proceeds from the issuance of common stock | $ | 221,176 | $ | | ||||
Sales load for commons stock issued | (3,137) | | ||||||
Offering costs paid for common stock issued | (50,369) | | ||||||
Stockholder distributions paid | (4,422,688) | (3,246,365) | ||||||
Repayment of Notes | | (48,875,000) | ||||||
Proceeds from issuance of Notes | | 100,000,000 | ||||||
Financing costs paid on Notes | | (2,238,553) | ||||||
Proceeds from SBA-guaranteed debentures | 20,000,000 | 33,500,000 | ||||||
Financing costs paid on SBA-guaranteed debentures | (487,000) | (1,615,725) | ||||||
Financing costs paid on Credit facility | (25,881) | | ||||||
Borrowings under Credit Facility | 57,388,800 | 113,300,000 | ||||||
Repayments of Credit Facility | (29,240,000) | (121,800,000) | ||||||
Net Cash Provided by Financing Activities | $ | 43,380,901 | $ | 69,024,357 | ||||
Net (Decrease) Increase in Cash and Cash Equivalents | $ | (19,544,073) | $ | 11,972,033 | ||||
Cash and Cash Equivalents balance at beginning of period | 44,174,856 | 18,477,602 | ||||||
Cash and Cash Equivalents Balance at End of Period | $ | 24,630,783 | $ | 30,449,635 | ||||
Supplemental and Non-Cash Activities | ||||||||
Cash paid for interest expense | $ | 7,216,009 | $ | 4,166,438 | ||||
Income and excise tax paid | 1,034,730 | 870,000 | ||||||
Increase in dividends payable | 1,041,978 | 1,623,187 | ||||||
Increase (decrease) in deferred offering costs | 26,481 | (90,000) | ||||||
Gain on conversion of equity investment | | 6,668 | ||||||
Reconciliation of Core Net Investment Income (1) | ||||
(Unaudited) | ||||
Quarter | Quarter | |||
ended | ended | |||
March 31, 2022 | March 31, 2021 | |||
Net investment income | $5,514,183 | $5,060,631 | ||
Capital gains incentive fee | (42,217) | 83,281 | ||
Income tax expense | 279,417 | 239,981 | ||
Core net investment income | $5,751,383 | $5,383,893 | ||
Per share amounts: | ||||
Net investment income per share | $0.28 | $0.26 | ||
Core net investment income per share | $0.29 | $0.28 | ||
Reconciliation of Realized Net Investment Income (2) | ||||
(Unaudited) | ||||
Quarter | Quarter | |||
ended | ended | |||
March 31, 2022 | March 31, 2021 | |||
Net investment income | $5,514,183 | $5,060,631 | ||
Net realized gain on investments | 3,458,090 | 462,228 | ||
Net realized loss on foreign currency translation | (7,350) | | ||
Loss on debt extinguishment | | (539,250) | ||
Total Realized Net Investment Income | $8,964,923 | $4,983,609 | ||
Per share amounts: | ||||
Net investment income per share | $0.28 | $0.26 | ||
Realized net investment income per share | $0.46 | $0.25 | ||
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SOURCE Stellus Capital Investment Corporation