Stellus Capital Investment Corporation Reports Results for its First Fiscal Quarter Ended March 31, 2025
HOUSTON, May 12, 2025 /PRNewswire/ -- Stellus Capital Investment Corporation (NYSE:SCM) ("Stellus", "we", or the "Company") today announced financial results for its fiscal quarter ended March 31, 2025.
Robert T. Ladd, Chief Executive Officer of Stellus, stated, "I am pleased to report solid operating results for the quarter ended March 31, 2025, in which we earned U.S. GAAP net investment income of $0.35 per share and core net investment income of $0.37 per share. During the quarter, we funded $55 million of investments and received $15 million of repayments, bringing the total portfolio to $991 million at fair value. Notably, we raised over $9 million of equity during the quarter under the at-the-market equity program. I'm also pleased to report that our investors have received a total of $295 million in distributions, equivalent to $16.95 per share, since we began operations."
FINANCIAL HIGHLIGHTS
($ in millions, except data relating to per share amounts and shares outstanding)
Three Months Ended | |||||
March 31, 2025 | March 31, 2024 | ||||
Amount | Per Share | Amount | Per Share | ||
Net investment income | $9.79 | $0.35 | $10.24 | $0.42 | |
Core net investment income(1) | 10.29 | 0.37 | 10.61 | 0.44 | |
Net realized loss on investments | (5.97) | (0.21) | (20.38) | (0.85) | |
Net realized loss on foreign currency translation | (0.03) | — | (0.03) | — | |
Total realized income(2) | $3.79 | $0.14 | ($10.17) | ($0.43) | |
Distributions | (11.09) | (0.40) | (9.65) | (0.40) | |
Net unrealized change in appreciation on investments | 1.19 | 0.04 | 23.52 | 0.98 | |
Net unrealized change in appreciation on foreign currency translation | 0.01 | — | — | — | |
Provision for taxes on unrealized appreciation on investments in taxable subsidiaries | — | — | (0.20) | (0.01) | |
Net increase in net assets resulting from operations | $4.99 | $0.18 | $13.15 | $0.54 | |
Weighted average shares outstanding | 27,602,612 | 24,125,642 | |||
(1) | Core net investment income, as presented, excludes the impact of capital gains incentive fees (reversal) and income taxes, the majority of which are excise taxes. The Company believes presenting core net investment income and the related per share amount is a useful supplemental disclosure for analyzing its financial performance. However, core net investment income is not a U.S. generally accepted accounting principles ("U.S. GAAP") measure and should not be considered as a replacement for net investment income and other earnings measures presented in accordance with U.S. GAAP. A reconciliation of net investment income in accordance with U.S. GAAP to core net investment income is presented in the table below the financial statements. |
(2) | Total realized income is the sum of net investment income, net realized losses on investments, net realized losses on foreign currency translations, and losses on debt extinguishment, all U.S. GAAP measures. |
PORTFOLIO ACTIVITY
($ in millions, except data relating to per share amounts, shares outstanding, and number of portfolio companies)
As of | As of | |||
March 31, 2025 | December 31, 2024 | |||
Investments at fair value | $991.1 | $953.5 | ||
Total assets | $1,011.7 | $980.9 | ||
Net assets | $372.8 | $369.9 | ||
Shares outstanding | 28,137,203 | 27,481,118 | ||
Net asset value per share | $13.25 | $13.46 | ||
Three Months Ended | ||||
March 31, 2025 | March 31, 2024 | |||
New investments | $55.4 | $28.5 | ||
Repayments of investments | (15.0) | (31.2) | ||
Net activity | $40.4 | ($2.7) | ||
As of | As of | |||
March 31, 2025 | December 31, 2024 | |||
Number of portfolio company investments | 110 | 105 | ||
Number of debt investments | 97 | 92 | ||
Weighted average yield of debt and other income producing investments (3) | ||||
Cash | 9.4 % | 9.5 % | ||
Payment-in-kind ("PIK") | 0.5 % | 0.4 % | ||
Fee amortization | 0.4 % | 0.4 % | ||
Total | 10.3 % | 10.3 % | ||
Weighted average yield on total investments(4) | ||||
Cash | 8.7 % | 8.9 % | ||
PIK | 0.5 % | 0.4 % | ||
Fee amortization | 0.4 % | 0.4 % | ||
Total | 9.6 % | 9.7 % | ||
(3) | The dollar-weighted average annualized effective yield is computed using the effective interest rate for the Company's debt investments and other income producing investments, including cash and PIK interest, as well as the accretion of deferred fees. The individual investment yields are then weighted by the respective cost of the investments (as of the date presented) in calculating the weighted average effective yield of the portfolio. The dollar-weighted average annualized yield on the Company's investments for a given period will generally be higher than what investors in the Company's common stock would realize in a return over the same period because the dollar-weighted average annualized yield does not reflect the Company's expenses or any sales load that may be paid by investors. |
(4) | The dollar-weighted average yield on total investments takes the same yields as calculated in the footnote above but weights them to determine the weighted average effective yield as a percentage of the Company's total investments, including non-income producing equity positions and debt investments on non-accrual status. |
Results of Operations
Investment income for the three months ended March 31, 2025 and 2024 totaled $25.0 million and $26.0 million, respectively, most of which was interest income from portfolio investments.
Gross operating expenses for the three months ended March 31, 2025 and 2024 totaled $16.4 million and $16.0 million, respectively. For the same respective periods, base management fees totaled $4.1 million and $3.9 million, income incentive fees totaled $2.1 million and $2.5 million, fees and expenses related to our borrowings totaled $8.3 million and $7.8 million (including interest and amortization of deferred financing costs), administrative expenses totaled $0.4 million and $0.5 million, income tax totaled $0.5 million and $0.4 million, and other expenses totaled $1.0 million and $0.9 million. The Company waived $1.2 million and $0.2 million of income incentive fees due to the total return limitation contained in the Investment Advisory Agreement between the Company and the Advisor (as defined below) for the three months ended March 31, 2025 and 2024, respectively.
Net investment income was $9.8 million and $10.2 million, or $0.35 and $0.42 per common share based on weighted average common shares outstanding of 27,602,612 and 24,125,642 for the three months ended March 31, 2025 and 2024, respectively. Core net investment income, which is not a U.S. GAAP measure and excludes the capital gains incentive fee (reversal) and income tax expense accruals, for the three months ended March 31, 2025 and 2024 was $10.3 million and $10.6 million, or $0.37 and $0.44 per share, respectively.
For the three months ended March 31, 2025 and 2024, the Company's investment portfolio had a net change in unrealized appreciation of $1.2 million and $23.5 million, respectively, and the Company had net realized losses of ($6.0) million and ($20.4) million, respectively.
Net increase in net assets resulting from operations totaled $5.0 million and $13.1 million, or $0.18 and $0.54 per common share, based on weighted average common shares outstanding of 27,602,612 and 24,125,642 for the three months ended March 31, 2025 and 2024, respectively.
Liquidity and Capital Resources
As of March 31, 2025, the Company's amended senior secured revolving credit agreement with certain bank lenders and Zions Bancorporation, N.A. dba Amegy Bank, as administrative agent (as amended from time to time, the "Credit Facility") provided for borrowings in an aggregate amount of up to $315.0 million on a committed basis. As of March 31, 2025 and December 31, 2024, the Credit Facility had an accordion feature which allowed for potential future expansion of the facility size up to $350.0 million.
As of March 31, 2025 and December 31, 2024, the Company had $221.8 million and $175.4 million in outstanding borrowings under the Credit Facility, respectively.
The Company issued 656,085 shares during the three months ended March 31, 2025 under the At-the-Market Program ("ATM Program") for gross proceeds of $9.3 million. The average per share offering price of shares issued under the ATM Program during the three months ended March 31, 2025 was $14.11. Stellus Capital Management, LLC, the Company's investment adviser (the "Advisor"), agreed to reimburse the Company for underwriting fees to the extent the per share price of the shares to the public, less underwriting fees, was less then net asset value per share. For the three months ended March 31, 2025, the Advisor was not required to reimburse underwriting fees as all shares were issued at a premium to net asset value.
Distributions
For both the three months ended March 31, 2025 and 2024, the Company declared aggregate distributions of $0.40 per share for the period ($11.1 million and $9.6 million in the aggregate, respectively). Tax characteristics of all distributions will be reported to stockholders on Form 1099-DIV after the end of the calendar year. None of these dividends are expected to include a return of capital.
Recent Portfolio Activity
The Company invested in the following portfolio companies during the three months ended March 31, 2025:
Activity Type | Date | Company Name | Company Description | Investment Amount | Instrument Type | ||||||
Add-On Investment | January 3, 2025 | Service Minds Company, LLC* | Provider of residential electrical services | $ | 10,000 | Revolver Commitment | |||||
New Investment | January 10, 2025 | Pacific Shoring Products, LLC | Manufacturer of trench shoring and safety equipment sold to equipment rental companies | $ | 8,500,000 | Senior Secured – First Lien | |||||
$ | 100,000 | Revolver Commitment | |||||||||
$ | 498,491 | Equity | |||||||||
New Investment | January 15, 2025 | Environmental Remedies, LLC | Residential asbestos abatement provider | $ | 7,330,762 | Senior Secured – First Lien | |||||
$ | 2,681,986 | Delayed Draw Term Loan Commitment | |||||||||
$ | 100,000 | Revolver Commitment | |||||||||
$ | 163,109 | Equity | |||||||||
New Investment | January 16, 2025 | Plus Delta Partners, Inc. | Provider of fundraising training and tools for higher education institutions and other nonprofits | $ | 7,400,000 | Senior Secured – First Lien | |||||
$ | 3,753,955 | Delayed Draw Term Loan Commitment | |||||||||
$ | 100,000 | Revolver Commitment | |||||||||
$ | 325,764 | Equity | |||||||||
New Investment | January 27, 2025 | Strategus, LLC | Provider of connected television advertising services | $ | 7,801,439 | Senior Secured – First Lien | |||||
$ | 2,524,737 | Delayed Draw Term Loan Commitment | |||||||||
$ | 100,000 | Revolver Commitment | |||||||||
$ | 170,362 | Equity | |||||||||
Add-On Investment | January 31, 2025 | Monitorus Holding, LLC* | Provider of media monitoring and evaluation services | $ | 9,710 | Unsecured Convertible Bond | |||||
Add-On Investment | February 7, 2025 | Service Minds Company, LLC* | Provider of residential electrical services | $ | 31,000 | Revolver Commitment | |||||
Add-On Investment | February 10, 2025 | Florachem Corporation* | Distiller and supplier of natural citrus, pine, and specialty inputs | $ | 877,716 | Senior Secured – First Lien | |||||
New Investment | February 28, 2025 | Identity Theft Guard Solutions, Inc. | Cyber breach response and monitoring services | $ | 8,722,887 | Senior Secured – First Lien | |||||
$ | 100,000 | Revolver Commitment | |||||||||
$ | 352,915 | Equity | |||||||||
New Investment | February 28, 2025 | MoboTrex, LLC | Distributor and manufacturer of intelligent traffic solution equipment | $ | 5,137,070 | Senior Secured – First Lien | |||||
$ | 109,312 | Delayed Draw Term Loan Commitment | |||||||||
$ | 100,000 | Revolver Commitment | |||||||||
Add-On Investment | March 7, 2025 | Elliott Aviation, LLC* | Provider of maintenance, repair, and overhaul and fixed-base operator services to the business aviation sector | $ | 915,125 | Revolver Commitment | |||||
New Investment | March 21, 2025 | Simpler Trading, LLC | Online education platform for retail investors | $ | 281,936 | Equity | |||||
Add-On Investment | March 28, 2025 | Advanced Barrier Extrusions, LLC* | Manufacturer of flexible packaging | $ | 2,607,637 | Senior Secured – First Lien | |||||
$ | 2,249,694 | Revolver Commitment | |||||||||
______________________________________ |
*Existing portfolio company |
The Company realized investments in the following portfolio companies during the three months ended March 31, 2025:
Activity Type | Date | Company Name | Company Description | Proceeds Received | Realized Loss | Instrument Type | ||||||||
Restructured Investment | March 21, 2025 | Trade Education Acquisition, L.L.C. | Online education platform for retail investors | $ | — | $ | (5,605,668) | Senior Secured – First Lien | ||||||
$ | — | $ | (46,000) | Revolver | ||||||||||
$ | — | $ | (662,660) | Equity | ||||||||||
Full Repayment | 3/28/2025 | DRS Holdings III, Inc. | Provider of a wide variety of products across the insole, custom fit orthotic and foot care category | $ | 8,542,830 | $ | — | Senior Secured – First Lien | ||||||
Events Subsequent to March 31, 2025
The Company's management has evaluated subsequent events through May 12, 2025. There have been no subsequent events that require recognition or disclosure except for the following described below.
Investment Portfolio
The Company invested in the following portfolio companies subsequent to March 31, 2025:
Activity Type | Date | Company Name | Company Description | Investment Amount | Instrument Type | ||||||
Add-On Investment | April 8, 2025 | TriplePoint Acquisition Holdings LLC* | Provider of HVAC, plumbing, and other mechanical and industrial services | $ | 1,773,809 | Senior Secured – First Lien | |||||
Add-On Investment | May 5, 2025 | FairWave Holdings, LLC* | Specialty coffee platform | $ | 19,336 | Equity | |||||
Add-On Investment | May 8, 2025 | Unicat Catalyst Holdings, LLC* | Manufacturer and distributor of catalysts and other industrial products | $ | 13,961 | Equity | |||||
______________________________________ |
*Existing portfolio company |
The Company realized investments in the following portfolio companies subsequent to March 31, 2025:
Activity Type | Date | Company Name | Company Description | Proceeds Received | Realized Gain | Instrument Type | ||||||||
Full Repayment | April 8, 2025 | Florachem Corporation | Distiller and supplier of natural citrus, pine, and specialty inputs | $ | 9,725,000 | $ | — | Senior Secured – First Lien | ||||||
$ | 53,078 | $ | — | Delayed Draw Term Loan Commitment | ||||||||||
$ | 100,000 | $ | — | Revolver Commitment | ||||||||||
$ | 514,107 | $ | 151,674 | Equity | ||||||||||
Credit Facility
The outstanding balance under the Credit Facility as of May 12, 2025 was $147.8 million.
7.250% Notes due 2030
On April 1, 2025, the Company issued $75.0 million in aggregate principal amount of 7.250% Notes due 2030 (the "7.250% Notes"). The 7.250% Notes bear interest at a rate of 7.250% per year payable semi-annually in arrears on April 1 and October 1 of each year, commencing October 1, 2025. The 7.250% Notes will mature on April 1, 2030, unless previously redeemed or repurchased in accordance with their terms. The 7.250% Notes are the direct unsecured obligations of the Company and rank pari passu with the Company's existing and future unsecured, unsubordinated indebtedness, including the Notes Payable; senior to any series of preferred stock that the Company may issue in the future; senior to any of the Company's future indebtedness that expressly provides it is subordinated to the 7.250% Notes; effectively subordinated to all of the Company's existing and future secured indebtedness (including indebtedness that is initially unsecured to which the Company subsequently grants security), to the extent of the value of the assets securing such indebtedness, including, without limitation, borrowings under the Credit Facility; and structurally subordinated to all existing and future indebtedness and other obligations of any of the Company's existing or future subsidiaries.
In connection with the 7.250% Notes, the Company and U.S. Bank Trust Company, National Association (as successor-in-interest to U.S. Bank National Association), as trustee (the "Trustee"), entered into a Fourth Supplemental Indenture (the "Fourth Supplemental Indenture") to the Base Indenture, dated May 5, 2014, between the Company and the Trustee (together with the Fourth Supplemental Indenture, the "Indenture").
The Indenture contains certain covenants, including covenants requiring the Company to comply with Section 18(a)(1)(A) as modified by Section 61(a)(2) of the Investment Company Act of 1940, as amended (the "1940 Act"), or any successor provisions, whether or not the Company continues to be subject to such provisions of the 1940 Act, but giving effect, in either case, to any exemptive relief granted to the Company by the U.S. Securities and Exchange Committee and certain other exceptions, and to provide financial information to the holders of the 7.250% Notes and the Trustee if the Company should no longer be subject to the reporting requirements under the Securities Exchange Act of 1934, as amended. These covenants are subject to important limitations and exceptions that are set forth in the Indenture.
Distributions Declared
On April 4, 2025, the Board of Directors of the Company declared a regular monthly dividend for each of April 2025, May 2025, and June 2025 as follows:
Ex-Dividend | Record | Payment | Amount per | ||||||
Declared | Date | Date | Date | Share | |||||
4/4/2025 | 4/30/2025 | 4/30/2025 | 5/15/2025 | $ | 0.1333 | ||||
4/4/2025 | 5/30/2025 | 5/30/2025 | 6/13/2025 | $ | 0.1333 | ||||
4/4/2025 | 6/30/2025 | 6/30/2025 | 7/15/2025 | $ | 0.1333 | ||||
Conference Call Information
Stellus Capital Investment Corporation will host a conference call to discuss these results on Tuesday, May 13, 2025 at 10:00 AM, Central Time. The conference call will be led by Robert T. Ladd, Chief Executive Officer, and W. Todd Huskinson, Chief Financial Officer, Chief Compliance Officer, Treasurer, and Secretary.
For those wishing to participate by telephone, please dial (888) 506-0062. Use passcode 260621. Starting approximately two hours after the conclusion of the call, a replay will be available through Tuesday, May 27, 2025 by dialing (877) 481-4010 and entering passcode 52407. The replay will also be available on the Company's website.
For those wishing to participate via Live Webcast, connect via the Public (SCIC) section of our website at www.stelluscapital.com, under the Events tab. A replay of the conference will be available on our website for approximately 90 days.
About Stellus Capital Investment Corporation
The Company is an externally managed, closed-end, non-diversified investment management company that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. The Company's investment objective is to maximize the total return to its stockholders in the form of current income and capital appreciation by investing primarily in private middle-market companies (typically those with $5.0 million to $50.0 million of EBITDA (earnings before interest, taxes, depreciation and amortization)) through first lien (including unitranche) loans, second lien loans and unsecured debt financing, with corresponding equity co-investments. The Company's investment activities are managed by its investment adviser, Stellus Capital Management. To learn more about Stellus Capital Investment Corporation, visit www.stelluscapital.com under the "Public (SCIC)" tab.
Forward-Looking Statements
Statements included herein may contain "forward-looking statements" which relate to future performance or financial condition. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of assumptions, risks and uncertainties, which change over time. Actual results may differ materially from those anticipated in any forward-looking statements as a result of a number of factors, including those described from time to time in filings by the Company with the Securities and Exchange Commission including the final prospectus that will be filed with the Securities and Exchange Commission. The Company undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release.
Contacts
Stellus Capital Investment Corporation
W. Todd Huskinson, Chief Financial Officer
(713) 292-5414
[email protected]
STELLUS CAPITAL INVESTMENT CORPORATION CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES | |||||||
March 31, 2025 | |||||||
(unaudited) | December 31, 2024 | ||||||
ASSETS | |||||||
Controlled investments at fair value (amortized cost of $17,934,808 for both periods) | $ | 7,707,712 | $ | 7,652,436 | |||
Non-controlled, non-affiliated investments, at fair value (amortized cost of $979,896,856 and $943,853,898, respectively) | 983,396,065 | 945,845,252 | |||||
Cash and cash equivalents | 10,888,821 | 20,058,594 | |||||
Receivable for sales and repayments of investments | 446,586 | 335,689 | |||||
Interest receivable | 6,229,272 | 4,947,765 | |||||
Income tax receivable | 2,383,725 | 1,301,965 | |||||
Other receivables | 108,750 | 87,995 | |||||
Related party receivable | — | 3,687 | |||||
Prepaid expenses | 576,553 | 666,866 | |||||
Total Assets | $ | 1,011,737,484 | $ | 980,900,249 | |||
LIABILITIES | |||||||
Notes Payable | $ | 99,554,505 | $ | 99,444,355 | |||
Credit Facility payable | 219,057,554 | 172,314,315 | |||||
SBA-guaranteed debentures | 305,190,923 | 321,251,939 | |||||
Dividends payable | 3,750,689 | 3,663,233 | |||||
Management fees payable | 4,054,726 | 4,034,109 | |||||
Income incentive fees payable | 1,651,506 | 3,109,560 | |||||
Interest payable | 1,492,428 | 5,281,343 | |||||
Related party payable | 1,290,893 | — | |||||
Unearned revenue | 620,803 | 548,626 | |||||
Administrative services payable | 380,523 | 393,513 | |||||
Other accrued expenses and liabilities | 1,926,752 | 937,316 | |||||
Total Liabilities | $ | 638,971,302 | $ | 610,978,309 | |||
Commitments and contingencies (Note 7) | |||||||
Net Assets | $ | 372,766,182 | $ | 369,921,940 | |||
NET ASSETS | |||||||
Common stock, par value $0.001 per share (100,000,000 shares authorized; 28,137,203 and 27,481,118 issued and outstanding, respectively) | $ | 28,137 | $ | 27,481 | |||
Paid-in capital | 388,486,702 | 379,549,272 | |||||
Total distributable loss | (15,748,657) | (9,654,813) | |||||
Net Assets | $ | 372,766,182 | $ | 369,921,940 | |||
Total Liabilities and Net Assets | $ | 1,011,737,484 | $ | 980,900,249 | |||
Net Asset Value Per Share | $ | 13.25 | $ | 13.46 | |||
STELLUS CAPITAL INVESTMENT CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) | |||||||
For the three months ended | |||||||
March 31, 2025 | March 31, 2024 | ||||||
INVESTMENT INCOME | |||||||
From controlled investments: | |||||||
Interest income | $ | — | $ | 81,636 | |||
From non-controlled, non-affiliated investments | |||||||
Interest income | 24,127,116 | 24,956,851 | |||||
Other income | 824,542 | 958,262 | |||||
Total Investment Income | $ | 24,951,658 | $ | 25,996,749 | |||
OPERATING EXPENSES | |||||||
Management fees | $ | 4,054,726 | $ | 3,852,233 | |||
Valuation fees | 157,889 | 156,507 | |||||
Administrative services expenses | 449,298 | 490,901 | |||||
Income incentive fees | 2,136,491 | 2,509,110 | |||||
Professional fees | 418,031 | 339,627 | |||||
Directors' fees | 111,250 | 108,250 | |||||
Insurance expense | 97,090 | 124,989 | |||||
Interest expense and other fees | 8,263,019 | 7,767,573 | |||||
Income tax expense | 499,547 | 370,719 | |||||
Other general and administrative expenses | 218,351 | 245,275 | |||||
Total Operating Expenses | $ | 16,405,692 | $ | 15,965,184 | |||
Income incentive fee waiver | (1,242,843) | (204,351) | |||||
Total Operating Expenses, net of fee waivers | $ | 15,162,849 | $ | 15,760,833 | |||
Net Investment Income | $ | 9,788,809 | $ | 10,235,916 | |||
Net realized loss on non-controlled, non-affiliated investment | $ | (5,967,221) | $ | (20,384,731) | |||
Net realized loss on foreign currency translations | (29,655) | (25,106) | |||||
Net change in unrealized appreciation on controlled investments | 55,276 | 536,570 | |||||
Net change in unrealized appreciation on non-controlled, non-affiliated investments | 1,138,017 | 22,982,020 | |||||
Net change in unrealized appreciation (depreciation) on foreign currency translations | 8,319 | (3,602) | |||||
Provision for taxes on net unrealized appreciation on investments | — | (192,607) | |||||
Net Increase in Net Assets Resulting from Operations | $ | 4,993,545 | $ | 13,148,460 | |||
Net Investment Income Per Share—basic and diluted | $ | 0.35 | $ | 0.42 | |||
Net Increase in Net Assets Resulting from Operations Per Share – basic and diluted | $ | 0.18 | $ | 0.54 | |||
Weighted Average Shares of Common Stock Outstanding—basic and diluted | 27,602,612 | 24,125,642 | |||||
Distributions Per Share—basic and diluted | $ | 0.40 | $ | 0.40 | |||
STELLUS CAPITAL INVESTMENT CORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS (unaudited) | ||||||||||||||
Common Stock | Total | |||||||||||||
Number | Par | Paid-in | distributable | |||||||||||
of shares | value | capital | (loss) | Net Assets | ||||||||||
Balances at December 31, 2023 | 24,125,642 | $ | 24,125 | $ | 335,918,984 | $ | (16,003,321) | $ | 319,939,788 | |||||
Net investment income | — | — | — | 10,235,916 | 10,235,916 | |||||||||
Net realized loss on investments | — | — | — | (20,384,731) | (20,384,731) | |||||||||
Net realized loss on foreign currency translations | — | — | — | (25,106) | (25,106) | |||||||||
Net change in unrealized appreciation on investments | — | — | — | 23,518,590 | 23,518,590 | |||||||||
Net change in unrealized depreciation on foreign currency translations | — | — | — | (3,602) | (3,602) | |||||||||
Provision for taxes on unrealized appreciation on investments | — | — | — | (192,607) | (192,607) | |||||||||
Distributions from net investment income | — | — | — | (9,647,844) | (9,647,844) | |||||||||
Balances at March 31, 2024 | 24,125,642 | $ | 24,125 | $ | 335,918,984 | $ | (12,502,705) | $ | 323,440,404 | |||||
Balances at December 31, 2024 | 27,481,118 | $ | 27,481 | $ | 379,549,272 | $ | (9,654,813) | $ | 369,921,940 | |||||
Net investment income | — | — | — | 9,788,809 | 9,788,809 | |||||||||
Net realized loss on investments | — | — | — | (5,967,221) | (5,967,221) | |||||||||
Net realized loss on foreign currency translations | — | — | — | (29,655) | (29,655) | |||||||||
Net change in unrealized appreciation on investments | — | — | — | 1,193,293 | 1,193,293 | |||||||||
Net change in unrealized depreciation on foreign currency translations | — | — | — | 8,319 | 8,319 | |||||||||
Distributions from net investment income | — | — | — | (11,087,389) | (11,087,389) | |||||||||
Issuance of common stock, net of offering costs(1) | 656,085 | 656 | 8,937,430 | — | 8,938,086 | |||||||||
Balances at March 31, 2025 | 28,137,203 | $ | 28,137 | $ | 388,486,702 | $ | (15,748,657) | $ | 372,766,182 | |||||
STELLUS CAPITAL INVESTMENT CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) | ||||||
For three months ended | ||||||
March 31, 2025 | March 31, 2024 | |||||
Cash flows from operating activities | ||||||
Net increase in net assets resulting from operations | $ | 4,993,545 | $ | 13,148,460 | ||
Adjustments to reconcile net increase in net assets from operations to net cash used in operating activities: | ||||||
Purchases of investments | (55,415,263) | (28,516,430) | ||||
Proceeds from sales and repayments of investments | 14,986,423 | 31,169,595 | ||||
Net change in unrealized appreciation on investments | (1,193,293) | (23,518,590) | ||||
Net change in unrealized (appreciation) depreciation on foreign currency translations | (8,319) | 3,602 | ||||
Increase in investments due to PIK | (976,479) | (750,054) | ||||
Amortization of premium and accretion of discount, net | (715,755) | (702,543) | ||||
Deferred tax provision | — | 192,607 | ||||
Amortization of loan structure fees | 315,618 | 264,707 | ||||
Amortization of deferred financing costs | 110,150 | 111,374 | ||||
Amortization of loan fees on SBA-guaranteed debentures | 188,984 | 314,055 | ||||
Net realized loss on investments | 5,967,221 | 20,384,731 | ||||
Changes in other assets and liabilities | ||||||
Increase in interest receivable | (1,281,507) | (1,602,062) | ||||
Increase in income tax receivable | (1,081,760) | (1,085,022) | ||||
Increase in other receivables | (20,755) | — | ||||
Decrease in related party receivables | 3,687 | — | ||||
Decrease in prepaid expenses | 90,313 | 21,256 | ||||
Increase (decrease) in management fees payable | 20,617 | (1,066,303) | ||||
Decrease in income incentive fees payable | (1,458,054) | (140,107) | ||||
(Decrease) increase in administrative services payable | (12,990) | 22,897 | ||||
Decrease in interest payable | (3,788,915) | (3,748,120) | ||||
Increase in related party payable | 1,290,893 | — | ||||
Increase in unearned revenue | 72,177 | 14,589 | ||||
Increase (decrease) in other accrued expenses and liabilities | 989,436 | (61,688) | ||||
Net Cash (Used) Provided in Operating Activities | $ | (36,924,026) | $ | 4,456,954 | ||
Cash flows from Financing Activities | ||||||
Proceeds from the issuance of common stock | $ | 9,256,982 | $ | — | ||
Sales load for common stock issued | (138,908) | — | ||||
Offering costs paid for common stock issued | (179,988) | (5,209) | ||||
Stockholder distributions paid | (10,999,933) | (6,431,896) | ||||
Repayments of SBA-guaranteed debentures | (16,250,000) | — | ||||
Financing costs paid on Credit Facility | — | (49,969) | ||||
Borrowings under Credit Facility | 67,700,000 | 50,000,000 | ||||
Repayments of Credit Facility | (21,633,900) | (25,333,900) | ||||
Net Cash Provided by Financing Activities | $ | 27,754,253 | $ | 18,179,026 | ||
Net (Decrease) Increase in Cash and Cash Equivalents | $ | (9,169,773) | $ | 22,635,980 | ||
Cash and Cash Equivalents Balance at Beginning of Period | $ | 20,058,594 | $ | 26,125,741 | ||
Cash and Cash Equivalents Balance at End of Period | $ | 10,888,821 | $ | 48,761,721 | ||
Supplemental and Non-Cash Activities | ||||||
Cash paid for interest expense | $ | 11,437,182 | $ | 10,825,557 | ||
Income and excise tax paid | 1,581,307 | 1,455,741 | ||||
Increase in distributions payable | 87,456 | 3,215,948 | ||||
Increase in deferred offering costs | — | 5,209 | ||||
Exchange of investments | 1,663,301 | 8,256,411 | ||||
Reconciliation of Core Net Investment Income (1) (Unaudited) | ||||
Three Months Ended | ||||
March 31, 2025 | March 31, 2024 | |||
Net investment income | $9,788,809 | $10,235,916 | ||
Income tax expense | 499,547 | 370,719 | ||
Core net investment income | $10,288,356 | $10,606,635 | ||
Per share amounts: | ||||
Net investment income per share | $0.35 | $0.42 | ||
Core net investment income per share | $0.37 | $0.44 | ||
Reconciliation of Realized Net Investment Income (2) (Unaudited) | ||||
Three Months Ended | ||||
March 31, 2025 | March 31, 2024 | |||
Net investment income | $9,788,809 | $10,235,916 | ||
Net realized loss on investments | (5,967,221) | (20,384,731) | ||
Net realized loss on foreign currency translation | (29,655) | (25,106) | ||
Total Realized Net Investment Income (Loss) | $3,791,933 | ($10,173,921) | ||
Per share amounts: | ||||
Net investment income per share | $0.35 | $0.42 | ||
Realized net investment income (loss) per share | $0.14 | ($0.42) | ||
SOURCE Stellus Capital Investment Corporation
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