Stellus Capital Investment Corporation · NYSE:SCM
Stellus Capital Investment — Q1 2020 Earnings Presentation
17 slides from Stellus Capital Investment's earnings presentation, May 2020
Slide 1: Investor Presentation Quarter ended March 31, 2020
Investor Presentation Quarter ended March 31, 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) Business Development Company
Stellus Capital Investment Corporation (NYSE:“SCM”) • Publicly traded business development company (NYSE: “SCM” ) Business • Investment portfolio of $610 million as of March 31, 2020 Development • Externally managed by Stellus Capital Management, LLC, a Company (BDC) registered investment advisor wi
Slide 5: Strong Origination Platform and Selective Investment Process
Stellus Capital Investment Corporation (NYSE:“SCM”) Strong Origination • Closed over 270 direct lending transactions since 2004 with more Platform and than 155 different financial sponsors* Selective • Over 700 middle market opportunities reviewed over the last twelve Investment months and closed ap
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 investing together for over 20 of $6 billion over the last 15 years years * Stellus Capital Relationship-driven team who Team Differentiators Have made
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 $30 million Investment Focus • Middle market and small cap companies with EBITDA
Slide 9: Diverse Financial Sponsor Relationships
Diverse Financial Sponsor Relationships * Altamont Capital Arlington Capital Audax Group The CapStreet Group Partners Partners Clarion Capital Partners CenterGate Capital Graham Partners Lee Equity Partners Milestone Partners Parthenon Capital Pamlico Capital Partners Prophet Equity Rhone Group Ridg
Slide 10: Balance Sheet
Balance Sheet ($ in 000's except per share data) Q1 2020 FY 2019 FY 2018 Unaudited Audited Audited Assets Cash $ 35,025 $ 16,133 $ 17,467 Investment Portfolio (at fair value) 609,544 628,948 504,483 Other Assets 4,487 3,432 4,337 Total Assets $ 649,056 $ 648,513 $ 526,287 Liabilities Credit Facility
Slide 11: Income Statement and Distributions
Income Statement and Distributions ($ in 000's except ratios and share data) Q1 2020 Q1 2019 FY 2019 FY 2018 Unaudited Unaudited Audited Audited Total Investment Income $ 15,261 $ 13,835 $ 58,912 $ 53,266 Interest expense and debt financing fees $ 4,292 $ 3,675 $ 14,976 $ 12,339 Operating Expenses $
Slide 12: Portfolio Statistics as of March 31, 2020
Portfolio Statistics as of March 31, 2020 Industry Concentration Geographic Concentration PR GA NC <1% UT AR <1% MO <1% <1% FL 2% 1% IN 2% TX MD 2% 19% 3% PA 3% TN 3% SC 3% UK 3% NY CA 3% 14% WI 3% CAD 3% OH 7% IL 10% NJ 8% AZ 8% Note: Percentages are based on Market Value INVESTOR PRESENTATION 12
Slide 13: Portfolio Statistics: Fixed vs. Floating Rate, Risk Grade
Portfolio Statistics as of March 31, 2020 Fixed vs. Floating Rate Debt Investments * Risk Grade Floating 95% Fixed 5% * Subject to LIBOR floors. The weighted average interest rate floor on floating rate loans was 1.19% as of March 31, 2020 Risk Grade Definition: 1 - Exceeding expectations; 2 - Perfo
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 March 31, 2020 New Debt Investments in the Last Four Quarters * Note: Reflects percentage of total debt investments at accreted cost. * Includes follow-on fundings for existing portfolio companies. INVESTOR PRESENTATION 15
Slide 16: Diversified Funding Sources as of March 31, 2020
Diversified Funding Sources as of March 31, 2020 Div erse sources of long-term, cost-efficient capital (3) FUNDING SOURCES FACILITY/ISSUANCE SIZE OUTSTANDING INTEREST RATE MATURITY Syndicated Credit Facility led by $230 million $205 million LIBOR + 2. 75% October 10, 2021 (As of 5/15/20) (1 ) Amegy
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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