Finance

Stellar Performance: Stellus Private Credit BDC Announces Financial Milestones

HOUSTON, May 10, 2024 /PRNewswire/ -- Stellus Private Credit BDC ("Stellus PBDC" or the "Company") has proudly reported their financial results for the first fiscal quarter ended March 31, 2024.

Robert T. Ladd, the Chief Executive Officer of Stellus PBDC, expressed his contentment over the strong performance in the first quarter, which was reflected in their generating $0.49 per share of net investment income and a boost in net asset value. Throughout the quarter, Stellus funded investments amounting to $17 million and received repayments totalling $9 million, escalating the total portfolio to a whopping $216 million at fair value. The diligence did not cease at the quarter’s end; rather, it persevered with on April 3, 2024, when the 2024 second quarter monthly dividend of $0.50 per share was declared, corresponding to an approximate annualized dividend yield of 13%.

FINANCIAL HIGHLIGHTS

The financial highlights showcase Stellus PBDC's strategic financial management and robust portfolio. With amounts detailed in millions, except for per-share data and shares outstanding, these highlights are pivotal for investors.

Three Months Ended March 31, 2024, VS. March 31, 2023:

• Net investment income rose from $2.64 million ($0.48 per share) to $3.55 million ($0.49 per share).
• Net unrealized gains on investments shifted from a loss of $0.06 million ($0.01 per share) to a gain of $0.33 million ($0.04 per share).
• Benefits for taxes on net unrealized depreciation on investments amounted to $0.05 million ($0.01 per share).
• Net assets from operations significantly increased from $2.58 million ($0.47 per share) to $3.93 million ($0.54 per share).

The portfolio activity echoes the company’s progressive growth and strong market presence. Investments at fair value escalated from $208.6 million to $216.3 million, and total assets jumped from $211.2 million to $219.0 million. Net assets burgeoned from $108.0 million to $112.2 million, with the net asset value per share ascending from $14.68 to $15.26.

On Distributions and Dividends:

The Company's commitment to providing shareholder returns was demonstrated with over $3.61 million in distributions, equating to a $0.50 per-share payout. The bullish dividend strategy is designed to reward investors while reinforcing the company's market position.

PORTFOLIO ACTIVITY

Stellus PBDC's investment strategy is manifested in the seamless execution of portfolio transactions. New investments boasted a staggering amount of $16.6 million, portraying the firm’s aggressive growth initiatives, and repayments of investments were ambitiously at $9.4 million. The Portfolio Activity reveals the dynamic and fluid nature of Stellus PBDC’s investment mechanics.

Results of Operations

Investment income for both periods presents a steady and promising growth, with current reporting periods showing a surge from $4.9 million to $6.4 million, thereby underscoring a consistent flow of income from portfolio investments. Gross operating expenses marked an increased from $3.3 million to $4.1 million, accounting for various operational costs such as management fees, incentive fees, and related borrowing expenses.

For both periods ending March 31, 2024, and March 31, 2023, shareholders reveled in the enviable net investment incomes detailing $3.6 million ($0.49 per share) and $2.6 million ($0.48 per share), respectively. Net appreciation changes flipped a previous loss into gain, showcasing $0.3 million against a $0.1 million decline in the comparable periods. Net assets from operations followed suit with $3.9 million and $2.6 million boosts, translating into per-share fortunes of $0.54 and $0.47, respectively.

Liquidity and Capital Resources

Stellus PBDC, conscientious of its capital requirements, entered into a senior secured revolving credit agreement with Zions Bancorporation, N.A., dba Amegy Bank, in September 2022. This credit agreement permits borrowings up to $150 million, expandable to a total of $200 million, conditions permitting. As of March 31, 2024, the borrowings stood at an impressive $105.3 million.

Recent Portfolio Activity

In the period following March 31, 2024, the firm continued its aggressive market pursuit by investing in several companies including Morgan Electrical Group Intermediate Holdings, Inc. and Impact Home Services LLC, reinforcing Stellus PBDC's position as a leader in the middle market.

Distributions Declared

April 3, 2024, was marked by the announcement of monthly distributions for April, May, and June 2024, each at $0.1666 per share, culminating in a total payout of $0.50 per share, with payment dates stipulated for the consecutive months' end. This unrivaled consistency in rewarding shareholders is a testament to the trust and confidence Stellus PBDC has earned in the market.

About Stellus Private Credit BDC

Stellus PBDC capitalizes on the potential of private middle-market companies by investing primarily through first lien (including unitranche) loans and second lien loans, paired with strategic equity co-investments. Managed by Stellus Private BDC Advisor, LLC, the company leverages the expertise and insight of its advisor for a robust and risk-averse investment portfolio.

Forward-Looking Statements

Certain statements in this release constitute forward-looking statements and are based on current expectations, predictions, and assumptions. Such statements are not guarantees of future performance and involve risks and uncertainties, and actual outcomes may differ materially as a result. The company will not update forward-looking statements and investors are cautioned to consult the filings with SEC.

For detailed information, connect with Stellus Private Credit BDC’s Chief Financial Officer, W. Todd Huskinson, at (713) 292-5414 or via email at [email protected]

SOURCE: Stellus Private Credit BDC