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): |
|
November 4, 2021 |
Fidus Investment Corporation
__________________________________________
(Exact name of registrant as specified in its charter)
Maryland |
814-00861 |
27-5017321 |
_____________________ |
_____________ |
______________ |
of incorporation) |
File Number) |
Identification No.) |
|
|
|
1603 Orrington Avenue, Suite 1005, Evanston, Illinois |
|
60201 |
_________________________________ |
|
___________ |
|
|
|
Registrant’s telephone number, including area code: |
|
847-859-3940 |
Not Applicable
______________________________________________
Former name or former address, if changed since last report
________________
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, par value $0.001 per share |
FDUS |
The 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 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
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 November 4, 2021, Fidus Investment Corporation issued a press release announcing its financial results for the quarter ended September 30, 2021. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The information disclosed under this Item 2.02, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be deemed incorporated by reference into any filing made under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.
Item 7.01. |
Regulation FD Disclosure. |
Fidus Investment Corporation issued a press release, filed herewith as Exhibit 99.1, on November 4, 2021 announcing the declaration of a base dividend of $0.32 per share, a supplemental dividend of $0.04 per share, and a special dividend of $0.05 per share, which are payable on December 17, 2021 to stockholders of record as of December 3, 2021.
The information disclosed under this Item 7.01, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be deemed incorporated by reference into any filing made under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
The following Exhibit 99.1 is being furnished herewith to this Current Report on Form 8-K:
Exhibit
No. Description
99.1 Press Release dated November 4, 2021 of Fidus Investment Corporation
SIGNATURES
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 hereunto duly authorized.
Date: November 4, 2021 Fidus Investment Corporation
By: /s/ Shelby E. Sherard
Shelby E. Sherard
Chief Financial Officer and Secretary
Exhibit 99.1
FIDUS INVESTMENT CORPORATION ANNOUNCES
Third QUARTER 2021 FINANCIAL RESULTS
Base Dividend of $0.32 and Supplemental Dividend of $0.04 Declared for Third Quarter
Board of Directors Declared Special Dividend of $0.05 Per Share
EVANSTON, Ill., November 4, 2021 – Fidus Investment Corporation (NASDAQ:FDUS) (“Fidus” or the “Company”), a provider of customized debt and equity financing solutions, primarily to lower middle-market companies based in the United States, today announced its financial results for the third quarter ended September 30, 2021.
Third Quarter 2021 Financial Highlights
Management Commentary
“Our third quarter results reflect a continuation of a period of heightened M&A activity that began nearly a year ago. Once again, our portfolio performed well and NAV grew to $18.31 per share. Originations of $78.2 million were offset by $127.5 million of repayments which included $23.4 million in proceeds from monetizing equity investments,” said Edward Ross, Chairman and CEO of Fidus Investment Corporation. “With two new investments totaling $27.0 million closing subsequent to quarter-end and a healthy pipeline of opportunities, we remain well positioned to judiciously build our portfolio of debt investments in lower middle market companies with resilient business models and positive long-term outlooks. Our focus, as always, is on managing the business for the long-term, adhering to our underwriting principles and generating attractive risk-adjusted returns while preserving capital.”
On a supplemental basis, we provide information relating to adjusted net investment income, which is a non-GAAP measure. This measure is provided in addition to, but not as a substitute for, net investment income. Adjusted net investment income represents net investment income excluding any capital gains incentive fee expense or (reversal) attributable to realized and unrealized gains and losses. The management agreement with our investment adviser provides that a capital gains incentive fee is determined and paid annually with respect to cumulative realized capital gains (but not unrealized capital gains) to the
extent such realized capital gains exceed realized and unrealized losses. In addition, we accrue, but do not pay, a capital gains incentive fee in connection with any unrealized capital appreciation, as appropriate. As such, we believe that adjusted net investment income is a useful indicator of operations exclusive of any capital gains incentive fee expense or (reversal) attributable to realized and unrealized gains and losses. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. Reconciliations of net investment income to adjusted net investment income are set forth in Schedule 1.
Third Quarter 2021 Financial Results
The following table provides a summary of our operating results for the three months ended September 30, 2021, as compared to the same period in 2020 (dollars in thousands, except per share data):
|
|
Three Months Ended September 30, |
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
2021 |
|
|
2020 |
|
|
$ Change |
|
|
% Change |
|
||||
Interest income |
|
$ |
17,859 |
|
|
$ |
18,765 |
|
|
$ |
(906 |
) |
|
|
(4.8 |
%) |
Payment-in-kind interest income |
|
|
1,260 |
|
|
|
1,249 |
|
|
|
11 |
|
|
|
0.9 |
% |
Dividend income |
|
|
457 |
|
|
|
471 |
|
|
|
(14 |
) |
|
|
(3.0 |
%) |
Fee income |
|
|
1,647 |
|
|
|
593 |
|
|
|
1,054 |
|
|
|
177.7 |
% |
Interest on idle funds |
|
|
6 |
|
|
|
(1 |
) |
|
|
7 |
|
|
|
(700.0 |
%) |
Total investment income |
|
$ |
21,229 |
|
|
$ |
21,077 |
|
|
$ |
152 |
|
|
|
0.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net investment income |
|
$ |
5,118 |
|
|
$ |
6,902 |
|
|
$ |
(1,784 |
) |
|
|
(25.8 |
%) |
Net investment income per share |
|
$ |
0.21 |
|
|
$ |
0.28 |
|
|
$ |
(0.07 |
) |
|
|
(25.0 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjusted net investment income (1) |
|
$ |
9,782 |
|
|
$ |
9,663 |
|
|
$ |
119 |
|
|
|
1.2 |
% |
Adjusted net investment income per share (1) |
|
$ |
0.40 |
|
|
$ |
0.40 |
|
|
$ |
- |
|
|
|
0.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net increase (decrease) in net assets resulting from operations |
|
$ |
28,442 |
|
|
$ |
20,707 |
|
|
$ |
7,735 |
|
|
|
37.4 |
% |
Net increase (decrease) in net assets resulting from operations per share |
|
$ |
1.16 |
|
|
$ |
0.85 |
|
|
$ |
0.31 |
|
|
|
36.5 |
% |
The $0.1 million increase in total investment income for the three months ended September 30, 2021, as compared to the same period in 2020 was primarily attributable to (i) a $1.0 million increase in fee income resulting from an increase in origination and prepayment fees, partial offset by a decrease in amendment fees and (ii) a $0.9 million decrease in total interest income resulting from a decrease in average debt investment balances outstanding, partially offset by a higher weighted average yield on debt investment balances outstanding, during 2021 as compared to 2020.
For the three months ended September 30, 2021, total expenses, including the base management and income incentive fee waivers and income tax provision, were $16.1 million, an increase of $1.9 million, or 13.7% from the $14.2 million of total expenses, including the base management and income incentive fee waivers and income tax provision, for the three months ended September 30, 2020. The increase was primarily attributable to (i) a $1.9 million increase in capital gains incentive fee accrued, a (ii) a $0.2 million decrease in interest and financing expenses due to a decrease in average borrowings outstanding and the weighted average interest rate, and (iii) a $0.2 million increase in general and administrative expenses.
Net investment income decreased by $1.8 million, or (25.8%), to $5.1 million during the three months ended September 30, 2021 as compared to the same period in 2020, as a result of the $0.1 million increase in total investment income and the $1.9 million increase in total expenses, including base management and income incentive fee waivers and income tax provision. Adjusted net investment income(1), which excludes the capital gains incentive fee accrual, increased by $0.1 million, or 1.2%, to $9.8 million.
For the three months ended September 30, 2021, the total net realized gain/(loss) on investments, net of income tax (provision)/benefit on realized gains, was $8.4 million, as compared to total net realized gain/(loss) on investments, net of income tax (provision)/benefit on realized gains, of $1.3 million for the same period in 2020.
Portfolio and Investment Activities
As of September 30, 2021, the fair value of our investment portfolio totaled $719,124 and consisted of 70 active portfolio companies and six portfolio companies that have sold their underlying operations. Our total portfolio investments at fair value were approximately 113.9% of the related cost basis as of September 30, 2021. As of September 30, 2021, 28 portfolio
company’s debt investments bore interest at a variable rate, which represented $317.2 million, or 55.9%, of our debt investment portfolio on a fair value basis, and the remainder of our debt investment portfolio was comprised of fixed rate investments. As of September 30, 2021, our average active portfolio company investment at amortized cost was $9.0 million, which excludes investments in the six portfolio companies that have sold their underlying operations. The weighted average yield on debt investments was 12.3% as of September 30, 2021. The weighted average yield was computed using the effective interest rates for debt investments at cost as of September 30, 2021, including the accretion of OID and loan origination fees, but excluding investments on non-accrual status and investments recorded as a secured borrowing, if any.
Third quarter 2021 investment activity included the following new portfolio company investments:
Liquidity and Capital Resources
As of September 30, 2021, we had $98.8 million in cash and cash equivalents and $60.0 million of unused capacity under our senior secured revolving credit facility (the “Credit Facility”). As of September 30, 2021, we had SBA debentures outstanding of $95.0 million, $19.0 million outstanding of our 6.000% notes due 2024, $63.3 million outstanding of our 5.375% notes due 2024 (the “November 2024 Notes” and collectively with the February 2024 Notes, the “Public Notes”), and $125.0 million outstanding of our 4.750% notes due 2026 (the “2026 Notes” and collectively with the Public Notes the “Notes”). As of September 30, 2021, the weighted average interest rate on total debt outstanding was 4.2%.
Subsequent Events
On October 1, 2021, we invested $8.5 million in first lien debt, subordinated debt, and common equity of Auto CRM LLC (dba Dealer Holdings), a leading SaaS-based provider of customer communication software to the auto repair market.
On October 6, 2021, we invested $18.5 million in first lien debt, common equity, and warrants of Acendre Midco, Inc., a market leading provider of cloud-based talent management software solutions.
On October 8, 2021, we closed the public offering of $125.0 million in aggregate principal amount of our 3.50% notes due 2026, or the “November 2026 Notes.” The total net proceeds to us from the November 2026 Notes, based on a public offering price of 99.996% of par, after deducting underwriting discounts of $2.5 million and estimated offering expenses of approximately $0.4 million, were approximately $122.1 million.
The November 2026 Notes will mature on November 15, 2026 and bear interest at a rate of 3.50% per year. The November 2026 Notes are unsecured obligations and rank pari passu with our existing and future unsecured indebtedness; and structurally subordinated to all existing and future indebtedness and other obligations of any of our subsidiaries, financing vehicles, or similar facilities we may form in the future, with respect to claims on the assets of any such subsidiaries, financing vehicles, or similar facilities. The November 2026 Notes may be redeemed in whole or in part at any time or from time to time at our option subject to a make whole provision if redeemed more than three months prior to maturity or at par thereafter. Interest on the November 2026 Notes is payable on May 15 and November 15 of each year, beginning May 15, 2022. We do not intend to list the November 2026 Notes on any securities exchange or automated dealer quotation system.
On October 26, 2021. we exited our debt investment in the Tranzonic Companies. The Company received payment in full of $7.1 million on our subordinated debt, which includes a prepayment fee.
On October 29, 2021, we committed $16.0 million in second lien debt in a leading marketing technology platform for digital customer acquisition across all consumer verticals, including financial services, home services, and insurance.
On November 2, 2021, we fully redeemed $19.0 million and $63.3 million of the issued and outstanding February 2024 and November 2024 Notes, respectively, resulting in a realized loss on extinguishment of debt of approximately $1.6 million.
Fourth Quarter 2021 Base Dividend of $0.32, Supplemental Dividend of $0.04, and Special Dividend of $0.05 Per Share Declared
On November 1, 2021, our board of directors declared a base dividend of $0.32 per share, a supplemental dividend of $0.04 per share, and a special dividend of $0.05 per share for the fourth quarter. The dividends will be payable on December 17, 2021, to stockholders of record as of December 3, 2021.
When declaring dividends, our board of directors reviews estimates of taxable income available for distribution, which differs from consolidated income under generally accepted accounting principles due to (i) changes in unrealized appreciation and depreciation, (ii) temporary and permanent differences in income and expense recognition, and (iii) the amount of undistributed taxable income carried over from a given year for distribution in the following year. The final determination of 2021 taxable income, as well as the tax attributes for 2021 dividends, will be made after the close of the 2021 tax year. The final tax attributes for 2021 dividends will generally include ordinary taxable income but may also include capital gains, qualified dividends and return of capital.
Fidus has adopted a dividend reinvestment plan (“DRIP”) that provides for reinvestment of dividends on behalf of its stockholders, unless a stockholder elects to receive cash. As a result, when we declare a cash dividend, stockholders who have not “opted out” of the DRIP at least two days prior to the dividend payment date will have their cash dividends automatically reinvested in additional shares of our common stock. Those stockholders whose shares are held by a broker or other financial intermediary may receive dividends in cash by notifying their broker or other financial intermediary of their election.
Third Quarter 2021 Financial Results Conference Call
Management will host a conference call to discuss the operating and financial results at 9:00am ET on Friday, November 5, 2021. To participate in the conference call, please dial (877) 810-3368 approximately 10 minutes prior to the call. International callers should dial (914) 495-8561. Please reference conference ID # 5155759.
A live webcast of the conference call will be available at http://investor.fdus.com/events-presentations. Please access the website 15 minutes prior to the start of the call to download and install any necessary audio software.
A telephone replay of the conference call will be available from 12:00pm ET on November 5, 2021, until 11:59pm ET on November 12, 2021, and may be accessed by calling (855) 859-2056 (domestic dial-in) or (404) 537-3406 (international dial-in) and reference conference ID # 5155759. An archived replay of the conference call will also be available in the investor relations section of the Company’s website.
ABOUT FIDUS INVESTMENT CORPORATION
Fidus Investment Corporation provides customized debt and equity financing solutions to lower middle-market companies, which management generally defines as U.S. based companies with revenues between $10 million and $150 million. The Company’s investment objective is to provide attractive risk-adjusted returns by generating both current income from debt investments and capital appreciation from equity related investments. Fidus seeks to partner with business owners, management teams and financial sponsors by providing customized financing for change of ownership transactions, recapitalizations, strategic acquisitions, business expansion and other growth initiatives.
Fidus is an externally managed, closed-end, non-diversified management investment company that has elected to be treated as a business development company under the Investment Company Act of 1940, as amended. In addition, for tax purposes, Fidus
has elected to be treated as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. Fidus was formed in February 2011 to continue and expand the business of Fidus Mezzanine Capital, L.P., which commenced operations in May 2007 and is licensed by the U.S. Small Business Administration as a Small Business Investment Company (SBIC).
FORWARD-LOOKING STATEMENTS
This press release may contain certain forward-looking statements which are based upon current expectations and are inherently uncertain, including, but not limited to, statements about the future performance and financial condition of the Company, the prospects of our existing and prospective portfolio companies and the financial condition and ability of our existing and prospective portfolio companies to achieve their objectives. Any such statements, other than statements of historical fact, are likely to be affected by other unknowable future events and conditions, including elements of the future that are or are not under the Company’s control, and that the Company may or may not have considered; accordingly, such statements cannot be guarantees or assurances of any aspect of future performance. Actual developments and results are highly likely to vary materially from these estimates and projections of the future as a result of a number of factors related to changes in the markets in which the Company invests, changes in the financial, capital, and lending markets, and other factors described from time to time in the Company’s filings with the Securities and Exchange Commission. Such statements speak only as of the time when made, and are based on information available to the Company as of the date hereof and are qualified in their entirety by this cautionary statement. The Company undertakes no obligation to update any such statement now or in the future, except as required by applicable law.
FIDUS INVESTMENT CORPORATION
Consolidated Statements of Assets and Liabilities
(in thousands, except shares and per share data)
|
|
|
|
|
|
|
|
|
||
|
|
September 30, |
|
|
December 31, |
|
||||
|
|
2021 |
|
|
2020 |
|
||||
ASSETS |
|
|
|
|
|
|
|
|
||
Investments, at fair value: |
|
|
|
|
|
|
|
|
||
Control investments (cost: $52,889 and $32,969, respectively) |
|
$ |
|
43,284 |
|
|
$ |
|
28,253 |
|
Affiliate investments (cost: $33,021 and $31,836, respectively) |
|
|
|
107,053 |
|
|
|
|
81,394 |
|
Non-control/non-affiliate investments (cost: $545,353 and $622,222, respectively) |
|
|
|
568,787 |
|
|
|
|
633,222 |
|
Total investments, at fair value (cost: $631,263 and $687,027, respectively) |
|
|
|
719,124 |
|
|
|
|
742,869 |
|
Cash and cash equivalents |
|
|
|
98,812 |
|
|
|
|
124,308 |
|
Interest receivable |
|
|
|
8,246 |
|
|
|
|
7,548 |
|
Prepaid expenses and other assets |
|
|
|
1,584 |
|
|
|
|
1,015 |
|
Total assets |
|
$ |
|
827,766 |
|
|
$ |
|
875,740 |
|
LIABILITIES |
|
|
|
|
|
|
|
|
||
SBA debentures, net of deferred financing costs |
|
$ |
|
92,146 |
|
|
$ |
|
144,004 |
|
Notes, net of deferred financing costs |
|
|
|
203,142 |
|
|
|
|
300,294 |
|
Borrowings under Credit Facility, net of deferred financing costs |
|
|
|
39,291 |
|
|
|
|
(1,048 |
) |
Secured Borrowings |
|
|
|
17,746 |
|
|
|
|
- |
|
Accrued interest and fees payable |
|
|
|
2,202 |
|
|
|
|
3,500 |
|
Base management fee payable, net of base management fee waiver – due to affiliate |
|
|
|
3,201 |
|
|
|
|
3,244 |
|
Income incentive fee payable, net of income incentive fee waiver – due to affiliate |
|
|
|
2,425 |
|
|
|
|
2,610 |
|
Capital gains incentive fee payable – due to affiliate |
|
|
|
19,669 |
|
|
|
|
11,031 |
|
Administration fee payable and other, net – due to affiliate |
|
|
|
571 |
|
|
|
|
576 |
|
Taxes payable |
|
|
|
(883 |
) |
|
|
|
275 |
|
Accounts payable and other liabilities |
|
|
|
711 |
|
|
|
|
494 |
|
Total liabilities |
|
|
$ |
380,221 |
|
|
|
$ |
464,980 |
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
||
NET ASSETS |
|
|
|
|
|
|
|
|
||
Common stock, $0.001 par value (100,000,000 shares authorized, 24,437,400 and 24,437,400 shares |
|
|
|
|
|
|
|
|
||
issued and outstanding at September 30, 2021 and December 31, 2020, respectively) |
|
|
$ |
24 |
|
|
|
$ |
24 |
|
Additional paid-in capital |
|
|
|
363,751 |
|
|
|
|
363,751 |
|
Total distributable earnings |
|
|
|
83,770 |
|
|
|
|
46,985 |
|
Total net assets |
|
|
|
447,545 |
|
|
|
|
410,760 |
|
Total liabilities and net assets |
|
$ |
|
827,766 |
|
|
$ |
|
875,740 |
|
Net asset value per common share |
|
$ |
|
18.31 |
|
|
$ |
|
16.81 |
|
FIDUS INVESTMENT CORPORATION
Consolidated Statements of Operations (unaudited)
(in thousands, except shares and per share data)
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
||||
Investment Income: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Control investments |
|
$ |
927 |
|
|
$ |
467 |
|
|
$ |
2,495 |
|
|
$ |
1,348 |
|
Affiliate investments |
|
|
537 |
|
|
|
849 |
|
|
|
2,096 |
|
|
|
2,663 |
|
Non-control/non-affiliate investments |
|
|
16,395 |
|
|
|
17,449 |
|
|
|
50,197 |
|
|
|
51,060 |
|
Total interest income |
|
|
17,859 |
|
|
|
18,765 |
|
|
|
54,788 |
|
|
|
55,071 |
|
Payment-in-kind interest income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Control investments |
|
|
724 |
|
|
|
453 |
|
|
|
1,661 |
|
|
|
1,323 |
|
Affiliate investments |
|
|
86 |
|
|
|
106 |
|
|
|
281 |
|
|
|
175 |
|
Non-control/non-affiliate investments |
|
|
450 |
|
|
|
690 |
|
|
|
1,390 |
|
|
|
2,013 |
|
Total payment-in-kind interest income |
|
|
1,260 |
|
|
|
1,249 |
|
|
|
3,332 |
|
|
|
3,511 |
|
Dividend income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Control investments |
|
|
— |
|
|
|
— |
|
|
|
568 |
|
|
|
— |
|
Affiliate investments |
|
|
— |
|
|
|
357 |
|
|
|
110 |
|
|
|
465 |
|
Non-control/non-affiliate investments |
|
|
457 |
|
|
|
114 |
|
|
|
699 |
|
|
|
160 |
|
Total dividend income |
|
|
457 |
|
|
|
471 |
|
|
|
1,377 |
|
|
|
625 |
|
Fee income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Control investments |
|
|
— |
|
|
|
— |
|
|
|
400 |
|
|
|
— |
|
Affiliate investments |
|
|
102 |
|
|
|
22 |
|
|
|
370 |
|
|
|
88 |
|
Non-control/non-affiliate investments |
|
|
1,545 |
|
|
|
571 |
|
|
|
6,071 |
|
|
|
2,189 |
|
Total fee income |
|
|
1,647 |
|
|
|
593 |
|
|
|
6,841 |
|
|
|
2,277 |
|
Interest on idle funds |
|
|
6 |
|
|
|
(1 |
) |
|
|
7 |
|
|
|
9 |
|
Total investment income |
|
|
21,229 |
|
|
|
21,077 |
|
|
|
66,345 |
|
|
|
61,493 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest and financing expenses |
|
|
4,662 |
|
|
|
4,878 |
|
|
|
14,418 |
|
|
|
14,701 |
|
Base management fee |
|
|
3,270 |
|
|
|
3,223 |
|
|
|
9,661 |
|
|
|
9,688 |
|
Incentive fee - income |
|
|
2,425 |
|
|
|
2,374 |
|
|
|
7,644 |
|
|
|
6,342 |
|
Incentive fee (reversal) - capital gains |
|
|
4,664 |
|
|
|
2,761 |
|
|
|
8,638 |
|
|
|
(6,380 |
) |
Administrative service expenses |
|
|
438 |
|
|
|
412 |
|
|
|
1,281 |
|
|
|
1,242 |
|
Professional fees |
|
|
347 |
|
|
|
301 |
|
|
|
982 |
|
|
|
1,508 |
|
Other general and administrative expenses |
|
|
374 |
|
|
|
224 |
|
|
|
1,115 |
|
|
|
1,059 |
|
Total expenses before base management and income incentive fee waivers |
|
|
16,180 |
|
|
|
14,173 |
|
|
|
43,739 |
|
|
|
28,160 |
|
Base management and income incentive fee waivers |
|
|
(69 |
) |
|
|
— |
|
|
|
(98 |
) |
|
|
(423 |
) |
Total expenses, net of base management and incentive fee waivers |
|
|
16,111 |
|
|
|
14,173 |
|
|
|
43,641 |
|
|
|
27,737 |
|
Net investment income before income taxes |
|
|
5,118 |
|
|
|
6,904 |
|
|
|
22,704 |
|
|
|
33,756 |
|
Income tax provision (benefit) |
|
|
- |
|
|
|
2 |
|
|
|
32 |
|
|
|
146 |
|
Net investment income |
|
|
5,118 |
|
|
|
6,902 |
|
|
|
22,672 |
|
|
|
33,610 |
|
Net realized and unrealized gains (losses) on investments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net realized gains (losses): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Control investments |
|
|
(990 |
) |
|
|
— |
|
|
|
(33 |
) |
|
|
— |
|
Affiliate investments |
|
|
30 |
|
|
|
(65 |
) |
|
|
30 |
|
|
|
24,354 |
|
Non-control/non-affiliate investments |
|
|
9,266 |
|
|
|
1,380 |
|
|
|
13,675 |
|
|
|
8,543 |
|
Total net realized gain (loss) on investments |
|
|
8,306 |
|
|
|
1,315 |
|
|
|
13,672 |
|
|
|
32,897 |
|
Income tax (provision) benefit from realized gains on investments |
|
|
143 |
|
|
|
— |
|
|
|
143 |
|
|
|
(1,065 |
) |
Net change in unrealized appreciation (depreciation): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Control investments |
|
|
1,096 |
|
|
|
607 |
|
|
|
(4,889 |
) |
|
|
(1,157 |
) |
Affiliate investments |
|
|
8,106 |
|
|
|
7,158 |
|
|
|
24,474 |
|
|
|
(28,295 |
) |
Non-control/non-affiliate investments |
|
|
6,133 |
|
|
|
4,899 |
|
|
|
12,434 |
|
|
|
(33,982 |
) |
Total net change in unrealized appreciation (depreciation) on investments |
|
|
15,335 |
|
|
|
12,664 |
|
|
|
32,019 |
|
|
|
(63,434 |
) |
Net gain (loss) on investments |
|
|
23,784 |
|
|
|
13,979 |
|
|
|
45,834 |
|
|
|
(31,602 |
) |
Realized losses on extinguishment of debt |
|
|
(460 |
) |
|
|
(174 |
) |
|
|
(2,640 |
) |
|
|
(299 |
) |
Net increase (decrease) in net assets resulting from operations |
|
$ |
28,442 |
|
|
$ |
20,707 |
|
|
$ |
65,866 |
|
|
$ |
1,709 |
|
Per common share data: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net investment income per share-basic and diluted |
|
$ |
0.21 |
|
|
$ |
0.28 |
|
|
$ |
0.93 |
|
|
$ |
1.37 |
|
Net increase in net assets resulting from operations per share — basic and diluted |
|
$ |
1.16 |
|
|
$ |
0.85 |
|
|
$ |
2.70 |
|
|
$ |
0.07 |
|
Dividends declared per share |
|
$ |
0.42 |
|
|
$ |
0.30 |
|
|
$ |
1.19 |
|
|
$ |
0.99 |
|
Weighted average number of shares outstanding — basic and diluted |
|
|
24,437,400 |
|
|
|
24,437,400 |
|
|
|
24,437,400 |
|
|
|
24,444,120 |
|
Schedule 1
Supplemental Information Regarding Adjusted Net Investment Income
On a supplemental basis, we provide information relating to adjusted net investment income, which is a non-GAAP measure. This measure is provided in addition to, but not as a substitute for, net investment income. Adjusted net investment income represents net investment income excluding any capital gains incentive fee expense or (reversal) attributable to realized and unrealized gains and losses. The management agreement with our advisor provides that a capital gains incentive fee is determined and paid annually with respect to cumulative realized capital gains (but not unrealized capital gains) to the extent such realized capital gains exceed realized and unrealized losses for such year, less the aggregate amount of any capital gains incentive fees paid in all prior years. In addition, we accrue, but do not pay, a capital gains incentive fee in connection with any unrealized capital appreciation, as appropriate. As such, we believe that adjusted net investment income is a useful indicator of operations exclusive of any capital gains incentive fee expense or (reversal) attributable to realized and unrealized gains and losses. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. The following table provides a reconciliation of net investment income to adjusted net investment income for the three and nine months ended September 30, 2021 and 2020.
|
|
|
|
|
($ in thousands) |
|
|
($ in thousands) |
|
||||||||||
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
|
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
|
|
|
(unaudited) |
|
|
(unaudited) |
|
||||||||||
|
|
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
||||
Net investment income |
|
|
|
|
|
5,118 |
|
|
|
6,902 |
|
|
|
22,672 |
|
|
|
33,610 |
|
Capital gains incentive fee expense (reversal) |
|
|
|
|
|
4,664 |
|
|
|
2,761 |
|
|
|
8,638 |
|
|
|
(6,380 |
) |
Adjusted net investment income (1) |
|
|
|
|
|
9,782 |
|
|
|
9,663 |
|
|
|
31,310 |
|
|
|
27,230 |
|
|
|
|
|
|
(Per share) |
|
|
(Per share) |
|
||||||||||
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
|
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
|
|
|
(unaudited) |
|
|
(unaudited) |
|
||||||||||
|
|
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
||||
Net investment income |
|
|
|
|
|
0.21 |
|
|
|
0.28 |
|
|
|
0.93 |
|
|
|
1.37 |
|
Capital gains incentive fee expense (reversal) |
|
|
|
|
|
0.19 |
|
|
|
0.12 |
|
|
|
0.35 |
|
|
|
(0.26 |
) |
Adjusted net investment income (1) |
|
|
|
|
|
0.40 |
|
|
|
0.40 |
|
|
|
1.28 |
|
|
|
1.11 |
|
Company Contact: |
Investor Relations Contact: |
Shelby E. Sherard |
Jody Burfening |
Chief Financial Officer |
LHA |
(847) 859-3940 |
(212) 838-3777 |
ssherard@fidusinv.com |
jburfening@lhai.com |