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Crescent Capital BDC, Inc. Reports September 30, 2023 Financial Results; Declares a Fourth Quarter Regular Dividend of $0.41 Per Share and Third Quarter Supplemental Dividend of $0.09 Per Share

LOS ANGELES, Nov. 08, 2023 (GLOBE NEWSWIRE) -- Crescent Capital BDC, Inc. (“Crescent BDC” or “Company”) (NASDAQ: CCAP) today reported net investment income of $21.7 million, or $0.59 per share, for the quarter ended September 30, 2023. Reported net asset value per share was $19.70 at September 30, 2023.

The Company announced that its Board of Directors (the “Board”) has declared a fourth quarter 2023 regular cash dividend of $0.41 per share to stockholders of record as of December 29, 2023, payable on January 16, 2024, and a third quarter 2023 supplemental cash dividend of $0.09 per share to stockholders of record as of November 30, 2023, payable on December 15, 2023.

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

 As of and for the three months ended 
 September 30, 2023 June 30, 2023 September 30, 2022 
Investments, at fair value $1,564.8 $1,581.1 $1,292.9 
Total assets $1,624.5 $1,624.6 $1,339.3 
Total net assets $730.3 $725.8 $622.6 
Net asset value per share $19.70 $19.58 $20.16 
           
Investment income $48.2 $46.7 $29.0 
Net investment income $21.7 $20.6 $16.0 
Net realized gains (losses), net of taxes $(0.1)$(6.6)$(2.5)
Net change in unrealized gains (losses), net of taxes $1.0 $8.6 $(15.8)
Net increase (decrease) in net assets resulting from operations $22.6 $22.6 $(2.4)
           
Net investment income per share $0.59 $0.56 $0.52 
Net realized gains (losses) per share, net of taxes $(0.00)$(0.18)$(0.08)
Net change in unrealized gains (losses) per share, net of taxes $0.02 $0.23 $(0.51)
Net increase (decrease) in net assets resulting from operations per share $0.61 $0.61 $(0.08)
Regular distributions paid per share $0.41 $0.41 $0.41 
Supplemental distributions paid per share $0.08  -  - 
Special distributions paid per share  -  - $0.05 
           
Non-GAAP Financial Measures1:          
Adjusted net investment income $21.7 $20.6 $13.0 
Adjusted net investment income per share $0.59 $0.56 $0.42 
           
Weighted average yield on income producing securities (at cost)2  11.9% 11.7% 9.5%
Percentage of debt investments at floating rates  98.6% 98.6% 98.7%

Portfolio & Investment Activity

As of September 30, 2023 and June 30, 2023, the Company had investments in 185 and 187 portfolio companies with an aggregate fair value of $1,564.8 and $1,581.1 million, respectively. The portfolio at fair value was comprised of the following asset types:

Portfolio Asset Types:            
  As of 
$ in millions September 30, 2023  June 30, 2023 
Investment Type Fair Value Percentage  Fair Value Percentage 
Senior secured first lien $445.0 28.4% $445.5 28.1%
Unitranche first lien3  938.9 60.0   955.0 60.4 
Unitranche first lien - last out3  13.8 0.9   14.3 0.9 
Senior secured second lien  57.6 3.7   57.2 3.6 
Unsecured debt  6.3 0.4   5.6 0.4 
Equity & other  49.0 3.1   48.9 3.1 
LLC/LP equity interests  54.2 3.5   54.6 3.5 
Total investments $1,564.8 100.0% $1,581.1 100.0%

For the quarter ended September 30, 2023, the Company invested $45.1 million across three new portfolio companies and several follow-on revolver and delayed draw fundings. For this period, the Company had $62.1 million in aggregate exits, sales and repayments.

For the quarter ended June 30, 2023, the Company invested $38.1 million across two new portfolio companies and several follow-on revolver and delayed draw fundings. For this period, the Company had $27.6 million in aggregate exits, sales and repayments.

Results of Operations

Investment income increased to $48.2 million for the three months ended September 30, 2023 from $46.7 million for the three months ended June 30, 2023, respectively. Interest income, which includes amortization of upfront fees, increased to $44.6 million for the three months ended September 30, 2023 from $43.1 million for the three months ended June 30, 2023. The increase was primarily driven by a rise in benchmark rates. Included in interest from investments for the three months ended September 30, 2023 and June 30, 2023 are $0.5 million and $0.1 million of accelerated accretion of OID related to paydown activity, respectively.

Dividend income decreased to $3.2 million for the three months ended September 30, 2023 from $3.4 million for the three months ended June 30, 2023. Other income, which includes consent, waiver, amendment, agency, underwriting and arranger fees, was $0.4 million and $0.2 million for the three months ended September 30, 2023 and June 30, 2023, respectively.

For the three months ended September 30, 2023 and June 30, 2023, total net expenses, including income and excise taxes, totaled $26.4 million and $26.1 million, respectively.

Liquidity and Capital Resources

As of September 30, 2023, the Company had $22.8 million in cash and cash equivalents and restricted cash and $317.3 million of undrawn capacity on its credit facilities, subject to borrowing base and other limitations. The weighted average cost of debt on the Company’s debt outstanding as of September 30, 2023 was 7.01%.

The Company’s debt to equity ratio was 1.18x as of September 30, 2023.

Conference Call
The Company will host a webcast/conference call on Thursday, November 9, 2023 at 12:00 p.m. (Eastern Time) to discuss its financial results for the quarter ended September 30, 2023. 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 the following number:

Toll Free: (888) 259-6580
Conference ID: 63859906

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.

Endnotes

Note: Numbers may not sum due to rounding.

1)   On a supplemental basis, the Company is disclosing adjusted net investment income and adjusted net investment income per share, each of which is a financial measure that is calculated and presented on a basis of methodology other than in accordance with U.S. GAAP (“non-GAAP”). Adjusted net investment income represents net investment income, excluding capital gains incentive fees. We use this non-GAAP financial measure internally to analyze and evaluate financial results and performance and believe that this non-GAAP financial measure is useful to investors as an additional tool to evaluate ongoing results and trends without giving effect to capital gains incentive fees. The Company’s investment advisory agreement provides that a capital gains-based incentive fee is determined and paid annually with respect to realized capital gains (but not unrealized capital appreciation) to the extent such realized capital gains exceed realized capital losses and unrealized capital depreciation on a cumulative basis. We believe that adjusted net investment income is a useful performance measure because it reflects the net investment income produced on the Company’s investments during a period without giving effect to any changes in the value of such investments and any related capital gains incentive fees between periods. The presentation of adjusted net investment income is not intended to be a substitute for financial results prepared in accordance with GAAP and should not be considered in isolation. The following table provides an unaudited reconciliation of net investment income (the most comparable U.S. GAAP measure) to adjusted net investment income for the periods presented:

  For the three months ended 
  September 30, 2023  June 30, 2023  September 30, 2022 
$ in millions, except per share data Amount  Per Share  Amount  Per Share  Amount  Per Share 
GAAP net investment income $21.7  $0.59  $20.6  $0.56  $16.0  $0.52 
Capital gains based incentive fee  -   -   -   -   (3.0)  (0.10)
Adjusted net investment income $21.7  $0.59  $20.6  $0.56  $13.0  $0.42 

2)   Yield excludes investments on non-accrual status.

3)   Unitranche loans are first lien loans that may extend deeper in a company’s capital structure than traditional first lien debt and may provide for a waterfall of cash flow priority among different lenders in the unitranche loan. In certain instances, the Company may find another lender to provide the “first out” portion of such loan and retain the “last out” portion of such loan, in which case, the “first out” portion of the loan would generally receive priority with respect to payment of principal, interest and any other amounts due thereunder over the “last out” portion that the Company would continue to hold. In exchange for the greater risk of loss, the “last out” portion earns a higher interest rate.

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

 As of
September 30, 2023
(Unaudited)
 As of
December 31, 2022
 
Assets    
Investments, at fair value    
Non-controlled non-affiliated investments (cost of $1,470,668 and $1,235,778, respectively)$1,448,134 $1,208,501 
Non-controlled affiliated investments (cost of $57,149 and $42,040, respectively) 54,714  43,080 
Controlled investments (cost of $67,725 and $13,638, respectively) 61,980  11,375 
Cash and cash equivalents 5,999  6,397 
Restricted cash and cash equivalents 16,756  10,670 
Interest and dividend receivable 14,428  9,945 
Receivable from unsettled transactions 11,568  5 
Unrealized appreciation on foreign currency forward contracts 8,846  8,154 
Deferred tax assets 473  91 
Other assets 1,589  4,660 
Total assets$1,624,487 $1,302,878 
     
Liabilities    
Debt (net of deferred financing costs of $7,669 and $5,380)$856,656 $654,456 
Distributions payable 15,195  12,664 
Interest and other debt financing costs payable 7,633  8,471 
Management fees payable 5,024  4,056 
Incentive fees payable 4,524  3,112 
Deferred tax liabilities 1,240  899 
Payable for investment purchased -  514 
Directors’ fees payable 151  151 
Unrealized depreciation on foreign currency forward contracts 93  157 
Accrued expenses and other liabilities 3,705  5,857 
Total liabilities$894,221 $690,337 
     
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,
37,061,547 and 30,887,360 shares issued and outstanding, respectively)
 37  31 
Paid-in capital in excess of par value 788,299  675,008 
Accumulated earnings (loss) (58,070) (62,498)
Total net assets$730,266 $612,541 
Total liabilities and net assets$1,624,487 $1,302,878 
Net asset value per share$19.70 $19.83 
 

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

  For the three months ended
September 30,
 For the nine months ended
September 30,
 
  2023 2022 2023 2022 
Investment Income:         
From non-controlled non-affiliated investments:         
Interest income $42,578 $26,047 $118,080 $70,490 
Paid-in-kind interest  703  401  1,971  1,091 
Dividend income  1  18  80  33 
Other income  237  174  466  434 
From non-controlled affiliated investments:         
Interest income  770  374  2,122  993 
Paid-in-kind interest  384  15  619  2,054 
Dividend income  530  400  1,709  3,671 
Other income  161    309   
From controlled investments:         
Interest income  148  192  468  558 
Paid-in-kind interest    187  192  538 
Dividend income  2,640  1,180  8,160  2,280 
Total investment income  48,152  28,988  134,176  82,142 
          
Expenses:         
Interest and other debt financing costs  15,379  8,651  43,019  20,693 
Management fees  5,073  4,144  14,541  12,235 
Income based incentive fees  4,593  2,717  12,634  8,039 
Capital gains based incentive fees    (3,103)   (5,252)
Professional fees  383  306  1,121  1,014 
Directors’ fees  151  142  457  373 
Other general and administrative expenses  618  635  2,099  2,001 
Total expenses  26,197  13,492  73,871  39,103 
Management fees waiver  (49) (62) (145) (175)
Income based incentive fees waiver  (69) (45) (229) (474)
Net expenses  26,079  13,385  73,497  38,454 
Net investment income before taxes  22,073  15,603  60,679  43,688 
(Benefit) provision for income and excise taxes  350  (350) 890  64 
Net investment income  21,723  15,953  59,789  43,624 
Net realized and unrealized gains (losses) on investments:         
Net realized gain (loss) on:         
Non-controlled non-affiliated investments  41  (1,285) (6,202) 21 
Non-controlled affiliated investments        7,113 
Controlled investments    (770)   (2,451)
Foreign currency transactions  (10) (73) (68) (6)
Foreign currency forward contracts        24 
Net change in unrealized appreciation (depreciation) on:         
Non-controlled non-affiliated investments and foreign currency translation  476  (14,413) 4,932  (33,152)
Non-controlled affiliated investments  (4,014) (5,916) (3,475) (10,456)
Controlled investments  2,488  (972) (3,482) (2,415)
Foreign currency forward contracts  1,994  5,699  755  11,286 
Net realized and unrealized gains (losses) on investments  975  (17,730) (7,540) (30,036)
Benefit (provision) for taxes on realized gain on investments  (120) (409) 132  (626)
Benefit (provision) for taxes on unrealized appreciation (depreciation) on investments  43  (192) 598  (20)
Net increase (decrease) in net assets resulting from operations $22,621 $(2,378)$52,979 $12,942 
          
Per common share data:         
Net increase (decrease) in net assets resulting from operations per share (basic and diluted): $0.61 $(0.08)$1.49 $0.42 
Net investment income per share (basic and diluted): $0.59 $0.52 $1.68 $1.41 
Weighted average shares outstanding (basic and diluted):  37,061,547  30,887,360  35,546,270  30,887,360 

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. Crescent BDC is externally managed by Crescent Cap Advisors, LLC, a subsidiary of Crescent. 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 is a global credit investment manager with over $40 billion of assets under management. For over 30 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 is headquartered in Los Angeles with offices in New York, Boston, Chicago and London with more than 200 employees globally. Crescent is a part of SLC Management, the institutional alternatives and traditional asset management business of Sun Life. For more information about Crescent, visit www.crescentcap.com. However, the contents of such website are not and should not be deemed to be incorporated by reference herein.

Contact:

Dan 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 adviser 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 adviser or its affiliates; (13) the ability of our investment adviser 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, 2022 and quarterly report on Form 10-Q for the quarter ended September 30, 2023, 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, 2022, which Crescent BDC filed with the U.S. Securities and Exchange Commission (the SEC) on February 22, 2023, Crescent BDC’s quarterly report on Form 10-Q for the quarter ended September 30, 2023, which Crescent BDC filed with the SEC on November 8, 2023 on Form 10-Q 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, 2022, Crescent BDC’s quarterly reports on Form 10-Q 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.


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