false0001513363FIDUS INVESTMENT Corp00015133632023-11-022023-11-02
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Date of Report (Date of Earliest Event Reported): |
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November 2, 2023 |
Fidus Investment Corporation
__________________________________________
(Exact name of registrant as specified in its charter)
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Maryland |
814-00861 |
27-5017321 |
_____________________
(State or other jurisdiction |
_____________
(Commission |
______________
(I.R.S. Employer |
of incorporation) |
File Number) |
Identification No.) |
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1603 Orrington Avenue, Suite 1005, Evanston, Illinois |
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60201 |
_________________________________
(Address of principal executive offices) |
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___________
(Zip Code) |
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Registrant’s telephone number, including area code: |
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847-859-3940 |
Not Applicable
______________________________________________
Former name or former address, if changed since last report
________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Common Stock, par value $0.001 per share |
FDUS |
The NASDAQ Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On November 2, 2023, Fidus Investment Corporation (the "Company") issued a press release announcing its financial results for the quarter ended September 30, 2023. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The information disclosed under this Item 2.02, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, and shall not be deemed incorporated by reference into any filing made by the Company under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, except as expressly set forth by specific reference in such filing.
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Item 7.01. |
Regulation FD Disclosure. |
Fidus Investment Corporation issued a press release, filed herewith as Exhibit 99.1, on November 2, 2023 announcing the declaration of 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, which are payable on December 27, 2023, to stockholders of record as of December 20, 2023.
The information disclosed under this Item 7.01, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, and shall not be deemed incorporated by reference into any filing made under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
The following Exhibit 99.1 is being furnished herewith to this Current Report on Form 8-K:
Exhibit
No. Description
99.1 Press Release dated November 2, 2023 of Fidus Investment Corporation
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: November 2, 2023 Fidus Investment Corporation
By: /s/ Shelby E. Sherard
Shelby E. Sherard
Chief Financial Officer and Secretary
Exhibit 99.1
FIDUS INVESTMENT CORPORATION ANNOUNCES
Third QUARTER 2023 FINANCIAL RESULTS
Board of Directors Declared Total Dividends of $0.80 Per Share for Fourth Quarter 2023
Base Dividend of $0.43, Supplemental Dividend of $0.27, and Special Dividend of $0.10 Per Share
EVANSTON, Ill., November 2, 2023 – 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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Three Months Ended September 30, |
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2023 |
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2022 |
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$ Change |
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% Change |
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Interest income |
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$ |
28,313 |
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$ |
21,511 |
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$ |
6,802 |
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31.6 |
% |
Payment-in-kind interest income |
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2,789 |
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413 |
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2,376 |
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575.3 |
% |
Dividend income |
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262 |
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645 |
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(383 |
) |
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(59.4 |
%) |
Fee income |
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2,255 |
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2,415 |
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(160 |
) |
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(6.6 |
%) |
Interest on idle funds |
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566 |
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8 |
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558 |
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6,975.0 |
% |
Total investment income |
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$ |
34,185 |
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$ |
24,992 |
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$ |
9,193 |
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36.8 |
% |
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Net investment income |
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$ |
16,660 |
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$ |
12,719 |
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$ |
3,941 |
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31.0 |
% |
Net investment income per share |
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$ |
0.63 |
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$ |
0.52 |
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$ |
0.11 |
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21.2 |
% |
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Adjusted net investment income (1) |
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$ |
18,188 |
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$ |
12,461 |
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$ |
5,727 |
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46.0 |
% |
Adjusted net investment income per share (1) |
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$ |
0.68 |
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$ |
0.51 |
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$ |
0.17 |
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33.3 |
% |
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Net increase (decrease) in net assets resulting from operations |
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$ |
24,299 |
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$ |
11,428 |
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$ |
12,871 |
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112.6 |
% |
Net increase (decrease) in net assets resulting from operations per share |
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$ |
0.91 |
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$ |
0.47 |
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$ |
0.44 |
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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.
FIDUS INVESTMENT CORPORATION
Consolidated Statements of Assets and Liabilities
(in thousands, except shares and per share data)
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September 30, |
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December 31, |
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2023 |
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2022 |
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ASSETS |
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Investments, at fair value: |
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Control investments (cost: $6,832 and $17,915, respectively) |
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$ |
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— |
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$ |
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— |
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Affiliate investments (cost: $46,480 and $55,804, respectively) |
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83,157 |
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101,590 |
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Non-control/non-affiliate investments (cost: $842,050 and $754,974, respectively) |
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843,702 |
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758,739 |
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Total investments, at fair value (cost: $895,362 and $828,693, respectively) |
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926,859 |
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860,329 |
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Cash and cash equivalents |
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80,337 |
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62,350 |
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Interest receivable |
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13,729 |
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11,826 |
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Prepaid expenses and other assets |
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1,800 |
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1,455 |
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Total assets |
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$ |
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1,022,725 |
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$ |
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935,960 |
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LIABILITIES |
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SBA debentures, net of deferred financing costs |
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$ |
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182,811 |
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$ |
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148,476 |
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Notes, net of deferred financing costs |
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246,962 |
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246,128 |
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Borrowings under Credit Facility, net of deferred financing costs |
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(1,157 |
) |
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(1,380 |
) |
Secured borrowings |
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16,319 |
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16,880 |
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Accrued interest and fees payable |
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3,337 |
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4,747 |
|
Base management fee payable, net of base management fee waiver – due to affiliate |
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4,089 |
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3,769 |
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Income incentive fee payable – due to affiliate |
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4,479 |
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|
3,035 |
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Capital gains incentive fee payable – due to affiliate |
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15,611 |
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22,659 |
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Administration fee payable and other, net – due to affiliate |
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|
579 |
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|
576 |
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Taxes payable |
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|
277 |
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9,937 |
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Accounts payable and other liabilities |
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793 |
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|
790 |
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Total liabilities |
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$ |
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474,100 |
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$ |
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455,617 |
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Commitments and contingencies |
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NET ASSETS |
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Common stock, $0.001 par value (100,000,000 shares authorized, 28,453,469 and 24,727,788 shares |
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outstanding at September 30, 2023 and December 31, 2022, respectively) |
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$ |
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28 |
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$ |
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25 |
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Additional paid-in capital |
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467,881 |
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395,672 |
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Total distributable earnings |
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80,716 |
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84,646 |
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Total net assets |
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548,625 |
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480,343 |
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Total liabilities and net assets |
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$ |
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1,022,725 |
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$ |
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935,960 |
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Net asset value per common share |
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$ |
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19.28 |
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$ |
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19.43 |
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FIDUS INVESTMENT CORPORATION
Consolidated Statements of Operations (unaudited)
(in thousands, except shares and per share data)
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Three Months Ended |
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Nine Months Ended |
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September 30, |
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September 30, |
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2023 |
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2022 |
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2023 |
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2022 |
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Investment Income: |
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Interest income |
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Control investments |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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Affiliate investments |
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1,011 |
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|
892 |
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3,168 |
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2,433 |
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Non-control/non-affiliate investments |
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27,302 |
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20,619 |
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|
77,268 |
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|
55,532 |
|
Total interest income |
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|
28,313 |
|
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|
21,511 |
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|
80,436 |
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|
57,965 |
|
Payment-in-kind interest income |
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Control investments |
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— |
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— |
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— |
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|
|
— |
|
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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