Stellus Capital Investment Corporation Reports Results for its First Fiscal Quarter Ended March 31, 2025

About this update from Stellus Capital Investment Corporation

HOUSTON , May 12, 2025 /PRNewswire/ -- Stellus Capital Investment Corporation (NYSE:SCM) ("Stellus", "we", or the "Company") today announced financial results for its fiscal quarter ended March 31, 2025 . Robert T. Ladd , Chief Executive Officer of Stellus, stated, "I am pleased to report solid operating results for the quarter ended March 31, 2025 , in which we earned U.S. GAAP net investment income of $0.35 per share and core net investment income of $0.37 per share. During the quarter, we funded $55 million of investments and received $15 million of repayments, bringing the total portfolio to $991 million at fair value. Notably, we raised over $9 million of equity during the quarter under the at-the-market equity program. I'm also pleased to report that our investors have received a total of $295 million in distributions, equivalent to $16.95 per share, since we began operations." FINANCIAL HIGHLIGHTS ($ in millions, except data relating to per share amounts and shares outstanding) PORTFOLIO ACTIVITY ($ in millions, except data relating to per share amounts, shares outstanding, and number of portfolio companies) Results of Operations Investment income for the three months ended March 31, 2025 and 2024 totaled $25.0 million and $26.0 million , respectively, most of which was interest income from portfolio investments. Gross operating expenses for the three months ended March 31, 2025 and 2024 totaled $16.4 million and $16.0 million , respectively. For the same respective periods, base management fees totaled $4.1 million and $3.9 million , income incentive fees totaled $2.1 million and $2.5 million , fees and expenses related to our borrowings totaled $8.3 million and $7.8 million (including interest and amortization of deferred financing costs), administrative expenses totaled $0.4 million and $0.5 million , income tax totaled $0.5 million and $0.4 million , and other expenses totaled $1.0 million and $0.9 million . The Company waived $1.2 million and $0.2 million of income incentive fees due to the total return limitation contained in the Investment Advisory Agreement between the Company and the Advisor (as defined below) for the three months ended March 31, 2025 and 2024, respectively. Net investment income was $9.8 million and $10.2 million , or $0.35 and $0.42 per common share based on weighted average common shares outstanding of 27,602,612 and 24,125,642 for the three months ended March 31, 2025 and 2024, respectively. Core net investment income, which is not a U.S. GAAP measure and excludes the capital gains incentive fee (reversal) and income tax expense accruals, for the three months ended March 31, 2025 and 2024 was $10.3 million and $10.6 million , or $0.37 and $0.44 per share, respectively. For the three months ended March 31, 2025 and 2024, the Company's investment portfolio had a net change in unrealized appreciation of $1.2 million and $23.5 million , respectively, and the Company had net realized losses of ($6.0) million and ($20.4) million , respectively. Net increase in net assets resulting from operations totaled $5.0 million and $13.1 million , or $0.18 and $0.54 per common share, based on weighted average common shares outstanding of 27,602,612 and 24,125,642 for the three months ended March 31, 2025 and 2024, respectively. Liquidity and Capital Resources As of March 31, 2025 , the Company's amended senior secured revolving credit agreement with certain bank lenders and Zions Bancorporation, N.A. dba Amegy Bank, as administrative agent (as amended from time to time, the "Credit Facility") provided for borrowings in an aggregate amount of up to $315.0 million on a committed basis. As of March 31, 2025 and December 31, 2024 , the Credit Facility had an accordion feature which allowed for potential future expansion of the facility size up to $350.0 million . As of March 31, 2025 and December 31, 2024 , the Company had $221.8 million and $175.4 million in outstanding borrowings under the Credit Facility, respectively. The Company issued 656,085 shares during the three months ended March 31, 2025 under the At-the-Market Program ("ATM Program") for gross proceeds of $9.3 million . The average per share offering price of shares issued under the ATM Program during the three months ended March 31, 2025 was $14.11 . Stellus Capital Management, LLC, the Company's investment adviser (the "Advisor"), agreed to reimburse the Company for underwriting fees to the extent the per share price of the shares to the public, less underwriting fees, was less then net asset value per share. For the three months ended March 31, 2025, the Advisor was not required to reimburse underwriting fees as all shares were issued at a premium to net asset value. Distributions For both the three months ended March 31, 2025 and 2024, the Company declared aggregate distributions of $0.40 per share for the period ( $11.1 million and $9.6 million in the aggregate, respectively). Tax characteristics of all distributions will be reported to stockholders on Form 1099-DIV after the end of the calendar year. None of these dividends are expected to include a return of capital. Recent Portfolio Activity The Company invested in the following portfolio companies during the three months ended March 31, 2025: The Company realized investments in the following portfolio companies during the three months ended March 31, 2025:   Events Subsequent to March 31, 2025 The Company's management has evaluated subsequent events through May 12, 2025 . There have been no subsequent events that require recognition or disclosure except for the following described below. Investment Portfolio The Company invested in the following portfolio companies subsequent to March 31, 2025 : The Company realized investments in the following portfolio companies subsequent to March 31, 2025 : Credit Facility The outstanding balance under the Credit Facility as of May 12, 2025 was $147.8 million . 7.250% Notes due 2030 On April 1, 2025 , the Company issued $75.0 million in aggregate principal amount of 7.250% Notes due 2030 (the "7.250% Notes"). The 7.250% Notes bear interest at a rate of 7.250% per year payable semi-annually in arrears on April 1 and October 1 of each year, commencing October 1, 2025 . The 7.250% Notes will mature on April 1, 2030 , unless previously redeemed or repurchased in accordance with their terms. The 7.250% Notes are the direct unsecured obligations of the Company and rank pari passu with the Company's existing and future unsecured, unsubordinated indebtedness, including the Notes Payable; senior to any series of preferred stock that the Company may issue in the future; senior to any of the Company's future indebtedness that expressly provides it is subordinated to the 7.250% Notes; effectively subordinated to all of the Company's existing and future secured indebtedness (including indebtedness that is initially unsecured to which the Company subsequently grants security), to the extent of the value of the assets securing such indebtedness, including, without limitation, borrowings under the Credit Facility; and structurally subordinated to all existing and future indebtedness and other obligations of any of the Company's existing or future subsidiaries. In connection with the 7.250% Notes, the Company and U.S. Bank Trust Company, National Association (as successor-in-interest to U.S. Bank National Association), as trustee (the "Trustee"), entered into a Fourth Supplemental Indenture (the "Fourth Supplemental Indenture") to the Base Indenture, dated May 5, 2014 , between the Company and the Trustee (together with the Fourth Supplemental Indenture, the "Indenture"). The Indenture contains certain covenants, including covenants requiring the Company to comply with Section 18(a)(1)(A) as modified by Section 61(a)(2) of the Investment Company Act of 1940, as amended (the "1940 Act"), or any successor provisions, whether or not the Company continues to be subject to such provisions of the 1940 Act, but giving effect, in either case, to any exemptive relief granted to the Company by the U.S. Securities and Exchange Committee and certain other exceptions, and to provide financial information to the holders of the 7.250% Notes and the Trustee if the Company should no longer be subject to the reporting requirements under the Securities Exchange Act of 1934, as amended. These covenants are subject to important limitations and exceptions that are set forth in the Indenture. Distributions Declared On April 4, 2025 , the Board of Directors of the Company declared a regular monthly dividend for each of April 2025 , May 2025 , and June 2025 as follows: Conference Call Information Stellus Capital Investment Corporation will host a conference call to discuss these results on Tuesday, May 13, 2025 at 10:00 AM, Central Time . The conference call will be led by Robert T. Ladd, Chief Executive Officer, and W. Todd Huskinson , Chief Financial Officer, Chief Compliance Officer, Treasurer, and Secretary. For those wishing to participate by telephone, please dial (888) 506-0062. Use passcode 260621. Starting approximately two hours after the conclusion of the call, a replay will be available through Tuesday, May 27, 2025 by dialing (877) 481-4010 and entering passcode 52407. The replay will also be available on the Company's website. For those wishing to participate via Live Webcast, connect via the Public (SCIC) section of our website at www.stelluscapital.com , under the Events tab. A replay of the conference will be available on our website for approximately 90 days. About Stellus Capital Investment Corporation The Company is an externally managed, closed-end, non-diversified investment management company that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. The Company's investment objective is to maximize the total return to its stockholders in the form of current income and capital appreciation by investing primarily in private middle-market companies (typically those with $5.0 million to $50.0 million of EBITDA (earnings before interest, taxes, depreciation and amortization)) through first lien (including unitranche) loans, second lien loans and unsecured debt financing, with corresponding equity co-investments. The Company's investment activities are managed by its investment adviser, Stellus Capital Management. To learn more about Stellus Capital Investment Corporation, visit www.stelluscapital.com under the "Public (SCIC)" tab. Forward-Looking Statements Statements included herein may contain "forward-looking statements" which relate to future performance or financial condition. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of assumptions, risks and uncertainties, which change over time. Actual results may differ materially from those anticipated in any forward-looking statements as a result of a number of factors, including those described from time to time in filings by the Company with the Securities and Exchange Commission including the final prospectus that will be filed with the Securities and Exchange Commission. The Company undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release. Contacts Stellus Capital Investment Corporation W. Todd Huskinson , Chief Financial Officer (713) 292-5414 [email protected]                                                                             View original content to download multimedia: https://www.prnewswire.com/news-releases/stellus-capital-investment-corporation-reports-results-for-its-first-fiscal-quarter-ended-march-31-2025-302452898.html SOURCE Stellus Capital Investment Corporation

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