LOS ANGELES, Aug. 09, 2023 (GLOBE NEWSWIRE) -- Crescent Capital BDC, Inc. (“Crescent BDC” or “Company”) ( CCAP) today reported net investment income of $20.6 million, or $0.56 per share, for the quarter ended June 30, 2023. Reported net asset value per share was $19.58 at June 30, 2023.
The Company announced that its Board of Directors (the “Board”) declared a regular cash dividend for the third quarter of 2023 of $0.41 per share, which will be paid on October 16, 2023 to stockholders of record as of the close of business on September 29, 2023. Additionally, the Board declared a supplemental cash dividend of $0.08 per share which will be paid on September 15, 2023 to stockholders of record as of August 31, 2023. Going forward, in addition to a quarterly base dividend of $0.41 per share, the Company’s Board expects to also declare, when applicable, a formula-based quarterly supplemental dividend in an amount to be determined each quarter.
Selected Financial Highlights
($ in millions, except per share amounts)
| As of and for the three months ended | ||||||||||||||||
| June 30, 2023 | March 31, 2023 | June 30, 2022 | ||||||||||||||
| Investments, at fair value | $ | 1,581.1 | $ | 1,566.0 | $ | 1,285.3 | ||||||||||
| Total assets | $ | 1,624.6 | $ | 1,631.1 | $ | 1,323.0 | ||||||||||
| Total net assets | $ | 725.8 | $ | 718.4 | $ | 639.2 | ||||||||||
| Net asset value per share | $ | 19.58 | $ | 19.38 | $ | 20.69 | ||||||||||
| Investment income | $ | 46.7 | $ | 39.3 | $ | 26.7 | ||||||||||
| Net investment income | $ | 20.6 | $ | 17.5 | $ | 15.5 | ||||||||||
| Net realized gains (losses), net of taxes | $ | (6.6 | ) | $ | 0.5 | $ | (1.8 | ) | ||||||||
| Net change in unrealized gains (losses), net of taxes | $ | 8.6 | $ | (10.2 | ) | $ | (14.6 | ) | ||||||||
| Net increase (decrease) in net assets resulting from operations | $ | 22.6 | $ | 7.8 | $ | (0.9 | ) | |||||||||
| Net investment income per share | $ | 0.56 | $ | 0.54 | $ | 0.50 | ||||||||||
| Net realized gains (losses) per share, net of taxes | $ | (0.18 | ) | $ | 0.01 | $ | (0.06 | ) | ||||||||
| Net change in unrealized gains (losses) per share, net of taxes | $ | 0.23 | $ | (0.31 | ) | $ | (0.47 | ) | ||||||||
| Net increase (decrease) in net assets resulting from operations per share | $ | 0.61 | $ | 0.24 | $ | (0.03 | ) | |||||||||
| Regular distributions paid per share | $ | 0.41 | $ | 0.41 | $ | 0.41 | ||||||||||
| Special distributions paid per share | - | - | $ | 0.05 | ||||||||||||
| Non-GAAP Financial Measures1: | ||||||||||||||||
| Adjusted net investment income | $ | 20.6 | $ | 17.5 | $ | 12.7 | ||||||||||
| Adjusted net investment income per share | $ | 0.56 | $ | 0.54 | $ | 0.41 | ||||||||||
| Weighted average yield on income producing securities (at cost)2 | 11.7 | % | 11.4 | % | 8.3 | % | ||||||||||
| Percentage of debt investments at floating rates | 98.6 | % | 98.6 | % | 98.7 | % | ||||||||||
Portfolio & Investment Activity
As of June 30, 2023 and December 31, 2022, the Company had investments in 187 and 129 portfolio companies with an aggregate fair value of $1,581.1 and $1,263.0 million, respectively. The portfolio at fair value was comprised of the following asset types:
| Portfolio Asset Types: | ||||||||||||||||||||
| As of | ||||||||||||||||||||
| $ in millions | June 30, 2023 | December 31, 2022 | ||||||||||||||||||
| Investment Type | Fair Value | Percentage | Fair Value | Percentage | ||||||||||||||||
| Senior secured first lien | $ | 445.5 | 28.1 | % | $ | 301.0 | 23.8 | % | ||||||||||||
| Unitranche first lien3 | 955.0 | 60.4 | 824.1 | 65.2 | ||||||||||||||||
| Unitranche first lien - last out3 | 14.3 | 0.9 | 13.8 | 1.1 | ||||||||||||||||
| Senior secured second lien | 57.2 | 3.6 | 60.9 | 4.8 | ||||||||||||||||
| Unsecured debt | 5.6 | 0.4 | 4.5 | 0.4 | ||||||||||||||||
| Equity & other | 48.9 | 3.1 | 44.9 | 3.6 | ||||||||||||||||
| LLC/LP equity interests | 54.6 | 3.5 | 13.8 | 1.1 | ||||||||||||||||
| Total investments | $ | 1,581.1 | 100.0 | % | $ | 1,263.0 | 100.0 | % | ||||||||||||
For the quarter ended June 30, 2023, the Company invested $38.1 million across two new portfolio companies and several follow-on revolver and delayed draw fundings. For this period, the Company had $27.6 million in aggregate exits, sales and repayments.
For the quarter ended March 31, 2023, the Company acquired $335.0 million of investments at cost across 63 new portfolio companies in connection with its acquisition of First Eagle Alternative Capital BDC, Inc. ("FCRD"). Additionally, the Company invested $29.0 million across three existing portfolio companies and several follow-on revolver and delayed draw fundings. For this period, the Company had $54.4 million in aggregate exits, sales and repayments.
Results of Operations
For the three months ended June 30, 2023 and 2022, investment income totaled $46.7 million and $26.7 million, respectively. Interest income, which includes amortization of upfront fees, increased from $24.4 million for the three months ended June 30, 2022 to $43.1 million for the three months ended June 30, 2023. The increase was driven by a rise in benchmark rates, the Company’s acquisition of FCRD, which closed in March 2023, and organic growth in the Company’s income producing portfolio. Included in interest from investments for the three months ended June 30, 2023 and 2022 are $0.1 million and $0.3 million of accelerated accretion of OID related to paydown activity, respectively.
Dividend income increased from $2.1 million for the three months ended June 30, 2022 to $3.4 million for the three months ended June 30, 2023 due to higher dividend distributions from the Company’s portfolio companies. Other income, which includes consent, waiver, amendment, agency, underwriting and arranger fees, was $0.2 million for the three months ended June 30, 2023 and 2022, respectively.
For the three months ended June 30, 2023 and 2022, total net expenses, including income and excise taxes, totaled $26.1 million and $11.2 million, respectively. The increase was primarily driven by interest and other debt financing costs, which increased from $6.6 million for the three months ended June 30, 2022 to $15.3 million for the three months ended June 30, 2023 due to higher weighted average debt outstanding and a higher weighted average cost of debt related to a rise in benchmark rates.
Liquidity and Capital Resources
As of June 30, 2023, the Company had $21.5 million in cash and cash equivalents and restricted cash and $314.5 million of undrawn capacity on its credit facilities, subject to borrowing base and other limitations. The weighted average interest rate on the Company’s debt outstanding as of June 30, 2023 was 6.73%.
The Company’s debt to equity ratio was 1.19x as of June 30, 2023.
Conference Call
The Company will host a webcast/conference call on Thursday, August 10, 2023 at 12:00 p.m. (Eastern Time) to discuss its financial results for the quarter ended June 30, 2023. Please visit Crescent BDC’s webcast link located on the Events & Presentations page of the Investor Relations section of Crescent BDC’s website for a slide presentation that complements the earnings conference call.
All interested parties are invited to participate via telephone or the live webcast, which will be hosted on a webcast link located on the Events & Presentations page of the Investor Resources section of Crescent BDC’s website at www.crescentbdc.com. Please visit the website to test your connection before the webcast. Participants are also invited to access the conference call by dialing the following number:
Toll Free: (888) 259-6580
Conference ID: 90261204
All callers will need to enter the Conference ID followed by the # sign and reference “Crescent BDC” once connected with the operator. An archived replay will be available via a webcast link located on the Investor Relations section of Crescent BDC's website.
Endnotes
Note: Numbers may not sum due to rounding.
1) On a supplemental basis, the Company is disclosing adjusted net investment income and adjusted net investment income per share, each of which is a financial measure that is calculated and presented on a basis of methodology other than in accordance with U.S. GAAP (“non-GAAP”). Adjusted net investment income represents net investment income, excluding capital gains incentive fees. We use this non-GAAP financial measure internally to analyze and evaluate financial results and performance and believe that this non-GAAP financial measure is useful to investors as an additional tool to evaluate ongoing results and trends without giving effect to capital gains incentive fees. The Company’s investment advisory agreement provides that a capital gains-based incentive fee is determined and paid annually with respect to realized capital gains (but not unrealized capital appreciation) to the extent such realized capital gains exceed realized capital losses and unrealized capital depreciation on a cumulative basis. We believe that adjusted net investment income is a useful performance measure because it reflects the net investment income produced on the Company’s investments during a period without giving effect to any changes in the value of such investments and any related capital gains incentive fees between periods. The presentation of adjusted net investment income is not intended to be a substitute for financial results prepared in accordance with GAAP and should not be considered in isolation. The following table provides an unaudited reconciliation of net investment income (the most comparable U.S. GAAP measure) to adjusted net investment income for the periods presented:
| For the three months ended | ||||||||||||||||||||||||||||||
| June 30, 2023 | March 31, 2023 | June 30, 2022 | ||||||||||||||||||||||||||||
| $ in millions, except per share data | Amount | Per Share | Amount | Per Share | Amount | Per Share | ||||||||||||||||||||||||
| GAAP net investment income | $ | 20.6 | $ | 0.56 | $ | 17.5 | $ | 0.54 | $ | 15.5 | $ | 0.50 | ||||||||||||||||||
| Capital gains based incentive fee | - | - | - | - | (2.8 | ) | (0.09 | ) | ||||||||||||||||||||||
| Adjusted net investment income | $ | 20.6 | $ | 0.56 | $ | 17.5 | $ | 0.54 | $ | 12.7 | $ | 0.41 | ||||||||||||||||||
2) Yield excludes investments on non-accrual status.
3) Unitranche loans are first lien loans that may extend deeper in a company’s capital structure than traditional first lien debt and may provide for a waterfall of cash flow priority among different lenders in the unitranche loan. In certain instances, the Company may find another lender to provide the “first out” portion of such loan and retain the “last out” portion of such loan, in which case, the “first out” portion of the loan would generally receive priority with respect to payment of principal, interest and any other amounts due thereunder over the “last out” portion that the Company would continue to hold. In exchange for the greater risk of loss, the “last out” portion earns a higher interest rate.
Crescent Capital BDC, Inc.
Consolidated Statements of Assets and Liabilities
(in thousands except share and per share data)
| As of June 30, 2023 (Unaudited) | As of December 31, 2022 | ||||||
| Assets | |||||||
| Investments, at fair value | |||||||
| Non-controlled non-affiliated (cost of $1,483,590 and $1,235,778, respectively) | $ | 1,461,735 | $ | 1,208,501 | |||
| Non-controlled affiliated (cost of $57,257 and $42,040, respectively) | 58,836 | 43,080 | |||||
| Controlled (cost of $68,792 and $13,638, respectively) | 60,559 | 11,375 | |||||
| Cash and cash equivalents | 7,535 | 6,397 | |||||
| Restricted cash and cash equivalents | 13,927 | 10,670 | |||||
| Interest and dividend receivable | 11,766 | 9,945 | |||||
| Unrealized appreciation on foreign currency forward contracts | 7,069 | 8,154 | |||||
| Deferred tax assets | 1,324 | 91 | |||||
| Receivable for investments sold | - | 5 | |||||
| Other assets | 1,872 | 4,660 | |||||
| Total assets | $ | 1,624,623 | $ | 1,302,878 | |||
| Liabilities | |||||||
| Debt (net of deferred financing costs of $7,974 and $5,380) | $ | 859,167 | $ | 654,456 | |||
| Distributions payable | 15,195 | 12,664 | |||||
| Interest and other debt financing costs payable | 9,393 | 8,471 | |||||
| Management fees payable | 4,960 | 4,056 | |||||
| Incentive fees payable | 4,278 | 3,112 | |||||
| Deferred tax liabilities | 2,134 | 899 | |||||
| Payable for investment purchased | - | 514 | |||||
| Directors’ fees payable | 146 | 151 | |||||
| Unrealized depreciation on foreign currency forward contracts | 310 | 157 | |||||
| Accrued expenses and other liabilities | 3,235 | 5,857 | |||||
| Total liabilities | $ | 898,818 | $ | 690,337 | |||
| Net assets | |||||||
| Preferred stock, par value $0.001 per share (10,000 shares authorized, zero outstanding, respectively) | $ | - | $ | - | |||
| Common stock, par value $0.001 per share (200,000,000 shares authorized, 37,061,547 and 30,887,360 shares issued and outstanding, respectively) | 37 | 31 | |||||
| Paid-in capital in excess of par value | 788,299 | 675,008 | |||||
| Accumulated earnings (loss) | (62,531 | ) | (62,498 | ) | |||
| Total net assets | $ | 725,805 | $ | 612,541 | |||
| Total liabilities and net assets | $ | 1,624,623 | $ | 1,302,878 | |||
| Net asset value per share | $ | 19.58 | $ | 19.83 | |||
Crescent Capital BDC, Inc.
Consolidated Statements of Operations
(in thousands except share and per share data)
(Unaudited)
| For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Investment Income: | ||||||||||||||||
| From non-controlled non-affiliated investments: | ||||||||||||||||
