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Stellus Capital Investment Corporation Reports Results for its Third Fiscal Quarter Ended September 30, 2024
Prnewswire· 2024-11-07 23:09
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]
Stellus Capital (SCM) Tops Q2 Earnings and Revenue Estimates
ZACKS· 2024-08-07 23:25
Stellus Capital (SCM) came out with quarterly earnings of $0.50 per share, beating the Zacks Consensus Estimate of $0.44 per share. This compares to earnings of $0.51 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 13.64%. A quarter ago, it was expected that this investment company would post earnings of $0.46 per share when it actually produced earnings of $0.44, delivering a surprise of -4.35%. Over the last four quarters, ...
Stellus Capital Investment Corporation Reports Results for its Second Fiscal Quarter Ended June 30, 2024
Prnewswire· 2024-08-07 20:17
Core Insights - Stellus Capital Investment Corporation reported solid operating results for Q2 2024, with U.S. GAAP net investment income of $0.48 per share and core net investment income of $0.50 per share, covering the declared dividend of $0.40 per share [1][4] - The loan portfolio yielded 11.7% as of June 30, 2024, with total distributions to investors amounting to $262 million over the company's 11 years of operation [1][4] Financial Highlights - Net investment income for Q2 2024 was $11.79 million, compared to $10.41 million in Q2 2023, with per share amounts of $0.48 and $0.49 respectively [2][4] - Core net investment income for Q2 2024 was $12.37 million, or $0.50 per share, down from $10.79 million, or $0.51 per share in Q2 2023 [2][4] - Total realized income for Q2 2024 was $13.75 million, with a per share amount of $0.55, compared to $10.09 million and $0.48 per share in Q2 2023 [2] - The company declared distributions of $0.40 per share for both Q2 2024 and Q2 2023, totaling $10.0 million and $8.7 million respectively [4] Portfolio Activity - As of June 30, 2024, investments at fair value totaled $899.7 million, up from $874.5 million at the end of 2023 [3] - The company made new investments totaling $66.3 million in Q2 2024, compared to $46.5 million in Q2 2023 [3] - The number of portfolio company investments increased to 100 from 93, with debt investments rising to 87 from 81 [3] Liquidity and Capital Resources - As of June 30, 2024, the company had $169.4 million in outstanding borrowings under its credit facility, compared to $160.1 million at the end of 2023 [4] - The company issued 1,855,356 shares under its At-the-Market Program during Q2 2024, raising gross proceeds of $25.8 million at an average price of $13.89 per share [4] Recent Developments - The company declared regular monthly distributions of $0.1333 per share for July, August, and September 2024 [9] - Subsequent to June 30, 2024, the company made an add-on investment of $9,995 in PCS Software, Inc. on July 31, 2024 [8]
Stellus Capital Investment Corporation Schedules Second Quarter 2024 Financial Results Conference Call
Prnewswire· 2024-08-01 02:07
HOUSTON, July 31, 2024 /PRNewswire/ -- Stellus Capital Investment Corporation (NYSE: SCM) will release its financial results for the second quarter ended June 30, 2024 on Wednesday, August 7, 2024, after the close of the stock market. Stellus Capital Investment Corporation will host a conference call to discuss these results on Thursday, August 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 ...
Stellus Capital Investment Corporation Announces $0.40 Third Quarter 2024 Regular Dividend, Payable Monthly in Increments of $0.1333 in August, September, and October 2024
Prnewswire· 2024-07-12 03:19
Core Points - Stellus Capital Investment Corporation has declared a monthly dividend of $0.1333 for July, August, and September 2024, totaling $0.40 per share for the third quarter [1][4] - The regular dividend will be paid to shareholders of record in August, September, and October 2024 [1][4] Dividend Summary - Declared Ex-Dividend Date: July 31, 2024; Record Date: July 31, 2024; Payment Date: August 15, 2024; Amount per Share: $0.1333 [4] - Declared Ex-Dividend Date: August 30, 2024; Record Date: August 30, 2024; Payment Date: September 13, 2024; Amount per Share: $0.1333 [4] - Declared Ex-Dividend Date: September 30, 2024; Record Date: September 30, 2024; Payment Date: October 15, 2024; Amount per Share: $0.1333 [4] 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 [4] - 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 [4] - Investment strategies include first lien, second lien, unitranche, and mezzanine debt financing, along with corresponding equity investments [4]
Stellus Capital: This 12% Yield Is Too Good To Miss
Seeking Alpha· 2024-06-04 12:41
PM Images Stellus Capital Investment Corporation (NYSE:SCM) is a solid buy for passive income on the pullback, in my view. The business development company covered its dividend with net investment income in 1Q24 and though the pay-out ratio has risen QoQ, I think that the dividend is reasonably safe, particularly in a moderate inflation environment that incentivizes the central bank to keep interest rates steady at the present level. As Stellus Capital Investment also exposed to a high percentage of floatin ...
Stellus Capital Investment (SCM) - 2024 Q1 - Earnings Call Transcript
2024-05-10 20:51
Stellus Capital Investment Corporation (NYSE:SCM) Q1 2024 Earnings Conference Call May 10, 2024 12:00 PM ET Company Participants Robert Ladd - Chairman and Chief Executive Officer Todd Huskinson - Chief Financial Officer, Chief Compliance Officer, Treasurer and Secretary Conference Call Participants Christopher Nolan - Ladenburg Thalmann Bryce Rowe - B. Riley Erik Zwick - Hovde Group Operator Good afternoon, ladies and gentlemen, and thank you for standing by. At this time, I would like to welcome everyone ...
Stellus Capital Investment (SCM) - 2024 Q1 - Quarterly Report
2024-05-09 20:03
PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for Stellus Capital Investment Corporation as of March 31, 2024, and for the three-month period then ended [Consolidated Statements of Assets and Liabilities](index=3&type=section&id=Consolidated%20Statements%20of%20Assets%20and%20Liabilities) As of March 31, 2024, total assets increased to $935.2 million from $908.1 million at year-end 2023, driven by a rise in cash and investments, with net assets increasing to $323.4 million and NAV per share to $13.41 Consolidated Balance Sheet Summary (unaudited) | Metric | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Total Assets** | **$935,221,348** | **$908,086,328** | | Total Investments at Fair Value | $875,884,146 | $874,460,683 | | Cash and cash equivalents | $48,761,721 | $26,125,741 | | **Total Liabilities** | **$611,780,944** | **$588,146,540** | | Credit Facility payable | $181,343,929 | $156,564,776 | | SBA-guaranteed debentures | $320,587,412 | $320,273,358 | | **Net Assets** | **$323,440,404** | **$319,939,788** | | **Net Asset Value Per Share** | **$13.41** | **$13.26** | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) For Q1 2024, Net Increase in Net Assets from Operations significantly rose to $13.1 million ($0.54 per share) from $4.7 million ($0.24 per share) in Q1 2023, driven by unrealized appreciation despite a net realized loss Quarterly Operating Results (unaudited) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | **Total Investment Income** | **$25,996,749** | **$24,075,347** | | Total Operating Expenses, net | $15,760,833 | $15,007,727 | | **Net Investment Income** | **$10,235,916** | **$9,067,620** | | Net realized (loss) gain | ($20,384,731) | $34,967 | | Net change in unrealized appreciation (depreciation) | $23,518,590 | ($4,249,642) | | **Net Increase in Net Assets from Operations** | **$13,148,460** | **$4,736,147** | | **NII Per Share** | **$0.42** | **$0.46** | | **Net Increase in Net Assets Per Share** | **$0.54** | **$0.24** | | Distributions Per Share | $0.40 | $0.40 | [Consolidated Statements of Changes in Net Assets](index=5&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Net%20Assets) Net assets increased by $3.5 million in Q1 2024 to $323.4 million, primarily due to net investment income and unrealized appreciation, partially offset by realized losses and distributions Reconciliation of Net Assets for Q1 2024 (unaudited) | Description | Amount | | :--- | :--- | | **Net Assets at December 31, 2023** | **$319,939,788** | | Net investment income | $10,235,916 | | Net realized loss on investments | ($20,384,731) | | Net change in unrealized appreciation on investments | $23,518,590 | | Distributions from net investment income | ($9,647,844) | | Other changes | ($221,315) | | **Net Assets at March 31, 2024** | **$323,440,404** | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The company generated $4.5 million in cash from operating activities in Q1 2024, a significant improvement from the prior year, resulting in a $22.6 million net increase in cash and cash equivalents Summary of Cash Flows (unaudited) | Cash Flow Activity | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net Cash Provided (Used) in Operating Activities | $4,456,954 | ($32,043,024) | | Net Cash Provided by Financing Activities | $18,179,026 | $1,851,795 | | **Net Increase (Decrease) in Cash** | **$22,635,980** | **($30,191,229)** | | Cash and Cash Equivalents at End of Period | $48,761,721 | $17,852,100 | [Consolidated Schedules of Investments](index=7&type=section&id=Consolidated%20Schedules%20of%20Investments) As of March 31, 2024, the investment portfolio had a fair value of $875.9 million across 94 companies, with 90% in senior secured first lien loans and significant concentrations in business services and healthcare Portfolio Composition by Investment Type (March 31, 2024) | Investment Type | Fair Value | % of Total | | :--- | :--- | :--- | | Senior Secured – First Lien | $782,845,785 | 90% | | Senior Secured – Second Lien | $11,948,850 | 1% | | Unsecured Debt | $6,210,612 | 1% | | Equity | $74,878,899 | 8% | | **Total Investments** | **$875,884,146** | **100%** | - The total investment portfolio consisted of investments in 94 companies with a total fair value of **$875.9 million** as of March 31, 2024[184](index=184&type=chunk)[254](index=254&type=chunk) - All investments are valued using significant unobservable inputs and are therefore classified as Level 3 within the fair value hierarchy[35](index=35&type=chunk)[189](index=189&type=chunk) [Notes to Unaudited Financial Statements](index=31&type=section&id=Notes%20to%20Unaudited%20Financial%20Statements) This section details the company's accounting policies, operations as a BDC and RIC, related-party agreements, dividend distributions, equity offerings, portfolio valuation, debt facilities, financial highlights, and subsequent events - The company operates as a Business Development Company (BDC) and a Regulated Investment Company (RIC), focusing on debt and equity investments in U.S. middle-market companies[85](index=85&type=chunk)[96](index=96&type=chunk) - The company utilizes two wholly-owned Small Business Investment Company (SBIC) subsidiaries to access up to **$325 million** in SBA-guaranteed debentures, which are excluded from the BDC asset coverage test[88](index=88&type=chunk)[89](index=89&type=chunk)[223](index=223&type=chunk) Financial Highlights Per Share (Q1 2024 vs Q1 2023) | Per Share Data | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net asset value at beginning of period | $13.26 | $14.02 | | Net investment income | $0.42 | $0.46 | | Total from operations | $0.54 | $0.24 | | Stockholder distributions | ($0.40) | ($0.40) | | **Net asset value at end of period** | **$13.41** | **$13.87** | - As of March 31, 2024, the company's asset coverage ratio was **214%** (or 2.14x), well above the regulatory minimum of **150%**[95](index=95&type=chunk)[209](index=209&type=chunk) - Subsequent to quarter-end, the company made new investments totaling over **$10 million**, realized its investment in Nutritional Medicinals, and declared monthly dividends of **$0.1333** per share for April, May, and June 2024[239](index=239&type=chunk)[240](index=240&type=chunk)[242](index=242&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=61&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition and operating results, covering investment objectives, portfolio composition, asset quality, operating performance, liquidity, capital resources, and debt facilities - The company's investment objective is to maximize total return through debt and equity investments in middle-market companies, typically those with **$5.0 million** to **$50.0 million** of EBITDA[246](index=246&type=chunk)[253](index=253&type=chunk) - As of March 31, 2024, **82%** of the portfolio by fair value was rated in the top two categories (performing at or above expectations), an improvement from **86%** at year-end 2023, with four portfolio companies on non-accrual status, representing **2.1%** of the portfolio's fair value[269](index=269&type=chunk)[270](index=270&type=chunk) - The increase in net investment income in Q1 2024 compared to Q1 2023 was attributed to portfolio growth and rising interest rates, which was partially offset by higher management and incentive fees[276](index=276&type=chunk)[280](index=280&type=chunk)[282](index=282&type=chunk) - Liquidity is derived from a **$260 million** Credit Facility, **$325 million** in SBA-guaranteed debentures, and **$100 million** in Notes Payable, with **$48.8 million** in cash and cash equivalents as of March 31, 2024[293](index=293&type=chunk)[295](index=295&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=78&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk, as 98% of its debt portfolio consists of floating-rate loans, with a 100 basis point interest rate increase or decrease impacting annual net interest income by approximately $6.1 million - As of March 31, 2024, **98%** of the company's loans by fair value bore interest at floating rates, primarily indexed to SOFR, making the company sensitive to changes in interest rates[330](index=330&type=chunk) Annual Impact of Interest Rate Changes on Net Income (as of March 31, 2024) | Change in Basis Points | Net Interest Income Impact ($ in millions) | | :--- | :--- | | Up 200 | $12.1 | | Up 100 | $6.1 | | Up 50 | $3.1 | | Down 50 | ($3.1) | | Down 100 | ($6.1) | | Down 200 | ($12.1) | [Item 4. Controls and Procedures](index=79&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of March 31, 2024, with no material changes to internal control over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures are effective as of the end of the period covered by the report[335](index=335&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended March 31, 2024, that materially affected, or are reasonably likely to materially affect, the company's internal controls[336](index=336&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=80&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently subject to any material legal proceedings, nor is it aware of any material legal proceedings being threatened against it - The company reports no material legal proceedings as of the filing date[338](index=338&type=chunk) [Item 1A. Risk Factors](index=80&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2023 - No material changes to the risk factors discussed in the company's Annual Report on Form 10-K filed on March 4, 2024, were identified during the three months ended March 31, 2024[339](index=339&type=chunk)[340](index=340&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=80&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not engage in any unregistered sales of its equity securities during the three months ended March 31, 2024 - The company did not conduct any unregistered sales of equity securities in the first quarter of 2024[341](index=341&type=chunk) [Item 3. Defaults Upon Senior Securities](index=80&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable as there were no defaults upon senior securities during the reporting period - Not applicable[342](index=342&type=chunk) [Item 4. Mine Safety Disclosures](index=80&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[343](index=343&type=chunk) [Item 5. Other Information](index=80&type=section&id=Item%205.%20Other%20Information) During the fiscal quarter ended March 31, 2024, none of the company's directors or executive officers adopted or terminated any Rule 10b5-1 trading plans or any non-Rule 10b5-1 trading arrangements - No directors or executive officers adopted or terminated any Rule 10b5-1 trading plans during the quarter[344](index=344&type=chunk) [Item 6. Exhibits](index=81&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the quarterly report, including certifications by the CEO and CFO as required by the Sarbanes-Oxley Act of 2002 and XBRL data files - The report includes required certifications from the CEO and CFO pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[345](index=345&type=chunk)
Stellus Capital Investment (SCM) - 2023 Q4 - Earnings Call Transcript
2024-03-05 22:36
Financial Data and Key Metrics Changes - Investment income per share was $0.50 and GAAP net investment income was $0.49 per share, with net asset value increasing by $0.07 to $13.26 per share [6] - A tax refund of $3 million was recorded due to a realized loss on previously marked down positions [6] - The company has $60 million of equity investments at cost marked at $72 million, indicating potential for greater than 2 times realization based on historical performance [7] Business Line Data and Key Metrics Changes - The investment portfolio at fair value was approximately $874 million across 93 portfolio companies, down from $886 million across 96 companies at the end of the previous quarter [32] - During the fourth quarter, the company invested $40.3 million in 3 new and 11 existing portfolio companies, with net portfolio decline at cost of $39.5 million [32] Market Data and Key Metrics Changes - The company is experiencing a slower environment for originations compared to previous quarters, with expectations that funding will be offset by repayments [8] - The average loan per company is $9.9 million, with the largest investment being $18.9 million, both at fair value [17] Company Strategy and Development Direction - The company aims to benefit from higher interest rates, with over 98% of its portfolio priced at floating rates and approximately 73% of liabilities at fixed rates [20] - There is an expectation for increased investment activity in the second half of the year, supported by substantial capacity for new investments [21] Management's Comments on Operating Environment and Future Outlook - Management noted that while the current environment is slower, they anticipate a pickup in activity due to significant dry powder in private equity and realizations from private equity firms [27] - The company expects to continue covering its dividend of $0.40 per share, with an annual yield of about 12.4% based on recent stock prices [34] Other Important Information - The company has two SBIC licenses, with plans to work with the SBA for a third license as some debentures are coming due [40] - Spillover income is projected to be about $37 million, which is sufficient to cover current dividends [48] Q&A Session Summary Question: How does the company view the 14% of the portfolio rated 3 or below? - Management believes these positions are manageable and supported by private equity ownership, indicating predictable results despite being under plan [38] Question: What is the expectation for fee income and other income in the upcoming year? - Management expects less other income in the first quarter but anticipates repayments to pick up later in the year [25] Question: What is the company's outlook on funding activity in the second half of the year? - Management expects funding activity to increase due to a combination of pipeline activity and broader market developments [42] Question: What are the expectations for PIK income in 2024? - Management does not expect a material change in PIK income for 2024, noting flexibility as a lender to provide PIK interest if necessary [52] Question: Are there any particular industries that the company finds increasingly attractive? - The company focuses on companies with substantial free cash flow generation and growth potential, avoiding high maintenance CapEx and commodity price risks [67]
Stellus Capital Investment (SCM) - 2023 Q4 - Annual Report
2024-03-04 22:27
Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NUMBER: 001-35730 STELLUS CAPITAL INVESTMENT CORPORATION (Exact name of registrant as specified in its charter) Maryland 46-0937320 (State or other jurisdiction of incorpo ...