Stellus Capital Investment Corporation · NYSE:SCM
Stellus Capital Investment — Q2 2020 Earnings Presentation
17 slides from Stellus Capital Investment's earnings presentation, August 2020
Slide 1: Investor Presentation Quarter ended June 30, 2020
Investor Presentation Quarter ended June 30, 2020 INVESTOR PRESENTATION
Slide 2: Disclaimer
Disclaimer THIS PRESENTATION IS FOR INFORMATIONAL PURPOSES ONLY. THE INFORMATION CONTAINED HEREIN IS NOT INTENDED TO PROVIDE, AND SHOULD NOT BE RELIED UPON FOR, ACCOUNTING, LEGAL OR TAX ADVICE OR INVESTMENT RECOMMENDATIONS. THIS PRESENTATION IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER
Slide 3: Table of Contents
Table of Contents Page 4 Company Background Page 9 Key Middle Market Relationships Page 10 Financial Highlights Page 12 Portfolio Overview Page 16 Funding Sources Page 17 Corporate Information INVESTOR PRESENTATION 3
Slide 4: Stellus Capital Investment Corporation (NYSE: SCM)
Stellus Capital Investment Corporation (NYSE:“SCM”) • Publicly traded business development company (NYSE: “SCM” ) Business • Investment portfolio of $640 million as of June 30, 2020 Development • Externally managed by Stellus Capital Management, LLC, a registered Company (BDC) investment advisor wit
Slide 5: Strong Origination Platform and Selective Investment Process
Stellus Capital Investment Corporation (NYSE:“SCM”) • Closed over 270 direct lending transactions since 2004 with more than Strong Origination 155 different financial sponsors* Platform and • Over 500 middle market opportunities reviewed over the last twelve Selective months and closed approximately
Slide 6: Established Team and Institutional Platform
Established Team and Institutional Platform Stellus Capital Investment Corporation investment committee members have over 155 years of total experience, which includes backgrounds in private credit, private equity, corporate finance, restructuring, management consulting, and accounting. TOTAL YEARS
Slide 7: Stellus Capital Differentiators
Stellus Capital Differentiators All partners have significant experience in restructuring Management team has been Partners have invested in excess of investing together for over 20 $6 billion over the last 15 years * years Stellus Capital Team Relationship-driven team who has Differentiators Have m
Slide 8: Product
Product SCM provides flexible financing for middle market companies. Objective • Provide first lien, second lien, unitranche and mezzanine debt financing, with corresponding equity co-investments Investment Size • Up to $30 million Investment Focus • Middle market and small cap companies with EBITDA
Slide 9: Diverse Financial Sponsor Relationships
Diverse Financial Sponsor Relationships * Altamont Capital Arlington Capital Audax Group The CapStreet Group Partners Partners Clarion Capital Partners CenterGate Capital Graham Partners Lee Equity Partners Milestone Partners Parthenon Capital Pamlico Capital Partners Prophet Equity Ridgemont Equity
Slide 10: Balance Sheet
Balance Sheet ($ in 000's except per share data) Q2 2020 Q1 2020 FY 2019 FY 2018 Unaudited Unaudited Audited Audited Assets Cash $ 23,210 $ 35,025 $ 16,133 $ 17,467 Investment Portfolio (at fair value) 640,714 609,544 628,948 504,483 Other Assets 2,732 4,487 3,432 4,337 Total Assets $ 666,656 $ 649,
Slide 11: Income Statement and Distributions
Income Statement and Distributions ($ in 000's except per share data) Q2 2020 Q1 2020 FY 2019 FY 2018 Unaudited Unaudited Audited Audited Total Investment Income $ 13,841 $ 15,261 $ 58,912 $ 53,266 Interest expense and debt financing fees $ 4,093 $ 4,292 $ 14,976 $ 12,339 Operating Expenses $ 4,023
Slide 12: Portfolio Statistics as of June 30, 2020
Portfolio Statistics as of June 30, 2020 Industry Concentration Geographic Concentration Note: Percentages are based on Market Value INVESTOR PRESENTATION 12
Slide 13: Portfolio Statistics: Fixed vs. Floating, Risk Grade
Portfolio Statistics as of June 30, 2020 Fixed vs. Floating Rate Debt Investments * Risk Grade * Subject to LIBOR floors. The weighted average interest rate floor on floating rate loans was 1.20% as of June 30, 2020 Risk Grade Definition: 1 - Exceeding expectations; 2 - Performing in accordance with
Slide 14: Investment Portfolio Growth
Investment Portfolio Growth ($’s in 000’s) INVESTOR PRESENTATION 14
Slide 15: Weighted Average Yields
Weighted Average Yields Debt Investment Portfolio as of June 30, 2020 New Debt Investments in the Last Four Quarters * Note: Reflects percentage of total debt investments at fair value. * Includes follow-on fundings for existing portfolio companies. INVESTOR PRESENTATION 15
Slide 16: Diversified Funding Sources as of June 30, 2020
Diversified Funding Sources as of June 30, 2020 Div erse sources of long-term, cost-efficient capital FUNDING SOURCES FACILITY/ISSUANCE SIZE OUTSTANDING INTEREST RATE (3) MATURITY Syndicated Credit Facility led by $230 million $181 million LIBOR + 2.50% October 10, 2021 (As of 8/6/20) Amegy (1) SBIC
Slide 17: Corporate Information
Corporate Information Executive Officers Directors Research Coverage Robert T. Ladd J. Tim Arnoult 1 Chairman, President & Janney Chief Executive Officer Bruce R. Bilger 1 Mitchel Penn, 410-583-5976 W. Todd Huskinson Dean D’Angelo Keefe, Bruyette & Woods Chief Financial Officer, Robert T. Ladd, Chai
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