BlackRock TCP Capital (TCPC) - 2025 Q1 - Quarterly Results

First Quarter 2025 Announcement Key Financial Results and Dividends Declared The company reported Q1 2025 net investment income and declared Q2 regular and special dividends Q1 2025 Financial Results and Q2 2025 Declared Dividends | Metric | Q1 2025 | Q2 2025 (Declared) | | :----- | :------ | :----------------- | | Net Investment Income (GAAP) per share | $0.38 | - | | Adjusted Net Investment Income per share | $0.36 | - | | Regular Dividend per share | - | $0.25 | | Special Dividend per share | - | $0.04 | - BlackRock TCP Capital Corp announced its financial results for the first quarter ended March 31, 2025, and declared a second quarter regular dividend of $0.25 per share and a special dividend of $0.04 per share, both payable on June 30, 2025[1][4] Management Commentary Management noted portfolio strengthening, stable income and NAV, and a disciplined investment approach amid uncertainty - Investments on non-accrual loans declined to 4.4% from 5.6% of the portfolio at fair value, reflecting the exit of four non-accrual investments, indicating portfolio stabilization[3] - Adjusted net investment income and net asset value were stable with last quarter's levels at $0.36 per share and $9.18 per share, respectively[3] - Management believes the company has a disciplined plan to position the portfolio to perform well in all market environments, despite uncertain global macroeconomic factors[4] Financial Highlights Summary of Key Financial Metrics Q1 2025 saw stable net investment income, a slight NAV decrease, and improved portfolio quality with fewer non-accrual loans Key Financial Metrics Comparison | Metric | March 31, 2025 | December 31, 2024 | Change | | :----------------------------------- | :------------- | :---------------- | :----- | | Net Asset Value per share | $9.18 | $9.23 | -$0.05 | | Net Increase (Decrease) in Net Assets from Operations (per share) | $0.25 | -$0.45 | +$0.70 | | Net Leverage | 1.13x | 1.14x | -0.01x | | Debt Investments on Non-Accrual (Fair Value) | 4.4% | 5.6% | -1.2% | | Debt Investments on Non-Accrual (Cost) | 12.6% | 14.4% | -1.8% | Q1 2025 Investment Activity | Investment Activity (Q1 2025) | Amount (approx.) | | :---------------------------- | :--------------- | | Total Investment Acquisitions | $66.0 million | | Total Investment Dispositions | $84.9 million | Non-GAAP Financial Measures Explanation The company uses adjusted non-GAAP metrics to exclude merger-related purchase accounting effects for better performance comparability - The company provides non-GAAP financial measures to enhance investors' understanding of its business and performance, particularly regarding the impact of purchase discount accounting from the Merger[6][7] - Adjusted net investment income: Excludes the amortization of purchase accounting discount from GAAP net investment income[6] - Adjusted net realized and unrealized gain (loss): Excludes unrealized appreciation resulting from the purchase discount and its corresponding reversal from GAAP net realized and unrealized gain (loss)[8] - Adjusted net increase (decrease) in net assets resulting from operations: Calculates net increase (decrease) in net assets resulting from operations based on Adjusted net investment income and Adjusted net realized and unrealized gain (loss)[8] Portfolio and Investment Activity Portfolio Composition The ~$1.8 billion portfolio is concentrated in senior secured debt, primarily first lien and floating rate investments Portfolio Composition as of March 31, 2025 | Metric | As of March 31, 2025 | | :-------------------------------- | :------------------- | | Total Fair Value of Portfolio | ~$1.8 billion | | Number of Portfolio Companies | 146 | | Senior Secured Debt | 90.0% | | First Lien Debt | 82.5% | | Equity Positions | 9.9% | | Floating Rate Debt Investments | 94.0% | | Floating Rate Debt with Interest Rate Floors | 97.9% | Investment Activity and Yields Q1 2025 featured net dispositions of $18.9 million, with a total debt portfolio yield of 12.2% Q1 2025 Investment Activity Breakdown | Investment Activity (Q1 2025) | Amount (approx.) | Percentage of Total Acquisitions | | :---------------------------- | :--------------- | :------------------------------- | | Total Investments Acquired | $66.0 million | - | | New Investments (2 companies) | - | - | | Existing Investments (9 companies) | - | - | | Senior Secured Loans Acquired | $60.5 million | 91.7% | | Equity Investments Acquired | $5.5 million | 8.3% | | Proceeds from Sales/Repayments | $84.9 million | - | Weighted Average Effective Yields | Yield Metric | March 31, 2025 | December 31, 2024 | Change | | :------------------------------------ | :------------- | :---------------- | :----- | | Weighted Average Annual Effective Yield (Debt Portfolio) | 12.2% | 12.4% | -0.2% | | Weighted Average Annual Effective Yield (Total Portfolio) | 10.8% | 11.1% | -0.3% | | Weighted Average Effective Yield (New Investments Q1 2025) | 11.4% | - | - | | Weighted Average Effective Yield (Exited Investments Q1 2025) | 11.2% | - | - | Non-Accrual Status Non-accrual loans decreased as a percentage of the portfolio at both fair value and cost, indicating improved credit quality Non-Accrual Debt Investments | Non-Accrual Status | March 31, 2025 | December 31, 2024 | Change | | :--------------------------------- | :------------- | :---------------- | :----- | | Debt Investments on Non-Accrual (Fair Value) | 4.4% | 5.6% | -1.2% | | Debt Investments on Non-Accrual (Cost) | 12.6% | 14.4% | -1.8% | | Number of Portfolio Companies on Non-Accrual | 8 | - | - | Consolidated Results of Operations Investment Income Total investment income for Q1 2025 was approximately $55.9 million, or $0.66 per share Q1 2025 Total Investment Income | Metric | Q1 2025 (Amount) | Q1 2025 (Per Share) | | :------------------------------------------------ | :--------------- | :------------------ | | Total Investment Income | ~$55.9 million | $0.66 | - Investment income included $0.03 per share from prepayment premiums and related accelerated original issue discount and exit fee amortization[14] - Included $0.05 per share from recurring portfolio investment original issue discount and exit fee amortization[14] - Included $0.08 per share from interest income paid in kind (PIK) and $0.04 per share in dividend income[14] Operating Expenses Total operating expenses were approximately $23.7 million, or $0.28 per share, after a $1.8 million management fee waiver Q1 2025 Operating Expenses | Metric | Q1 2025 (Amount) | Q1 2025 (Per Share) | | :-------------------------------- | :--------------- | :------------------ | | Total Operating Expenses (after waiver) | ~$23.7 million | $0.28 | | Interest and Other Debt Expenses | $17.1 million | $0.20 | | Base Management Fees | $5.5 million | $0.06 | | Management Fee Waiver | $1.8 million | $0.02 | - No incentive compensation was accrued for Q1 2025 as the company's cumulative total return did not exceed the total return hurdle[15] Net Investment Income and Realized/Unrealized Gains (Losses) Net investment income was $32.2 million, while a net realized loss was partially offset by a net unrealized gain Q1 2025 Net Investment Income and Gains/Losses | Metric | Q1 2025 (Amount) | Q1 2025 (Per Share) | Q4 2024 (Per Share) | | :------------------------------------------------ | :--------------- | :------------------ | :------------------ | | Net Investment Income | ~$32.2 million | $0.38 | $0.38 (Adjusted) | | Net Realized Loss | $40.9 million | $0.48 | - | | Net Unrealized Gain | $29.6 million | $0.35 | - | | Net Increase in Net Assets from Operations | $20.9 million | $0.25 | -$0.45 | - Net realized loss primarily comprised of $24.5 million from Securus, $7.6 million from CIBT, and $6.7 million from McAfee dispositions[16] - Net unrealized gain primarily reflects $23.9 million reversal from Securus, $7.5 million from CIBT, and $5.3 million from McAfee dispositions, along with $10.8 million gain on Job and Talent and $5.3 million gain on AutoAlert, partially offset by other unrealized losses[16] Liquidity and Capital Resources Liquidity and Debt Structure Available liquidity was approximately $628.9 million, with total debt outstanding of $1.106 billion Available Liquidity as of March 31, 2025 | Liquidity Component (March 31, 2025) | Amount (approx.) | | :----------------------------------- | :--------------- | | Available Capacity under Leverage Program | $530.0 million | | Cash and Cash Equivalents | $99.1 million | | Payable for Investments Purchased | -$0.2 million | | Total Available Liquidity | $628.9 million | Debt Metrics as of March 31, 2025 | Debt Metric (March 31, 2025) | Amount | | :--------------------------- | :------------- | | Total Debt Outstanding | $1,106,203,300 | | Weighted-Average Interest Rate | 5.17% | Debt Facilities and Notes Outstanding | Debt Facility | Maturity | Rate | Carrying Value | Available Capacity | Total Capacity | | :-------------------- | :------- | :--------- | :------------- | :----------------- | :------------- | | Operating Facility | 2029 | SOFR+2.00% | $120,000,000 | $180,000,000 | $300,000,000 | | Funding Facility II | 2027 | SOFR+2.05% | $100,000,000 | $100,000,000 | $200,000,000 | | Merger Sub Facility | 2028 | SOFR+2.00% | $25,000,000 | $240,000,000 | $265,000,000 | | SBA Debentures | 2025-2031 | 2.45% | $122,000,000 | $10,000,000 | $132,000,000 | | 2025 Notes ($92M par) | 2025 | Fixed/Variable | $92,000,000 | — | $92,000,000 | | 2026 Notes ($325M par) | 2026 | 2.85% | $325,298,791 | — | $325,298,791 | | 2029 Notes ($325M par) | 2029 | 6.95% | $321,904,509 | — | $321,904,509 | Shareholder Return Programs (DRIP & Repurchase Plan) The company utilized its dividend reinvestment plan and share repurchase program during the quarter - The new dividend reinvestment plan (DRIP), effective March 18, 2024, allows shareholders to opt-in for reinvestment of cash distributions; approximately $1.4 million was reinvested in Q1 2025[19] Q1 2025 Share Repurchase Plan Activity | Share Repurchase Plan (Q1 2025) | Value | | :------------------------------ | :------ | | Shares Repurchased | 3,150 | | Price Per Share (Weighted Avg.) | $8.54 | | Total Cost (including broker fees) | $26,915 | Recent Developments Post-Quarter Investment and Share Repurchase Activity Subsequent to quarter-end, the company invested $43.6 million and repurchased 39,500 shares Post-Quarter Investment Activity (April 1 - May 7, 2025) | Post-Quarter Investment Activity (Apr 1 - May 7, 2025) | Value | | :--------------------------------------------------- | :------------ | | Investments Made (primarily two senior secured loans) | ~$43.6 million | | Combined Effective Yield | ~10.0% | - The Company Repurchase Plan was re-approved on April 29, 2025, to be in effect through April 30, 2026, for an approved $50.0 million repurchase amount[23] Post-Quarter Share Repurchase Activity (April 1 - May 7, 2025) | Post-Quarter Share Repurchase Activity (Apr 1 - May 7, 2025) | Value | | :--------------------------------------------------------- | :---------- | | Shares Repurchased | 39,500 | | Weighted Average Price | $6.70 | | Total Cost | $264,706 | Operating Facility Amendment and Q2 Dividend Declaration The company amended its operating facility and the Board declared Q2 regular and special dividends - On May 2, 2025, an amendment to the Operating Facility clarified that "control" does not include "negative" control or "blocking" rights and waived a default related to a subsidiary guarantor[24] Q2 2025 Dividend Declaration (May 8, 2025) | Q2 2025 Dividend Declaration (May 8, 2025) | Per Share Amount | | :--------------------------------------- | :--------------- | | Regular Dividend | $0.25 | | Special Dividend | $0.04 | | Payable Date | June 30, 2025 | | Record Date | June 16, 2025 | Conference Call and Webcast Information Details for Q1 2025 Earnings Call The company hosted its Q1 2025 earnings call on May 8, 2025, providing dial-in and webcast details - Conference call held on Thursday, May 8, 2025, at 12:00 p.m. Eastern Time (9:00 a.m. Pacific Time)[26] - Dial-in: (833) 470-1428 (US) / (404) 975-4839 (International), Access Code: 912158[26] - Webcast available in the investor relations section of www.tcpcapital.com, with an archived replay available until May 15, 2025[26] Consolidated Financial Statements Consolidated Statements of Assets and Liabilities The company's total assets decreased slightly to $1.899 billion, with net assets per share at $9.18 Consolidated Statements of Assets and Liabilities Summary | Metric | March 31, 2025 | December 31, 2024 | | :---------------------- | :--------------- | :---------------- | | Total Investments (at fair value) | $1,769,273,768 | $1,794,758,336 | | Cash and Cash Equivalents | $99,114,852 | $91,589,702 | | Total Assets | $1,898,903,559 | $1,923,031,363 | | Total Liabilities | $1,117,584,635 | $1,137,907,696 | | Net Assets | $781,318,924 | $785,123,667 | | Net Assets per Share | $9.18 | $9.23 | Consolidated Statements of Operations The company reported a net increase in net assets from operations of $20.9 million, or $0.25 per share Consolidated Statements of Operations Summary | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Total Investment Income | $55,888,915 | $55,729,309 | | Total Operating Expenses (after waiver) | $23,686,246 | $27,468,036 | | Net Investment Income | $32,202,669 | $28,261,273 | | Net Realized Gain (Loss) | $(40,917,338) | $(168,077) | | Net Change in Unrealized Appreciation (Depreciation) | $29,609,257 | $(23,036,055) | | Net Realized and Unrealized Gain (Loss) | $(11,308,081) | $(23,204,132) | | Net Increase (Decrease) in Net Assets from Operations | $20,894,588 | $5,057,141 | | Basic and Diluted Earnings (Loss) per Share | $0.25 | $0.08 | About the Company and Disclaimers About BlackRock TCP Capital Corp. BlackRock TCP Capital Corp is a BDC focused on direct lending to middle-market companies to achieve high total returns - BlackRock TCP Capital Corp (NASDAQ: TCPC) is a specialty finance company and Business Development Company (BDC) focused on direct lending to middle-market and small businesses[31] - The company's investment objective is to achieve high total returns through current income and capital appreciation, with an emphasis on principal protection[31] Forward-Looking Statements This report contains forward-looking statements that involve risks and uncertainties, and actual results may differ materially - This press release contains forward-looking statements based on estimates, projections, beliefs, and assumptions of management, which are not guarantees of future performance and involve risks and uncertainties[33] - Actual results could differ materially due to factors such as changes in general economic conditions, financing terms, interest rates, availability of transactions, and regulatory changes[33] - Investors should review the 'Risk Factors' section of the company's Form 10-K for the year ended December 31, 2024, and subsequent periodic filings with the SEC for detailed information[33] Contact Information Provides contact details for investor relations inquiries for BlackRock TCP Capital Corp - For investor relations inquiries, contact Michaela Murray at (310) 566-1094 or investor.relations@tcpcapital.com[35]