Fidus Investment Corporation (NASDAQ:FDUS) (“Fidus” or the
“Company”), a provider of customized debt and equity financing
solutions, primarily to lower middle-market companies based in the
United States, today announced its financial results for the third
quarter ended September 30, 2023.
Third Quarter 2023 Financial Highlights
- Total investment income of $34.2
million
- Net investment income of $16.7
million, or $0.63 per share
- Adjusted net investment income of
$18.2 million, or $0.68 per share(1)
- Net increase in net assets
resulting from operations of $24.3 million, or $0.91 per share
- Invested $56.7 million in debt and
equity securities, including two new portfolio companies
- Received proceeds from repayments
and realizations of $69.9 million
- Paid total dividends of $0.72 per
share: regular quarterly dividend of $0.41 per share, supplemental
dividend of $0.21 per share, and special dividend of $0.10 per
share on September 27, 2023
- Net asset value (“NAV”) of $548.6
million, or $19.28 per share, as of September 30, 2023
- Estimated spillover income (or
taxable income in excess of distributions) as of September 30,
2023 of $32.7 million, or $1.15 per share
Management Commentary
“Our portfolio delivered strong results for the
third quarter, building on a strong first half of 2023.
Income-producing assets generated a 46% increase in Adjusted NII
compared to last year, well in excess of our base dividend,
reflecting both higher loan balances and higher yields, and our
equity portfolio produced realized gains totaling $9.8 million. As
a result of our portfolio’s performance in 2023, the Board of
Directors has declared an increase in the base dividend to $0.43
per share. Our strategy of managing the business for the long-term,
with a steadfast focus on growing NAV over time, preserving capital
and generating attractive risk-adjusted returns, continues to
deliver value to our shareholders,” said Edward Ross, Chairman and
CEO of Fidus Investment Corporation.
(1) Supplemental
information regarding adjusted net investment income:
On a supplemental basis, we provide information
relating to adjusted net investment income, which is a non-GAAP
measure. This measure is provided in addition to, but not as a
substitute for, net investment income. Adjusted net investment
income represents net investment income excluding any capital gains
incentive fee expense or (reversal) attributable to realized and
unrealized gains and losses. The management agreement with our
investment adviser provides that a capital gains incentive fee is
determined and paid annually with respect to cumulative realized
capital gains (but not unrealized capital gains) to the extent such
realized capital gains exceed realized and unrealized losses. In
addition, we accrue, but do not pay, a capital gains incentive fee
in connection with any unrealized capital appreciation, as
appropriate. As such, we believe that adjusted net investment
income is a useful indicator of operations exclusive of any capital
gains incentive fee expense or (reversal) attributable to realized
and unrealized gains and losses. The presentation of this
additional information is not meant to be considered in isolation
or as a substitute for financial results prepared in accordance
with GAAP. Reconciliations of net investment income to adjusted net
investment income are set forth in Schedule 1.
Third Quarter 2023 Financial Results
The following table provides a summary of our
operating results for the three months ended September 30,
2023, as compared to the same period in 2022 (dollars in thousands,
except per share data):
| |
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|
|
|
|
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|
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|
|
|
Three Months Ended September 30, |
|
|
|
|
|
|
|
|
|
|
2023 |
|
|
2022 |
|
|
$ Change |
|
|
% Change |
|
|
Interest income |
|
$ |
28,313 |
|
|
$ |
21,511 |
|
|
$ |
6,802 |
|
|
|
31.6 |
% |
|
Payment-in-kind interest income |
|
|
2,789 |
|
|
|
413 |
|
|
|
2,376 |
|
|
|
575.3 |
% |
|
Dividend income |
|
|
262 |
|
|
|
645 |
|
|
|
(383 |
) |
|
|
(59.4 |
%) |
|
Fee income |
|
|
2,255 |
|
|
|
2,415 |
|
|
|
(160 |
) |
|
|
(6.6 |
%) |
|
Interest on idle funds |
|
|
566 |
|
|
|
8 |
|
|
|
558 |
|
|
|
6,975.0 |
% |
|
Total investment income |
|
$ |
34,185 |
|
|
$ |
24,992 |
|
|
$ |
9,193 |
|
|
|
36.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
$ |
16,660 |
|
|
$ |
12,719 |
|
|
$ |
3,941 |
|
|
|
31.0 |
% |
|
Net investment income per share |
|
$ |
0.63 |
|
|
$ |
0.52 |
|
|
$ |
0.11 |
|
|
|
21.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net investment income(1) |
|
$ |
18,188 |
|
|
$ |
12,461 |
|
|
$ |
5,727 |
|
|
|
46.0 |
% |
|
Adjusted net investment income per share(1) |
|
$ |
0.68 |
|
|
$ |
0.51 |
|
|
$ |
0.17 |
|
|
|
33.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets resulting from
operations |
|
$ |
24,299 |
|
|
$ |
11,428 |
|
|
$ |
12,871 |
|
|
|
112.6 |
% |
|
Net increase (decrease) in net assets resulting from operations per
share |
|
$ |
0.91 |
|
|
$ |
0.47 |
|
|
$ |
0.44 |
|
|
|
93.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The $9.2 million increase in total investment
income for the three months ended September 30, 2023, as
compared to the same period in 2022, was primarily attributable to
(i) a $9.2 million increase in total interest income (including
payment-in-kind interest income) resulting from an increase in
average debt investment balances outstanding and an increase in
weighted average yield on debt investment balances outstanding,
(ii) a $0.2 million decrease in fee income resulting from a
decrease in amendment fees and origination fees, partially offset
by an increase in prepayment fees, (iii) a $0.4 million decrease in
dividend income due to decreased levels of distributions received
from equity investments, and (iv) a $0.6 million increase in
interest on idle funds due to an increase in weighted average
interest on cash balances outstanding.
For the three months ended September 30,
2023, total expenses, including the base management fee waivers and
income tax provision, were $17.5 million, an increase of $5.2
million, or 42.8% from the $12.3 million of total expenses,
including the base management fee waiver and income tax provision,
for the three months ended September 30, 2022. The increase
was primarily attributable to (i) a $1.8 million increase in
capital gains incentive fee accrued, (ii) a $1.5 million net
increase in the income incentive fee, (iii) a $1.3 million increase
in interest and financing expenses due to an increase in debt
outstanding in 2023 and an increase in weighted average interest
rate on borrowings, (iv) a $0.4 million net increase in base
management fee, including the base management fee waiver, due to
higher average total assets, and (v) a $0.2 million increase in
professional fees.
Net investment income increased by $4.0 million,
or 31.0%, to $16.7 million during the three months ended
September 30, 2023 as compared to the same period in 2022 as a
result of the $9.2 million increase in total investment income,
partially offset by the $5.2 million increase in total expenses,
including base management fee waiver and income tax provision.
Adjusted net investment income,(1) which excludes the capital gains
incentive fee accrual, was $0.68 per share compared to $0.51 per
share in the prior year.
For the three months ended September 30,
2023, the total net realized gain/(loss) on investments, net of
income tax (provision)/benefit on realized gains, was $9.8 million,
as compared to total net realized gain/(loss) on investments, net
of income tax (provision)/benefit on realized gains, of $40.0
million for the same period in 2022.
Portfolio and Investment Activities
As of September 30, 2023, the fair value of
our investment portfolio totaled $926.9 million and consisted of 80
active portfolio companies and two portfolio companies that have
sold their underlying operations. Our total portfolio investments
at fair value were approximately 103.5% of the related cost basis
as of September 30, 2023. As of September 30, 2023, the
debt investments of 45 portfolio companies bore interest at a
variable rate, which represented $588.5 million, or 73.7%, of our
debt investment portfolio on a fair value basis, and the remainder
of our debt investment portfolio was comprised of fixed-rate
investments. As of September 30, 2023, our average active
portfolio company investment at amortized cost was $11.2 million,
which excludes investments in the two portfolio companies that have
sold their underlying operations. The weighted average yield on
debt investments was 14.6% as of September 30, 2023. The
weighted average yield was computed using the effective interest
rates for debt investments at cost as of September 30, 2023,
including the accretion of original issue discounts and loan
origination fees, but excluding investments on non-accrual status
and investments recorded as a secured borrowing, if any.
Third quarter 2023 investment activity included
the following new portfolio company investments:
- Dealerbuilt
Acquisition, LLC, a leading provider of Dealer Management System
(DMS) software for auto dealerships. Fidus invested $13.0 million
in first lien debt, $5.0 in subordinated debt, and $1.0 million in
preferred equity.
- MDME Holding Corp.,
a leading regional provider of durable medical equipment to hospice
agencies and sub-acute care facilities. Fidus invested $12.8
million in first lien debt and $1.3 million in preferred
equity.
Liquidity and Capital Resources
As of September 30, 2023, we had $80.3
million in cash and cash equivalents and $100.0 million of
available borrowings under our senior secured revolving credit
facility (the “Credit Facility”). For the nine months ended
September 30, 2023, we received net proceeds of $71.6 million
from the equity at-the-market program. As of September 30,
2023, we had SBA debentures outstanding of $188.0 million, $125.0
million outstanding of our 4.75% notes due January 2026 and $125.0
million outstanding of our 3.50% notes due November 2026. As of
September 30, 2023, the weighted average interest rate on
total debt outstanding was 4.3%.
Subsequent Events
On October 11, 2023, we invested $18.0 million in first lien
debt and preferred equity in White Label Communications, LLC, a
provider of private label communication solutions to managed
service providers.
On October 26, 2023, we issued an additional $3.0 million in SBA
debentures, which will bear interest at a fixed interim interest
rate of 6.083% until the pooling date in March 2024.
On October 30, 2023, we exited our debt investment in GP&C
Operations, LLC (dba Garlock Printing and Converting). We received
payment in full of $10.8 million on our first lien debt, which
included a prepayment fee.
On October 31, 2023, we invested $13.8 million in first lien
debt and preferred equity in a provider of advertising
intelligence, research, and sales enablement solutions to media
sellers, agencies, brands, and ad tech companies.
On October 31, 2023, we exited our debt investment in Power Grid
Components, Inc. We received payment in full of $10.3 million on
our second lien debt.
On November 1, 2023, we exited our debt
investments in Combined Systems, Inc. We received payment in full
of $8.2 million on our first lien debt and revolving loan, which
included a prepayment fee.
Third Quarter 2023 Dividends Declared
On October 30, 2023, our board of directors
declared a base dividend of $0.43 per share, a supplemental
dividend of $0.27 per share, and a special dividend of $0.10 per
share for the third quarter, which are payable on December 27,
2023, to stockholders of record as of December 20, 2023.
When declaring dividends, our board of directors
reviews estimates of taxable income available for distribution,
which differs from consolidated income under GAAP due to (i)
changes in unrealized appreciation and depreciation, (ii) temporary
and permanent differences in income and expense recognition, and
(iii) the amount of undistributed taxable income carried over from
a given year for distribution in the following year. The final
determination of 2023 taxable income, as well as the tax attributes
for 2023 dividends, will be made after the close of the 2023 tax
year. The final tax attributes for 2023 dividends will generally
include ordinary taxable income but may also include capital gains,
qualified dividends and return of capital.
Fidus has adopted a dividend reinvestment plan
(“DRIP”) that provides for reinvestment of dividends on behalf of
its stockholders, unless a stockholder elects to receive cash. As a
result, when we declare a cash dividend, stockholders who have not
“opted out” of the DRIP at least two days prior to the dividend
payment date will have their cash dividends automatically
reinvested in additional shares of our common stock. Those
stockholders whose shares are held by a broker or other financial
intermediary may receive dividends in cash by notifying their
broker or other financial intermediary of their election.
Third Quarter 2023 Financial Results Conference
Call
Management will host a conference call to
discuss the operating and financial results at 9:00am ET on Friday,
November 3, 2023. To participate in the conference call, please
dial (866) 652-5200 approximately 10 minutes prior to the call.
International callers should dial (412) 317-6060. Please ask to be
joined into the Fidus Investment Corporation call.
A live webcast of the conference call will be
available at
https://investor.fdus.com/news-events/events-presentations. Please
access the website 15 minutes prior to the start of the call to
download and install any necessary audio software. A webcast replay
of the conference call will be available two hours after the call
on the investor relations section of the Company’s website.
ABOUT FIDUS INVESTMENT
CORPORATION
Fidus Investment Corporation provides customized
debt and equity financing solutions to lower middle-market
companies, which management generally defines as U.S. based
companies with revenues between $10 million and $150 million. The
Company’s investment objective is to provide attractive
risk-adjusted returns by generating both current income from debt
investments and capital appreciation from equity related
investments. Fidus seeks to partner with business owners,
management teams and financial sponsors by providing customized
financing for change of ownership transactions, recapitalizations,
strategic acquisitions, business expansion and other growth
initiatives.
Fidus is an externally managed, closed-end,
non-diversified management investment company that has elected to
be treated as a business development company under the Investment
Company Act of 1940, as amended. In addition, for tax purposes,
Fidus has elected to be treated as a regulated investment company
under Subchapter M of the Internal Revenue Code of 1986, as
amended. Fidus was formed in February 2011 to continue and expand
the business of Fidus Mezzanine Capital, L.P., which commenced
operations in May 2007 and is licensed by the U.S. Small Business
Administration as a Small Business Investment Company (SBIC).
FORWARD-LOOKING STATEMENTS
This press release may contain certain
forward-looking statements which are based upon current
expectations and are inherently uncertain, including, but not
limited to, statements about the future performance and financial
condition of the Company, the prospects of our existing and
prospective portfolio companies, the financial condition and
ability of our existing and prospective portfolio companies to
achieve their objectives, and the timing, form and amount of any
distributions or supplemental dividends in the future. Any such
statements, other than statements of historical fact, are likely to
be affected by other unknowable future events and conditions,
including elements of the future that are or are not under the
Company’s control, and that the Company may or may not have
considered, such as changes in the financial and lending markets;
the impact of interest rate volatility, including the replacement
of LIBOR with alternate rates and rising interest rates; and the
dependence of the Company’s future success on the general economy
and its impact on the industries in which the Company invests;
accordingly, such statements cannot be guarantees or assurances of
any aspect of future performance. Actual developments and results
are highly likely to vary materially from these estimates and
projections of the future as a result of a number of factors
related to changes in the markets in which the
Company invests, changes in the financial, capital, and
lending markets, and other factors described from time to time in
the Company’s filings with the Securities and Exchange Commission.
Such statements speak only as of the time when made, and are based
on information available to the Company as of the date hereof and
are qualified in their entirety by this cautionary statement. The
Company undertakes no obligation to update any such statement now
or in the future, except as required by applicable law.
| |
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FIDUS INVESTMENT CORPORATIONConsolidated
Statements of Assets and Liabilities(in thousands,
except shares and per share data) |
|
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|
|
|
|
| |
|
September 30, |
|
|
December 31, |
|
| |
|
2023 |
|
|
2022 |
|
| ASSETS |
|
|
|
|
|
|
|
|
| Investments, at fair
value: |
|
|
|
|
|
|
|
|
|
Control investments (cost: $6,832 and $17,915, respectively) |
|
$ |
— |
|
|
$ |
— |
|
|
Affiliate investments (cost: $46,480 and $55,804,
respectively) |
|
|
83,157 |
|
|
|
101,590 |
|
|
Non-control/non-affiliate investments (cost: $842,050 and
$754,974, respectively) |
|
|
843,702 |
|
|
|
758,739 |
|
| Total investments, at fair
value (cost: $895,362 and $828,693, respectively) |
|
|
926,859 |
|
|
|
860,329 |
|
| Cash and cash equivalents |
|
|
80,337 |
|
|
|
62,350 |
|
| Interest receivable |
|
|
13,729 |
|
|
|
11,826 |
|
| Prepaid expenses and other
assets |
|
|
1,800 |
|
|
|
1,455 |
|
| Total
assets |
|
$ |
1,022,725 |
|
|
$ |
935,960 |
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
| SBA debentures, net of
deferred financing costs |
|
$ |
182,811 |
|
|
$ |
148,476 |
|
| Notes, net of deferred
financing costs |
|
|
246,962 |
|
|
|
246,128 |
|
| Borrowings under Credit
Facility, net of deferred financing costs |
|
|
(1,157 |
) |
|
|
(1,380 |
) |
| Secured borrowings |
|
|
16,319 |
|
|
|
16,880 |
|
| Accrued interest and fees
payable |
|
|
3,337 |
|
|
|
4,747 |
|
| Base management fee payable,
net of base management fee waiver – due to affiliate |
|
|
4,089 |
|
|
|
3,769 |
|
| Income incentive fee payable –
due to affiliate |
|
|
4,479 |
|
|
|
3,035 |
|
| Capital gains incentive fee
payable – due to affiliate |
|
|
15,611 |
|
|
|
22,659 |
|
| Administration fee payable and
other, net – due to affiliate |
|
|
579 |
|
|
|
576 |
|
| Taxes payable |
|
|
277 |
|
|
|
9,937 |
|
| Accounts payable and other
liabilities |
|
|
793 |
|
|
|
790 |
|
| Total
liabilities |
|
$ |
474,100 |
|
|
$ |
455,617 |
|
| Commitments and
contingencies |
|
|
|
|
|
|
|
|
| NET
ASSETS |
|
|
|
|
|
|
|
|
| Common stock, $0.001 par value
(100,000,000 shares authorized, 28,453,469 and 24,727,788
shares |
|
|
|
|
|
|
|
|
|
outstanding at September 30, 2023 and December 31, 2022,
respectively) |
|
$ |
28 |
|
|
$ |
25 |
|
|
Additional paid-in capital |
|
|
467,881 |
|
|
|
395,672 |
|
| Total distributable
earnings |
|
|
80,716 |
|
|
|
84,646 |
|
| Total net
assets |
|
|
548,625 |
|
|
|
480,343 |
|
| Total liabilities and
net assets |
|
$ |
1,022,725 |
|
|
$ |
935,960 |
|
| Net asset value per
common share |
|
$ |
19.28 |
|
|
$ |
19.43 |
|
| |
|
|
|
|
|
|
|
|
| |
|
FIDUS INVESTMENT CORPORATIONConsolidated
Statements of Operations (unaudited)(in thousands,
except shares and per share data) |
| |
|
|
|
|
|
|
| |
|
Three Months Ended |
|
|
Nine Months Ended |
|
| |
|
September 30, |
|
|
September 30, |
|
| |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
| Investment
Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
Control investments |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
Affiliate investments |
|
|
1,011 |
|
|
|
892 |
|
|
|
3,168 |
|
|
|
2,433 |
|
|
Non-control/non-affiliate investments |
|
|
27,302 |
|
|
|
20,619 |
|
|
|
77,268 |
|
|
|
55,532 |
|
|
Total interest income |
|
|
28,313 |
|
|
|
21,511 |
|
|
|
80,436 |
|
|
|
57,965 |
|
|
Payment-in-kind interest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
Control investments |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Affiliate investments |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
30 |
|
|
Non-control/non-affiliate investments |
|
|
2,789 |
|
|
|
413 |
|
|
|
4,661 |
|
|
|
1,297 |
|
|
Total payment-in-kind interest income |
|
|
2,789 |
|
|
|
413 |
|
|
|
4,661 |
|
|
|
1,327 |
|
|
Dividend income |
|
|
|
|
|
|
|
|
|
|
|
|
|
Control investments |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Affiliate investments |
|
|
(1 |
) |
|
|
— |
|
|
|
519 |
|
|
|
725 |
|
|
Non-control/non-affiliate investments |
|
|
263 |
|
|
|
645 |
|
|
|
431 |
|
|
|
685 |
|
|
Total dividend income |
|
|
262 |
|
|
|
645 |
|
|
|
950 |
|
|
|
1,410 |
|
|
Fee income |
|
|
|
|
|
|
|
|
|
|
|
|
|
Control investments |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Affiliate investments |
|
|
5 |
|
|
|
155 |
|
|
|
60 |
|
|
|
452 |
|
|
Non-control/non-affiliate investments |
|
|
2,250 |
|
|
|
2,260 |
|
|
|
5,868 |
|
|
|
5,497 |
|
|
Total fee income |
|
|
2,255 |
|
|
|
2,415 |
|
|
|
5,928 |
|
|
|
5,949 |
|
|
Interest on idle funds |
|
|
566 |
|
|
|
8 |
|
|
|
1,824 |
|
|
|
12 |
|
| Total investment income |
|
|
34,185 |
|
|
|
24,992 |
|
|
|
93,799 |
|
|
|
66,663 |
|
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and financing expenses |
|
|
5,985 |
|
|
|
4,686 |
|
|
|
16,761 |
|
|
|
13,737 |
|
|
Base management fee |
|
|
4,161 |
|
|
|
3,763 |
|
|
|
12,066 |
|
|
|
10,724 |
|
|
Incentive fee - income |
|
|
4,478 |
|
|
|
3,047 |
|
|
|
11,959 |
|
|
|
5,283 |
|
|
Incentive fee (reversal) - capital gains |
|
|
1,528 |
|
|
|
(258 |
) |
|
|
507 |
|
|
|
(593 |
) |
|
Administrative service expenses |
|
|
581 |
|
|
|
480 |
|
|
|
1,672 |
|
|
|
1,412 |
|
|
Professional fees |
|
|
587 |
|
|
|
339 |
|
|
|
2,044 |
|
|
|
1,546 |
|
|
Other general and administrative expenses |
|
|
269 |
|
|
|
303 |
|
|
|
773 |
|
|
|
719 |
|
| Total expenses before base
management fee waiver |
|
|
17,589 |
|
|
|
12,360 |
|
|
|
45,782 |
|
|
|
32,828 |
|
|
Base management fee waiver |
|
|
(72 |
) |
|
|
(76 |
) |
|
|
(216 |
) |
|
|
(228 |
) |
| Total expenses, net of base
management fee waiver |
|
|
17,517 |
|
|
|
12,284 |
|
|
|
45,566 |
|
|
|
32,600 |
|
| Net investment income before
income taxes |
|
|
16,668 |
|
|
|
12,708 |
|
|
|
48,233 |
|
|
|
34,063 |
|
|
Income tax provision (benefit) |
|
|
8 |
|
|
|
(11 |
) |
|
|
66 |
|
|
|
(2 |
) |
| Net investment
income |
|
|
16,660 |
|
|
|
12,719 |
|
|
|
48,167 |
|
|
|
34,065 |
|
| Net realized and
unrealized gains (losses) on investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gains (losses): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Control investments |
|
|
— |
|
|
|
407 |
|
|
|
(11,458 |
) |
|
|
342 |
|
|
Affiliate investments |
|
|
1 |
|
|
|
24,216 |
|
|
|
100 |
|
|
|
39,840 |
|
|
Non-control/non-affiliate investments |
|
|
9,749 |
|
|
|
15,421 |
|
|
|
15,625 |
|
|
|
25,038 |
|
|
Total net realized gain (loss) on investments |
|
|
9,750 |
|
|
|
40,044 |
|
|
|
4,267 |
|
|
|
65,220 |
|
|
Income tax (provision) benefit from realized gains on
investments |
|
|
(31 |
) |
|
|
— |
|
|
|
(1,569 |
) |
|
|
(121 |
) |
|
Net change in unrealized appreciation (depreciation): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Control investments |
|
|
— |
|
|
|
— |
|
|
|
11,083 |
|
|
|
(2,151 |
) |
|
Affiliate investments |
|
|
(4,507 |
) |
|
|
(21,085 |
) |
|
|
(9,109 |
) |
|
|
(42,013 |
) |
|
Non-control/non-affiliate investments |
|
|
2,450 |
|
|
|
(20,197 |
) |
|
|
(2,113 |
) |
|
|
(23,650 |
) |
|
Total net change in unrealized appreciation (depreciation) on
investments |
|
|
(2,057 |
) |
|
|
(41,282 |
) |
|
|
(139 |
) |
|
|
(67,814 |
) |
| Net gain (loss) on
investments |
|
|
7,662 |
|
|
|
(1,238 |
) |
|
|
2,559 |
|
|
|
(2,715 |
) |
| Realized losses on
extinguishment of debt |
|
|
(23 |
) |
|
|
(53 |
) |
|
|
(23 |
) |
|
|
(251 |
) |
| Net increase
(decrease) in net assets resulting from operations |
|
$ |
24,299 |
|
|
$ |
11,428 |
|
|
$ |
50,703 |
|
|
$ |
31,099 |
|
| Per common share
data: |
|
|
|
|
|
|
|
|
|
|
|
|
| Net investment income per
share-basic and diluted |
|
$ |
0.63 |
|
|
$ |
0.52 |
|
|
$ |
1.89 |
|
|
$ |
1.39 |
|
| Net increase in net assets
resulting from operations per share — basic and diluted |
|
$ |
0.91 |
|
|
$ |
0.47 |
|
|
$ |
1.99 |
|
|
$ |
1.27 |
|
| Dividends declared per
share |
|
$ |
0.72 |
|
|
$ |
0.86 |
|
|
$ |
2.08 |
|
|
$ |
1.82 |
|
| Weighted average number of
shares outstanding — basic and diluted |
|
|
26,618,973 |
|
|
|
24,437,400 |
|
|
|
25,490,379 |
|
|
|
24,437,400 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule 1
Supplemental Information Regarding
Adjusted Net Investment Income
On a supplemental basis, we provide information
relating to adjusted net investment income, which is a non-GAAP
measure. This measure is provided in addition to, but not as a
substitute for, net investment income. Adjusted net investment
income represents net investment income excluding any capital gains
incentive fee expense or (reversal) attributable to realized and
unrealized gains and losses. The management agreement with our
investment advisor provides that a capital gains incentive fee is
determined and paid annually with respect to cumulative realized
capital gains (but not unrealized capital gains) to the extent such
realized capital gains exceed realized and unrealized losses for
such year, less the aggregate amount of any capital gains incentive
fees paid in all prior years. In addition, we accrue, but do not
pay, a capital gains incentive fee in connection with any
unrealized capital appreciation, as appropriate. As such, we
believe that adjusted net investment income is a useful indicator
of operations exclusive of any capital gains incentive fee expense
or (reversal) attributable to realized and unrealized gains and
losses. The presentation of this additional information is not
meant to be considered in isolation or as a substitute for
financial results prepared in accordance with GAAP. The following
table provides a reconciliation of net investment income to
adjusted net investment income for the three and nine months ended
September 30, 2023 and 2022.
| |
|
|
|
|
|
| |
($ in thousands) |
|
|
($ in thousands) |
|
| |
Three Months Ended |
|
|
Nine Months Ended |
|
| |
September 30, |
|
|
September 30, |
|
| |
(unaudited) |
|
|
(unaudited) |
|
| |
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
Net investment income |
$ |
16,660 |
|
|
$ |
12,719 |
|
|
$ |
48,167 |
|
|
$ |
34,065 |
|
| Capital gains incentive fee
expense (reversal) |
|
1,528 |
|
|
|
(258 |
) |
|
|
507 |
|
|
|
(593 |
) |
| Adjusted net investment
income(1) |
$ |
18,188 |
|
|
$ |
12,461 |
|
|
$ |
48,674 |
|
|
$ |
33,472 |
|
| |
(Per share) |
|
|
(Per share) |
|
| |
Three Months Ended |
|
|
Nine Months Ended |
|
| |
September 30, |
|
|
September 30, |
|
| |
(unaudited) |
|
|
(unaudited) |
|
| |
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
Net investment income |
$ |
0.63 |
|
|
$ |
0.52 |
|
|
$ |
1.89 |
|
|
$ |
1.39 |
|
| Capital gains incentive fee
expense (reversal) |
|
0.05 |
|
|
|
(0.01 |
) |
|
|
0.02 |
|
|
|
(0.02 |
) |
| Adjusted net investment
income(1) |
$ |
0.68 |
|
|
$ |
0.51 |
|
|
$ |
1.91 |
|
|
$ |
1.37 |
|
|
(1) |
|
Adjusted net investment income per share amounts are calculated as
adjusted net investment income divided by weighted average shares
outstanding for the period. Due to rounding, the sum of net
investment income per share and capital gains incentive fee expense
(reversal) amounts may not equal the adjusted net investment income
per share amount presented here. |
|
|
|
|
|
Company Contact: |
Investor Relations Contact: |
| Shelby E. Sherard |
Jody Burfening |
| Chief Financial Officer |
LHA |
| (847) 859-3940 |
(212) 838-3777 |
| ssherard@fidusinv.com |
jburfening@lhai.com |
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