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 May 2, 2022

BLACKROCK CAPITAL INVESTMENT

CORPORATION

Date: May 2, 2022

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 (“GAAP NII”) was $6.5 million, or $0.09 per share, up 9% from the prior quarter, providing first quarter distribution coverage of 88%, up from 80% in the prior quarter.

•

Adjusted Net Investment Income¹ (“Adjusted NII”) was $6.0 million, or $0.08 per share, providing first quarter adjusted distribution coverage of 82%, down slightly from 84% in the prior quarter. GAAP NII and Adjusted NII include fee and other one-time income of $0.01 per share.

•

Net Asset Value (“NAV”) decreased slightly to $346.9 million, down 0.8% from $349.7 million at the end of 2021; NAV per share decreased by 0.6% to $4.70 per share from $4.73 per share at the end of 2021.

•

Gross deployments totaled $44.0 million during the first quarter, substantially all in senior secured debt. During the first quarter, 9 new portfolio companies were added, bringing total portfolio companies at quarter-end to 93, up from 86 at the end of 2021 and 55 at the end of 2020. Gross repayments during the first quarter were $78.7 million, including $45.2 million from full repayment and exit of St. George Warehousing and Trucking Co. (“St. George”), previously the Company’s largest investment.

•

Net leverage was 0.46x as of March 31, 2022, and was down from 0.56x as of December 31, 2021, primarily driven by net investment dispositions during the first quarter. Total available liquidity for deployment into portfolio company investments, including cash, was approximately $248 million, subject to leverage and borrowing base restrictions.

•

Under the existing share repurchase program, 106,308 shares were repurchased during the first quarter for approximately $0.4 million at an average price of $4.14 per share, including brokerage commissions.

•

On April 21, 2022, the Company entered into a Master Note Purchase Agreement (the “Note Purchase Agreement”) governing the issuance of $92.0 million in aggregate principal amount of senior unsecured notes (the “Notes”) in two tranches to qualified institutional investors in a private placement. The Company will issue $35 million in aggregate principal amount of Notes with a fixed interest rate of 5.82% and $57 million in aggregate principal amount of Notes bearing interest at a rate equal to the Secured Overnight Financing Rate (“SOFR”) plus 3.14%. The Notes will be issued at a closing expected to occur on June 9, 2022, subject to customary closing conditions. The Notes will mature on December 9, 2025 unless redeemed, purchased or prepaid prior to such date. For more information, please refer to the Form 8-K as filed with the Securities and Exchange Commission (“SEC”) on April 22, 2022.

March 31, 2022

December 31, 2021

December 31, 2020

December 31, 2019

Portfolio Composition

First Lien Debt

72%

74%

50%

34%

Second Lien Debt

20%

19%

27%

23%

Junior Capital¹

8%

7%

23%

43%

Portfolio Company Count

93

86

55

47

Non-Core Assets

Portfolio Company Count²

5

5

6

9

Fair Market Value ("FMV", in Millions)

26

26

42

120

% of investments, at FMV

5%

5%

9%

16%

¹

Includes unsecured/subordinated debt and equity investments.

²

Excludes portfolio companies with zero FMV.

Q1 2022

Q4 2021

Q1 2021

($'s in millions, except per share data) ²

Total Amount

Per Share

Total Amount

Per Share

Total Amount

Per Share

Net Investment Income/(loss)

$6.5

$0.09

$5.9

$0.08

$4.2

$0.06

Net realized and unrealized gains/(losses)

$(1.0)

$(0.01)

$0.7

$0.01

$12.0

$0.16

Basic earnings/(losses)

$5.5

$0.07

$6.7

$0.09

$16.2

$0.22

Distributions declared

$7.4

$0.10

$7.4

$0.10

$7.4

$0.10

Net Investment Income/(loss), as adjusted¹

$6.0

$0.08

$6.2

$0.08

$4.2

$0.06

Basic earnings/(losses), as adjusted¹

$5.1

$0.07

$6.9

$0.09

$16.2

$0.22

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

March 31, 2022

December 31, 2021

March 31, 2021

Total assets

$533.3

$572.0

$483.5

Investment portfolio, at FMV

$517.8

$552.6

$458.3

Debt outstanding

$171.6

$196.9

$141.5

Total net assets

$346.9

$349.7

$322.9

Net asset value per share

$4.70

$4.73

$4.35

Net leverage ratio¹

0.46x

0.56x

0.38x

¹

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.

•

Issuance of Senior Unsecured Debt: On April 21, 2022, the Company entered into the “Note Purchase Agreement” governing the issuance on June 9, 2022, of $92.0 million in aggregate principal amount of Notes in two tranches to qualified institutional investors in a private placement. The Company will issue $35.0 million in aggregate principal amount of Notes with a fixed interest rate of 5.82%, and $57.0 million in aggregate principal amount of Notes bearing interest at a rate equal to SOFR plus 3.14%. The Notes have a maturity date of December 9, 2025. The Company may prepay the Notes at its option, subject to a prepayment premium, in an amount equal to 2% during the first year, 1% during the 2^nd year, 0.5% during the 3^rd year and zero thereafter. In addition, the Company will be obligated to offer to repay the Notes at par if certain change in control events occur. The Notes are general unsecured obligations of the Company that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company. Additionally, the Company has entered into an interest rate swap agreement with a notional value of $35.0 million for the first three years of the Notes’ term, pursuant to which the Company will pay a floating rate of interest equal to SOFR and will receive a fixed rate of interest equal to 2.633%. For more information, please refer to the Form 8-K as filed with the SEC on April 22, 2022.

•

Other Junior Capital Exposure: As of March 31, 2022, the Company’s other junior capital (including unsecured/subordinated debt and equity) exposure, excluding non-core assets, remained low at 6% of the portfolio, consistent with the prior quarter, and down from 21% at December 31, 2020, and 40% at December 31, 2019.

•

Share Repurchase Program: On November 2, 2021, the Company’s Board of Directors authorized the Company to purchase up to a total of 8,000,000 shares, effective until the earlier of November 2, 2022, or such time that all the authorized shares have been repurchased. During the first quarter, 106,308 shares were repurchased for $440,237 at an average price of $4.14 per share, including brokerage commissions. As of March 31, 2022, 7,800,586 shares remained authorized for repurchase.

•

GAAP NII was $6.5 million, or approximately $0.09 per share, for the three months ended March 31, 2022 (and Adjusted NII was $6.0 million or $0.08 per share). Relative to distributions declared of $0.10 per share, GAAP NII distribution coverage was 88%, up from 80% from the prior quarter; Adjusted NII distribution coverage was 82% for the first quarter, down slightly from 84% in the prior quarter. As we continue to re-deploy capital into assets consistent with our core strategy, we expect our earnings power to improve in the coming quarters.

•

NAV decreased modestly to $346.9 million at March 31, 2022, down 0.8% from $349.7 million at December 31, 2021. NAV per share decreased 0.6% to $4.70 per share quarter-over-quarter.

•

For the quarter ended March 31, 2022, we incurred management fees of $2.1 million, and incentive fees based on income of $19,013.

•

GAAP requires that the capital gains incentive fee accrual consider unrealized capital appreciation, as a capital gains incentive fee would be payable if such unrealized capital appreciation were realized on a “hypothetical liquidation” basis. Additionally, if the resulting calculation amount is negative, the accrual for GAAP in a given period may result in the reduction or reversal of incentive fees on capital gains accrued in a prior period. For the quarter ended March 31, 2022, a capital gains incentive fees reduction of $(0.5) million was recorded on that basis (refer to Supplemental Information below for further details). At March 31, 2022, the balance of accrued incentive fees on capital gains was approximately $1.1 million. However, such amount was not realized nor payable as of such date. There can be no assurance that such unrealized capital appreciation will actually be realized in the future, or that any accrued capital gains incentive fee will become payable under our investment management agreement or the Investment Advisers Act of 1940. Amounts ultimately paid under the investment management agreement will be consistent with the formula reflected in the agreement.

Three Months Ended

($’s in millions)

March 31, 2022

December 31, 2021

March 31, 2021

Investment deployments

$44.0

$68.5

$54.9

Investment exits

$78.7

$75.7

$88.0

Number of portfolio company investments at the end of period

93

86

60

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

8.5%

8.7%

8.5%

% of Portfolio invested in Secured debt, at FMV

92%

93%

86%

% of Portfolio invested in Unsecured debt, at FMV

5%

5%

6%

% of Portfolio invested in Equity, at FMV

3%

2%

8%

Average investment by portfolio company, at amortized cost

$6.3

$7.1

$9.4

•

We deployed $44.0 million during the quarter while exits and repayments totaled $78.7 million, resulting in a $34.7 million net decrease in our portfolio.

▪

Deployments consisted of nine new portfolio companies and primarily six investments/funding into existing portfolio companies, which are outlined as follows:

▪

$9.4 million SOFR (“S”) + 6.00% first lien term loan, $0.7 million unfunded delayed draw term loan and $0.7 million unfunded revolver to Alpine Acquisition Corp II (48Forty), a provider of recycled wood pallet solutions;

▪

$7.9 million S + 8.50% first lien delayed draw term loan (with an additional $7.3 million unfunded) to Elevate Brands OpCo LLC, a consolidator of small- to medium-sized brands that sell through Amazon’s third-party platform;

▪

$4.7 million S + 6.50% first lien term loan, and $6.7 million unfunded delayed draw term loan to Greystone Select Company II, LLC, a real estate investment firm;

▪

$3.8 million S + 6.50% first lien term loan to Terraboost Media Operating Company, LLC, a media and wellness company;

▪

$2.8 million S + 7.00% first lien term loan to Alphasense, Inc., an enterprise SaaS company that offers an AI-based search engine for market intelligence;

▪

$2.6 million S + 6.50% first lien term loan to Reveal Data Corporation et al, an artificial intelligence enhanced eDiscovery software platform;

▪

$2.3 million S + 7.50% first lien term loan to Nvest, Inc., a business-to-business enterprise-level software provider targeting the retail banking and wealth advisory sector;

▪

$1.9 million S + 6.25% first lien term loan and $0.7 million unfunded revolver to Emerald Technologies (U.S.) AcquisitionCo, Inc., an electronic manufacturing services provider; and

▪

$1.9 million S + 7.50% first lien term loan to Elastic Path Software Inc., a provider of enterprise e-commerce software solutions.

▪

$2.0 million of S + 7.25% first lien term loan to Keep Truckin, Inc.;

▪

$1.6 million of S + 7.00% first lien term loan to ESO Solutions, Inc.;

▪

$0.8 million LIBOR (“L”) + 9.00% first lien delayed draw term loan funding to Razor Group GmbH;

▪

$0.7 million L + 6.50% first lien delayed draw term loan funding to Homerenew Buyer, Inc.;

▪

$0.5 million L + 6.00% first lien delayed draw term loan funding to Tempus, LLC.; and

▪

$0.5 million L + 6.25% first lien revolver funding to Dude Solutions Holdings, Inc.

▪

Sales, exits, and repayments were primarily concentrated in three portfolio company investments:

▪

$45.2 million full repayment of first lien loans in St. George Warehousing & Trucking Co. of California, Inc., previously our largest investment position;

▪

$16.4 million full repayment of first lien term loan in WH Buyer, LLC; and

▪

$15.0 million full repayment of first lien delayed draw term loan in FinancialForce.com, Inc.

•

During the quarter ended March 31, 2022, there were no new non-accrual investments. As of March 31, 2022, there were three non-accrual investment positions, representing approximately 4.5% and 14.1% of total debt and preferred stock investments, at fair value and cost, respectively, as compared to three non-accrual investment positions of approximately 4.2% and 13.4% of total debt and preferred stock investments at fair value and cost, respectively, as of December 31, 2021. The weighted average internal investment rating of the portfolio at FMV at March 31, 2022 declined slightly to 1.25 as compared to 1.21 at December 31, 2021 and improved from 1.72 at March 31, 2021.

•

During the quarter ended March 31, 2022, net realized and unrealized losses were $(1.0) million, primarily attributable to spread widening during the quarter.

•

At March 31, 2022, we had $10.6 million in cash and cash equivalents and $237.0 million of availability under our credit facility, subject to leverage restrictions, resulting in approximately $247.6 million of availability for deployment into portfolio company investments. Committed but unfunded portfolio obligations at March 31, 2022 were $60.8 million, at par. 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 0.46x at quarter-end, and our 299% asset coverage ratio provided the Company with additional debt capacity of $237.0 million under its asset coverage requirements, subject to borrowing capacity and borrowing base restrictions. Further, as of March 31, 2022, approximately 87% of our assets were invested in qualifying assets, exceeding the 70% regulatory requirement of a business development company.

•

For the first quarter of 2022, the Company declared a cash dividend of $0.10 per share, payable on July 7, 2022 to stockholders of record at the close of business on June 16, 2022.

March 31, 2022

December 31, 2021

Assets

(Unaudited)

Investments at fair value:

Non-controlled, non-affiliated investments (cost of $487,539,706 and $520,501,274)

$491,006,357

$526,504,945

Non-controlled, affiliated investments (cost of $4,974,043 and $5,027,616)

4,660,863

4,131,978

Controlled investments (cost of $89,097,765 and $89,097,765)

22,083,000

21,927,071

Total investments at fair value (cost of $581,611,514 and $614,626,655)

517,750,220

552,563,994

Cash and cash equivalents

10,588,855

12,750,121

Interest, dividends and fees receivable

2,837,619

3,671,722

Deferred debt issuance costs

1,398,905

1,511,418

Receivable for investments sold

83,157

690,550

Prepaid expenses and other assets

607,910

788,469

Total assets

$533,266,666

$571,976,274

Liabilities

Debt (net of deferred issuance costs of $194,703 and $425,272)

$171,555,297

$196,875,330

Distributions payable

7,380,270

7,392,972

Interest and debt related payables

2,371,204

601,379

Management fees payable

2,059,864

2,122,519

Income incentive fees payable

19,013

170,002

Accrued capital gains incentive fees

1,073,068

1,544,569

Accrued administrative expenses

365,507

384,225

Payable for investments purchased

21,196

11,679,798

Accrued expenses and other liabilities

1,516,805

1,553,507

Total liabilities

186,362,224

222,324,301

Net assets

Common stock, par value $.001 per share, 200,000,000 common shares authorized, 84,478,251 and 84,478,251 issued and 73,770,679 and 73,876,987 outstanding

84,478

84,478

Paid-in capital in excess of par

848,022,547

852,360,178

Distributable earnings (losses)

(432,272,960)

(434,303,297)

Treasury stock at cost, 10,707,572 and 10,601,264 shares held

(68,929,623)

(68,489,386)

Total net assets

346,904,442

349,651,973

Total liabilities and net assets

$533,266,666

$571,976,274

Net assets per share

$4.70

$4.73

Three Months Ended (Unaudited)

March 31, 2022

March 31, 2021

Investment income

Interest income (excluding PIK):

Non-controlled, non-affiliated investments

$

11,606,903

$

8,049,250

Non-controlled, affiliated investments

—

11,867

Controlled investments

—

583,200

PIK interest income:

Non-controlled, non-affiliated investments

123,018

780,679

Non-controlled, affiliated investments

115,896

119,029

Dividend income (excluding PIK):

Non-controlled, affiliated investments

—

71,500

Controlled investments

—

511,067

PIK dividend income:

Non-controlled, non-affiliated investments

75,882

—

Other income:

Non-controlled, non-affiliated investments

260,588

146,032

Total investment income

12,182,287

10,272,624

Expenses:

Interest and other debt expenses

2,728,951

2,753,096

Management fees

2,059,864

1,799,766

Incentive fees on income

19,013

—

Incentive fees on capital gains(1)

(471,501

)

—

Administrative expenses

365,507

322,115

Professional fees

302,857

412,159

Insurance expense

199,758

199,364

Director fees

153,125

153,125

Investment advisor expenses

25,819

87,500

Other operating expenses

303,799

355,282

Total expenses, before incentive fee waiver

5,687,192

6,082,407

Incentive fee waiver

—

—

Total expenses, net of incentive fee waiver

5,687,192

6,082,407

Net investment income(1)

6,495,095

4,190,217

Realized and Unrealized Gain (Loss):

Net realized gain (loss):

Non-controlled, non-affiliated investments

825,913

(646,274

)

Non-controlled, affiliated investments

—

(7,989,591

)

Controlled investments

—

(2,290,143

)

Net realized gain (loss)

825,913

(10,926,008

)

Net change in unrealized appreciation (depreciation):

Non-controlled, non-affiliated investments

(2,537,021

)

9,868,556

Non-controlled, affiliated investments

582,458

6,834,973

Controlled investments

155,929

6,137,248

Foreign currency translation

—

96,019

Net change in unrealized appreciation (depreciation)

(1,798,634

)

22,936,796

Net realized and unrealized gain (loss)

(972,721

)

12,010,788

Net Increase (Decrease) in Net Assets Resulting from Operations

5,522,374

16,201,005

Net Investment Income Per Share—basic(1)

$

0.09

$

0.06

Earnings (Loss) Per Share—basic(1)

$

0.07

$

0.22

Weighted Average Shares Outstanding—basic

73,822,190

74,436,429

Net Investment Income Per Share—diluted(1)

$

0.09

$

0.06

Earnings (Loss) Per Share—diluted(1)

$

0.07

$

0.20

Weighted Average Shares Outstanding—diluted

90,815,927

91,430,166

⁽¹⁾

Net investment income and per share amounts displayed above are net of the reversal for incentive fees on capital gains which is reflected on a hypothetical liquidation basis in accordance with GAAP for the three months ended March 31, 2022. Refer to Supplemental Information section below for further details and as adjusted figures that reflect that there were no incentive fees on capital gains realized and payable to the Advisor during such periods.

Three Months Ended

March 31, 2022

March 31, 2021

GAAP Basis:

Net Investment Income

$6,495,095

$4,190,217

Net Investment Income per share

0.09

0.06

Addback: GAAP incentive fee (reversal) based on capital gains

(471,501)

—

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

19,013

—

Pre-Incentive Fee¹:

Net Investment Income

$6,042,607

$4,190,217

Net Investment Income per share

0.08

0.06

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

(19,013)

—

As Adjusted²:

Net Investment Income

$6,023,594

$4,190,217

Net Investment Income per share

0.08

0.06

¹

Pre-Incentive Fee: Amounts are adjusted to remove all incentive fees. Such fees have been accrued (reversed) but are not due and payable at the reporting date.

²

As Adjusted: Amounts are adjusted to remove the GAAP accrual (reversal) for incentive fee based on capital gains, and to include only the incremental incentive fee based on income. Adjusted amounts reflect the fact that no incentive fee on capital gains was realized and payable to the Advisor during the three months ended March 31, 2022 and 2021, respectively. Under the Current Management Agreement, incentive fee based on income is 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.