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Crescent Capital BDC, Inc. Reports Second Quarter 2020 Financial Results; Declares a Third Quarter 2020 Regular Dividend of $0.41 per Share

Crescent Capital BDC

LOS ANGELES, Aug. 10, 2020 (GLOBE NEWSWIRE) -- Crescent Capital BDC, Inc. (“Crescent BDC” or “Company”) (NASDAQ: CCAP) today reported net investment income of $13.0 million, or $0.46 per share, and a net increase in net assets resulting from operations of $56.4 million, or $2.00 per share, for the second quarter ended June 30, 2020. Reported net asset value per share was $18.12 at June 30, 2020 as compared to $16.52 at March 31, 2020.

The increase in net asset value for the second quarter was primarily driven by unrealized gains from the impact of credit spreads tightening relative to the end of the first quarter.

Declaration of Regular Dividend for Third Quarter 2020

The Company announced that its Board of Directors has declared a third quarter 2020 dividend of $0.41 per share, which will be paid on or around October 15, 2020 to stockholders of record as of the close of business on September 30, 2020.

Selected Financial Highlights
($ in millions, except per share amounts. Unaudited.)

 

As of

June 30, 2020

 

March 31, 2020

 

June 30, 2019

Investments, at fair value

 

$

895.2

 

 

$

883.2

 

 

$

624.9

 

Total assets

 

$

926.3

 

 

$

909.9

 

 

$

637.2

 

Total net assets

 

$

510.3

 

 

$

465.8

 

 

$

320.8

 

Net asset value per share

 

$

18.12

 

 

$

16.52

 

 

$

19.75

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average yield on income producing securities (at cost)1

 

 

7.9

%

 

 

7.9

%

 

 

8.4

%

Percentage of debt investments at floating rates

 

 

96.9

%

 

 

96.0

%

 

 

96.1

%

 

 

 

 

 

 

 

 

 

 

(1) Yield excludes investments on non-accrual status.


 

 

 

 

 

Three Months Ended

 

 

June 30, 2020

 

March 31, 2020

 

 

Total Amount

 

Per Share

 

Total Amount

 

Per Share

Total investment income

 

$

19.3

 

 

$

0.69

 

 

$

18.8

 

 

$

0.72

 

Net investment income

 

$

13.0

 

 

$

0.46

 

 

$

11.6

 

 

$

0.44

 

Net realized gains (losses)

 

$

(1.1

)

 

$

(0.04

)

 

$

(0.1

)

 

$

(0.00

)

Net unrealized gains (losses), net of taxes

 

$

44.5

 

 

$

1.59

 

 

$

(82.2

)

 

$

(3.14

)

Realized loss on asset acquisition

 

 

n/a

 

 

 

n/a

 

 

$

(3.8

)

 

$

(0.14

)

Net increase (decrease) in net assets resulting from operations

 

$

56.4

 

 

$

2.00

 

 

$

(74.5

)

 

$

(2.84

)

Dividend distributions per share

 

 

 

 

$

0.41

 

 

 

 

 

$

0.41

 

Portfolio & Investing Activity

As of June 30, 2020 and March 31, 2020, the Company had investments in 124 and 127 portfolio companies with an aggregate fair value of $895.2 million and $883.2 million, respectively. The portfolio at fair value was comprised of the following asset types:

 

 

As of

$ in millions

 

June 30, 2020

 

March 31, 2020

Investment Type

 

Fair Value

 

Percentage

 

Fair Value

 

Percentage

Senior secured first lien

 

$

361.7

 

 

40.4

%

 

$

387.2

 

 

43.8

%

Unitranche first lien

 

 

307.2

 

 

34.3

%

 

 

294.2

 

 

33.3

%

Unitranche first lien - last out

 

 

14.4

 

 

1.6

%

 

 

14.6

 

 

1.6

%

Senior secured second lien

 

 

106.7

 

 

11.9

%

 

 

102.9

 

 

11.7

%

Unsecured debt

 

 

8.7

 

 

1.0

%

 

 

8.6

 

 

1.0

%

Equity & other

 

 

45.0

 

 

5.0

%

 

 

31.8

 

 

3.6

%

LLC/LP equity interests

 

 

51.5

 

 

5.8

%

 

 

43.9

 

 

5.0

%

Total investments

 

$

895.2

 

 

100.0

%

 

$

883.2

 

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended June 30, 2020, the Company invested $26.4 million into one new portfolio company, one refinancing and several follow-on revolver and delayed draw fundings. For this period, the Company had $60.4 million in aggregate exits, sales and repayments.

For the three months ended March 31, 2020, excluding assets acquired in the Alcentra Capital Corp. ("Alcentra") acquisition, the Company invested $117.4 million across seven new portfolio companies and three existing portfolio companies. For this period, the Company had $73.8 million in aggregate exits, sales and repayments.

Results of Operations for the Three Months Ended June 30, 2020

Investment income increased to $19.3 million for the three months ended June 30, 2020 from $18.8 million for the three months ended March 31, 2020. The increase was due in part to three months of investment income from Alcentra portfolio investments that the Company acquired on January 31, 2020.

Total net expenses, including income and excise taxes, decreased to $6.4 million for the three months ended June 30, 2020 from $7.3 million for the three months ended March 31, 2020. The decrease was primarily due to lower interest and other debt financing costs as the weighted average interest rate on the Company’s weighted average outstanding debt decreased from 4.0% for the three months ended March 31, 2020 to 3.0% for the three months ended June 30, 2020.

Liquidity and Capital Resources

As of June 30, 2020, the Company had $11.6 million in cash and cash equivalents and restricted cash and $166.1 million of undrawn capacity on its revolving credit facilities, subject to borrowing base and other limitations. The weighted average interest rate on the Company’s debt outstanding was 2.7% as of June 30, 2020.

The Company’s debt to equity ratio was 0.78x as of June 30, 2020.

On July 30, 2020, the Company announced that it agreed to issue $50 million aggregate principal amount of 5.95% senior unsecured notes due July 30, 2023. Pro forma for this transaction, the Company had over $200 million of available liquidity as of June 30, 2020.

Conference Call

The Company will host a webcast/conference call on Tuesday, August 11, 2020 at 12:00 p.m. (Eastern Time) to discuss its quarter ended June 30, 2020 financial results. Please visit Crescent BDC’s webcast link located on the Events & Presentations page of the Investor Relations section of Crescent BDC’s website for a slide presentation that complements the earnings conference call.

All interested parties are invited to participate via telephone or the live webcast, which will be hosted on a webcast link located on the Events & Presentations page of the Investor Resources section of Crescent BDC’s website at www.crescentbdc.com. Please visit the website to test your connection before the webcast. Participants are also invited to access the conference call by dialing one of the following numbers:

Domestic: (855) 982-6679
International: (614) 999-9468
Conference ID: 8443979

All callers will need to enter the Conference ID followed by the # sign and reference "Crescent BDC" once connected with the operator. An archived replay will be available via a webcast link located on the Investor Relations section of Crescent BDC's website.

About Crescent BDC

Crescent BDC is a business development company that seeks to maximize the total return of its stockholders in the form of current income and capital appreciation by providing capital solutions to middle market companies with sound business fundamentals and strong growth prospects. Crescent BDC utilizes the extensive experience, origination capabilities and disciplined investment process of Crescent Capital Group LP (“Crescent Capital”).  Crescent BDC is externally managed by Crescent Cap Advisors, LLC, a subsidiary of Crescent Capital. Crescent BDC has elected to be regulated as a business development company under the Investment Company Act of 1940. For more information about Crescent BDC, visit www.crescentbdc.com. However, the contents of such website are not and should not be deemed to be incorporated by reference herein.

About Crescent Capital Group

Crescent Capital is a global credit investment manager with approximately $28 billion of assets under management. For over 25 years, the firm has focused on below investment grade credit through strategies that invest in marketable and privately-originated debt securities including senior bank loans, high yield bonds, as well as private senior, unitranche, and junior debt securities.  Crescent Capital is headquartered in Los Angeles with offices in New York, Boston, and London and more than 180 employees globally. For more information about Crescent Capital, visit www.crescentcap.com. However, the contents of such website are not and should not be deemed to be incorporated by reference herein.

Contact:

Daniel McMahon
daniel.mcmahon@crescentcap.com       
212-364-0149
           
Forward-Looking Statements

This press release, and other statements that Crescent BDC may make, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act, with respect to Crescent BDC’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.

Crescent BDC 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 Crescent BDC 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 Crescent BDC’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 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, 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.

Crescent BDC’s Annual Report on Form 10-K for the year ended December 31, 2019 and quarterly report on Form 10-Q for the quarter ended June 30, 2020, each filed with the SEC, identify additional factors that can affect forward-looking statements.

Other Information

The information in this press release is summary information only and should be read in conjunction with Crescent BDC’s annual report on Form 10-K for the year ended December 31, 2019, which Crescent BDC filed with the U.S. Securities and Exchange Commission (the SEC) on March 4, 2020, Crescent BDC’s quarterly report on Form 10-Q for the quarter ended June 30, 2020, which Crescent BDC filed with the SEC on August 11, 2020, as well as Crescent BDC’s other reports filed with the SEC. A copy of Crescent BDC’s annual report on Form 10-K for the year ended December 31, 2019, Crescent BDC’s quarterly report on Form 10-Q for the quarter ended June 30, 2020 and Crescent BDC’s other reports filed with the SEC can be found on Crescent BDC’s website at www.crescentbdc.com and the SEC’s website at www.sec.gov.


Crescent Capital BDC, Inc.
Consolidated Statements of Assets and Liabilities
(in thousands except share and per share data)

 

As of

 

As of

June 30, 2020

December 31,

(Unaudited)

2019

Assets

 

 

 

 

 

 

Investments, at fair value

 

 

 

 

 

 

Non-controlled non-affiliated (cost of $864,843 and $675,329, respectively)

 

$

821,831

 

 

$

671,582

 

Non-controlled affiliated (cost of $33,782 and $19,766, respectively)

 

 

42,890

 

 

 

20,507

 

Controlled (cost of $39,000 and $34,000, respectively)

 

 

30,513

 

 

 

34,442

 

Cash and cash equivalents

 

 

3,514

 

 

 

4,576

 

Restricted cash and cash equivalents

 

 

8,043

 

 

 

8,851

 

Receivable for investments sold

 

 

11,393

 

 

 

160

 

Interest receivable

 

 

3,980

 

 

 

2,832

 

Unrealized appreciation on foreign currency forward contracts

 

 

2,672

 

 

 

758

 

Deferred tax assets

 

 

762

 

 

 

421

 

Other assets

 

 

712

 

 

 

3,046

 

Total assets

 

$

926,310

 

 

$

747,175

 

 

Liabilities

Debt (net of deferred financing costs of $4,504 and $3,431, respectively)

 

$

395,829

 

 

$

322,010

 

Distributions payable

 

 

11,548

 

 

 

8,554

 

Interest and other debt financing costs payable

 

 

3,345

 

 

 

3,545

 

Accrued expenses and other liabilities

 

 

2,553

 

 

 

3,788

 

Management fees payable

 

 

1,660

 

 

 

1,343

 

Deferred tax liabilities

 

 

959

 

 

 

879

 

Directors’ fees payable

 

 

110

 

 

 

74

 

Unrealized depreciation on foreign currency forward contracts

 

 

8

 

 

 

65

 

Total liabilities

 

$

416,012

 

 

$

340,258

 

 

Net Assets

 

 

 

 

 

 

Preferred stock, par value $0.001 per share (10,000 shares authorized, zero outstanding, respectively)

 

$

 

 

$

 

Common stock, par value $0.001 per share (200,000,000 shares authorized, 28,167,360 and 20,862,314 shares issued and outstanding, respectively)

 

 

28

 

 

 

21

 

Paid-in capital in excess of par value

 

 

558,913

 

 

 

414,293

 

Accumulated loss

 

 

(48,643

)

 

 

(7,397

)

Total Net Assets

 

$

510,298

 

 

$

406,917

 

Total Liabilities and Net Assets

 

$

926,310

 

 

$

747,175

 

Net asset value per share

 

$

18.12

 

 

$

19.50

 

 


Crescent Capital BDC, Inc.
Consolidated Statements of Operations
(in thousands except share and per share data)
(Unaudited)

 

For the three months ended

 

For the six months ended

June 30,

June 30,

2020

 

 

2019

 

2020

 

 

2019

 

Investment Income:

 

 

 

 

 

 

From non-controlled non-affiliated investments:

 

 

 

 

 

 

Interest income

 

$

15,689

 

 

$

10,523

 

 

$

32,292

 

 

$

20,875

 

Paid-in-kind interest

 

 

697

 

 

 

172

 

 

 

1,246

 

 

 

337

 

Dividend income

 

 

712

 

 

 

508

 

 

 

1,604

 

 

 

931

 

Other income

 

 

620

 

 

 

500

 

 

 

1,060

 

 

 

744

 

From non-controlled affiliated investments:

 

 

 

 

 

 

Interest income

 

 

328

 

 

 

265

 

 

 

671

 

 

 

537

 

Paid-in-kind interest

 

 

481

 

 

 

 

 

 

485

 

 

 

 

From controlled investments:

 

 

 

 

 

 

Dividend income

 

 

800

 

 

 

550

 

 

 

800

 

 

 

550

 

Total investment income

 

 

19,327

 

 

 

12,518

 

 

 

38,158

 

 

 

23,974

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

Interest and other debt financing costs

 

 

3,631

 

 

 

3,173

 

 

 

7,980

 

 

 

5,982

 

Management fees

 

 

2,767

 

 

 

2,160

 

 

 

5,418

 

 

 

4,050

 

Incentive fees

 

 

2,267

 

 

 

1,107

 

 

 

4,199

 

 

 

2,131

 

Professional fees

 

 

364

 

 

 

192

 

 

 

706

 

 

 

384

 

Directors' fees

 

 

110

 

 

 

72

 

 

 

239

 

 

 

145

 

Organization expenses

 

 

 

 

 

49

 

 

 

 

 

 

91

 

Other general and administrative expenses

 

 

495

 

 

 

537

 

 

 

1,221

 

 

 

1,058

 

Total expenses

 

 

9,634

 

 

 

7,290

 

 

 

19,763

 

 

 

13,841

 

Management fee waiver

 

 

(1,107

)

 

 

(1,044

)

 

 

(2,264

)

 

 

(1,947

)

Incentive fee waiver

 

 

(2,267

)

 

 

(1,107

)

 

 

(4,199

)

 

 

(2,131

)

Net expenses

 

 

6,260

 

 

 

5,139

 

 

 

13,300

 

 

 

9,763

 

Net investment income before taxes

 

 

13,067

 

 

 

7,379

 

 

 

24,858

 

 

 

14,211

 

Income and excise taxes

 

 

111

 

 

 

3

 

 

 

349

 

 

 

6

 

Net investment income

 

 

12,956

 

 

 

7,376

 

 

 

24,509

 

 

 

14,205

 

 

 

 

 

 

 

 

Net realized and unrealized gains (losses) on investments:

 

 

 

 

 

 

Net realized gain/(loss) on:

 

 

 

 

 

 

Non-controlled non-affiliated investments

 

 

(1,136

)

 

 

(660

)

 

 

(1,023

)

 

 

(921

)

Foreign currency transactions

 

 

76

 

 

 

476

 

 

 

(161

)

 

 

489

 

Net change in unrealized appreciation (depreciation) on:

 

 

 

 

 

 

Non-controlled non-affiliated investments and foreign currency translation

 

 

25,140

 

 

 

1,434

 

 

 

(39,300

)

 

 

3,894

 

Non-controlled affiliated investments

 

 

11,878

 

 

 

80

 

 

 

8,367

 

 

 

616

 

Controlled investments

 

 

7,914

 

 

 

(472

)

 

 

(8,929

)

 

 

(713

)

Foreign currency forward contracts

 

 

(218

)

 

 

309

 

 

 

1,972

 

 

 

282

 

Net realized and unrealized gains (losses) on investments

 

 

43,654

 

 

 

1,167

 

 

 

(39,074

)

 

 

3,647

 

Realized loss on asset acquisition

 

 

 

 

 

 

 

 

(3,825

)

 

 

 

Net realized and unrealized gains (losses) on investments and asset acquisition

 

 

43,654

 

 

 

1,167

 

 

 

(42,899

)

 

 

3,647

 

Benefit (provision) for taxes on unrealized appreciation (depreciation) on investments

 

 

(193

)

 

 

(31

)

 

 

262

 

 

 

(480

)

Net increase (decrease) in net assets resulting from operations

 

$

56,417

 

 

 

8,512

 

 

$

(18,128

)

 

 

17,372

 

 

 

 

 

 

 

 

Per Common Share Data:

 

 

 

 

 

 

Net increase (decrease) in net assets resulting from operations per share (basic and diluted):

 

$

2.00

 

 

 

0.54

 

 

$

(0.67

)

 

 

1.15

 

Net investment income per share (basic and diluted):

 

$

0.46

 

 

 

0.47

 

 

$

0.90

 

 

 

0.94

 

Weighted average shares outstanding (basic and diluted):

 

 

28,168,643

 

 

 

15,703,473

 

 

 

27,190,817

 

 

 

15,087,362