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 August 5, 2021

BLACKROCK CAPITAL INVESTMENT

CORPORATION

Date: August 5, 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 $0.07 per share, or $4.8 million, was up 15.6% from the first quarter, which provided second quarter distribution coverage of 65%, an improvement from 56% in the first quarter.  

•

Net Asset Value (“NAV”) increased to $347.2 million, up 7.5% from $322.9 million at the end of the first quarter of 2021; NAV per share increased 7.6% to $4.68 per share from $4.35 per share, primarily due to net realized and unrealized gains of $27.2 million during the quarter.

•

Strong gross deployments in senior secured debt of $88.9 million with sixteen new portfolio companies added, and further progress towards reducing junior capital and non-core exposure including previously disclosed exit on Red Apple.

•

Net leverage of 0.56x as of June 30, 2021, up from 0.38x as of March 31, 2021, primarily driven by net deployments during the current quarter.

•

Total liquidity for portfolio company investments, including cash, was approximately $230 million, subject to leverage and borrowing base restrictions.

•

Under the existing share repurchase program, 80,944 shares were repurchased during the second quarter for approximately $0.3 million at an average price of $3.73 per share, including brokerage commissions.

•

Subsequent to June 30, 2021, the Company exited its equity investment in SVP-Singer Holdings LP (“SVP”), a non-core legacy portfolio company, as a result of the sale of SVP. The exit resulted in $19.6 million of cash proceeds and newly issued equity with a cost basis of approximately $6 million.

Three Months Ended June 30, 2021

$ in Millions

%

Deployments

First Lien Debt

69

77%

Second Lien Debt

20

23%

Repayments/Exits

Non-Core & Junior Capital

19

73%

Other Core Assets

6

27%

Pro Forma³

June 30, 2021

June 30, 2021

December 31, 2020

December 31, 2019

Portfolio Composition

First Lien Debt

66%

64%

50%

34%

Second Lien Debt

22%

21%

27%

23%

Junior Capital¹

12%

15%

23%

43%

Portfolio Company Count

74

74

55

47

Non-Core Assets

Portfolio Company Count²

5

5

6

9

Fair Market Value ("FMV", in Millions)

26

46

42

120

% of investments, at FMV

5%

8%

9%

16%

¹

Includes unsecured/subordinated debt and equity investments.

²

Excludes portfolio companies with zero FMV.

³

Represents portfolio information on a pro forma basis following the successful monetization of the SVP equity subsequent to June 30, 2021. The pro forma amounts are calculated by excluding SVP FMV from the portfolio at June 30, 2021 and including newly issued equity associated with the SVP sale.

Q2 2021

Q1 2021

Q2 2020

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

Total Amount

Per Share

Total Amount

Per Share

Total Amount

Per Share

Net Investment Income/(loss)

$4.8

$0.07

$4.2

$0.06

$8.8

$0.13

Net realized and unrealized gains/(losses)

$27.2

$0.36

$12.0

$0.16

$(36.2)

$(0.53)

Basic earnings/(losses)

$32.0

$0.43

$16.2

$0.22

$(27.4)

$(0.40)

Distributions declared

$7.4

$0.10

$7.4

$0.10

$6.8

$0.10

Net Investment Income/(loss), as adjusted¹

$4.8

$0.07

$4.2

$0.06

$8.8

$0.13

Basic earnings/(losses), as adjusted¹

$32.0

$0.43

$16.2

$0.22

$(27.4)

$(0.40)

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

June 30, 2021

March 31, 2021

December 31, 2020

June 30, 2020

Total assets

$571.7

$483.5

$511.7

$663.8

Investment portfolio, at fair market value

$549.3

$458.3

$479.0

$644.3

Debt outstanding

$193.9

$141.5

$179.8

$319.3

Total net assets

$347.2

$322.9

$315.0

$329.7

Net asset value per share

$4.68

$4.35

$4.23

$4.84

Net leverage ratio²

0.56x

0.38x

0.51x

0.95x

¹

Non-GAAP basis financial measure. See Supplemental Information.

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

As previously disclosed, the Company fully exited its debt and equity positions in Red Apple Stores Inc., resulting in proceeds of $14.9 million (including $0.1 million of interest). Refer to the Company’s Current Report on Form 8-K, filed with the SEC on May 3, 2021.

o

As of June 30, 2021, non-core legacy assets comprised approximately $45.9 million, or 8% of our total portfolio at FMV (five portfolio companies, excluding portfolio companies with zero FMV), as compared to 8% at the end of the first quarter of 2021 and 16% at the end of 2019. The equity investment in SVP, a non-core asset, had a fair value of $25.9 million at June 30, 2021, an increase of $23.2 million compared to prior quarter, driven by an expected sale of the portfolio company which closed subsequent to June 30, 2021. The successful exit of our existing equity investment in SVP resulted in cash proceeds of $19.6 million and newly issued equity with a cost basis of approximately $6 million. Based on the mechanics of the sale, the Company may receive additional proceeds in the future from an escrow and earn out payment linked to the performance of SVP. As a result of the SVP sale, non-core assets would decline to approximately $25.9 million, or 5% of the portfolio at FMV on a pro forma basis, which would be comprised of $17.6 million of income producing investments across two portfolio companies and $8.3 million in non-income producing assets.  

•

Reduced Exposure in Other Junior Capital:

o

Other junior capital (unsecured debt and equity) exposure, excluding non-core assets, in the portfolio stood at 10% by FMV, down from 13% at March 31, 2021 and 40% at December 31, 2019.

o

During the second quarter, BCIC Senior Loan Partners (“SLP”) returned an incremental $3.8 million of capital to BCIC with proceeds from exiting one of its investments. At June 30, 2021, SLP held first lien loans in three portfolio companies, with an aggregate FMV of $29.6 million. BCIC owns 85% of the equity in SLP.

•

Revolving Credit Facility Amendment: As previously disclosed, on April 23, 2021, the Company entered into a Sixth Amendment to the Credit Facility which among other items, extended the maturity date on loans made under the Credit Facility from June 5, 2023 to April 23, 2025, and reduced the aggregate commitment under the Credit Facility from $300 million to $265 million. For more information on the Amendment, refer to the Company’s Current Report on Form 8-K, filed with the SEC on April 29, 2021.

•

Share Repurchase Program: 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. During the quarter, 80,944 shares were repurchased for $301,703 at an average price of $3.73 per share, including brokerage commissions. As of June 30, 2021, 7,162,994 shares remained authorized for repurchase. Cumulative repurchases since BlackRock entered into the investment management agreement with the Company in early 2015 totaled approximately 8.6 million shares at an average price of $6.42 per share, including brokerage commissions, for a total of $55.2 million. Since the inception of our share repurchase program through June 30, 2021, we have purchased approximately 10.3 million shares at an average price of $6.52 per share, including brokerage commissions, for a total of $67.5 million.

•

NII was $4.8 million, or approximately $0.07 per share, for the three months ended June 30, 2021. Relative to distributions declared of $0.10 per share, our NII distribution coverage was 65% for the quarter, up from 56% from the first quarter. As we continue to re-deploy into assets consistent with our core strategy, post successfully reducing our exposure in junior capital and non-core investments during 2020 and the first half of 2021, we expect our earnings power to be accretive in the coming quarters.

•

NAV increased to $347.2 million, up 7.5% from $322.9 million at March 31, 2021. NAV per share increased 7.6% or $0.33 per share to $4.68 per share on a quarter-over-quarter basis, primarily due to net realized and unrealized gains of $27.2 million during the quarter.

•

For the quarter ended June 30, 2021, we incurred base management fees of $1.8 million, and zero incentive management fees based on income. Since March 2017, the adviser has waived $29.7 million of incentive management fees on a cumulative basis. There was no accrual or payment of incentive management fees based on gains as of June 30, 2021.

Three Months Ended

($’s in millions)

June 30, 2021

March 31, 2021

June 30, 2020

Investment deployments

$88.9

$54.9

$21.5

Investment exits

$25.4

$88.0

$22.6

Number of portfolio company investments at the end of period

74

60

52

Weighted average yield of debt and income producing equity securities, at FMV

8.6%

8.5%

9.9%

% of Portfolio invested in Secured debt, at FMV

85%

86%

59%

% of Portfolio invested in Unsecured debt, at FMV

5%

6%

27%

% of Portfolio invested in Equity, at FMV

10%

8%

14%

Average investment by portfolio company, at amortized cost

$8.4

$9.4

$21.8

•

We deployed $88.9 million during the quarter while exits and repayments totaled $25.4 million, resulting in a $63.5 million net increase in portfolio, consistent with our strategy of redeploying capital into our core strategy.  

▪

Deployments primarily consisted of sixteen new portfolio companies and four investments into existing portfolio companies, which are outlined as follows:

▪

$10.9 million L + 8.00% first lien term loan and $0.9 million unfunded revolver to Pluralsight, Inc., an enterprise technology learning platform;

▪

$9.6 million L + 7.25% first lien term loan to Keep Truckin, Inc., a provider of safety and fleet management solutions for transportation and logistics companies;

▪

$7.0 million L + 8.25% second lien term loan to McAfee, LLC, a device-to-cloud focus cybersecurity company;

▪

$6.5 million L + 7.00% first lien term loan and $0.8 million unfunded revolver to ESO Solutions, Inc., a provider of electronic health records, patient care reporting and other mission critical enterprise software solutions;

▪

$5.0 million L + 7.50% second lien term loan to GI Consilio Parent, LLC, a provider of electronic discovery, document review and consulting services;

▪

$5.0 million L + 8.00% second lien term loan to Ensono, Inc., a hybrid IT services provider;

▪

$4.9 million L + 7.50% first lien term loan and $0.7 million unfunded revolver to Backoffice Associates Holdings, LLC, a provider of data migration, transformation and governance software and services;

▪

$4.7 million funded L + 9.00% first lien delayed draw term loan (with an additional $7.0 million unfunded commitment) to Razor Group GmbH, a Germany based consolidator of small to medium sized brands that sell through Amazon’s third-party platform;

▪

$4.7 million L + 7.62% first lien term loan to Whele LLC, a consolidator of small to medium sized brands that sell through Amazon’s third-party platform;

▪

$3.1 million L + 7.00% first lien term loan, $0.4 million unfunded delayed draw term loan and $0.3 million unfunded revolver to Aras Corporation, Inc., a provider of product lifecycle management software for manufacturing companies;

▪

$2.9 million L + 7.25% first lien term loan and $0.2 million unfunded revolver to Appriss Health, LLC, a cloud based software and analytics platform that connects healthcare professionals;

▪

$2.7 million L + 6.00% first lien term loan to INH Buyer, Inc., a primary care physician group;

▪

$2.4 million L + 6.50% first lien term loan and $1.2 million unfunded delayed draw term loan to Colony Display, LLC, a designer, manufacturer, and installer of in-store fixtures and displays for retailers;

▪

$2.2 million L + 6.00% first lien term loan and $0.9 million unfunded delayed draw term loan to Porcelain Acquisition Corporation, a developer, importer, and distributor of porcelain and luxury tile and other hard surface floor coverings;

▪

$2.0 million L + 8.00% second lien term loan to Gainwell Acquisition Corporation, a provider of technology solutions to health and human services programs; and

▪

$1.4 million L + 7.00% second lien term loan and $2.9 million unfunded delayed draw term loan to MetroNet Systems Holdings, LLC, a provider of high-speed broadband, video and voice services with residential and commercial customers across the Midwest.

▪

$6.3 million of incremental L + 7.75% first lien term loan to Barri Financial Group, LLC;

▪

$2.9 million of incremental L + 8.75% first lien delayed draw term loan to JobandTalent USA, Inc.;

▪

$1.6 million L + 6.25% first lien delayed draw term loan funding to Peter C. Foy & Associates Insurance Services, LLC; and

▪

$1.3 million L + 6.75% first lien delayed draw term loan funding to Sonny’s Enterprises, LLC.

o

Sales, exits, and repayments were primarily concentrated in two complete exits in portfolio company investments, one partial return of capital and one partial sale:

▪

$14.9 million of proceeds (including $0.1 million of interest) from debt and equity positions in Red Apple Stores Inc., a non-core legacy asset;

▪

$3.8 million partial return of capital from equity investment in SLP;

▪

$3.6 million full repayment of second lien term loan in Aretec Group, Inc; and

▪

$1.3 million of proceeds from partial sale of first lien term loan in ESO Solutions, Inc.

•

As of June 30, 2021, there were three non-accrual investment positions, representing approximately 4.4% and 14.5% of total debt and preferred stock investments, at fair value and cost, respectively, as compared to four non-accrual investment positions of approximately 5.5% and 16.5% of total debt and preferred stock investments at fair value and cost, respectively, at March 31, 2021. The weighted average internal investment rating of the portfolio at FMV at June 30, 2021 improved to 1.37 as compared to 1.72 at March 31, 2021.

•

During the quarter ended June 30, 2021, net realized and unrealized gains were $27.2 million, primarily attributable to valuation appreciation on SVP, and overall market recovery.

•

At June 30, 2021, we had $17.0 million in cash and cash equivalents and $213.0 million of availability under our credit facility, subject to leverage restrictions, resulting in approximately $230.0 million of availability for portfolio company investments. Committed but unfunded portfolio obligations at June 30, 2021 were $41.0 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 deploy new capital consistent with our strategy.

•

Net leverage, adjusted for available cash, receivables for investments sold, payables for investments purchased and unamortized debt issuance costs, was 0.56x at quarter-end, and our 276% asset coverage ratio provided the Company with additional debt capacity of $213.0 million under its asset coverage requirements, subject to borrowing base restrictions. Further, as of June 30, 2021, approximately 89% of our assets were invested in qualifying assets, exceeding the 70% regulatory requirement of a business development company.

•

For the second quarter of 2021, the Company declared an all cash dividend of $0.10 per share, payable on October 6, 2021 to stockholders of record at the close of business on September 15, 2021.

June 30, 2021

December 31, 2020

Assets

       (Unaudited)

Investments at fair value:

Non-controlled, non-affiliated investments (cost of $469,917,118 and $369,079,320)

$493,129,011

$354,957,936

Non-controlled, affiliated investments (cost of $5,121,773 and $20,927,907)

4,281,369

13,099,313

Controlled investments (cost of $143,128,356 and $216,768,227)

51,869,839

110,968,227

Total investments at fair value (cost of $618,167,247 and $606,775,454)

549,280,219

479,025,476

Cash and cash equivalents

17,030,583

23,332,831

Interest, dividends and fees receivable

2,484,493

2,138,304

Receivable for investments sold

25,156

5,439,507

Deferred debt issuance costs

1,741,443

1,374,115

Prepaid expenses and other assets

1,153,459

409,357

Total assets

$571,715,353

$511,719,590

Liabilities

Debt (net of deferred issuance costs of $896,656 and $1,360,356)

$193,926,217

$179,798,037

Distributions payable

7,413,594

-

Payable for investments purchased

16,845,569

9,193,917

Management fees payable

1,775,684

2,313,447

Incentive fees payable

1,849,597

1,849,597

Interest and debt related payables

620,493

502,682

Accrued administrative expenses

314,886

389,064

Accrued expenses and other liabilities

1,758,928

2,662,569

Total liabilities

224,504,968

196,709,313

Net assets

Common stock, par value $.001 per share, 200,000,000 common shares authorized, 84,478,251 and 84,478,251 issued and 74,129,659 and 74,466,665 outstanding

84,478

84,478

Paid-in capital in excess of par

858,079,713

858,079,713

Distributable earnings (losses)

(443,485,518)

(476,857,055)

Treasury stock at cost, 10,348,592 and 10,011,586 shares held

(67,468,288)

(66,296,859)

Total net assets

347,210,385

315,010,277

Total liabilities and net assets

$571,715,353

$511,719,590

Net assets per share

$4.68

$4.23

Three Months Ended

Six Months Ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Investment income

Interest income (excluding PIK):

Non-controlled, non-affiliated investments

$9,210,827

$7,600,731

$17,260,077

$15,722,654

Non-controlled, affiliated investments

—

118,000

11,867

243,474

Controlled investments

135,371

5,486,595

718,571

10,902,430

PIK income:

Non-controlled, non-affiliated investments

815,710

1,358,694

1,596,389

2,454,125

Non-controlled, affiliated investments

117,985

112,958

237,014

221,789

Controlled investments

—

180,156

—

1,053,664

Dividend income:

Non-controlled, affiliated investments

—

—

71,500

—

Controlled investments

536,908

2,566,148

1,047,975

5,473,651

Other income:

Non-controlled, non-affiliated investments

40,958

17,087

186,990

63,254

Non-controlled, affiliated investments

—

1,436

—

2,871

Controlled investments

—

61,153

—

64,340

Total investment income

10,857,759

17,502,958

21,130,383

36,202,252

Operating expenses

Interest and other debt expenses

2,969,177

4,359,441

5,722,273

8,571,715

Management fees

1,775,684

2,708,862

3,575,450

6,004,549

Incentive fees

—

1,608,740

—

3,533,138

Professional fees

254,834

544,845

666,993

1,069,857

Administrative expenses

314,886

375,704

637,001

689,265

Insurance expense

201,597

123,223

400,961

242,843

Director fees

153,125

152,500

306,250

337,250

Investment advisor expenses

87,500

87,500

175,000

175,000

Other operating expenses

258,232

384,693

613,514

723,596

Total expenses, before incentive fee waiver

6,015,035

10,345,508

12,097,442

21,347,213

Incentive fee waiver

—

(1,608,740)

—

(3,533,138)

Expenses, net of incentive fee waiver

6,015,035

8,736,768

12,097,442

17,814,075

Net investment income

4,842,724

8,766,190

9,032,941

18,388,177

Realized and Unrealized Gain (Loss):

Net realized gain (loss):

Non-controlled, non-affiliated investments

6,773

(12,316,751)

(639,501)

(12,311,266)

Non-controlled, affiliated investments

—

(42,238,921)

(7,989,591)

(43,774,013)

Controlled investments

(8,749,931)

—

(11,040,074)

—

   Net realized gain (loss)

(8,743,158)

(54,555,672)

(19,669,166)

(56,085,279)

Net change in unrealized appreciation (depreciation):

Non-controlled, non-affiliated investments

27,464,721

11,084,426

37,333,277

(15,942,530)

Non-controlled, affiliated investments

153,217

42,458,272

6,988,190

34,178,158

Controlled investments

8,689,595

(35,387,880)

14,826,843

(66,790,209)

Foreign currency translation

(381,379)

239,587

(285,360)

(337,060)

   Net change in unrealized appreciation (depreciation)

35,926,154

18,394,405

58,862,950

(48,891,641)

Net realized and unrealized gain (loss)

27,182,996

(36,161,267)

39,193,784

(104,976,920)

Net Increase (Decrease) in Net Assets Resulting from Operations

$32,025,720

$(27,395,077)

$48,226,725

$(86,588,743)

Net Investment Income Per Share—basic

$0.07

$0.13

$0.12

$0.27

Earnings (Loss) Per Share—basic

$0.43

$(0.40)

$0.65

$(1.27)

Weighted Average Shares Outstanding—basic

74,150,425

68,117,628

74,292,637

68,365,792

Net Investment Income Per Share—diluted

$0.07

$0.13

$0.12

$0.27

Earnings (Loss) Per Share—diluted

$0.38

$(0.40)

$0.58

$(1.27)

Weighted Average Shares Outstanding—diluted

91,144,162

85,111,365

91,286,374

85,359,529

Three Months Ended

Six Months Ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

GAAP Basis:

Net Investment Income

$4,842,724

$8,766,190

$9,032,941

$18,388,177

Net Investment Income per share

0.07

0.13

0.12

0.27

Addback: GAAP incentive fee expense based on Gains

—

—

—

—

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

—

—

—

—

Pre-Incentive Fee¹:

Net Investment Income

$4,842,724

$8,766,190

$9,032,941

$18,388,177

Net Investment Income per share

0.07

0.13

0.12

0.27

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

—

—

—

—

As Adjusted²:

Net Investment Income

$4,842,724

$8,766,190

$9,032,941

$18,388,177

Net Investment Income per share

0.07

0.13

0.12

0.27

¹

Pre-Incentive Fee: Amounts are adjusted to remove all incentive fees. Such fees are calculated but not necessarily due and payable at this time.

²

As Adjusted: Amounts are adjusted to remove the incentive fee expense based on gains, as required by GAAP, and to include only the incremental incentive fee expense based on Income. Incentive fee expense based on income has been calculated for each calendar quarter and may be paid on a quarterly basis if certain thresholds are met.  Amounts reflect the Company's ongoing operating results and reflect the Company's financial performance over time.