- GAAP Net Investment Income (NII) of
$0.17 per share providing fourth quarter distribution coverage of
approximately 94%
- Net Asset Value (NAV) per share
declined 7.7% or $0.59 per share to $7.07 per share on a
quarter-over-quarter basis primarily due to net unrealized
depreciation on certain legacy assets
- Net leverage of 0.36x was down
reflecting a net reduction in investments. Total liquidity for
portfolio company investments, including cash, was approximately
$252 million, subject to leverage and borrowing base
restrictions
- Waiver of incentive management fees
based on income extended until June 30, 2019
- Under our existing share repurchase
program, we repurchased 1,986,014 shares of common stock for $11.2
million at an average price of $5.62, including brokerage
commissions, via open market purchases in the fourth quarter.
BlackRock Capital Investment Corporation (NASDAQ:BKCC) (“BCIC”
or the “Company,” “we,” “us” or “our”) announced today that its
Board of Directors declared a quarterly distribution of $0.18 per
share, payable on April 8, 2019 to stockholders of record at the
close of business on March 18, 2019.
“We continued to execute upon our disciplined deployment
strategy in the fourth quarter. Our net unrealized and realized
losses of $46 million (or $0.66 per share) were largely
concentrated in certain equity or equity-like legacy investments.
Our investment in US Well alone resulted in $20 million of
unrealized loss. In connection with the November 2018 merger of US
Well with a publicly traded entity (Nasdaq: USWS), our legacy
equity in US Well was converted into publicly traded shares of
USWS. The quarter-end valuation reflected the December 31, 2018
USWS closing price of $6.50, subject to additional discounts for
lock-up periods. The stock price of USWS has increased during Q1
2019 to-date and we anticipate that the valuation of our investment
will continue to shift in-line with the quarter-end closing prices
of the USWS stock. As the broad equity markets declined towards the
end of the fourth quarter, the comparable multiples used in valuing
some of the other investments also declined, contributing
significantly to reduced valuations. We continue to work towards
monetizing and exiting certain non-income producing legacy assets
in our portfolio. We are seeking to create sales or natural exits
of these assets in a manner that we believe to be in the best
interest of our stockholders. We believe that exiting these
positions will be accretive to our Net Investment Income and reduce
the volatility in our portfolio valuation” commented James E.
Keenan, Chairman and Interim CEO of BlackRock Capital Investment
Corporation.
“The Company has now started to benefit from increased deal flow
and added industry-specific expertise following the acquisition
last year of Tennenbaum Capital Partners, or TCP, by the Company’s
adviser, BlackRock Capital Investment Advisors, LLC. The investment
teams and investment processes for the Company and TCP affiliated
funds have been integrated, and we believe that this will help add
value for the Company’s stockholders. As part of this integration,
we are pleased to announce that Howard Levkowitz and Raj Vig,
former managing partners of TCP, have joined the investment
committee that supports the Company. As voting members, they bring
vast experience and expertise in direct lending. Subsequent to the
quarter-ended December 31, 2018, we have begun to co-invest with
TCP affiliated funds, and we expect the frequency of co-investments
to increase going forward. Additionally, we believe that a benefit
of our ability to co-invest with TCP affiliated funds is to
mitigate portfolio risk by increasing issuer and sector
diversity.
“Under BlackRock’s management of BCIC, from March 6, 2015 to
December 31, 2018, we have deployed approximately $962 million of
capital, of which $362 million has been exited with a realized IRR
of 14.0%. Under our existing share repurchase program, during the
fourth quarter, we invested approximately $11.2 million in share
repurchases at an average price of $5.62 per share. With liquidity
at $252 million and no debt maturities until 2022, we have
significant operating flexibility and deployment capacity.”
Financial Highlights
Q4 2018 Q3 2018
Q4 2017 Total Per
Total Per Total
Per ($'s in millions, except per share data)
Amount Share
Amount Share
Amount Share Net
Investment Income/(loss) $ 11.8 $ 0.17 $ 12.5 $ 0.18 $ 14.5 $ 0.20
Net realized and unrealized gains/(losses) $ (46.4 ) $ (0.66 ) $
7.9 $ 0.11 $ (16.4 ) $ (0.22 ) Deferred taxes $ 2.2 $ 0.03 $ (0.4 )
$ (0.01 ) $ 5.3 $ 0.07 Realized losses on extinguishment of debt —
— — — — — Basic earnings/(losses) $ (32.4 ) $ (0.46 ) $ 20.0 $ 0.28
$ 3.3 $ 0.05 Distributions declared $ 12.6 $ 0.18 $ 12.8 $ 0.18 $
13.2 $ 0.18 Net Investment Income/(loss), as adjusted1 $ 11.8 $
0.17 $ 12.5 $ 0.18 $ 14.5 $ 0.20
Basic earnings/(losses), as adjusted1
$ (32.4 ) $ (0.46 ) $ 20.0
$ 0.28 $ 3.3 $ 0.05
2018 Totals
2017 Totals Total Per
Total Per ($'s in millions, except
per share data) Amount
Share Amount
Share Net Investment Income/(loss) $
47.4 $ 0.66 $ 55.1 $ 0.75 Net realized and unrealized
gains/(losses) $ (56.6 ) $ (0.79 ) $ (32.9 ) $ (0.44 ) Realized
losses on extinguishment of debt — — $ (1.3 ) $ (0.02 ) Basic
earnings/(loss) $ (9.2 ) $ (0.13 ) $ 20.9 $ 0.29 Distributions
declared $ 51.3 $ 0.72 $ 52.5 $ 0.72 Net Investment
Income/(loss), as adjusted1 $ 47.4 $ 0.66 $ 55.1 $ 0.75 Basic
earnings/(loss), as adjusted1 $ (9.2 ) $ (0.13
) $ 20.9 $ 0.29
As of As
of As of December 31, September 30,
December 31, ($'s in millions, except per share data)
2018 2018
2017 Total assets $ 693.6 $ 799.5 $
799.9 Investment portfolio, at fair market value $ 671.7 $ 780.6 $
757.9 Debt outstanding $ 186.4 $ 233.0 $ 206.7 Total net assets $
487.0 $ 543.2 $ 571.1 Net asset value per share $ 7.07 $ 7.66 $
7.83
Net leverage ratio2
0.36x 0.43x
0.32x
_____________________
1 Non-GAAP basis financial measure. See Supplemental
Information on page 8. 2 Calculated as the ratio between (A) debt,
excluding unamortized debt issuance costs, less available cash and
receivable for investments sold, and (B) net asset value.
Business Updates
- Under our existing share repurchase
program, during the fourth quarter of 2018, 1,986,014 shares were
repurchased for $11.2 million at an average price of $5.62 per
share, including brokerage commissions. The cumulative repurchases
since BlackRock entered into the investment management agreement
with the Company in early 2015 totaled approximately 7.2 million
shares for $49.9 million, representing 80.3% of total share
repurchase activity, on a dollar basis, since inception. Since the
inception of our share repurchase program through December 31,
2018, we have purchased 8.9 million shares at an average price of
$6.96 per share, including brokerage commissions, for a total of
$62.2 million. In April 2018, our Board of Directors authorized an
additional 2.5 million shares for repurchase, effective July 1,
2018 until the earlier of June 30, 2019 or until such time that all
of the authorized shares have been repurchased. Furthermore, in
October 2018, an additional 3 million shares were authorized for
repurchases, effective November 5, 2018 until the earlier of
October 28, 2019 or until such time that all of the authorized
shares have been repurchased.
- The non-core legacy asset book
comprised 33% of our total portfolio by fair market value as of
December 31, 2018. This is further broken down into
income-producing investments, non-earning equities and non-accrual
investments at 25%, 7% and 1% of the total portfolio, respectively
by fair market value. Our investments in Vertellus Holdings, AGY
Holding, Sur La Table, US Well Services and related issuers
comprise 73% of the non-core book by fair market value.
- Waiver of our incentive management fee
based on income, which previously ran through December 31, 2018,
has been extended to June 30, 2019.
Portfolio and Investment Activity*
Three months Three months
($’s in millions) ended
ended Year ended Year ended December 31,
2018 December 31, 2017 December 31, 2018
December 31, 2017 Investment deployments $ 32.0 $ 63.3 $
308.6 $ 243.4 Investment exits $ 94.7 $ 124.3 $ 338.4 $ 386.4
Number of portfolio company investments at the end of period 27 30
Weighted average yield of debt and income
producingequity securities, at fair market value
11.5 % 10.8 % % of Portfolio invested in Secured debt, at fair
market value 47 % 56 % % of Portfolio invested in Unsecured debt,
at fair market value 23 % 17 % % of Portfolio invested in Equity,
at fair market value 30 % 27 %
Average investment by portfolio company,
at amortized cost(excluding investments below $5.0 million)
$ 34.1 $ 33.0
*balance sheet amounts above are as of period end
- We deployed $32.0 million during the
quarter while exits of investments totaled $94.7 million, resulting
in a $62.7 million net decrease in our portfolio due to investment
activity.
- Our deployments were primarily
concentrated in one new portfolio company investment and two
investments into existing portfolio companies.
- $15.0 million funded L+7.50% second
lien term loan to Outcomes Group Holdings, which is a specialized
care management provider in the workers’ compensation
industry;
- $11.9 million of incremental L + 11.0%
unsecured debt as well as $0.4 million of preferred stock at 13.5%
to Gordon Brothers Finance Company (“GBFC”) to fund portfolio
growth; and
- $2.5 million of incremental L + 6.00%
first lien delayed draw term loan to United PF Holdings, LLC.
- Our repayments were primarily
concentrated in two portfolio company exits, two position exits,
and one partial repayment:
- $19.0 million and $8.2 million
repayments of Pathway Partners Vet Management Company, LLC second
lien term loan and second lien delayed draw term loan,
respectively;
- $12.9 million repayment of K2 Pure
Solutions Nocal, LP first lien term loan;
- $31.2 million and $7.9 million cash
repayments of U.S. Well Services, LLC first lien term loan and
revolver, respectively; and
- $15.0 million partial repayment of
unsecured debt to GBFC.
- Our $96.3 million equity investment in
Senior Loan Partners is generating a yield of approximately 11%.
During the fourth quarter, Senior Loan Partners made investments
into four new portfolio companies and four existing portfolio
companies totaling $57.5 million of new capital deployments during
the quarter. Total committed capital and outstanding investments,
at par, amounted to $363.5 million and $343.6 million,
respectively, to 27 borrowers. The four new investments at par were
(i) a $12.0 million first lien term loan to Achilles Acquisition,
LLC, a national employee benefits agency specializing in insurance
for small-to-medium sized businesses, (ii) a $10.0 million first
lien term loan to NGS US Finco, LLC, an operation and maintenance
provider of natural gas transmission networks in the US, (iii) an
$8.9 million first lien term loan to F.M.I. Intermediate Holdings,
LLC, a vertically integrated provider of flight critical, complex
structural assemblies and related manufacturing services for global
commercial, military and business aircraft, and (iv) a $8.0 million
first lien term loan and a $2.0 million unfunded delayed draw term
loan to TLE Holdings, LLC, a developer of care and early education
programs throughout the US. Incremental investments to existing
portfolio companies primarily included (i) an additional $8.5
million investment Crown Paper Group Inc., and (ii) an additional
$8.6 million investment in Digital Room, LLC.
- As of December 31, 2018, there were
three non-accrual investment positions, representing approximately
1.6% and 7.1% of total debt and preferred stock investments, at
fair value and cost, respectively, as compared to non-accrual
investment positions of approximately 3.6% and 14.3% of total debt
and preferred stock investments at fair value and cost,
respectively, at December 31, 2017. Our average internal investment
rating at fair market value at December 31, 2018 was 1.44 as
compared to 1.31 as of the prior quarter end.
- During the quarter ended December 31,
2018, net realized and unrealized losses before tax were $(46.4)
million, primarily due to depreciation in portfolio valuations
during the quarter. For the three months ended December 31, 2018,
unrealized gains in a consolidated taxable subsidiary resulted in a
decrease to our deferred tax liability of $2.2 million.
Fourth Quarter Financial Updates
- GAAP net investment income (“NII”) was
$11.8 million, or $0.17 per share, and $47.4 million, or $0.66 per
share, respectively, for the three months and year ended December
31, 2018. Relative to distributions declared of $0.18 per share,
our NII distribution coverage was 94% for the quarter. For the full
year 2018, relative to distributions declared of $0.72 per share,
our NII distribution coverage was 93%.
- As previously disclosed, our base
management fee rate was reduced from an annual rate of 2.00% of
total assets to 1.75% effective March 7, 2017. For the year ended
December 31, 2018, $8.5 million of incentive management fees based
on income were earned by our investment adviser; however, as
previously disclosed, any such fees earned until December 31, 2018
were waived by our investment adviser. This waiver has now been
extended to June 30, 2019. Pursuant to the waiver, $16.5 million of
incentive management fees have been waived on a cumulative basis.
During the year, there was no accrual for incentive management fees
based on gains.
- The Company holds certain portfolio
investments through taxable subsidiaries as pass through entities.
Income earned and gains realized on the investment held by the
taxable subsidiary are taxable to such subsidiary. For the three
months ended December 31, 2018, a reversal of a deferred tax
liability of $2.2 million was included in net realized and
unrealized gain (loss), primarily due to a depreciation in
valuations on the portfolio investments held in a taxable
subsidiary. For the year ended December 31, 2018, deferred tax had
no impact to the Consolidated Statement of Operations.
- Tax characteristics of all 2018
distributions were reported to stockholders on Form 1099 after the
end of the calendar year. Our 2018 distributions of $0.72 per share
were comprised of $0.70 per share from various sources of income
and $0.02 per share of return of capital. Our return of capital
distributions totaled $1.98 per share from inception to December
31, 2018. At our discretion, we may carry forward taxable income in
excess of calendar year distributions and pay a 4% excise tax on
this income. We will accrue excise tax on estimated undistributed
taxable income as required. There was no undistributed taxable
income carried forward from 2018.
Liquidity and Capital Resources
- At December 31, 2018, we had $13.5
million in cash and cash equivalents and $238.6 million of
availability under our credit facility, subject to leverage
restrictions, resulting in approximately $252.1 million of
availability for portfolio company investments.
- Net leverage, adjusted for available
cash, receivables for investments sold, payables for investments
purchased and unamortized debt issuance costs, stood at 0.36x at
quarter-end, and our 354% asset coverage ratio provided the Company
with available debt capacity under its asset coverage requirements
of $293.4 million. Further, as of quarter-end, approximately 78% of
our portfolio was invested in qualifying assets, exceeding the 70%
regulatory requirement of a business development company.
Conference Call
BlackRock Capital Investment Corporation will host a
webcast/teleconference at 10:00 a.m. (Eastern Time) on Thursday,
March 7, 2019, to discuss its fourth quarter 2018 financial
results. All interested parties are welcome to participate. You can
access the teleconference by dialing, from the United States, (888)
254-3590, or from outside the United States, +1-323-994-2093, 10
minutes before 10:00 a.m. and referencing the BlackRock Capital
Investment Corporation Conference Call (ID Number 1729257). A live,
listen-only webcast will also be available via the Investor
Relations section of www.blackrockbkcc.com. Both the teleconference
and webcast will be available for replay by 1:00 p.m. on Thursday,
March 7, 2019 and ending at 1:00 p.m. on Thursday, March 21, 2019.
To access the replay of the teleconference, callers from the United
States should dial (888) 203-1112 and callers from outside the
United States should dial (719) 457-0820 and enter the Conference
ID Number 1729257.
Prior to the webcast/teleconference, an investor presentation
that complements the earnings conference call will be posted to
BlackRock Capital Investment Corporation’s website within the
Presentations section of the Investors page (http://www.blackrockbkcc.com/news-and-events/disclaimer).
About BlackRock Capital Investment Corporation
BlackRock Capital Investment Corporation is a business
development company that provides debt and equity capital to
middle-market companies.
The Company's investment objective is to generate both current
income and capital appreciation through debt and equity
investments. The Company invests primarily in middle-market
companies in the form of senior and junior secured and unsecured
debt securities and loans, each of which may include an equity
component, and by making direct preferred, common and other equity
investments in such companies.
BlackRock Capital Investment
Corporation
Consolidated Statements of Assets and
Liabilities
December
31,
2018
December 31,
2017
Assets Investments at fair value: Non-controlled,
non-affiliated investments (cost of $233,331,450 and $311,938,762)
$ 200,569,644 $ 261,683,202 Non-controlled, affiliated investments
(cost of $130,892,674 and $195,354,637) 111,727,234 215,779,077
Controlled investments (cost of $388,870,375 and $321,999,526)
359,356,068 280,478,528 Total investments at
fair value (cost of $753,094,499 and $829,292,925) 671,652,946
757,940,807 Cash and cash equivalents 13,497,320 29,014,645
Receivable for investments sold 1,691,077 1,344,918 Interest,
dividends and fees receivable 4,084,001 8,342,780 Prepaid expenses
and other assets 2,707,036 3,236,819 Total
Assets $ 693,632,380 $ 799,879,969
Liabilities Debt
(net of deferred financing costs of $3,227,965 and $4,209,445) $
186,397,728 $ 206,661,272 Interest and credit facility fees payable
722,841 1,820,971 Distributions payable 12,552,212 13,152,924 Base
management fees payable 3,494,520 3,734,655 Payable for investments
purchased 989,460 479,297 Accrued administrative services 376,507
114,995 Other accrued expenses and payables 2,078,958
2,815,923 Total Liabilities 206,612,226
228,780,037
Net Assets
Common stock, par value $.001 per share,
200,000,000 common shares authorized, 77,861,287 and
77,723,764 issued and 68,921,798 and
72,946,910 outstanding
77,861 77,723 Paid-in capital in excess of par 853,248,794
858,087,822 Distributable earnings (losses) (304,106,473)
(249,331,111) Treasury stock at cost, 8,939,489 and 4,776,854
shares held (62,200,028) (37,734,502) Total
Net Assets 487,020,154 571,099,932 Total
Liabilities and Net Assets $ 693,632,380 $ 799,879,969 Net
Asset Value Per Share $ 7.07 $ 7.83
BlackRock Capital Investment
Corporation
Consolidated Statements of
Operations
Three Three months months Ended
ended 12/31/18 12/31/17 Year ended
Year ended (Unaudited)
(Unaudited)
12/31/18 12/31/17
Investment Income: Non-controlled, non-affiliated
investments: Cash interest income $ 6,458,180 $ 9,751,698 $
28,138,255 $ 42,597,334 PIK interest income 231,517 202,494 516,904
3,340,360 Cash dividend income — — — 404,780 PIK dividend income —
— — 65,944 Fee income 366,042
2,708,371 1,428,852
3,213,513 Total investment income from
non-controlled, non-affiliated investments 7,055,739
12,662,563
30,084,011 49,621,931
Non-controlled, affiliated investments: Cash interest income
1,937,189 2,954,495 9,401,715 10,540,239 PIK interest income
374,151 986,653 1,784,118 4,054,626 PIK dividend income 254,555
917,861 827,934 2,997,385 Fee income —
156,716 35,000
506,632 Total investment income from non-controlled,
affiliated investments 2,565,895
5,015,725 12,048,767
18,098,882 Controlled investments: Cash
interest income 7,064,876 4,119,450 24,490,257 18,714,928 PIK
interest income — 143,484 1,474,466 1,463,401 Cash dividend income
3,968,845 2,456,399 14,264,703 8,814,639 PIK dividend income — —
731,516 — Fee income 13,855 —
725,643 25,000
Total investment income from controlled investments
11,047,576 6,719,333
41,686,585 29,017,968
Other income 48,231 —
48,231 590,429
Total investment income 20,717,441
24,397,621 83,867,594
97,329,210
Expenses: Base
management fees 3,494,520 3,734,655 14,138,788 16,391,532 Incentive
management fees 2,356,899 2,903,436 8,510,866 7,980,098 Interest
and credit facility fees 3,786,153 4,149,211 15,228,062 18,205,912
Professional fees 864,500 1,026,921 2,428,850 2,708,262
Administrative services 376,507 114,995 1,702,723 1,039,221
Director fees 181,000 193,250 727,000 668,500 Investment advisor
expenses 87,500 87,500 350,000 350,004 Other 142,768
573,908 1,860,696
2,874,087 Total expenses, before
incentive management fee waiver 11,289,847 12,783,876 44,946,985
50,217,616 Incentive management fee waiver (2,356,899 )
(2,903,436 ) (8,510,866 )
(7,980,098 ) Expenses, net of incentive
management fee waiver 8,932,948
9,880,440 36,436,119
42,237,518
Net Investment Income
11,784,493 14,517,181
47,431,475 55,091,692
Realized and Unrealized Gain (Loss): Net
realized gain (loss): Non-controlled, non-affiliated investments
3,237 (859,750 ) (46,104,588 ) (54,814,358 ) Non-controlled,
affiliated investments 28,550,295 — 28,550,295 — Controlled
investments 375,000 —
(28,384,662 ) 2,375,534
Net realized gain (loss) 28,928,532
(859,750 ) (45,938,955 )
(52,438,824 ) Net change in unrealized appreciation
(depreciation) on: Non-controlled, non-affiliated investments
(6,923,226 ) (8,065,434 ) 17,493,755 23,612,802 Non-controlled,
affiliated investments (52,063,236 ) 346,794 (35,110,643 )
23,722,730 Controlled investments (16,012,774 ) (7,814,577 )
7,527,453 (28,225,914 ) Foreign currency translation
(356,834 ) (23,380 )
(565,247 ) 463,413 Net change in
unrealized appreciation (depreciation) (75,356,070 )
(15,556,597 ) (10,654,682 )
19,573,031 Deferred Taxes
2,220,156 5,257,916
— — Net realized and unrealized
gain (loss) (44,207,382 ) (11,158,431 )
(56,593,637 ) (32,865,793
) Realized losses on extinguishment of debt —
(10,723 ) —
(1,323,442 )
Net Increase (Decrease) in Net Assets Resulting
from Operations $ (32,422,889 ) $ 3,348,027
$ (9,162,162 ) $ 20,902,457
Net Investment Income Per Share—basic $ 0.17
$ 0.20 $ 0.66 $
0.75 Earnings (Loss) Per Share—basic $ (0.46 )
$ 0.05 $ (0.13 ) $ 0.29
Average Shares Outstanding—basic 69,835,855
73,145,321 71,373,570
72,983,354 Net Investment Income
Per Share—diluted $ 0.16 $ 0.19
$ 0.64 $ 0.73 Earnings (Loss)
Per Share—diluted $ (0.46 ) $ 0.05
$ (0.13 ) $ 0.29 Average Shares
Outstanding—diluted (NII only) 86,829,592
94,875,804 88,367,307
90,927,689 Distributions
Declared Per Share $ 0.18 $ 0.18
$ 0.72 $ 0.72
Supplemental Information
The Company reports its financial results on a GAAP basis;
however, management believes that evaluating the Company’s ongoing
operating results may be enhanced if investors have additional
non-GAAP basis financial measures. Management reviews non-GAAP
financial measures to assess ongoing operations and, for the
reasons described below, considers them to be effective indicators,
for both management and investors, of the Company’s financial
performance over time. The Company’s management does not advocate
that investors consider such non-GAAP financial measures in
isolation from, or as a substitute for, financial information
prepared in accordance with GAAP.
Until March 6, 2017, the Company recorded its liability for
incentive management fees based on income as it became legally
obligated to pay them, based on a hypothetical liquidation at the
end of each reporting period. The Company’s obligation to pay
incentive management fees with respect to any fiscal quarter until
March 6, 2017 was based on a formula that reflects the Company’s
results over a trailing four-fiscal quarter period ending with the
pro-rated period until March 6, 2017. The Company is legally
obligated to pay the amount resulting from the formula less any
cash payments of incentive management fees during the prior three
quarters. The formula’s requirement to reduce the incentive
management fee by amounts paid with respect to such fees in the
prior three quarters caused the Company’s incentive management fee
expense to become concentrated in the fourth quarter of each year.
Management believes that reflecting incentive management fees
throughout the year, as the related investment income is earned, is
an effective measure of the Company’s profitability and financial
performance that facilitates comparison of current results with
historical results and with those of the Company’s peers. The
Company’s “as adjusted” results reflect incentive management fees
based on the formula the Company utilizes for each trailing
four-fiscal quarter period until March 6, 2017, with the formula
applied to each quarter’s incremental earnings and without any
reduction for incentive management fees paid during the prior three
quarters. The resulting amount represents an upper limit of each
quarter’s incremental incentive management fees that the Company
may become legally obligated to pay at the end of the year. Prior
year amounts are estimated in the same manner. These estimates
represent upper limits because, in any calendar year, subsequent
quarters’ investment underperformance could reduce the incentive
management fees payable by the Company with respect to prior
quarters’ operating results. After March 6, 2017, incentive
management fees based on income have been calculated for each
calendar quarter and are paid on a quarterly basis if certain
thresholds are met. The Company records its liability for incentive
management fees based on capital gains by performing a hypothetical
liquidation at the end of each reporting period. The accrual of
this hypothetical capital gains incentive management fee is
required by GAAP, but it should be noted that a fee so calculated
and accrued is not due and payable until the end of the measurement
period, or every June 30. The incremental incentive management fees
disclosed for a given period are not necessarily indicative of
actual full year results. Changes in the economic environment,
financial markets and other parameters used in determining such
estimates could cause actual results to differ and such differences
could be material. In addition, on March 7, 2017, BlackRock
Advisors, in consultation with the Company’s Board of Directors,
agreed to waive incentive fees based on income after March 6,
2017 to December 31, 2018, which has subsequently been
extended to June 30, 2019. BCIA has agreed to honor such waiver.
For a more detailed description of the Company’s incentive
management fee, please refer to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 2018, on file with the
Securities and Exchange Commission ("SEC").
Computations for the periods below are derived from the
Company's financial statements as follows:
Three months
ended
Three months
ended
Year ended Year ended December
31,
2018
December 31,
2017
December 31,
2018
December 31,
2017
GAAP Basis: Net Investment Income $ 11,784,493 $ 14,517,181
$ 47,431,475 $ 55,091,692 Net Investment Income per share 0.17 0.20
0.66 0.75 Addback: GAAP incentive management fee expense based on
Gains — — — — Addback: GAAP incentive management fee expense based
on Income — — — —
Pre-Incentive Fee1: Net
Investment Income $ 11,784,493 $ 14,517,181 $ 47,431,475 $
55,091,692 Net Investment Income per share 0.17 0.20 0.66 0.75
Less: Incremental incentive management fee expense based on Income
— — — —
As Adjusted2: Net Investment Income $
11,784,493 $ 14,517,181 $ 47,431,475 $ 55,091,692 Net Investment
Income per share 0.17
0.20 0.66
0.75 Note: The NetInvestment Income amounts for the
three and twelve months ended December 31, 2018 are net of
incentive management fees based on income and a corresponding
incentive management fee waiver in the amounts of $2,356,899 and
$8,510,866, respectively. For the periods shown, there is no
difference between the GAAP and as adjusted figures; however, there
may be a difference in future periods. 1
Pre-Incentive Fee: Amounts are
adjusted to remove all incentive management fees. Such fees are
calculated but not necessarily due and payable at this time.
2
As Adjusted: Amounts are adjusted
to remove the incentive management fee expense based on gains, as
required by GAAP, and to include only the incremental incentive
management fee expense based on Income. Until March 6, 2017, the
incremental incentive management fee was calculated based on the
current quarter's incremental earnings, and without any reduction
for incentive management fees paid during the prior calendar
quarters. After March 6, 2017, incentive management fee expense
based on income has been calculated for each calendar quarter and
may be paid on a quarterly basis if certain thresholds are met.
Amounts reflect the Company's ongoing operating results and reflect
the Company's financial performance over time.
Forward-looking statements
This press release, and other statements that BlackRock Capital
Investment Corporation may make, may contain forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act, with respect to BlackRock Capital Investment
Corporation’s future financial or business performance, strategies
or expectations. Forward-looking statements are typically
identified by words or phrases such as “trend,” “potential,”
“opportunity,” “pipeline,” “believe,” “comfortable,” “expect,”
“anticipate,” “current,” “intention,” “estimate,” “position,”
“assume,” “outlook,” “continue,” “remain,” “maintain,” “sustain,”
“seek,” “achieve,” and similar expressions, or future or
conditional verbs such as “will,” “would,” “should,” “could,” “may”
or similar expressions.
BlackRock Capital Investment Corporation cautions that
forward-looking statements are subject to numerous assumptions,
risks and uncertainties, which may change over time.
Forward-looking statements speak only as of the date they are made,
and BlackRock Capital Investment Corporation assumes no duty to and
does not undertake to update forward-looking statements. Actual
results could differ materially from those anticipated in
forward-looking statements and future results could differ
materially from historical performance.
In addition to factors previously disclosed in BlackRock Capital
Investment Corporation’s SEC reports and those identified elsewhere
in this press release, the following factors, among others, could
cause actual results to differ materially from forward-looking
statements or historical performance: (1) our future operating
results; (2) our business prospects and the prospects of our
portfolio companies; (3) the impact of investments that we expect
to make; (4) our contractual arrangements and relationships with
third parties; (5) the dependence of our future success on the
general economy and its impact on the industries in which we
invest; (6) the financial condition of and ability of our current
and prospective portfolio companies to achieve their objectives;
(7) our expected financings and investments; (8) the adequacy of
our cash resources and working capital, including our ability to
obtain continued financing on favorable terms; (9) the timing of
cash flows, if any, from the operations of our portfolio companies;
(10) the impact of increased competition; (11) the ability of our
investment advisor to locate suitable investments for us and to
monitor and administer our investments; (12) potential conflicts of
interest in the allocation of opportunities between us and other
investment funds managed by our investment advisor or its
affiliates; (13) the ability of our investment advisor to attract
and retain highly talented professionals; (14) changes in law and
policy accompanying the new administration and uncertainty pending
any such changes; (15) increased geopolitical unrest, terrorist
attacks or acts of war, which may adversely affect the general
economy, domestic and local financial and capital markets, or the
specific industries of our portfolio companies; (16) changes and
volatility in political, economic or industry conditions, the
interest rate environment, foreign exchange rates or financial and
capital markets; (17) the unfavorable resolution of legal
proceedings; and (18) the impact of changes to tax legislation and,
generally, our tax position.
BlackRock Capital Investment Corporation’s Annual Report on Form
10-K for the year ended December 31, 2018, filed with the SEC
identifies additional factors that can affect forward-looking
statements.
Available Information
BlackRock Capital Investment Corporation’s filings with the SEC,
press releases, earnings releases and other financial information
are available on its website at www.blackrockbkcc.com. The
information contained on our website is not a part of this press
release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190306005743/en/
Investor Contact:Nik Singhal212.810.5427Press
Contact:Brian Beades212.810.5596
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