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HOUSTON, Aug. 3, 2022 /PRNewswire/ — Stellus Capital Funding Company (NYSE: SCM) (“Stellus” or “the Firm”) right now introduced monetary outcomes for its second fiscal quarter ended June 30, 2022.
Robert T. Ladd, Chief Government Officer of Stellus, acknowledged, “I’m happy to report constructive outcomes for the second quarter, by which we greater than coated our common dividend with GAAP and Core web funding revenue, grew our portfolio to $852 million at truthful worth, upsized our financial institution credit score facility to $265 million and maintained asset high quality. We’re benefitting from the rising rate of interest setting as our mortgage portfolio’s yield has now risen 80 foundation factors from the top of the primary quarter. In July, along with our common dividend of $0.28 per quarter within the combination, our Board of Administrators declared an extra combination dividend of $0.06 for the third quarter. These dividends complete $0.34 per share within the combination, payable in month-to-month increments, for the third quarter.”
FINANCIAL HIGHLIGHTS
($ in tens of millions, besides knowledge regarding per share quantities and shares excellent)
|
Quarter Ended |
Six Months Ended |
|||||
|
June 30, 2022 |
June 30, 2022 |
|||||
|
Quantity |
Per Share |
Quantity |
Per Share |
|||
|
Internet funding revenue |
$6.17 |
$0.32 |
$11.69 |
$0.60 |
||
|
Core web funding revenue (1) |
5.62 |
0.29 |
11.37 |
0.58 |
||
|
Internet realized positive factors on investments |
(0.35) |
(0.02) |
3.11 |
0.16 |
||
|
Internet realized loss on overseas foreign money |
– |
– |
(0.01) |
– |
||
|
Complete realized revenue(2) |
5.82 |
0.30 |
14.79 |
0.76 |
||
|
Distributions |
(6.64) |
(0.34) |
(12.11) |
(0.62) |
||
|
Internet unrealized depreciation on investments |
(4.29) |
(0.22) |
(8.01) |
(0.41) |
||
|
Internet unrealized depreciation on overseas foreign money translation |
(0.04) |
– |
(0.04) |
– |
||
|
Provision for taxes on unrealized appreciation on investments in taxable subsidiaries |
(0.16) |
(0.01) |
(0.18) |
(0.01) |
||
|
Internet enhance in web belongings ensuing from operations |
$1.34 |
0.07 |
$6.56 |
0.34 |
||
|
Weighted common shares excellent |
19,543,117 |
19,530,509 |
||||
|
(1) |
Core web funding revenue, as introduced, excludes the impression of capital positive factors incentive charges and revenue taxes, nearly all of that are excise taxes. The Firm believes presenting core web funding revenue and the associated per share quantity is a helpful supplemental disclosure for analyzing its monetary efficiency. Nevertheless, core web funding revenue is a non-U.S. GAAP measure and shouldn’t be thought-about as a alternative for web funding revenue and different earnings measures introduced in accordance with U.S. GAAP. A reconciliation of web funding revenue in accordance with U.S. GAAP to core web funding revenue is introduced within the desk beneath the monetary statements. |
|
(2) |
Complete realized revenue is the sum of web funding revenue, web realized positive factors (losses) on investments, web realized positive factors (losses) on overseas foreign money, and loss on debt extinguishment; all U.S. GAAP measures. |
PORTFOLIO ACTIVITY
($ in tens of millions, besides knowledge regarding per share quantities and variety of portfolio firms)
|
As of |
As of |
||||
|
June 30, |
December 31, |
||||
|
2022 |
2021 |
||||
|
Investments at truthful worth |
$852.00 |
$772.9 |
|||
|
Complete belongings |
$882.90 |
$821.3 |
|||
|
Internet belongings |
$279.90 |
$285.1 |
|||
|
Shares excellent |
19,545,935 |
19,517,595 |
|||
|
Internet asset worth per share |
$14.32 |
$14.61 |
|||
|
Quarter Ended |
Six Months Ended |
||||
|
June 30, |
June 30, |
||||
|
2022 |
2022 |
||||
|
New investments |
$67.6 |
$142.1 |
|||
|
Repayments of investments |
(48.2) |
(58.2) |
|||
|
Internet exercise |
$19.4 |
$83.9 |
|||
|
As of |
As of |
||||
|
June 30, |
December 31, |
||||
|
2022 |
2021 |
||||
|
Variety of portfolio firm investments |
83 |
73 |
|||
|
Variety of debt investments |
70 |
58 |
|||
|
Weight common yield of debt and different revenue producing investments (3) |
|||||
|
Money |
7.9 % |
7.4 % |
|||
|
Cost-in-kind (“PIK”) |
0.2 % |
0.2 % |
|||
|
Charge amortization |
0.4 % |
0.4 % |
|||
|
Complete |
8.5 % |
8.0 % |
|||
|
Weighted common yield on complete investments (4) |
|||||
|
Money |
7.4 % |
6.9 % |
|||
|
Cost-in-kind (“PIK”) |
0.2 % |
0.2 % |
|||
|
Charge amortization |
0.4 % |
0.4 % |
|||
|
Complete |
8.0 % |
7.5 % |
|||
|
(3) |
The dollar-weighted common annualized efficient yield is computed utilizing the efficient rate of interest for our debt investments and different revenue producing investments, together with money and PIK curiosity, in addition to the accretion of deferred charges. The person funding yields are then weighted by the respective value of the investments (as of the date introduced) in calculating the weighted common efficient yield of the portfolio. The dollar-weighted common annualized yield on the Firm’s investments for a given interval will usually be greater than what buyers of our frequent inventory would understand in a return over the identical interval as a result of the dollar-weighted common annualized yield doesn’t replicate the Firm’s expense or any gross sales load which may be paid by buyers. |
|
(4) |
The greenback weighted common yield on complete investments takes the identical yields as calculated within the footnote above, however weights them to find out the weighted common efficient yield as a proportion of the Firm’s complete investments, together with non-income producing loans and fairness. |
Outcomes of Operations
Funding revenue for the three months ended June 30, 2022 and 2021 totaled $16.1 million and $15.1 million, respectively, most of which was curiosity revenue from portfolio investments.
Working bills for the three months ended June 30, 2022 and 2021, totaled $9.9 million and $9.6 million, respectively. For a similar respective durations, base administration charges totaled $3.7 million and $3.Three million, revenue incentive charges totaled $0.0 and $0.1 million, capital positive factors incentive charges (reversal) totaled ($1.0) million and $0.Zero million, charges and bills associated to our borrowings totaled $5.5 million and $4.7 million (together with curiosity and amortization of deferred financing prices), administrative bills totaled $0.5 million for each durations, revenue tax totaled $0.Four million and $0.Three million and different bills totaled $0.Eight million and $0.7 million.
Internet funding revenue was $6.2 million and $5.5 million, or $0.32 and $0.28 per frequent share based mostly on weighted common frequent shares excellent for the three months ended June 30, 2022 and 2021 of 19,543,117 and 19,486,003, respectively.
The capital positive factors incentive price had a reversal of ($1.0) million for the three months ended June 30, 2022 as a result of lower in web realized and unrealized positive factors over the quarter. Such charges, as calculated and accrued, wouldn’t essentially be payable below the funding advisory settlement, and should by no means be paid based mostly upon the computation of incentive charges in subsequent durations. The revenue tax expense accrual of $0.Four million for the three months ended June 30, 2022 was accrued based mostly on estimates of undistributed taxable revenue, which was generated largely from web revenue. Core web funding revenue, which is a non-U.S. GAAP measure that excludes these accruals, for the three months ended June 30, 2022 was $5.6 million, or $0.29 per share; and for the three months ended June 30, 2021 was $5.Eight million, or $0.30 per share.
The Firm’s funding portfolio had a web change in unrealized (depreciation) appreciation for the three months ended June 30, 2022 and 2021, of ($4.3) million and $1.7 million, respectively. For the three months ended June 30, 2022 and 2021, the Firm had realized losses of ($0.4) million and ($1.8) million, respectively.
Internet enhance in web belongings ensuing from operations totaled $1.Three million and $5.6 million, or $0.07 and $0.29 per frequent share, based mostly on weighted common frequent shares excellent for the three months ended June 30, 2022 and 2021 of 19,543,117 and 19,486,003, respectively.
Liquidity and Capital Assets
As of June 30, 2022, our amended and restated senior secured revolving credit score settlement with sure financial institution lenders and Zions Bancorporation, N.A. dba Amegy Financial institution, as administrative agent (as amended infrequently, the “Credit score Facility”) supplied for borrowings in an combination quantity of as much as $265.Zero million on a dedicated foundation. As of June 30, 2022 and 2021, the Credit score Facility had an accordion characteristic which allowed for potential future growth of the power dimension to $280.Zero million. As of June 30, 2022 and December 31, 2021, we had $203.6 million and $177.Three million in excellent borrowings below the Credit score Facility, respectively.
Distributions
In the course of the three months ended June 30, 2022 and 2021, we declared combination distributions of $0.34 per share and $0.25 per share ($6.6 million and $4.9 million, respectively) for every quarter. Tax traits of all distributions will likely be reported to stockholders on Type 1099-DIV after the top of the calendar 12 months. None of those dividends are anticipated to incorporate a return of capital.
Latest Portfolio Exercise
On April 1, 2022, we invested $0.1 million within the first lien time period mortgage and dedicated $0.1 million within the revolver of Worldwide Designs Group LLC, a regional distributor, vendor, and customized fabricator of high-end ceramic and stone tile merchandise and equipment. Moreover, we invested $0.1 million within the fairness of the corporate.
On April 1, 2022, we invested $0.1 million within the first lien time period mortgage and dedicated $0.1 million within the revolver of Tilley Chemical Firm, Inc., a distributor of specialty chemical compounds, oils, and lubricants into the meals & beverage, lubricants, taste and fragrances, private care, and different chemical compounds end-markets.
On April 4, 2022, we invested $11.Three million within the first lien time period mortgage and dedicated $0.1 million within the revolver of Microbe Formulation LLC, a supplier of dietary dietary supplements and different pure options for detox and intestine well being.
On April 7, 2022, we obtained $1.Three million in full realization on the fairness of Vitality Labs Holding Corp., leading to a $0.7 million realized achieve.
On April 15, 2022, we invested $6.6 million within the first lien time period mortgage of Anne Lewis Methods, LLC, an current portfolio firm.
On April 15, 2022, we invested $0.1 million within the fairness of Pure TopCo, LLC, an current portfolio firm.
On April 25, 2022, we obtained full reimbursement on the primary lien time period mortgage of SQAD, LLC for complete proceeds of $14.1 million. We additionally obtained $2.Four million in full realization on the fairness of the corporate, leading to a $2.1 million realized achieve.
On April 29, 2022, we invested $10.Zero million within the first lien time period mortgage and dedicated $0.1 million within the revolver and $0.1 million within the delayed draw time period mortgage of Florachem Holdings, LLC, a distiller and provider of pure citrus, pine, and specialty inputs. Moreover, we invested $0.Four million within the fairness of the corporate.
On Might 17, 2022, we invested $0.1 million within the first lien time period mortgage and dedicated $0.1 million within the revolver of AIP ATCO Purchaser, LLC, a supplier of high quality assurance companies for automotive OEMs and suppliers.
On Might 20, 2022, we invested $0.1 million within the fairness of TradePending Holdings, LLC, an current portfolio firm.
On Might 24, 2022, we invested $0.1 million within the first lien time period mortgage and dedicated €0.1 million euro within the revolver and €0.1 million euro within the delayed draw time period mortgage of Monitorus Holding, LLC, a supplier of media monitoring and analysis companies.
On June 1, 2022, we invested $0.1 million within the fairness of PCP MT Aggregator Holdings, L.P., an current portfolio firm.
On June 6, 2022, we invested $13.Eight million within the first lien time period mortgage and dedicated $0.1 million within the revolver of Lightning Intermediate II, LLC, a nutritional vitamins, minerals, and dietary supplements model. Moreover, we invested $0.Four million within the fairness of the corporate.
On June 15, 2022, we invested $0.Three million within the fairness of ADS Group Topco, LLC, an current portfolio firm.
On June 15, 2022, we invested $0.9 million within the first lien time period mortgage of SIB Holdings, LLC, an current portfolio firm.
On June 24, 2022, we obtained full reimbursement on the primary lien time period loans of Grupo HIMA San Pablo, Inc. for complete proceeds of $0.7 million, leading to a $3.9 million realized loss.
On June 27, 2022, we invested $0.Three million within the fairness of HV GS Acquisition, LP, an current portfolio firm.
On June 30, 2022, we invested $0.1 million within the fairness of HV Acquisition VI, LLC, an current portfolio firm.
On June 30, 2022, we invested $0.1 million within the fairness of Tower Arch Infolinks Media, LP, an current portfolio firm.
Occasions Subsequent to June 30, 2022
On July 1, 2022, we invested $0.1 million within the first lien time period mortgage and dedicated $0.1 million within the revolver of Warmth Makes Sense Shared Companies, LLC, a branded haircare platform. Moreover, we invested $0.1 million within the fairness of the corporate.
On July 5, 2022, we invested $13.9 million within the first lien time period mortgage Baker Manufacturing Firm, LLC, a producer of water effectively gear, specialised filtration pumps, and customized castings. Moreover, we invested $0.7 million within the fairness of the corporate.
On July 15, 2022, we obtained full reimbursement on the primary lien time period mortgage and revolver of Worldwide Designs Group, LLC for complete proceeds of $0.1 million.
On July 15, 2022, we obtained full reimbursement on the primary lien time period mortgage of ASC Communications, LLC for complete proceeds of $8.2 million. We additionally obtained $1.Eight million in full realization on the fairness of the corporate, leading to a $1.Eight million realized achieve.
On July 15, 2022, we invested $1.Zero million within the first lien time period mortgage of Exacta Land Surveyors, LLC, an current portfolio firm. Moreover, we invested $0.1 million within the fairness of the corporate.
On July 20, 2022, we invested $2.2 million within the first lien time period mortgage of SIB Holdings, LLC, an current portfolio firm.
On July 28, 2022, we invested $0.1 million within the fairness of USASF Blocker IV LLC, an current portfolio firm.
On July 29, 2022, we invested $13.Zero million within the first lien time period mortgage and dedicated $0.1 million within the revolver and $0.1 million within the delayed draw time period mortgage of a supplier of product testing and client insights. Moreover, we invested $0.7 million within the fairness of the corporate.
Credit score Facility
The excellent steadiness below the credit score facility as of August 3, 2022 was $198.2 million.
SBA-guaranteed Debentures
On July 1, 2022, the Firm contributed $5.Zero million in capital to its SBIC II subsidiary. Up to now, the Firm has contributed $78.Zero million of its $87.5 million regulatory capital dedication. The whole steadiness of SBA-guaranteed debentures excellent as of August 3, 2022 was $300.Zero million.
Distributions Declared
On July 13, 2022, our board of administrators declared a daily month-to-month distribution for every of July, August, and September 2022 as follows:
|
Ex-Dividend |
Report |
Cost |
Quantity per |
||||||
|
Declared |
Date |
Date |
Date |
Share |
|||||
|
7/13/2022 |
7/28/2022 |
7/29/2022 |
8/15/2022 |
$ |
0.0933 |
||||
|
7/13/2022 |
8/30/2022 |
8/31/2022 |
9/15/2022 |
$ |
0.0933 |
||||
|
7/13/2022 |
9/29/2022 |
9/30/2022 |
10/14/2022 |
$ |
0.0933 |
||||
On July 13, 2022, our board of administrators declared an extra month-to-month distribution for every of July, August, and September 2022 as follows:
|
Ex-Dividend |
Report |
Cost |
Quantity per |
||||||
|
Declared |
Date |
Date |
Date |
Share |
|||||
|
7/13/2022 |
7/28/2022 |
7/29/2022 |
8/15/2022 |
$ |
0.02 |
||||
|
7/13/2022 |
8/30/2022 |
8/31/2022 |
9/15/2022 |
$ |
0.02 |
||||
|
7/13/2022 |
9/29/2022 |
9/30/2022 |
10/14/2022 |
$ |
0.02 |
||||
Convention Name Info
Stellus Capital Funding Company will host a convention name to debate these outcomes on Thursday, August 4, 2022 at 11:00 AM, Central Daylight Time. The convention name will likely be led by Robert T. Ladd, chief govt officer, and W. Todd Huskinson, chief monetary officer, chief compliance officer, treasurer, and secretary.
For these wishing to take part by phone, please dial (888) 394-8218. Use passcode 9390038. Beginning roughly two hours after the conclusion of the decision, a replay will likely be obtainable by way of Friday, August 12, 2022 by dialing (888) 203-1112 and coming into passcode 9390038. The replay may also be obtainable on the corporate’s web site.
For these wishing to take part through Stay Webcast, join through the Public Firm (SCIC) part of our web site at www.stelluscapital.com, below the Occasions tab. A replay of the convention will likely be obtainable on our web site for roughly 90 days.
About Stellus Capital Funding Company
The Firm is an externally-managed, closed-end, non-diversified funding administration firm that has elected to be regulated as a enterprise improvement firm below the Funding Firm Act of 1940, as amended. The Firm’s funding goal is to maximise the overall return to its stockholders within the type of present revenue and capital appreciation by investing primarily in non-public middle-market firms (sometimes these with $5.Zero million to $50.Zero million of EBITDA (earnings earlier than curiosity, taxes, depreciation and amortization)) by way of first lien (together with unitranche) loans, second lien loans and unsecured debt financing, with corresponding fairness co-investments. The Firm’s funding actions are managed by its funding adviser, Stellus Capital Administration. To be taught extra about Stellus Capital Funding Company, go to www.stelluscapital.com below the “Public (SCIC)” tab.
Ahead-Wanting Statements
Statements included herein might include “forward-looking statements” which relate to future efficiency or monetary situation. Statements aside from statements of historic details included on this press launch, together with statements about COVID-19 and its impacts, might represent forward-looking statements and usually are not ensures of future efficiency or outcomes and contain plenty of assumptions, dangers and uncertainties, which change over time. Precise outcomes might differ materially from these anticipated in any forward-looking statements because of plenty of components, together with these described infrequently in filings by the Firm with the Securities and Alternate Fee together with the ultimate prospectus that will likely be filed with the Securities and Alternate Fee. The Firm undertakes no responsibility to replace any forward-looking assertion made herein. All forward-looking statements communicate solely as of the date of this press launch.
Contacts
Stellus Capital Funding Company
W. Todd Huskinson, Chief Monetary Officer
(713) 292-5414
thuskinson@stelluscapital.com
|
STELLUS CAPITAL INVESTMENT CORPORATION CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES |
|||||||
|
June 30, |
|||||||
|
2022 |
December 31, |
||||||
|
(unaudited) |
2021 |
||||||
|
ASSETS |
|||||||
|
Non-controlled, non-affiliated investments, at truthful worth (amortized value of $873,575,942 and $785,005,957, respectively) |
$ |
852,000,318 |
$ |
772,873,326 |
|||
|
Money and money equivalents |
26,462,108 |
44,174,856 |
|||||
|
Receivable for gross sales and repayments of investments |
770,998 |
536,105 |
|||||
|
Curiosity receivable |
2,973,110 |
2,944,599 |
|||||
|
Different receivables |
177,533 |
54,752 |
|||||
|
Deferred tax asset |
— |
151,278 |
|||||
|
Associated social gathering receivable |
187,132 |
— |
|||||
|
Deferred providing prices |
89,158 |
14,888 |
|||||
|
Pay as you go bills |
286,039 |
512,214 |
|||||
|
Complete Property |
$ |
882,946,396 |
$ |
||||
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