Core Points - Stellus Capital Investment Corporation has declared a monthly dividend of $0.1333 for January, February, and March 2025, totaling $0.40 per share for the first quarter [1] - The regular dividend will be paid to shareholders of record in February, March, and April 2025 [1] Dividend Summary - The ex-dividend date for the January dividend is January 31, 2025, with a payment date of February 14, 2025 [2] - The ex-dividend date for the February dividend is February 28, 2025, with a payment date of March 14, 2025 [2] - The ex-dividend date for the March dividend is March 31, 2025, with a payment date of April 15, 2025 [2] Company Overview - Stellus Capital Investment Corporation is an externally-managed, closed-end, non-diversified investment management company regulated as a business development company under the Investment Company Act of 1940 [3] - The company's investment objective is to maximize total return to stockholders through current income and capital appreciation by investing primarily in private middle-market companies with EBITDA between $5.0 million and $50.0 million [3] - Investment strategies include first lien, second lien, unitranche, and mezzanine debt financing, along with corresponding equity investments [3]

Core Insights - The article emphasizes the importance of innovation and disruption in the financial sector, particularly focusing on high-tech and early growth companies [1] Company and Industry Summary - The financial researcher highlights a beneficial long position in SCM shares, indicating confidence in the company's future performance [2] - The article aims to provide insights into current events and significant news within the industry, suggesting a proactive approach to identifying investment opportunities [1]

Financial Data and Key Metrics Changes - In Q3 2024, the company generated GAAP net investment income of $0.39 per share and core net investment income of $0.40 per share, which excludes estimated excise taxes [7] - Net asset value per share increased by $0.19 during the quarter, primarily due to net unrealized depreciation on the investment portfolio [7] - The investment portfolio at fair value was $908.7 million, up from $899.7 million as of June 30, 2024 [8] Business Line Data and Key Metrics Changes - The company invested $9.4 million in one new portfolio company and had $8.4 million in other investment activity at par during the third quarter [8] - The company received one full repayment totaling $8.4 million and $5.5 million of other repayments, both at par [8] - 98% of loans were secured and 95% were priced at floating rates, with an average loan per company of $9.5 million [8] Market Data and Key Metrics Changes - The company expects to end Q4 with a portfolio between $930 million and $950 million, with anticipated loan repayments of approximately $29 million [10] - The average yield is projected to decrease from 11.7% in the prior quarter to 11% for Q4 due to lower SOFR rates [15] Company Strategy and Development Direction - The company plans to grow its portfolio to over $1 billion, supported by an increased bank facility from $260 million to $315 million [11] - The company declared a dividend for Q4 at a rate of $0.40 per quarter, payable monthly [11] Management's Comments on Operating Environment and Future Outlook - Management noted that the lower SOFR rate impacted net investment income, and they expect investment activity to pick up in Q4 [13][14] - The company is confident in reaching the $930 million to $950 million portfolio target by year-end, citing 10 to 15 active deals [25] Other Important Information - The company has paid over $273 million in dividends since its IPO, representing $16.28 per share to an investor in the IPO [6] - Spillover income stands at $42 million as of the end of Q3 [22] Q&A Session Summary Question: Was there any temporary driver for NII being below the dividend this quarter? - Management indicated that a lower SOFR rate and lighter investment activity contributed to the lower NII, but nothing unusual was noted [13] Question: Is the current EPS run rate sustainable? - Management suggested that the EPS run rate would depend on other income in Q4, with a reminder that SOFR rates have dropped [15] Question: What is the status of the fee waiver? - Management indicated that a fee waiver might occur in Q2 2025, depending on future performance [19] Question: What is the spillover income? - Spillover income currently stands at $42 million [20] Question: Will the appreciation tied to a potential transaction occur in Q4? - Management confirmed that the expected appreciation is anticipated to occur in Q4 [21] Question: How confident is the company in reaching the $930 million to $950 million target? - Management expressed confidence, citing 10 to 15 active deals [25]

Financial Performance - Stellus Capital reported quarterly earnings of $0.40 per share, missing the Zacks Consensus Estimate of $0.46 per share, and down from $0.49 per share a year ago, representing an earnings surprise of -13.04% [1] - The company posted revenues of $26.5 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 3.14%, and down from $27.17 million year-over-year [2] - The current consensus EPS estimate for the coming quarter is $0.42 on revenues of $27.62 million, and for the current fiscal year, it is $1.84 on revenues of $107.6 million [7] Market Performance - Stellus Capital shares have increased by approximately 7.9% since the beginning of the year, while the S&P 500 has gained 24.3% [3] - The company has surpassed consensus EPS estimates two times over the last four quarters and topped consensus revenue estimates three times during the same period [2] Earnings Outlook - The estimate revisions trend for Stellus Capital is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] - The sustainability of the stock's immediate price movement will depend on management's commentary during the earnings call and future earnings expectations [3][4] Industry Context - Stellus Capital operates within the Financial - SBIC & Commercial Industry, which is currently ranked in the bottom 27% of over 250 Zacks industries, suggesting potential challenges ahead [8] - The performance of Stellus Capital may be influenced by the overall outlook for the industry, as research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]

Core Insights - Stellus Capital Investment Corporation reported solid operating results for the fiscal quarter ended September 30, 2024, with U.S. GAAP net investment income of $0.39 per share and core net investment income of $0.40 per share, covering the declared regular dividend of $0.40 per share [1][4] - The net asset value per share increased by $0.19 from the previous quarter, reaching $13.55 [1][12] - The company has increased its capital base by $55 million through the upsizing of its Credit Facility to $315 million [1][10] Financial Highlights - For the three months ended September 30, 2024, net investment income was $10.26 million, down from $10.82 million in the same period of 2023, with per share amounts of $0.39 and $0.47 respectively [2][4] - Core net investment income for the same period was $10.62 million, compared to $11.16 million in 2023, with per share amounts of $0.40 and $0.49 respectively [2][4] - Total realized income for the quarter was $6.94 million, down from $11.40 million in the prior year [2][4] Portfolio Activity - As of September 30, 2024, the company had investments at fair value totaling $908.7 million, an increase from $874.5 million at the end of 2023 [3] - The total assets increased to $957.1 million from $908.1 million [3] - The company made new investments totaling $17.8 million during the quarter, while repayments of investments amounted to $15.5 million, resulting in net activity of $2.3 million [3] Investment Income and Expenses - Investment income for the three months ended September 30, 2024, was $26.5 million, compared to $27.2 million in the same period of 2023 [4][13] - Gross operating expenses for the quarter were $16.2 million, slightly down from $16.3 million in the previous year [4][13] - The company declared aggregate distributions of $0.40 per share for both the current and prior year periods, totaling $10.6 million and $9.3 million respectively [4][9] Recent Developments - The company has continued to invest in various portfolio companies, with notable investments including PCS Software, Trade Education Acquisition, and Bart & Associates during the quarter [5][6] - Subsequent to September 30, 2024, the company made additional investments in Compost 360 Investments and Norplex Micarta Acquisition, totaling $13.05 million [7][10]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NUMBER: 814-00971 STELLUS CAPITAL INVESTMENT CORPORATION (Exact Name of Registrant as Specified in Its Charter) Maryland 46-0937320 (State or Other Jur ...

HOUSTON, Oct. 30, 2024 /PRNewswire/ -- Stellus Capital Investment Corporation (NYSE: SCM) will release its financial results for the third quarter ended September 30, 2024 on Thursday, November 7, 2024, after the close of the stock market. 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, C ...

HOUSTON, Oct. 10, 2024 /PRNewswire/ -- Stellus Capital Investment Corporation (the "Company") (NYSE: SCM) announced that its Board of Directors has declared a monthly dividend of $0.1333 for each of October, November, and December, totaling $0.40 per share in the aggregate for the fourth quarter of 2024. The regular dividend of $0.40 per share will be paid to shareholders of record in November and December 2024, and January 2025. Summary of Fourth Quarter 2024 Regular Monthly Dividends Declared Ex-Dividend ...

imagedepotpro Overview I previously covered Stellus Capital Investment Corporation (NYSE:SCM) back in May and issued a hold rating due to the price trading at a high premium to net asset value. The total return since my last article has lagged the S&P 500 due to a bit of a price pullback. Now that the price has retracted a bit, I wanted to revisit to provide some updated insights regarding the financials and valuation. I also wanted to share some thoughts around the changing interest rate environment and wh ...

Henrik Sorensen Stellus Capital Investment Corporation (NYSE:SCM) offers passive income investors a very well-covered 12% dividend yield that is paid on a monthly installment basis. The business development company has had a fairly stable dividend pay-out ratio in the last twelve months, and Stellus Capital Investment originated a solid amount of new investments in the last quarter. SCM is paying passive income investors a robust yield and though the BDC has seen an increase in its non-accrual ratio in the ...