falseBlackrock Capital Investment Corporation000132600300013260032023-05-012023-05-01

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): May 1, 2023

 

BLACKROCK CAPITAL INVESTMENT CORPORATION

(Exact name of registrant as specified in its charter)

 

 

Delaware	814-00712	20-2725151
(State or other jurisdiction of	(Commission	(IRS Employer
incorporation or organization)	File Number)	Identification Number)

 

50 Hudson Yards

New York, NY 10001

(Address of principal executive offices)

(212) 810-5800

(Registrant’s telephone number, including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ 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))

Securities registered pursuant to Section 12(b) of the Act:

 

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

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

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ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On May 1, 2023, the Registrant issued a press release announcing its financial results for the quarter ended March 31, 2023. The text of the press release is included as Exhibit 99.1 to this Form 8-K.

The information disclosed under this Item 2.02, including Exhibit 99.1 hereto, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 and shall not be deemed incorporated by reference into any filing made under the Securities Act of 1933, except as expressly set forth by specific reference in such filing.

ITEM 7.01. REGULATION FD DISCLOSURE.

The Registrant issued a press release, filed herewith as Exhibit 99.1, and by this reference incorporated herein, on May 1, 2023 announcing the declaration of a quarterly dividend of $0.10 per share. The dividend is payable on July 6, 2023 to stockholders of record as of June 15, 2023.

The information disclosed under this Item 7.01, including Exhibit 99.1 hereto, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 and shall not be deemed incorporated by reference into any filing made under the Securities Act of 1933, except as expressly set forth by specific reference in such filing.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits.

 

Exhibit Number		Description
99.1		Press Release, dated as of May 1, 2023
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		BLACKROCK CAPITAL INVESTMENT CORPORATION
Date: May 1, 2023		By:	/s/ Chip Holladay
			Name: Chip Holladay
			Title: Interim Chief Financial Officer and Treasurer

 

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EXHIBIT 99.1

 

Investor Contact:		Press Contact:
Nik Singhal		Brian Beades
212.810.5427		212.810.5596

 

 

 

BlackRock Capital Investment Corporation Reports Financial Results for the Quarter Ended March 31, 2023, Declares Quarterly Cash Dividend of $0.10 per Share

 

 

 

 

New York, May 1, 2023 – BlackRock Capital Investment Corporation (NASDAQ:BKCC) (“BCIC” or the “Company,” “we,” “us” or “our”) announced today that its Board of Directors declared a quarterly dividend of $0.10 per share, payable on July 6, 2023 to stockholders of record at the close of business on June 15, 2023.

 

 

 

 

 

 

 

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“We continued to successfully execute on our strategy of (i) increasing the earnings power of our portfolio via disciplined growth and (ii) increasing the resiliency of our portfolio by creating a diversified portfolio of senior secured assets. Our NII continued to grow this quarter, increasing 9.5% from the prior quarter. We are very pleased that our NII covered our $0.10 dividend for the third consecutive quarter, with increased coverage of 122% this quarter, up from 112% in the fourth quarter,” said James E. Keenan, Chairman and Interim CEO of the Company. “We ended the quarter with a well-diversified portfolio of 121 companies, more than double the number of portfolio companies we had at the end of 2020. At the end of the quarter, 82% of our portfolio consisted of first lien investments, up from 74% at the end of 2021 and 50% at the end of 2020. We have now exceeded our target of having at least 80% of the portfolio in first lien investments."

“Even as we grew our loan portfolio, we were highly selective during the first quarter in which we saw reduced origination activity across the market. Corporate mergers and acquisitions, demand for growth financings as well as refinancing activity remained muted in the rising interest rate environment. Still, we added 8 new portfolio companies during the quarter, drawing upon the power of the BlackRock platform. We deployed $38 million in the first quarter on a gross basis – almost entirely in first lien loans. This is our fourth consecutive quarter with net positive deployments, totaling approximately $91 million over the last 12 months. Our relatively modest leverage ratio of 0.81x provides flexibility to continue to selectively grow our portfolio and further increase our earnings power,” Mr. Keenan continued.

“Against the macroeconomic backdrop of continued inflation, higher interest rates, and softening consumer demand, we remain conservative in underwriting new investments and vigilant in monitoring our existing portfolio. We believe we are well positioned to withstand the impact of a deteriorating economic environment. Additionally, during the quarter, we exited and realized our non-core legacy investments in Advanced Lighting (previously a non-accrual asset) and Kemmerer, reducing our non-core exposure to less than 1% of the portfolio. Our credit quality remains solid as there were no new non-accrual investments in the first quarter, demonstrating our unwavering focus on our strong credit culture.” Mr. Keenan concluded.

	March 31, 2023	December 31, 2022	December 31, 2021	December 31, 2020
Portfolio Composition
First Lien Debt	82%	79%	74%	50%
Second Lien Debt	13%	16%	19%	27%
Junior Capital1	5%	5%	7%	23%
Portfolio Company Count	121	116	86	55
Non-Core Assets
Portfolio Company Count2	1	3	5	6
Fair Market Value ("FMV", in Millions)	4	9	26	42
% of investments, at FMV	1%	2%	5%	9%

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Financial Highlights

	Q1 2023		Q4 2022		Q1 2022
($'s in millions, except per share data)2	Total Amount	Per Share	Total Amount	Per Share	Total Amount	Per Share
Net Investment Income/(loss)	$8.9	$0.12	$8.1	$0.11	$6.5	$0.09
Net realized and unrealized gains/(losses)	$(0.3)	—	$(13.2)	$(0.18)	$(1.0)	$(0.01)
Basic earnings/(losses)	$8.5	$0.12	$(5.1)	$(0.07)	$5.5	$0.07
Dividends declared	$7.3	$0.10	$7.3	$0.10	$7.4	$0.10
Net Investment Income/(loss), as adjusted1	$8.9	$0.12	$8.1	$0.11	$6.0	$0.08
Basic earnings/(losses), as adjusted1	$8.5	$0.12	$(5.1)	$(0.07)	$5.1	$0.07

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($'s in millions, except per share data)	March 31, 2023	December 31, 2022	March 31, 2022
Total assets	$602.5	$589.1	$533.3
Investment portfolio, at FMV	$587.8	$570.5	$517.8
Debt outstanding	$263.1	$253.0	$171.6
Total net assets	$319.8	$318.5	$346.9
Net asset value per share	$4.41	$4.39	$4.70
Net leverage ratio1	0.81x	0.77x	0.46x

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Business Updates

 

First Quarter Financial Updates

 

Portfolio and Investment Activity*

($’s in millions)	Three Months Ended
	March 31, 2023	December 31, 2022	March 31, 2022
Investment deployments	$37.6	$36.0	$44.0
Investment exits	$20.7	$27.9	$78.7
Number of portfolio company investments at end of period	121	116	93
Weighted average yield of debt and income producing equity securities, at FMV	12.5%	12.0%	8.5%
% of Portfolio invested in Secured debt, at FMV	95%	94%	92%
% of Portfolio invested in Unsecured/subordinated debt, at FMV	4%	4%	5%
% of Portfolio invested in Equity, at FMV	1%	2%	3%
Average investment by portfolio company, at amortized cost	$5.6	$5.7	$6.3

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*Balance sheet amounts and yield information above are as of period end.

 

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New Portfolio Companies

Incremental Investment /Funding Primarily in the Following Existing Portfolio Companies

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Liquidity and Capital Resources

Conference Call

BlackRock Capital Investment Corporation will host a webcast/teleconference at 10:00 a.m. (Eastern Time) on Tuesday, May 2, 2023, to discuss its first quarter 2023 financial results. All interested parties are welcome to participate. You can access the teleconference by dialing, from the United States, (877) 502-9276 or from outside the United States, +1 (773) 305-6867, 10 minutes before 10:00 a.m. and referencing the BlackRock Capital Investment Corporation Conference Call (ID Number 5586820). This teleconference can also be accessed using Microsoft Edge, Google Chrome, or Firefox via this link: BlackRock Capital Investment Corporation First Quarter 2023 Earnings Call. Once clicked-on, please enter your information to be connected. Please note that the link becomes active 15 minutes prior to the scheduled start time. A live, listen-only webcast will also be available via the investor relations section of www.blackrockbkcc.com.

 

The teleconference and the webcast will be available for replay by 3:00 p.m. on Tuesday, May 2, 2023 and ending at 3:00 p.m. on Tuesday, May 16, 2023. The replay of the teleconference can be accessed via the following link: BlackRock Capital Investment Corporation First Quarter 2023 Earnings Call Replay. To access the webcast, please visit the investor relations section of www.blackrockbkcc.com.

Prior to the webcast/teleconference, an investor presentation that complements the earnings conference call will be posted to BlackRock Capital Investment Corporation’s website within the Presentations section of the Investors page.

About BlackRock Capital Investment Corporation

Formed in 2005, BlackRock Capital Investment Corporation is a business development company that provides debt and equity capital to middle-market companies.

The Company's investment objective is to generate both current income and capital appreciation through debt and equity investments. We invest primarily in middle-market companies in the form of senior debt securities and loans, and our investment portfolio may include junior secured and unsecured debt securities and loans, each of which may include an equity component.

 

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BlackRock Capital Investment Corporation

Consolidated Statements of Assets and Liabilities

	March 31, 2023 (Unaudited)		December 31, 2022
Assets
Investments at fair value:
Non-controlled, non-affiliated investments (cost of $589,444,287 and $569,528,145)	$572,111,003		$551,686,646
Non-controlled, affiliated investments (cost of $1,139,598 and $3,849,638)	—		3,574,438
Controlled investments (cost of $84,922,381 and $84,922,381)	15,673,000		15,228,000
Total investments at fair value (cost of $675,506,266 and $658,300,164)	587,784,003		570,489,084
Interest, dividends and fees receivable	6,236,671		5,515,446
Cash and cash equivalents	5,164,450		9,531,190
Due from broker	1,868,232		1,946,507
Deferred debt issuance costs	942,605		1,055,117
Receivable for investments sold	116,102		12,096
Prepaid expenses and other assets	382,314		510,706
Total assets	$602,494,377		$589,060,146
Liabilities
Debt (net of deferred issuance costs of $913,305 and $996,839)	$263,086,695		$253,003,161
Dividends payable	7,257,191		7,257,191
Income incentive fees payable	5,279,252		3,403,349
Management fees payable	2,130,472		2,186,540
Interest and debt related payables	1,335,009		738,719
Interest Rate Swap at fair value	1,165,514		1,332,299
Payable for investments purchased	607,368		600,391
Accrued administrative expenses	292,634		397,299
Accrued expenses and other liabilities	1,557,683		1,618,844
Total liabilities	282,711,818		270,537,793
Net Assets
Common stock, par value $.001 per share, 200,000,000 common shares authorized, 84,481,797 issued and 72,571,907 outstanding	84,482		84,482
Paid-in capital in excess of par	850,199,351		850,199,351
Distributable earnings (losses)	(457,127,572)		(458,387,778)
Treasury stock at cost, 11,909,890 shares held	(73,373,702)		(73,373,702)
Total net assets	319,782,559		318,522,353
Total liabilities and net assets	$602,494,377		$589,060,146
Net assets per share	$4.41		$4.39

 

 

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BlackRock Capital Investment Corporation

Consolidated Statements of Operations

(Unaudited)

		Three Months Ended
		March 31, 2023		March 31, 2022
Investment income
Interest income (excluding PIK):
Non-controlled, non-affiliated investments		$17,412,475		$11,606,903
PIK interest income:
Non-controlled, non-affiliated investments		1,029,231		123,018
Non-controlled, affiliated investments		31,794		115,896
PIK dividend income:
Non-controlled, non-affiliated investments		86,342		75,882
Other income:
Non-controlled, non-affiliated investments		204,123		260,588
Total investment income		18,763,965		12,182,287
Operating expenses
Interest and other debt expenses		4,718,231		2,728,951
Management fees		2,130,472		2,059,864
Incentive fees on income		1,875,903		19,013
Incentive fees on capital gains(1)		—		(471,501)
Administrative expenses		292,634		365,507
Professional fees		193,427		302,857
Insurance expense		160,957		199,758
Director fees		149,625		153,125
Investment advisor expenses		17,093		25,819
Other operating expenses		364,131		303,799
Total expenses		9,902,473		5,687,192
Net investment income(1)		8,861,492		6,495,095
Realized and unrealized gain (loss) on investments and Interest Rate Swap
Net realized gain (loss):
Non-controlled, non-affiliated investments		(157,791)		825,913
Non-controlled, affiliated investments		(441,906)		—
Net realized gain (loss)		(599,697)		825,913
Net change in unrealized appreciation (depreciation):
Non-controlled, non-affiliated investments		508,216		(2,537,021)
Non-controlled, affiliated investments		(864,398)		582,458
Controlled investments		445,000		155,929
Interest Rate Swap		166,784		—
Net change in unrealized appreciation (depreciation)		255,602		(1,798,634)
Net realized and unrealized gain (loss)		(344,095)		(972,721)
Net increase (decrease) in net assets resulting from operations		$8,517,397		$5,522,374
Net investment income per share—basic(1)		$0.12		$0.09
Earnings (loss) per share—basic(1)		$0.12		$0.07
Weighted average shares outstanding—basic		72,571,907		73,822,190
Net investment income per share—diluted(1)(2)		$0.12		$0.09
Earnings (loss) per share—diluted(1)(2)		$0.12		$0.07
Weighted average shares outstanding—diluted		72,571,907		90,815,927

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Supplemental Information

The Company reports its financial results on a generally accepted accounting principles (“GAAP”) basis; however, management believes that evaluating the Company’s ongoing operating results may be enhanced if investors have additional non-GAAP basis financial measures. Management reviews non-GAAP financial measures to assess ongoing operations and, for the reasons described below, considers them to be effective indicators, for both management and investors, of the Company’s financial performance over time. The Company’s management does not advocate that investors consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.

 

The Company records its liability for incentive fees based on capital gains (if any) by performing a hypothetical liquidation basis calculation at the end of each reporting period, as required by GAAP, which assumes that all unrealized capital appreciation and depreciation is realized as of the reporting date. It should be noted that incentive fees based on capital gains (if any) are not due and payable until the end of the annual measurement period, or every June 30. The incremental incentive fees disclosed for a given period are not necessarily indicative of actual full year results. Changes in the economic environment, financial markets, geopolitical conditions and other parameters could cause actual results to differ from estimates and such differences could be material. There can be no assurance that unrealized capital appreciation and depreciation will be realized in the future, or that any accrued capital gains incentive fee will become payable. Incentive fee amounts on capital gains actually paid by the Company will specifically exclude consideration of unrealized capital appreciation, consistent with requirements under the Investment Advisers Act of 1940 and the Company’s investment management agreement. For a more detailed description of the Company’s incentive fees, please refer to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022, on file with the Securities and Exchange Commission ("SEC").

 

Computations for the periods below are derived from the Company's financial statements as follows:

 

	Three Months Ended
	March 31, 2023		March 31, 2022
GAAP Basis:
Net Investment Income	$8,861,492		$6,495,095
Net Investment Income per share	0.12		0.09
Addback: GAAP incentive fee (reversal) based on capital gains	—		(471,501)
Addback: GAAP incentive fee based on Income	1,875,903		19,013
Pre-Incentive Fee1:
Net Investment Income	$10,737,395		$6,042,607
Net Investment Income per share	0.15		0.08
Less: Incremental incentive fee based on Income	(1,875,903)		(19,013)
As Adjusted2:
Net Investment Income	$8,861,492		$6,023,594
Net Investment Income per share	0.12		0.08

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Forward-looking statements

This press release, and other statements that BlackRock Capital Investment Corporation may make, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act, with respect to BlackRock Capital Investment Corporation’s future financial or business performance, strategies or expectations. Forward-looking statements are typically identified by words or phrases such as “trend,” “potential,” “opportunity,” “pipeline,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “may” or similar expressions.

BlackRock Capital Investment Corporation cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which may change over time. Forward-looking statements speak only as of the date they are made, and BlackRock Capital Investment Corporation assumes no duty to and does not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance.

In addition to factors previously disclosed in BlackRock Capital Investment Corporation’s SEC reports and those identified elsewhere in this press release, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: (1) our future operating results; (2) our business prospects and the prospects of our

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portfolio companies; (3) the impact of investments that we expect to make; (4) our contractual arrangements and relationships with third parties; (5) the dependence of our future success on the general economy and its impact on the industries in which we invest; (6) the financial condition of and ability of our current and prospective portfolio companies to achieve their objectives; (7) our expected financings and investments; (8) the adequacy of our cash resources and working capital, including our ability to obtain continued financing on favorable terms; (9) the timing of cash flows, if any, from the operations of our portfolio companies; (10) the impact of increased competition; (11) the ability of our investment advisor to locate suitable investments for us and to monitor and administer our investments; (12) potential conflicts of interest in the allocation of opportunities between us and other investment funds managed by our investment advisor or its affiliates; (13) the ability of our investment advisor to attract and retain highly talented professionals; (14) changes in law and policy accompanying the new administration and uncertainty pending any such changes; (15) increased geopolitical unrest, terrorist attacks or acts of war, which may adversely affect the general economy, domestic and local financial and capital markets, or the specific industries of our portfolio companies; (16) changes and volatility in political, economic or industry conditions, the interest rate environment, inflation, credit risk, foreign exchange rates or financial and capital markets; (17) the unfavorable resolution of legal proceedings; and (18) the impact of changes to tax legislation and, generally, our tax position.

BlackRock Capital Investment Corporation’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 1, 2023, identifies additional factors that can affect forward-looking statements.

Available Information

BlackRock Capital Investment Corporation’s filings with the SEC, press releases, earnings releases and other financial information are available on its website at www.blackrockbkcc.com. The information contained on our website is not a part of this press release.

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