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8-K
false000132600300013260032023-08-022023-08-02

 

 

 

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): August 2, 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. ☐

 

 

 

 

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On August 2, 2023, the Registrant issued a press release announcing its financial results for the quarter ended June 30, 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 August 2, 2023 announcing the declaration of a quarterly dividend of $0.10 per share. The dividend is payable on October 6, 2023 to stockholders of record as of September 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 August 2, 2023

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

-2-

 

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: August 2, 2023

 

By:

/s/ Chip Holladay

 

 

 

Name: Chip Holladay

 

 

 

Title: Interim Chief Financial Officer and Treasurer

 

-3-
EX-99.1

 

 

EXHIBIT 99.1

https://cdn.kscope.io/37d1de15c937cd177040369e4da8c5b1-img245174108_0.jpg 

Investor Contact:

 

Press Contact:

Nik Singhal

 

Christopher Beattie

212.810.5427

 

646.231.8518

 

 

 

BlackRock Capital Investment Corporation Reports Financial Results for the Quarter Ended June 30, 2023, Declares Quarterly Cash Dividend of $0.10 per Share

 

•
GAAP Net Investment Income (“NII”) was $8.9 million, or $0.12 per share, in the second quarter, consistent with the first quarter NII level. Second quarter NII provided dividend coverage of 123% on a GAAP basis, an increase from the prior quarter dividend coverage of 122%.
•
Net Asset Value (“NAV”) decreased to $314.0 million as of June 30, 2023, down from $319.8 million as of March 31, 2023, driven largely by net unrealized depreciation in portfolio fair value of $7.0 million during the quarter. NAV per share decreased to $4.33 per share from $4.41 per share as of March 31, 2023.
•
Gross deployments during the second quarter were $20.8 million, substantially all of which were in first lien loans. The weighted average yield on gross deployments during the quarter was 12.1%, up from 11.9% on deployments in the prior quarter. During the quarter, 3 new portfolio companies were added. Total portfolio companies held at quarter-end were 121, which was flat from the prior quarter, up from 116 at the end of 2022 and 86 at the end of 2021. Gross repayments during the quarter were $6.5 million, including full exits from 3 existing portfolio companies.
•
The Company’s weighted-average portfolio yield as of June 30, 2023 increased to 12.8% based on total portfolio fair value, up from 12.4% as of March 31, 2023. The increase was largely driven by a rise in LIBOR and SOFR rates.
•
Net leverage was 0.86x as of June 30, 2023, up from 0.81x as of March 31, 2023, driven by borrowings to fund new deployments during the quarter. Total available liquidity at quarter-end, including borrowing capacity and cash on hand, was $85.4 million, subject to leverage and borrowing base restrictions.

 

 

 

New York, August 2, 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 October 6, 2023 to stockholders of record at the close of business on September 15, 2023.

 

 

 

 

 

 

 

“We are pleased to see the successful transformation of the Company’s portfolio, which now represents a well diversified pool of income producing assets, with a first lien heavy orientation. With a relatively modest leverage ratio of 0.86x, we have the flexibility to selectively grow our portfolio and continue to increase our earnings power. For the fourth consecutive quarter, our NII covered our $0.10 dividend, with a robust coverage of 123% for the 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 held at the end of 2020. At quarter-end, 84% of our portfolio consisted of first lien investments, up from 74% at the end of 2021 and 50% at the end of 2020."

“Even as the overall lending activity remains muted in this rising interest rate environment, we have been able to take advantage of our investing capacity and selectively grow our loan portfolio. While origination activity is lower than historical levels, we are seeing better pricing, less levered capital structures and ability to negotiate better structural protections. We added 3 new portfolio companies during the second quarter, drawing upon the power of the BlackRock platform. We deployed $21 million in the quarter on a gross basis – almost entirely in first lien loans. This was our fifth consecutive quarter with net positive deployment, totaling approximately $105 million of investments into new and existing portfolio companies over that period,” 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. Our credit quality remains solid, with no new non-accrual investments in the second quarter, demonstrating our unwavering focus on our strong credit culture.” Mr. Keenan concluded.

 

June 30, 2023

December 31, 2022

December 31, 2021

December 31, 2020

Portfolio Composition

 

 

 

 

First Lien Debt

84%

79%

74%

50%

Second Lien Debt

12%

16%

19%

27%

Junior Capital1

4%

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)3

—

9

26

42

% of investments, at FMV3

—

2%

5%

9%

_______________________________________________

1.
Includes unsecured/subordinated debt and equity investments.
2.
Excludes portfolio companies with zero FMV.
3.
As of June 30, 2023, the fair market value of non-core assets is less than $0.1 million, therefore the FMV and the % of investments at FMV of non-core assets have been rounded to zero.

Financial Highlights

Q2 2023

Q1 2023

Q2 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

$8.9

$0.12

$7.1

$0.10

Net realized and unrealized gains/(losses)

$(7.4)

$(0.10)

$(0.3)

—

$(9.7)

$(0.13)

Basic earnings/(losses)

$1.5

$0.02

$8.5

$0.12

$(2.5)

$(0.03)

Dividends declared

$7.3

$0.10

$7.3

$0.10

$7.4

$0.10

Net Investment Income/(loss), as adjusted1

$8.9

$0.12

$8.9

$0.12

$6.0

$0.08

Basic earnings/(losses), as adjusted1

$1.5

$0.02

$8.5

$0.12

$(3.6)

$(0.05)

_______________________________________________

1.
Non-GAAP basis financial measure, excluding the hypothetical liquidation basis capital gain incentive fee accrual (reversal), if any, under GAAP. See Supplemental Information.
2.
Totals may not foot due to rounding.
 

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

June 30, 2023

March 31, 2023

December 31, 2022

June 30, 2022

 

 

 

 

 

Total assets

$619.0

$602.5

$589.1

$585.3

Investment portfolio, at FMV

$595.8

$587.8

$570.5

$557.4

Debt outstanding

$283.2

$263.1

$253.0

$237.0

Total net assets

$314.0

$319.8

$318.5

$335.4

Net asset value per share

$4.33

$4.41

$4.39

$4.57

Net leverage ratio1

0.86x

0.81x

0.77x

0.64x

_______________________________________________

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.

 

-2-

Business Updates

•
Continued Portfolio Growth and Deployment: The Company continued to see net positive deployment of capital into portfolio investments including $14.3 million during the three months ended June 30, 2023, marking the fifth consecutive quarter of portfolio growth. The Company has deployed approximately $105 million of capital into new and existing portfolio companies on a net basis since March 31, 2022, predominantly all of which was invested in first lien loans.
•
Non-Core Legacy Portfolio and Other Junior Capital Exposure: As of June 30, 2023, the Company's non-core assets have been reduced to 0.01% of the entire portfolio at fair value, down from 9% at the end of 2020. As of June 30, 2023, the Company’s other junior capital (including unsecured/subordinated debt and equity) exposure, excluding non-core assets, remained low at 4% of the portfolio, down from 6% at December 31, 2021 and 21% at December 31, 2020. During the second quarter, the Company received a $0.5 million partial repayment of its unsecured debt position in Gordon Brothers Finance Company ("GBFC"), a non-accrual investment.

 

Second Quarter Financial Updates

•
NII was $8.9 million, or approximately $0.12 per share, for the three months ended June 30, 2023, consistent with prior quarter NII. Relative to our dividend declared of $0.10 per share, dividend coverage was 123% on a GAAP basis, up from 122% in the prior quarter. As compared to the second quarter of 2022, NII increased $1.8 million, representing a 25% year-over-year increase; dividend coverage similarly increased from 97% in the second quarter of 2022 to 123% in the current quarter.
•
NAV decreased to $314.0 million at June 30, 2023, down from $319.8 million at March 31, 2023, largely driven by $7.0 million of unrealized depreciation in portfolio fair value. This decrease was concentrated in certain positions including Stitch Holdings, L.P. (a legacy non-core equity position), Astra Acquisition Corp. and Thras.io, LLC. NAV per share decreased to $4.33 per share from $4.41 per share as of March 31, 2023.

 

Portfolio and Investment Activity*

($’s in millions)

Three Months Ended

 

June 30, 2023

March 31, 2023

June 30, 2022

 

 

 

 

Investment deployments

$20.8

$37.6

$73.5

Investment exits

$6.5

$20.7

$25.1

Number of portfolio company investments at end of period

121

121

100

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

12.9%

12.5%

9.3%

% of Portfolio invested in Secured debt, at FMV

96%

95%

94%

% of Portfolio invested in Unsecured/subordinated debt, at FMV

3%

4%

4%

% of Portfolio invested in Equity, at FMV

1%

1%

2%

Average investment by portfolio company, at amortized cost

$5.7

$5.6

$6.3

_______________________________________________

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

 

-3-

•
We deployed $20.8 million during the quarter while exits and repayments totaled $6.5 million, resulting in a $14.3 million net increase in our portfolio.
▪
Deployments consisted of investments/fundings into 3 new portfolio companies and primarily 5 existing portfolio companies, which are outlined as follows:

New Portfolio Companies

•
$6.1 million SOFR ("S") + 6.50% first lien term loan and $0.6 million unfunded revolver to Serrano Parent, LLC (Sumo Logic), a cloud-native software provider for observability and security management;
•
$4.5 million S + 7.00% first lien term loan and $0.5 million unfunded revolver to Fusion Risk Management, Inc., a software provider of business continuity and risk management solutions; and
•
$2.2 million S + 7.50% first lien term loan and $0.3 million unfunded revolver to Lucky US BuyerCo LLC (Global Payments), a payment services provider to the gaming sector.

Incremental Investment /Funding Primarily in the Following Existing Portfolio Companies

•
$1.7 million S + 9.00% delayed draw term loan ("DDTL") funding to Freedom Financial Network Funding, LLC;
•
$1.5 million S + 5.75% first lien term loan and $0.3 million unfunded revolver to Superman Holdings, LLC (Foundation Software);
•
$0.9 million S + 6.75% first lien term loan, $0.2 million unfunded DDTL, and $0.2 million unfunded revolver to Sonny's Enterprises, LLC;
•
$0.7 million S + 6.25% DDTL funding to Wealth Enhancement Group, LLC; and
•
$0.6 million S + 6.25% DDTL funding to Accordion Partners, LLC.
▪
Exits and repayments were primarily concentrated in three complete exits of portfolio company investments and one partial paydown:
•
$3.3 million full repayment at par of first lien term loan and DDTL in Sunland Asphalt & Construction, LLC;
•
$0.4 million full repayment at par of first lien term loan in Fusion Risk Management, Inc.;
•
$0.3 million full repayment at par of first lien term loan in RigUp, Inc.; and
•
$0.5 million partial repayment of unsecured debt position in GBFC, a non-accrual position.
•
There were no new non-accrual investments during the quarter ended June 30, 2023. At quarter-end, the Company had only two non-accrual investment positions, representing approximately 2.5% and 11.0% of total debt and preferred stock investments, at fair value and cost, respectively.
•
The weighted average internal investment rating of the portfolio at FMV was 1.44 at June 30, 2023, as compared to 1.35 at March 31, 2023, 1.33 at December 31, 2022 and 1.21 at December 31, 2021.
•
During the quarter ended June 30, 2023, net realized and unrealized losses were $(7.4) million, including $(7.0) million of unrealized depreciation on investments and $(0.6) million of depreciation on our interest rate swap, which was partially offset by $0.2 million of realized gains during the quarter.

Liquidity and Capital Resources

•
At June 30, 2023, we had $12.4 million in cash and cash equivalents and $73.0 million of availability under our Credit Facility, subject to leverage restrictions, resulting in $85.4 million of availability for deployment into portfolio company investments, including current unfunded commitments and for general use in the normal course of business.
•
Net leverage, adjusted for available cash, receivables for investments sold, payables for investments purchased and unamortized debt issuance costs, was 0.86x at quarter-end, and our 210% asset coverage ratio provided the Company with additional debt capacity of $73.0 million under its asset coverage requirements, subject to borrowing capacity and borrowing base restrictions. Further, as of June 30, 2023, approximately 84% of our assets were invested in qualifying assets, exceeding the 70% requirement for a business development company under Section 55(a) of the Investment Company Act of 1940.

-4-

•
For the second quarter of 2023, the Company declared a cash dividend of $0.10 per share, payable on October 6, 2023 to stockholders of record at the close of business on September 15, 2023.

Conference Call

BlackRock Capital Investment Corporation will host a webcast/teleconference at 10:00 a.m. (Eastern Time) on Thursday, August 3, 2023, to discuss its second quarter 2023 financial results. All interested parties are welcome to participate. You can access the teleconference by dialing, from the United States, (877) 400-0505 or from outside the United States, +1 (773) 305-6865, 10 minutes before 10:00 a.m. and referencing the BlackRock Capital Investment Corporation Conference Call (ID Number 9021727). This teleconference can also be accessed using Microsoft Edge, Google Chrome, or Firefox via this link: Second 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 Thursday, August 3, 2023 and ending at 3:00 p.m. on Thursday, August 17, 2023. The replay of the teleconference can be accessed via the following link: Second 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.

 

-5-

BlackRock Capital Investment Corporation

Consolidated Statements of Assets and Liabilities

 

June 30, 2023 (Unaudited)

 

December 31, 2022

 

Assets

 

 

 

 

Investments at fair value:

 

 

 

 

Non-controlled, non-affiliated investments (cost of $605,038,194 and $569,528,145)

$580,838,411

 

$551,686,646

 

Non-controlled, affiliated investments (cost of $1,139,598 and $3,849,638)

—

 

3,574,438

 

Controlled investments (cost of $84,419,465 and $84,922,381)

14,999,000

 

15,228,000

 

Total investments at fair value (cost of $690,597,257 and $658,300,164)

595,837,411

 

570,489,084

 

Cash and cash equivalents

12,405,398

 

9,531,190

 

Interest, dividends and fees receivable

6,836,319

 

5,515,446

 

Due from broker

2,097,000

 

1,946,507

 

Deferred debt issuance costs

1,347,337

 

1,055,117

 

Receivable for investments sold

36,986

 

12,096

 

Prepaid expenses and other assets

403,727

 

510,706

 

Total assets

$618,964,178

 

$589,060,146

 

Liabilities

 

 

 

 

Debt (net of deferred issuance costs of $828,843 and $996,839)

$283,171,157

 

$253,003,161

 

Dividends payable

7,257,191

 

7,257,191

 

Income incentive fees payable

7,165,434

 

3,403,349

 

Management fees payable

2,221,908

 

2,186,540

 

Interest and debt related payables

1,698,635

 

738,719

 

Interest Rate Swap at fair value

1,445,045

 

1,332,299

 

Accrued administrative expenses

288,454

 

397,299

 

Payable for investments purchased

1,463

 

600,391

 

Accrued expenses and other liabilities

1,685,832

 

1,618,844

 

Total liabilities

304,935,119

 

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)

(462,881,072)

 

(458,387,778)

 

Treasury stock at cost, 11,909,890 shares held

(73,373,702)

 

(73,373,702)

 

Total net assets

314,029,059

 

318,522,353

 

Total liabilities and net assets

$618,964,178

 

$589,060,146

 

Net assets per share

$4.33

 

$4.39

 

 

 

-6-

BlackRock Capital Investment Corporation

Consolidated Statements of Operations

(Unaudited)

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30, 2023

 

June 30, 2022

 

June 30, 2023

 

June 30, 2022

 

Investment income

 

 

 

 

 

 

 

 

 

Interest income (excluding PIK):

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

$18,541,747

 

$11,646,011

 

$35,954,222

 

$23,252,914

 

PIK interest income:

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

999,236

 

126,140

 

2,028,467

 

249,158

 

Non-controlled, affiliated investments

 

—

 

116,572

 

31,794

 

232,468

 

PIK dividend income:

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

89,040

 

78,729

 

175,382

 

154,611

 

Other income:

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

311,438

 

301,503

 

515,561

 

562,091

 

Total investment income

 

19,941,461

 

12,268,955

 

38,705,426

 

24,451,242

 

Operating expenses

 

 

 

 

 

 

 

 

 

Interest and other debt expenses

 

5,482,450

 

2,860,691

 

10,200,681

 

5,589,642

 

Management fees

 

2,221,908

 

1,947,167

 

4,352,380

 

4,007,031

 

Incentive fees on income

 

1,886,182

 

69,343

 

3,762,085

 

88,356

 

Incentive fees on capital gains(1)

 

—

 

(1,073,068)

 

—

 

(1,544,569)

 

Director fees

 

299,375

 

153,125

 

449,000

 

306,250

 

Administrative expenses

 

288,454

 

299,262

 

581,088

 

664,769

 

Professional fees

 

249,734

 

207,489

 

443,161

 

510,346

 

Insurance expense

 

162,746

 

196,114

 

323,703

 

395,872

 

Investment advisor expenses

 

17,094

 

25,819

 

34,187

 

51,638

 

Other operating expenses

 

423,298

 

462,797

 

787,429

 

766,596

 

Total expenses

 

11,031,241

 

5,148,739

 

20,933,714

 

10,835,931

 

 

 

 

 

 

 

 

 

 

 

Net investment income(1)

 

8,910,220

 

7,120,216

 

17,771,712

 

13,615,311

 

Realized and unrealized gain (loss) on investments and Interest Rate Swap

 

 

 

 

 

 

 

 

 

Net realized gain (loss):

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

195,593

 

—

 

37,802

 

825,913

 

Non-controlled, affiliated investments

 

—

 

—

 

(441,906)

 

—

 

Net realized gain (loss)

 

195,593

 

—

 

(404,104)

 

825,913

 

Net change in unrealized appreciation (depreciation):

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

(6,866,500)

 

(9,875,353)

 

(6,358,284)

 

(12,412,374)

 

Non-controlled, affiliated investments

 

—

 

(352,787)

 

(864,398)

 

229,671

 

Controlled investments

 

(171,084)

 

766,458

 

273,916

 

922,387

 

Interest Rate Swap

 

(564,538)

 

(198,694)

 

(397,754)

 

(198,694)

 

Net change in unrealized appreciation (depreciation)

 

(7,602,122)

 

(9,660,376)

 

(7,346,520)

 

(11,459,010)

 

Net realized and unrealized gain (loss)

 

(7,406,529)

 

(9,660,376)

 

(7,750,624)

 

(10,633,097)

 

Net increase (decrease) in net assets resulting from operations

 

$1,503,691

 

$(2,540,160)

 

$10,021,088

 

$2,982,214

 

Net investment income per share—basic(1)

 

$0.12

 

$0.10

 

$0.24

 

$0.18

 

Earnings (loss) per share—basic(1)

 

$0.02

 

$(0.03)

 

$0.14

 

$0.04

 

Weighted average shares outstanding—basic

 

72,571,907

 

73,667,822

 

72,571,907

 

73,744,580

 

Net investment income per share—diluted(1)(2)

 

$0.12

 

$0.10

 

$0.24

 

$0.18

 

Earnings (loss) per share—diluted(1)(2)

 

$0.02

 

$(0.03)

 

$0.14

 

$0.04

 

Weighted average shares outstanding—diluted

 

72,571,907

 

87,860,082

 

72,571,907

 

89,329,839

 

_______________________________________________

(1)
Net investment income and per share amounts displayed above are net of the accrual (reversal) for incentive fees on capital gains which is reflected on a hypothetical liquidation basis in accordance with GAAP for the three and six months ended June 30, 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.
(2)
For the three and six month periods ended June 30, 2022, the impact of the hypothetical conversion of the 2022 Convertible Notes was antidilutive.

 

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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

Six Months Ended

 

June 30, 2023

June 30, 2022

June 30, 2023

June 30, 2022

GAAP Basis:

 

 

 

 

 

 

 

 

Net Investment Income

$8,910,220

 

$7,120,216

 

$17,771,712

 

$13,615,311

 

Net Investment Income per share

0.12

 

0.10

 

0.24

 

0.18

 

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

—

 

(1,073,068)

 

—

 

(1,544,569)

 

Addback: GAAP incentive fee based on Income

1,886,182

 

69,343

 

3,762,085

 

88,356

 

Pre-Incentive Fee1:

 

 

 

 

 

 

 

 

Net Investment Income

$10,796,402

 

$6,116,491

 

$21,533,797

 

$12,159,098

 

Net Investment Income per share

0.15

 

0.08

 

0.30

 

0.16

 

Less: Incremental incentive fee based on Income

(1,886,182)

 

(69,343)

 

(3,762,085)

 

(88,356)

 

As Adjusted2:

 

 

 

 

 

 

 

 

Net Investment Income

$8,910,220

 

$6,047,148

 

$17,771,712

 

$12,070,742

 

Net Investment Income per share

0.12

 

0.08

 

0.24

 

0.16

 

_______________________________________________

1.
Pre-Incentive Fee: Amounts are adjusted to remove the impact of all accrued (reversed) incentive fees recorded during the period.
2.
As Adjusted: Amounts are adjusted to remove the GAAP accrual (reversal) for incentive fee based on capital gains (if any) 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 and six month periods ended June 30, 2023 and 2022, respectively. Under the current investment 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.

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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