- GAAP Net Investment Income (“NII”) was $9.5 million, or $0.13
per share, in the third quarter, a 7% increase from the second
quarter, and a 24% year-over-year increase from the third quarter
of 2022. Third quarter NII provided dividend coverage of 131% on a
GAAP basis, an increase from prior quarter dividend coverage of
123% and up from 105% coverage in the third quarter of 2022.
- Net Asset Value (“NAV”) increased to $317.6 million as of
September 30, 2023, up 1% from $314.0 million as of June 30, 2023,
driven by $2.3 million of NII in excess of the declared dividend
and $1.3 million of net realized and unrealized gains on the
portfolio during the quarter. NAV per share increased to $4.38 per
share from $4.33 per share as of June 30, 2023.
- Gross deployments during the third quarter totaled $40.3
million, substantially all of which were in first lien loans. The
weighted average yield on gross deployments during the quarter was
13.4%, up from 12.1% in the prior quarter. Gross repayments during
the quarter were $43.6 million. The Company held 120 total
portfolio companies at quarter-end.
- The Company’s weighted-average portfolio yield as of September
30, 2023 was 12.8% based on total portfolio fair value, consistent
with the second quarter.
- Net leverage was 0.84x as of September 30, 2023, down slightly
from 0.86x as of June 30, 2023, driven by net repayments of our
credit facility during the quarter. Total available liquidity at
quarter-end, including borrowing capacity and cash on hand, was
$89.8 million, subject to leverage and borrowing base
restrictions.
- On September 6, 2023, the Company amended its credit facility
which, among other terms, (i) extended the maturity of the loans
made under the credit facility to September 2028 and (ii) reduced
the applicable interest rate margin by 25 basis points per
annum.
- As previously disclosed, on September 6, 2023, the Company
entered into an Agreement and Plan of Merger (the “Merger
Agreement”) with BlackRock TCP Capital Corp. (“TCPC”), pursuant to
which the Company will merge with and into a wholly owned, indirect
subsidiary of TCPC ("Merger Sub"), subject to stockholder approval,
customary regulatory approvals and other closing conditions.
Following the merger, TCPC will continue to trade on the Nasdaq
Global Select Market under the ticker symbol “TCPC” and Merger Sub
will continue as a subsidiary of TCPC.
BlackRock Capital Investment Corporation (NASDAQ:BKCC) (“BCIC”
or the “Company,” “we,” “us” or “our”) announced today that its
Board of Directors declared a quarterly dividend of $0.10 per
share, payable on January 8, 2024 to stockholders of record at the
close of business on December 15, 2023.
“We are pleased to report a continued increase in our NII this
quarter which provided a healthy 131% coverage of our dividend.
This marked the tenth successive quarter of increasing dividend
coverage. With a relatively modest leverage ratio of 0.84x, we have
the flexibility to identify compelling investment opportunities,
prudently grow our portfolio and continue to increase our earnings
power. The portfolio now represents a well-diversified pool of
income producing assets with first lien loans comprising 85% of the
investments by fair market value,” said James E. Keenan, Chairman
and Interim CEO of the Company. “We ended the quarter with a
well-diversified portfolio of 120 companies, more than double the
number of portfolio companies we held at the end of 2020."
“With the successful transformation of the Company’s portfolio
behind us, our NAV has demonstrated increased stability this year
with the NAV per share at the end of the third quarter roughly flat
with the NAV per share at the end of 2022. We believe this is a
direct consequence of transitioning into a first-lien oriented
portfolio. Against the macroeconomic backdrop of continued
inflation, higher interest rates, and softening consumer demand, we
remain conservative in underwriting new investments and vigilant in
monitoring our existing portfolio. We believe we are well
positioned to withstand the impact of a deteriorating economic
environment,” Mr. Keenan added.
“Additionally, we are excited to have recently announced the
proposed merger between BlackRock Capital Investment Corporation
and BlackRock TCP Capital Corp. We believe that this is an
opportune time to combine our companies. With BCIC having
successfully transformed its portfolio, the investment portfolios
of the companies are now closely aligned. We believe this
transaction positions the combined company for sustained growth and
would create meaningful value for the stockholders of BCIC,
including opportunities to benefit from more efficient access to
capital, the potential for improved trading dynamics, combined
operating efficiencies, and a base management fee reduction that
has been proposed in conjunction with a successful closing of the
transaction. This merger is a strategic next step in the growth and
evolution of BlackRock's business development company platform,”
Mr. Keenan concluded.
September 30, 2023
December 31, 2022
December 31, 2021
December 31, 2020
Portfolio Composition
First Lien Debt
85%
79%
74%
50%
Second Lien Debt
11%
16%
19%
27%
Junior Capital1
4%
5%
7%
23%
Portfolio Company Count
120
116
86
55
Non-Core Assets
Portfolio Company Count2
1
3
5
6
Fair Market Value ("FMV", in
Millions)3
—
9
26
42
% of investments, at FMV3
—
2%
5%
9%
_______________________________________________
1.
Includes unsecured/subordinated debt and
equity investments.
2.
Excludes portfolio companies with zero
FMV.
3.
As of September 30, 2023, the fair market
value of non-core assets is less than $0.1 million, therefore the
FMV and the % of investments at FMV of non-core assets have been
rounded to zero.
Financial Highlights
Q3 2023
Q2 2023
Q3 2022
($'s in millions, except per share
data)2
Total Amount
Per Share
Total Amount
Per Share
Total Amount
Per Share
Net Investment Income/(loss)
$9.5
$0.13
$8.9
$0.12
$7.7
$0.10
Net realized and unrealized
gains/(losses)
$1.3
$0.02
$(7.4)
$(0.10)
$(2.1)
$(0.03)
Basic earnings/(losses)
$10.8
$0.15
$1.5
$0.02
$5.6
$0.08
Dividends declared
$7.3
$0.10
$7.3
$0.10
$7.3
$0.10
Net Investment Income/(loss), as
adjusted1
$9.8
$0.13
$8.9
$0.12
$7.7
$0.10
Basic earnings/(losses), as adjusted1
$11.1
$0.15
$1.5
$0.02
$5.6
$0.08
_______________________________________________
1.
Non-GAAP basis financial measure,
excluding the hypothetical liquidation basis capital gain incentive
fee accrual (reversal), if any, under GAAP. See Supplemental
Information.
2.
Totals may not foot due to rounding.
($'s in millions, except per share
data)
September 30, 2023
June 30, 2023
December 31, 2022
September 30, 2022
Total assets
$618.0
$619.0
$589.1
$612.0
Investment portfolio, at FMV
$595.3
$595.8
$570.5
$574.6
Debt outstanding
$275.3
$283.2
$253.0
$260.9
Total net assets
$317.6
$314.0
$318.5
$332.0
Net asset value per share
$4.38
$4.33
$4.39
$4.56
Net leverage ratio1
0.84x
0.86x
0.77x
0.71x
_______________________________________________
1.
Calculated as the ratio between (a) debt,
excluding unamortized debt issuance costs, less available cash and
receivable for investments sold, plus payables for investments
purchased, and (b) NAV.
Business Updates
- Merger Agreement: As
previously disclosed, on September 6, 2023, the Company entered
into a Merger Agreement with TCPC, a Delaware corporation, BCIC
Merger Sub, LLC, a Delaware limited liability company and indirect
wholly-owned subsidiary of TCPC (formerly known as Project Spurs
Merger Sub, LLC, “Merger Sub”), and, solely for the limited
purposes set forth therein, (x) Tennenbaum Capital Partners, LLC
("TCP"), a Delaware limited liability company and investment
advisor to TCPC, and (y) BlackRock Capital Investment Advisors,
LLC, the investment advisor to the Company. The Company’s Board of
Directors and TCPC's Board of Directors, including all of the
independent directors of each board, on the recommendation of a
special committee comprised solely of the independent directors of
each respective board, have approved the Merger Agreement and the
terms and transactions contemplated thereby. For more information,
please refer to the Form 8-K as filed with the Securities and
Exchange Commission (the “SEC”) on September 6, 2023. On October 6,
2023, TCPC filed a preliminary registration statement on Form N-14,
which included a joint proxy statement of TCPC and BCIC, and TCPC’s
prospectus. The registration statement on Form N-14 is subject to
review by the SEC. Once the registration statement on Form N-14 is
declared effective, TCPC will file its final joint proxy
statement/prospectus with the SEC and TCPC and the Company will
begin mailing proxies to their respective stockholders. The
transaction is subject to approval by TCPC’s and BCIC’s
stockholders, customary regulatory approvals and other closing
conditions. Assuming these conditions are satisfied, the
transaction is expected to close in the first calendar quarter of
2024. For more information, please refer to the Form 8-K as filed
with the SEC on September 6, 2023 and the joint proxy statement on
Form N-14, filed by TCPC with the SEC on October 6, 2023. In
connection with entry into the Merger Agreement and subject to
closing of the merger, TCP has agreed to reduce its base management
fee rate for the combined company from 1.50% to 1.25% on assets
equal to or below 200% of the net asset value of the combined
company (for the avoidance of doubt, the base management fee rate
on assets that exceed 200% of the net asset value of the combined
company would remain 1.00%) with no change to the basis of
calculation.
- Credit Facility Amendment:
As previously disclosed, on September 6, 2023, the Company entered
into its eighth amendment under its credit facility which (i)
extended the maturity date of the loans made under the credit
facility to September 6, 2028, (ii) extended the termination date
of the commitments available under the credit facility to September
6, 2027, (iii) reduced the applicable margin to be applied to
interest on the loans by 25 basis points per annum to either 1.75%
or 2.00% for SOFR based borrowings depending on the ratio of the
borrowing base to certain committed indebtedness, (iv) reduced the
commitment fee on unused commitments from 40 basis points per annum
to 37.5 basis points per annum, and (v) subject to certain closing
conditions being met, permits the Company to merge with and into
Merger Sub, with Merger Sub continuing as the surviving company and
as a wholly-owned subsidiary of Special Value Continuation Partners
LLC, a Delaware limited liability company and a wholly owned
subsidiary of TCPC. For more information, please refer to the Form
8-K as filed with the SEC on September 6, 2023.
- Non-Core Legacy Portfolio and Other
Junior Capital Exposure: As of September 30, 2023, the
Company's non-core assets represented just 0.01% of the entire
portfolio at fair value, down from 9% at the end of 2020. As of
September 30, 2023, the Company’s other junior capital (including
unsecured/subordinated debt and equity) exposure, excluding
non-core assets, remained low at 4% of the portfolio, down from 6%
at December 31, 2021 and 21% at December 31, 2020.
- Share Repurchase Program:
No shares were repurchased under our existing share repurchase
program, during the third quarter of 2023. Cumulative repurchases
since BlackRock entered into the investment management agreement
with the Company in early 2015 total approximately 10.2 million
shares for $61.1 million. Since the inception of the share
repurchase program through September 30, 2023, the Company has
purchased over 11.9 million shares at an average price of $6.16 per
share, including brokerage commissions, for a total of $73.4
million. As of September 30, 2023, 8,000,000 shares remained
authorized for repurchase. Upon expiration of the current share
repurchase program on November 6, 2023, the Company's Board of
Directors reapproved the authorization for the Company to purchase
up to a total of 8,000,000 shares, commencing on November 7, 2023
and effective until the earlier of (i) November 6, 2024 or (ii)
such time that all the authorized shares have been repurchased,
subject to the terms of the share repurchase program.
Third Quarter Financial Updates
- NII was $9.5 million, or approximately $0.13 per share, for the
three months ended September 30, 2023, up from $8.9 million in the
prior quarter. The increase was due largely to additional income
earned on $11.0 million of net deployments into portfolio company
investments over the last two quarters as well as $1.0 million in
fee and other one-time income from investment exits during the
third quarter, partially offset by a $0.8 million increase in
operating expenses during the quarter. Relative to our declared
dividend of $0.10 per share, dividend coverage was 131% on a GAAP
basis, up from 123% in the prior quarter and from 105% in the third
quarter of 2022. As compared to the third quarter of 2022, NII for
the quarter increased $1.9 million, representing a 24%
year-over-year increase.
- NAV increased to $317.6 million at September 30, 2023, up from
$314.0 million at June 30, 2023, driven by $2.3 million of NII in
excess of the declared dividend and $1.3 million of net realized
and unrealized gains during the quarter. NAV per share increased to
$4.38 per share from $4.33 per share as of June 30, 2023.
Portfolio and Investment Activity*
($’s in millions)
Three Months Ended
September 30, 2023
June 30, 2023
September 30, 2022
Investment deployments
$40.3
$20.8
$78.0
Investment exits
$43.6
$6.5
$60.8
Number of portfolio company investments at
end of period
120
121
111
Weighted average yield of debt and income
producing equity securities, at FMV
12.9%
12.9%
10.6%
% of Portfolio invested in Secured debt,
at FMV
96%
96%
94%
% of Portfolio invested in
Unsecured/subordinated debt, at FMV
3%
3%
4%
% of Portfolio invested in Equity, at
FMV
1%
1%
2%
Average investment by portfolio company,
at amortized cost
$5.7
$5.7
$5.8
_______________________________________________
*Balance sheet amounts and yield
information above are as of period end.
- We deployed $40.3 million during the quarter while exits and
repayments totaled $43.6 million, resulting in a $3.3 million net
decrease in our portfolio.
- Deployments consisted of investments/fundings into three new
portfolio companies and primarily six existing portfolio companies,
which are outlined as follows:
New Portfolio
Companies
- $4.5 million S + 9.00% first lien term loan to Nephron
Pharmaceuticals Corp. et al, a pharmaceutical company specializing
in manufacturing generic respiratory medications;
- $2.0 million S + 6.50% first lien term loan and $0.2 million
partially funded revolver to Trintech, Inc., a software provider of
cloud-based reconciliation and financial close solutions; and
- $0.3 million S + 6.00% first lien term loan, $0.3 million
partially funded DDTL and $0.1 million partially funded revolver to
Vortex Companies, LLC, a solutions provider of water and wastewater
infrastructure rehabilitation.
Existing Portfolio
Companies
- $14.2 million SOFR ("S") + 9.00% first lien term loans and $1.9
million unfunded delayed draw term loan ("DDTL") to SellerX Germany
GmbH, a consolidator of small to medium sized brands that sell
through Amazon’s third-party platform. This investment was made
following the combination of two prior portfolio companies, SellerX
and Elevate, which effectively consolidated the prior financings to
these portfolio companies into a single new credit facility. On a
net basis, the Company’s funded exposure to SellerX and Elevate did
not change during the quarter. The prior financings are treated as
exits as described below;
- $6.8 million S + 7.25% first lien term loan and $0.7 million
unfunded revolver to Bluefin Holding, LLC (Allvue), a provider of
enterprise software solutions to alternative investment managers.
This investment was made following a refinancing of our prior
investment in Bluefin which is treated as an exit as described
below;
- $4.7 million S + 6.75% first lien term loan to Calceus
Acquisition, Inc. (Cole Haan), a lifestyle retailer of apparel,
footwear and accessories. This investment was made following a
refinancing of our prior investment in Cole Haan which is treated
as an exit as described below;
- $4.6 million S + 6.50% first lien term loan and $0.4 million
unfunded revolver to e-Discovery Acquireco, LLC (Reveal), an
electronic discovery software provider. This investment was made
following a refinancing of our prior investment in Reveal which is
treated as an exit as described below;
- $2.3 million S + 6.00% unfunded DDTL and $0.4 million partially
funded revolver to Modigent, LLC (fka Pueblo Mechanical and
Controls, LLC); and
- $0.8 million S + 8.00% first lien term loan to Bonterra LLC
(fka Cybergrants Holdings, LLC).
- Exits and repayments were primarily concentrated in eleven
portfolio companies, including three partial paydowns, with a total
of $1.0 million in fee and other one-time income generated on these
transactions:
- $7.7 million full repayment at par of first lien DDTL in
Elevate Brands OpCo LLC;
- $7.6 million full repayment at par of first lien term loans in
Syntellis Parent, LLC (Axiom Software);
- $6.4 million full repayment at par of first lien DDTL in
SellerX Germany GmbH & Co. Kg;
- $5.1 million partial repayment at par of first lien term loan
in PVHC Holding Corp.;
- $4.8 million full repayment at par of second lien term loan in
Bluefin Holding, LLC (BlackMountain);
- $4.6 million full repayment at par of first lien term loan and
senior secured notes in Calceus Acquisition, Inc. (Cole Haan);
- $2.8 million full repayment at par of first lien term loans in
Reveal Data Corporation et al;
- $1.1 million full repayment at par of second lien term loan in
VT TopCo, Inc. (Veritext);
- $0.7 million partial repayment at par of first lien term loans
and revolver in Backoffice Associates Holdings, LLC (Syniti);
- $0.6 million partial repayment of first lien term loan, DDTL,
and revolver in Accordion Partners LLC; and
- $0.2 million of proceeds from the exit of warrants in
FinancialForce.com, Inc.
- As of September 30, 2023, our first lien term loan in Whele LLC
(Perch) was designated as a non-accrual investment position, due to
a continued decline in operating performance. At quarter-end, the
Company had three non-accrual investment positions, representing
approximately 3.4% and 12.0% of total debt and preferred stock
investments, at fair value and cost, respectively.
- The weighted average internal investment rating of the
portfolio at FMV was 1.45 at September 30, 2023, as compared to
1.44 at June 30, 2023 and 1.33 at December 31, 2022.
- During the quarter ended September 30, 2023, net realized and
unrealized gains were $1.3 million, including $1.3 million of
unrealized appreciation and $0.2 million of realized gain on
investments, partially offset by $(0.2) million of unrealized
depreciation on our interest rate swap during the quarter.
Liquidity and Capital Resources
- At September 30, 2023, we had $8.8 million in cash and cash
equivalents and $81.0 million of availability under our Credit
Facility, subject to leverage restrictions, resulting in $89.8
million of availability for deployment into portfolio company
investments, including current unfunded commitments, and for
general use in the normal course of business.
- Net leverage, adjusted for available cash, receivables for
investments sold, payables for investments purchased and
unamortized debt issuance costs, was 0.84x at quarter-end, and our
214% asset coverage ratio provided the Company with additional debt
capacity of $81.0 million under its asset coverage requirements,
subject to borrowing capacity and borrowing base restrictions.
Further, as of September 30, 2023, approximately 83% of our assets
were invested in qualifying assets, exceeding the 70% requirement
for a business development company under Section 55(a) of the
Investment Company Act of 1940.
- For the fourth quarter of 2023, the Company declared a cash
dividend of $0.10 per share, payable on January 8, 2024 to
stockholders of record at the close of business on December 15,
2023.
Conference Call
BlackRock Capital Investment Corporation will host a
webcast/teleconference at 10:00 a.m. (Eastern Time) on Thursday,
November 9, 2023, to discuss its third quarter 2023 financial
results. All interested parties are welcome to participate. You can
access the teleconference by dialing, from the United States, (866)
400-0049 or from outside the United States, +1 (720) 543-0302, 10
minutes before 10:00 a.m. and referencing the BlackRock Capital
Investment Corporation Conference Call (ID Number 4863202). This
teleconference can also be accessed using Microsoft Edge, Google
Chrome, or Firefox via this link: BlackRock Capital Investment
Corporation Third Quarter 2023 Earnings Call. Once clicked-on,
please enter your information to be connected. Please note that the
link becomes active 15 minutes prior to the scheduled start time. A
live, listen-only webcast will also be available via the investor
relations section of www.blackrockbkcc.com.
The teleconference and the webcast will be available for replay
by 3:00 p.m. on Thursday, November 9, 2023 and ending at 3:00 p.m.
on Thursday, November 23, 2023. The replay of the teleconference
can be accessed via the following link: BlackRock Capital
Investment Corporation Third Quarter 2023 Earnings Call Replay. To
access the webcast, please visit the investor relations section of
www.blackrockbkcc.com.
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.
About BlackRock Capital Investment Corporation
Formed in 2005, 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. We invest primarily in middle-market companies in the
form of senior debt securities and loans, and our investment
portfolio may include junior secured and unsecured debt securities
and loans, each of which may include an equity component.
BlackRock Capital Investment
Corporation
Consolidated Statements of
Assets and Liabilities
September 30, 2023
(Unaudited)
December 31, 2022
Assets
Investments at fair value:
Non-controlled, non-affiliated investments
(cost of $603,241,914 and $569,528,145)
$580,291,076
$551,686,646
Non-controlled, affiliated investments
(cost of $1,139,598 and $3,849,638)
—
3,574,438
Controlled investments (cost of
$84,419,465 and $84,922,381)
15,051,000
15,228,000
Total investments at fair value (cost of
$688,800,977 and $658,300,164)
595,342,076
570,489,084
Cash and cash equivalents
8,781,026
9,531,190
Interest, dividends and fees
receivable
8,039,386
5,515,446
Deferred debt issuance costs
3,101,928
1,055,117
Due from broker
2,227,876
1,946,507
Receivable for investments sold
69,434
12,096
Prepaid expenses and other assets
481,982
510,706
Total assets
$618,043,708
$589,060,146
Liabilities
Debt (net of deferred issuance costs of
$743,453 and $996,839)
$275,256,547
$253,003,161
Income incentive fees payable
9,235,880
3,403,349
Accrued capital gains incentive fees
261,077
—
Dividends payable
7,257,191
7,257,191
Management fees payable
2,278,742
2,186,540
Interest and debt related payables
1,851,583
738,719
Interest Rate Swap at fair value
1,669,628
1,332,299
Accrued administrative expenses
225,478
397,299
Payable for investments purchased
—
600,391
Accrued expenses and other liabilities
2,409,378
1,618,844
Total liabilities
300,445,504
270,537,793
Net Assets
Common stock, par value $.001 per share,
200,000,000 common shares authorized, 84,481,797 issued and
72,571,907 outstanding
84,482
84,482
Paid-in capital in excess of par
850,199,351
850,199,351
Distributable earnings (losses)
(459,311,927)
(458,387,778)
Treasury stock at cost, 11,909,890 shares
held
(73,373,702)
(73,373,702)
Total net assets
317,598,204
318,522,353
Total liabilities and net assets
$618,043,708
$589,060,146
Net assets per share
$4.38
$4.39
BlackRock Capital Investment
Corporation
Consolidated Statements of
Operations
(Unaudited)
Three Months Ended
Nine Months Ended
September 30, 2023
September 30, 2022
September 30, 2023
September 30, 2022
Investment income
Interest income (excluding PIK):
Non-controlled, non-affiliated
investments
$19,406,840
$14,733,808
$55,361,062
$37,986,722
PIK interest income:
Non-controlled, non-affiliated
investments
1,568,546
376,854
3,597,013
626,012
Non-controlled, affiliated investments
—
114,909
31,794
347,377
PIK dividend income:
Non-controlled, non-affiliated
investments
91,823
81,188
267,205
235,799
Other income:
Non-controlled, non-affiliated
investments
273,219
718,634
788,780
1,280,725
Total investment income
21,340,428
16,025,393
60,045,854
40,476,635
Operating expenses
Interest and other debt expenses
5,682,588
3,337,735
15,883,269
8,927,377
Management fees
2,278,742
2,118,115
6,631,122
6,125,146
Incentive fees on income
2,070,446
1,621,402
5,832,531
1,709,758
Incentive fees on capital gains(1)
261,077
—
261,077
(1,544,569)
Professional fees
529,477
214,022
972,638
724,368
Administrative expenses
225,478
345,707
806,566
1,010,476
Director fees
208,125
149,375
657,125
455,625
Insurance expense
144,452
187,022
468,155
582,894
Investment advisor expenses
17,093
25,819
51,280
77,457
Other operating expenses
405,266
363,161
1,192,695
1,129,757
Total expenses
11,822,744
8,362,358
32,756,458
19,198,289
Net investment income(1)
9,517,684
7,663,035
27,289,396
21,278,346
Realized and unrealized gain (loss) on
investments and Interest Rate Swap
Net realized gain (loss):
Non-controlled, non-affiliated
investments
204,267
370,660
242,069
1,196,573
Non-controlled, affiliated investments
—
—
(441,906)
—
Net realized gain (loss)
204,267
370,660
(199,837)
1,196,573
Net change in unrealized appreciation
(depreciation):
Non-controlled, non-affiliated
investments
1,248,945
(1,281,032)
(5,109,339)
(13,693,406)
Non-controlled, affiliated investments
—
102,585
(864,398)
332,256
Controlled investments
52,000
(232,073)
325,916
690,314
Interest Rate Swap
(196,560)
(1,015,964)
(594,314)
(1,214,658)
Net change in unrealized appreciation
(depreciation)
1,104,385
(2,426,484)
(6,242,135)
(13,885,494)
Net realized and unrealized gain
(loss)
1,308,652
(2,055,824)
(6,441,972)
(12,688,921)
Net increase (decrease) in net assets
resulting from operations
$10,826,336
$5,607,211
$20,847,424
$8,589,425
Net investment income per
share—basic(1)
$0.13
$0.10
$0.38
$0.29
Earnings (loss) per share—basic(1)
$0.15
$0.08
$0.29
$0.12
Weighted average shares
outstanding—basic
72,571,907
73,170,323
72,571,907
73,551,057
Net investment income per
share—diluted(1)(2)
$0.13
$0.10
$0.38
$0.29
Earnings (loss) per
share—diluted(1)(2)
$0.15
$0.08
$0.29
$0.12
Weighted average shares
outstanding—diluted
72,571,907
73,170,323
72,571,907
83,884,141
_______________________________________________
(1)
Net investment income and per share
amounts displayed above are net of the accrual (reversal) for
incentive fees on capital gains which is reflected on a
hypothetical liquidation basis in accordance with GAAP for the
three and nine month periods ended September 30, 2023 and for the
nine month period ended September 30, 2022. Refer to Supplemental
Information section below for further details and as adjusted
figures that reflect that there were no incentive fees on capital
gains realized and payable to the Advisor during such periods.
(2)
For the nine month period ended September
30, 2022, the impact of the hypothetical conversion of the 2022
Convertible Notes was antidilutive.
Supplemental Information
The Company reports its financial results on a generally
accepted accounting principles (“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.
The Company records its liability for incentive fees based on
capital gains (if any) by performing a hypothetical liquidation
basis calculation at the end of each reporting period, as required
by GAAP, which assumes that all unrealized capital appreciation and
depreciation is realized as of the reporting date. It should be
noted that incentive fees based on capital gains (if any) are not
due and payable until the end of the annual measurement period, or
every June 30. The incremental incentive fees disclosed for a given
period are not necessarily indicative of actual full year results.
Changes in the economic environment, financial markets,
geopolitical conditions and other parameters could cause actual
results to differ from estimates and such differences could be
material. There can be no assurance that unrealized capital
appreciation and depreciation will be realized in the future, or
that any accrued capital gains incentive fee will become payable.
Incentive fee amounts on capital gains actually paid by the Company
will specifically exclude consideration of unrealized capital
appreciation, consistent with requirements under the Investment
Advisers Act of 1940 and the Company’s investment management
agreement. For a more detailed description of the Company’s
incentive fees, please refer to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 2022, on file with the
SEC.
Computations for the periods below are derived from the
Company's financial statements as follows:
Three Months Ended
Nine Months Ended
September 30, 2023
September 30, 2022
September 30, 2023
September 30, 2022
GAAP Basis:
Net Investment Income
$9,517,684
$7,663,035
$27,289,396
$21,278,346
Net Investment Income per share
0.13
0.10
0.38
0.29
Addback: GAAP incentive fee (reversal)
based on capital gains
261,077
-
261,077
(1,544,569)
Addback: GAAP incentive fee based on
Income
2,070,446
1,621,402
5,832,531
1,709,758
Pre-Incentive Fee1:
Net Investment Income
$11,849,207
$9,284,437
$33,383,004
$21,443,535
Net Investment Income per share
0.16
0.13
0.46
0.29
Less: Incremental incentive fee based on
Income
(2,070,446)
(1,621,402)
(5,832,531)
(1,709,758)
As Adjusted2:
Net Investment Income
$9,778,761
$7,663,035
$27,550,473
$19,733,777
Net Investment Income per share
0.13
0.10
0.38
0.27
_______________________________________________
1.
Pre-Incentive Fee: Amounts are
adjusted to remove all incentive fees (if any).
2.
As Adjusted: Amounts are adjusted
to remove the GAAP accrual (reversal) for incentive fee based on
capital gains (if any), and to include only the incremental
incentive fee based on income (if any). Adjusted amounts reflect
the fact that no incentive fee on capital gains was realized and
payable to the Advisor during the three and nine month periods
ended September 30, 2023 and 2022, respectively. Under the current
investment management agreement, incentive fee based on income is
calculated for each calendar quarter and may be paid on a quarterly
basis if certain thresholds are met.
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, inflation, credit risk, 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.
Certain additional factors related to the Merger could cause
actual results and conditions to differ materially from those
projected, including the uncertainties associated with (1) the
timing or likelihood of the Merger closing; (2) the expected
synergies and savings associated with the Merger; (3) the ability
to realize the anticipated benefits of the Merger, including the
expected accretion to net investment income and the elimination or
reduction of certain expenses and costs due to the Merger; (4) the
percentage of our and TCPC stockholders voting in favor of the
proposals submitted for their approval; (5) the possibility that
competing offers or acquisition proposals will be made; (6) the
possibility that any or all of the various conditions to the
consummation of the Merger may not be satisfied or waived; (7)
risks related to diverting management’s attention from ongoing
business operations; (8) the risk that stockholder litigation in
connection with the Merger may result in significant costs of
defense and liability; (9) changes in the economy, financial
markets and political environment, including the impacts of
inflation and rising interest rates; (10) risks associated with
possible disruption in the operations of BCIC and TCPC or the
economy generally due to terrorism, war or other geopolitical
conflict (including the current conflict between Russia and
Ukraine), natural disasters or public health crises and epidemics;
(11) future changes in laws or regulations (including the
interpretation of these laws and regulations by regulatory
authorities); (12) conditions in our and TCPC’s operating areas,
particularly with respect to business development companies or
regulated investment companies; and (13) other considerations that
may be disclosed from time to time in our and TCPC’s publicly
disseminated documents and filings.
BlackRock Capital Investment Corporation’s Annual Report on Form
10-K for the year ended December 31, 2022, filed with the SEC on
March 1, 2023, and the Company's Form 8-K related to the Merger
Agreement, filed with the SEC on September 6, 2023, identify
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/20231108698998/en/
Investor Contact: Nik Singhal 212.810.5427
Press Contact: Christopher Beattie 646.231.8518
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