Delaware

814-00712

20-2725151

(State or other jurisdiction of

(Commission

(IRS Employer

incorporation or organization)

File Number)

Identification Number)

☐

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))

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common Stock, $0.001 par value

BKCC

NASDAQ Global Select Market

ITEM 2.02.

RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

ITEM 7.01.

REGULATION FD DISCLOSURE.

ITEM 9.01.

FINANCIAL STATEMENTS AND EXHIBITS.

Exhibit

Number

Description

99.1

Press Release, dated as of March 3, 2021

BLACKROCK CAPITAL INVESTMENT

CORPORATION

Date: March 3, 2021

By:

/s/ Abby Miller

Name: Abby Miller

Title: Chief Financial Officer and Treasurer

Investor Contact:

Press Contact:

Nik Singhal

Brian Beades

212.810.5427

212.810.5596

•

GAAP Net Investment Income (“NII”) of $0.10 per share, or $7.3 million, provided fourth quarter distribution coverage of 101%.  

•

Net Asset Value (“NAV”) increased to $315.0 million, up 2.8% from $306.6 million; NAV per share decreased 0.2% to $4.23 per share from $4.24 per share, primarily due to an increase in total shares outstanding.

•

Transformational progress towards reducing junior capital and non-core exposure, successfully exiting  $171 million of these investments during the fourth quarter and subsequent period. As a result, non-core holdings represent just 9%¹ of the total portfolio at fair value as of February 23, 2021.

•

Net leverage of 0.51x as of December 31, 2020, down significantly from 0.98x as of September 30, 2020, primarily driven by net investment exits during the fourth quarter.

•

Total liquidity for portfolio company investments, including cash, was approximately $285 million, subject to leverage and borrowing base restrictions.

February 23, 2021¹

September 30, 2020

December 31, 2019

Portfolio Composition

First Lien Debt

58%

37%

34%

Second Lien Debt

28%

25%

23%

Junior Capital²

14%

38%

43%

Portfolio Company Count

58

55

47

Non-Core Assets

Portfolio Company Count³

6

7

9

FMV ($ in Millions)

40

53

120

% of investments, at FMV

9%

9%

16%

October 1, 2020 - February 23, 2021

$ in Millions

%

Deployments

First Lien Debt

69

76%

Second Lien Debt

21

23%

Unsecured Debt

1

1%

Repayments/Exits

Non-Core & Junior Capital

171

68%

Other Core Assets

80

32%

Q4 2020

Q3 2020

Q4 2019

($'s in millions, except per share data)

Total Amount

Per Share

Total Amount

Per Share

Total Amount

Per Share

Net Investment Income/(loss)

$7.3

$0.10

$8.5

$0.12

$9.6

$0.14

Net realized and unrealized gains/(losses)

$2.6

$0.04

$(35.7)

$(0.51)

$(11.2)

$(0.16)

Basic earnings/(losses)

$9.9

$0.14

$(27.2)

$(0.39)

$(1.6)

$(0.02)

Distributions declared

$7.2

$0.10

$7.0

$0.10

$9.6

$0.14

Net Investment Income/(loss), as adjusted¹

$7.3

$0.10

$8.5

$0.12

$9.6

$0.14

Basic earnings/(losses), as adjusted¹

$9.9

$0.14

$(27.2)

$(0.39)

$(1.6)

$(0.02)

2020 Totals

2019 Totals

($'s in millions, except per share data)

Total Amount

Per Share

Total Amount

Per Share

Net Investment Income/(loss)

$34.2

$0.49

$41.9

$0.61

Net realized and unrealized gains/(losses)

$(138.1)

$(1.98)

$(48.8)

$(0.71)

Basic earnings/(losses)

$(103.9)

$(1.49)

$(6.9)

$(0.10)

Distributions declared

$30.6

$0.44

$44.1

$0.64

Net Investment Income/(loss), as adjusted¹

$34.2

$0.49

$41.9

$0.61

Basic earnings/(losses), as adjusted¹

$(103.9)

$(1.49)

$(6.9)

$(0.10)

($'s in millions, except per share data)

December 31, 2020

September 30, 2020

December 31, 2019

Total assets

$511.7

$621.4

$774.1

Investment portfolio, at fair market value

$479.0

$609.0

$749.9

Debt outstanding

$179.8

$305.0

$313.6

Total net assets

$315.0

$306.6

$435.6

Net asset value per share

$4.23

$4.24

$6.33

Net leverage ratio²

0.51x

0.98x

0.70x

¹

Non-GAAP basis financial measure. See Supplemental Information on page 10.

²

Calculated as the ratio between (A) debt, excluding unamortized debt issuance costs, less available cash and receivable for investments sold, plus payables for investments purchased, and (B) NAV.

•

Reduced Exposure in Non-core Legacy Portfolio:

o

Our investment in the unsecured debt of CB-HDT Holdings, Inc. was repaid in full (along with the entire accrued and unpaid PIK interest), resulting in a repayment of $9.4 million to the Company. This investment had a FMV of $8.9 million at September 30, 2020.

o

Red Apple Stores Inc. paid down $6.2 million on its 2nd lien loan to the Company utilizing excess cash on its balance sheet as its financial performance improved significantly during 2020. The FMV of the remaining 2nd lien investment in Red Apple is $14.8 million as of December 31, 2020. This investment had a FMV of $17.3 million at September 30, 2020, which was prior to the aforementioned principal reduction.

o

As of February 23^rd, 2021, non-core legacy assets comprised approximately $40 million, or 9% of our total portfolio at fair market value (six portfolio companies), as compared to 9% at the end of the third quarter and 16% at the end of 2019. Of the $40 million, approximately $38 million of non-core positions at FMV consist of income-producing investments across five portfolio companies.

•

Reduced Exposure in other junior capital:

o

During the fourth quarter, $87.4 million of repayments were received on the unsecured debt of GBFC. These repayments were driven by (i) the previously disclosed sale of GBFC’s loan portfolio to Callodine Commercial Finance, Inc. and (ii) monetization of an equity warrant position issued by a prior GBFC portfolio company. The FMV of the Company’s remaining unsecured debt of GBFC is $22.9 million as December 31, 2020. This investment had an FMV of $121.8 million at September 30, 2020 which was prior to the aforementioned loan portfolio sale.

o

SLP sold a majority of its loan portfolio in the fourth quarter. Following this sale, SLP paid off and terminated its credit facility, and returned $23.0 million of capital to BCIC in December. Subsequent to year end, SLP partially sold one additional investment and returned an incremental $4 million to BCIC. After these sales, the remaining portfolio of SLP now consists of four portfolio companies with first lien loans with an aggregate FMV of approximately $31 million. BCIC owns 85% of the equity in SLP.

o

Investments in the subordinated debt and equity of First Boston Construction Holdings, LLC were fully repaid subsequent to the end of the fourth quarter resulting in the payment of $38.5 million to the Company. These investments had a FMV of $37.2 million at December 31, 2020.

•

Share Repurchase Program: No shares were repurchased under our existing share repurchase program during the fourth quarter of 2020. Cumulative repurchases since BlackRock entered into the investment management agreement with the Company in early 2015 total approximately 8.3 million shares for $54.0 million. Since the inception of our share repurchase program through December 31, 2020, we have purchased over 10.0 million shares at an average price of $6.62 per share, including brokerage commissions, for a total of $66.3 million. On November 3, 2020, the Company’s Board of Directors authorized the Company to purchase up to a total of 7,500,000 shares, effective until the earlier of November 2, 2021 or such time that all the authorized shares have been repurchased. As of December 31, 2020, 7,500,000 shares remained authorized for repurchase. With several strategic portfolio exits already accomplished, BCIC is increasing the amount of capital allocated towards programmatic share repurchases.

•

NII was $7.3 million, or $0.10 per share, for the three months ended December 31, 2020. Relative to distributions declared of $0.10 per share, our NII distribution coverage was 101% for the quarter. Total investment income declined by 10.4% compared to previous quarter mainly driven by GBFC unsecured debt being put on non-accrual status during the fourth quarter.

•

NAV increased to $315.0 million, up 2.8% from $306.6 million as of September 30, 2020. NAV per share decreased 0.2% or $(0.01) per share to $4.23 per share on a quarter-over-quarter basis, primarily due to an increase in total shares outstanding.

•

For the quarter ended December 31, 2020, we incurred base management fees of $2.3 million, and incentive management fees based on income of $1.3 million. Our advisor has voluntarily waived the incentive fees based on income of $1.3 million, resulting in no net incentive fees for the period. Since March 2017, the adviser has waived $29.7 million of incentive management fees on a cumulative basis. For incentive management fees based on gains, there was no accrual or payment as of December 31, 2020.

•

Tax characteristics of all 2020 distributions were reported to stockholders on Form 1099 after the end of the calendar year. Our 2020 distributions included a $0.12 per share return of capital. Our return of capital distributions totaled $2.11 per share from inception to December 31, 2020. At our discretion, we may carry forward taxable income in excess of calendar year distributions and pay a 4% excise tax on this income.  We will accrue excise tax on estimated undistributed taxable income as required. There was no undistributed taxable income carried forward from 2020.

($’s in millions)

Three Months

Ended

December 31, 2020

Three Months

Ended

December 31, 2019

Year

Ended

December 31, 2020

Year

Ended

December 31, 2019

Investment deployments

$59.9

$73.0

$143.5

$303.5

Investment exits

$193.2

$38.1

$277.6

$176.7

Number of portfolio company investments at the end of period

55

47

55

47

Weighted average yield of debt and income producing equity securities, at fair market value

8.9%

10.9%

8.9%

10.9%

% of Portfolio invested in Secured debt, at fair market value

77%

57%

77%

57%

% of Portfolio invested in Unsecured debt, at fair market value

13%

22%

13%

22%

% of Portfolio invested in Equity, at fair market value

10%

21%

10%

21%

Average investment by portfolio company, at amortized cost

(excluding investments below $5.0 million)

$17.3

$21.9

$17.3

$21.9

•

We deployed $59.9 million during the quarter while exits and repayments totaled $193.2 million, resulting in a $133.3 million net decrease in our portfolio primarily due to progress made in reducing exposure in non-core and other junior capital investments previously mentioned.  

▪

Our deployments primarily consisted of seven new portfolio companies and three investments into existing portfolio companies, which are outlined as follows:

▪

$25.0 million L + 9.00% first lien term loan and $8.1 million unfunded delayed draw term loan to Callodine Commercial Finance, LLC, as part of the previously disclosed GBFC transaction;

▪

$7.8 million L + 6.25% first lien term loan to Paula's Choice Holdings, Inc., a well-established direct-to-consumer skincare brand;

▪

$5.8 million L + 9.00% second lien term loan to Team Services Group, LLC, a leading provider of homecare assistance for the elderly and people with disabilities;

▪

$4.7 million L + 7.00% first lien term loan and $3.1 million unfunded delayed draw term loan to Thras.io, LLC, a consolidator of small to medium sized brands that sell through Amazon’s third-party platform;

▪

$4.7 million L + 8.00% second lien term loan to Syndigo, LLC, a provider of digital content and retail optimization solutions for the consumer goods industry;

▪

$1.8 million L + 6.25% first lien term loan and $0.3 million revolving term loan ($0.1 million unfunded) to IT Parent, LLC, a sales automation software platform designed for insurance carriers and distributors; and

▪

$1.5 million L + 7.00% first lien term loan and $3.5 million unfunded delayed draw term loan to Sonny’s Enterprises, LLC, a manufacturer and provider of car wash equipment, parts, chemicals and controls software;

▪

$3.0 million of incremental L + 6.76% first lien term loan to Live Auctioneers, LLC;

▪

$2.3 million of incremental L + 8.50% second lien term loan to AmeriLife Holdings, LLC; and

▪

$1.3 million of incremental L + 7.00% second lien term loan to NEP II, Inc.

▪

Our sales, exits, and repayments were primarily concentrated in seven portfolio company exits, three partial repayments, two partial sales, and one partial return of capital:

▪

$87.4 million partial repayment of our unsecured debt in GBFC;

▪

$23.0 million partial return of capital from our equity investment in SLP;

▪

$17.5 million full repayment of Vertellus Holdings, LLC first lien term loan;

▪

$11.9 million full repayment of Cambrex Corporation second lien term loan;

▪

$9.4 million full repayment of CB-HDT Holdings, Inc. unsecured debt, a non-core legacy position;

▪

$9.1 million of proceeds from our partial sale of Zest Acquisition Corp. second lien term loan;

▪

$8.4 million full repayment of P&L Development, LLC first lien term loan;

▪

$6.2 million partial repayment of Red Apple Stores Inc. second lien term loan, a non-core legacy position;

▪

$5.1 million full repayment of ECI Macola/Max Holding, LLC second lien term loan;

▪

$4.9 million of proceeds from our partial sale of Midwest Physician Administrative Services, LLC second lien term loan;

▪

$3.5 million partial repayment of Outcomes Group Holdings, Inc. second lien term loan;  

▪

$2.7 million full repayment of Pulse Secure, LLC first lien term loan; and

▪

$2.4 million full repayment of Marketlive, LLC (Kibo) first lien term loan.

•

As of December 31, 2020, there were four non-accrual investment positions, representing approximately 6.5% and 17.8% of total debt and preferred stock investments, at fair value and cost, respectively, as compared to four non-accrual investment positions of approximately 2.4% and 6.9% of total debt and preferred stock investments at fair value and cost, respectively, at December 31, 2019. As previously disclosed, the Company’s unsecured debt investment in GBFC became a new non-accrual investment during the quarter after the sale of GBFC’s loan portfolio. As described earlier, the remaining investment stands to benefit from recovery on the interests retained by GBFC. The average internal investment rating of the portfolio at fair market value at December 31, 2020 was 1.90 as compared to 1.78 as of the prior quarter end. As of February 23, 2021, there were three non-accrual investment positions, representing approximately 5.4% of total debt and preferred stock investments, at fair value.

•

During the quarter ended December 31, 2020, net realized and unrealized gains were $2.6 million, primarily attributable to net appreciation in portfolio valuations during the quarter.

•

At December 31, 2020, we had $23.3 million in cash and cash equivalents and $261.2 million of availability under our credit facility, subject to leverage restrictions, resulting in approximately $284.5 million of availability for portfolio company investments. Committed but unfunded portfolio obligations at December 31, 2020 were $20.0 million (excluding the $4.2 million LP commitment to SLP, which is completely discretionary). We believe there is sufficient liquidity to meet all of the Company’s obligations and selectively deploy new capital.

•

Net leverage, adjusted for available cash, receivables for investments sold, payables for investments purchased and unamortized debt issuance costs, was 0.51x at quarter-end, and our 271% asset coverage ratio provided the Company with available debt capacity under its asset coverage requirements of $220.7 million. As of February 23, 2021, after accounting for portfolio activity subsequent to the quarter, net leverage declined to approximately 0.43x. Further, as of December 31, 2020, approximately 82% of our assets were invested in qualifying assets, exceeding the 70% regulatory requirement of a business development company.

•

On December 30, 2020, the Company paid a dividend of $0.10 per share, or $7.23 million, to stockholders of record on November 18, 2020, as announced on November 4, 2020. Of the total $7.23 million dividend, approximately $1.45 million was paid in cash and $5.78 million was paid in approximately 2.16 million shares of the Company’s common stock issued at a price of $2.684 per share (representing the average closing stock price for the Company’s stock on the five trading days beginning on December 16, 2020 and ending on December 22, 2020 (both days inclusive)). Due to the portion of dividends paid in common stock, our NAV has increased by approximately $5.78 million on December 30, 2020.

•

For the first quarter of 2021, BCIC declared an all cash dividend of $0.10 per share, payable on April 7, 2021 to stockholders of record at the close of business on March 17, 2021.

December 31, 2020

December 31, 2019

Assets

Investments at fair value:

Non-controlled, non-affiliated investments (cost of $369,079,320 and $389,156,775)

$354,957,936

$377,136,394

Non-controlled, affiliated investments (cost of $20,927,907 and $65,825,475)

13,099,313

22,473,524

Controlled investments (cost of $216,768,227 and $400,561,551)

110,968,227

350,249,163

Total investments at fair value (cost of $606,775,454 and $855,543,801)

479,025,476

749,859,081

Cash and cash equivalents

23,332,831

14,678,878

Receivable for investments sold

5,439,507

1,871,435

Interest, dividends and fees receivable

2,138,304

5,708,324

Prepaid expenses and other assets

1,783,472

1,945,709

Total Assets

$511,719,590

$774,063,427

Liabilities

Debt (net of deferred financing costs of $1,360,356 and $2,298,004)

$179,798,037

$313,569,694

Interest and credit facility fees payable

502,682

757,472

Distributions payable

—

9,637,075

Base management fees payable

2,313,447

3,251,194

Incentive management fees payable

1,849,597

1,849,597

Payable for investments purchased

9,193,917

7,312,500

Accrued administrative services

389,064

372,407

Other accrued expenses and payables

2,662,569

1,704,507

Total Liabilities

196,709,313

338,454,446

Net Assets

Common stock, par value $.001 per share, 200,000,000 common shares authorized, 84,478,251 and 77,861,287 issued and 74,466,665 and 68,836,255 outstanding

84,478

77,861

Paid-in capital in excess of par

866,720,809

849,240,398

Distributable earnings (losses)

(485,498,151)

(351,040,023)

Treasury stock at cost, 10,011,586 and 9,025,032 shares held

(66,296,859)

(62,669,255)

Total Net Assets

315,010,277

435,608,981

Total Liabilities and Net Assets

$511,719,590

$774,063,427

Net Asset Value Per Share

$4.23

$6.33

Three Months Ended

December 31, 2020 (Unaudited)

Three Months Ended

December 31, 2019 (Unaudited)

Year

Ended

December 31,

2020

Year

Ended

December 31,

2019

Investment Income:

Non-controlled, non-affiliated investments:

Cash interest income

$8,160,377

$8,370,290

$31,426,192

$29,292,857

PIK interest income

1,268,636

1,226,151

5,026,084

2,085,016

Fee income

543,312

89,829

620,705

1,444,113

Total investment income from non-controlled, non-affiliated investments

9,972,325

9,686,270

37,072,981

32,821,986

Non-controlled, affiliated investments:

Cash interest income

117,138

128,895

474,862

3,493,487

PIK interest income

121,049

116,575

461,367

245,197

PIK dividend income

—

—

—

220,480

Fee income

(7,377)

1,451

(3,055)

3,055

Total investment income from non-controlled, affiliated investments

230,810

246,921

933,174

3,962,219

Controlled investments:

Cash interest income

3,184,893

5,105,807

19,794,470

22,832,830

PIK interest income

—

759,254

1,053,664

2,776,671

Cash dividend income

1,220,030

3,389,999

8,190,499

15,562,959

Fee income

3,186

3,186

70,712

131,485

Total investment income from controlled investments

4,408,109

9,258,246

29,109,345

41,303,945

Other income

—

—

—

30,371

Total investment income

14,611,244

19,191,437

67,115,500

78,118,521

Expenses:

Base management fees

2,313,447

3,251,193

10,799,832

12,425,101

Incentive management fees

1,278,947

2,122,796

6,304,333

8,751,521

Interest and credit facility fees

3,344,257

4,091,942

15,584,214

15,558,648

Professional fees

432,544

309,728

1,964,252

2,093,064

Administrative services

389,064

372,407

1,457,979

1,403,419

Director fees

157,500

176,500

652,250

729,750

Investment advisor expenses

87,500

87,500

350,000

350,000

Other

578,667

288,190

2,083,486

1,800,932

Total expenses, before incentive management fee waiver

8,581,926

10,700,256

39,196,346

43,112,435

Incentive management fee waiver

(1,278,947)

(1,145,894)

(6,304,333)

(6,901,924)

Expenses, net of incentive management fee waiver

7,302,979

9,554,362

32,892,013

36,210,511

Net Investment Income

7,308,265

9,637,075

34,223,487

41,908,010

Realized and Unrealized Gain (Loss):

Net realized gain (loss):

Non-controlled, non-affiliated investments

(612,107)

(264,342)

(12,941,524)

(23,660,181)

Non-controlled, affiliated investments

(77,952)

(879,673)

(43,851,965)

(1,225,060)

Controlled investments

—

—

(59,194,744)

—

Net realized gain (loss)

(690,059)

(1,144,015)

(115,988,233)

(24,885,241)

Net change in unrealized appreciation (depreciation) on:

Non-controlled, non-affiliated investments

5,978,376

953,491

(2,123,600)

21,084,787

Non-controlled, affiliated investments

848,530

(1,733,802)

35,523,356

(24,529,889)

Controlled investments

(3,870,607)

(9,423,322)

(55,623,040)

(20,798,389)

Foreign currency translation

325,302

136,690

135,427

333,982

Net change in unrealized appreciation (depreciation)

3,281,601

(10,066,943)

(22,087,857)

(23,909,509)

Net realized and unrealized gain (loss)

2,591,542

(11,210,958)

(138,076,090)

(48,794,750)

Net Increase (Decrease) in Net Assets Resulting from Operations

$9,899,807

$(1,573,883)

$(103,852,603)

$(6,886,740)

Net Investment Income Per Share—basic

$0.10

$0.14

$0.49

$0.61

Earnings (Loss) Per Share—basic

$0.14

$(0.02)

$(1.49)

$(0.10)

Average Shares Outstanding—basic

72,358,355

68,836,255

69,801,849

68,836,590

Net Investment Income Per Share—diluted

$0.10

$0.14

$0.49

$0.59

Earnings (Loss) Per Share—diluted

$0.14

$(0.02)

$(1.49)

$(0.10)

Average Shares Outstanding—diluted

89,352,092

85,829,992

86,795,585

85,830,326

Distributions Declared Per Share

$0.10

$0.14

$0.44

$0.64

Three Months

Ended

December 31, 2020

Three Months

Ended

December 31, 2019

Year Ended

December 31, 2020

Year Ended

December 31, 2019

GAAP Basis:

Net Investment Income

$7,308,265

$9,637,075

$34,223,487

$41,908,010

Net Investment Income per share

0.10

0.14

0.49

0.61

Addback: GAAP incentive management fee expense based on Gains

—

—

—

—

Addback: GAAP incentive management fee expense based on Income net of incentive management fee waiver

—

976,902

—

1,849,597

Pre-Incentive Fee¹:

Net Investment Income

$7,308,265

$10,613,977

$34,223,487

$43,757,607

Net Investment Income per share

0.10

0.15

0.49

0.64

Less: Incremental incentive management fee expense based on Income net of incentive management fee waiver

—

(976,902)

—

(1,849,597)

As Adjusted²:

Net Investment Income

$7,308,265

$9,637,075

$34,223,487

$41,908,010

Net Investment Income per share

0.10

0.14

0.49

0.61