HOUSTON, May 11, 2026 /PRNewswire/ --Â Stellus Capital Investment Corporation (NYSE:SCM) ("Stellus", "we", or the "Company") today announced financial results for its fiscal quarter ended March 31, 2026.
Robert T. Ladd, Chief Executive Officer of Stellus, stated, "I am pleased to report solid operating results for the quarter ended March 31, 2026, in which we earned U.S. GAAP net investment income of $0.26 per share, core net investment income of $0.27 per share and net realized income of $0.29 per share. During the quarter, we funded $28 million of investments and received $42 million of repayments, resulting in a total portfolio of $990 million at fair value. I'm also pleased to report that our investors have received a total of $339 million in distributions, equivalent to $18.49 per share, since we began operations."
FINANCIAL HIGHLIGHTS
($ in millions, except data relating to per share amounts and shares outstanding)
Three Months Ended | |||||
March 31, 2026 | March 31, 2025 | ||||
Amount | Per Share | Amount | Per Share | ||
Net investment income | $7.50 | $0.26 | $9.79 | $0.35 | |
Core net investment income(1) | 7.86 | 0.27 | 10.29 | 0.37 | |
Net realized gain (loss) on investments | 0.75 | 0.03 | (5.97) | (0.21) | |
Net realized gain (loss) on foreign currency translation | — | — | (0.03) | — | |
Total realized income(2) | $8.25 | $0.29 | $3.79 | $0.14 | |
Distributions | (9.84) | (0.34) | (11.09) | (0.40) | |
Net unrealized change in (depreciation) appreciation on investments | (6.54) | (0.23) | 1.20 | 0.04 | |
Net unrealized change in depreciation on foreign currency translation | (0.05) | — | — | — | |
Net increase in net assets resulting from operations | $1.66 | $0.06 | $4.99 | $0.18 | |
Weighted average shares outstanding | 28,947,254 | 27,602,612 | |||
(1) | Core net investment income, as presented, excludes the impact of capital gains incentive fees (reversal) and income taxes, the majority of which are excise taxes. The Company believes presenting core net investment income and the related per share amount is a useful supplemental disclosure for analyzing its financial performance. However, core net investment income is a non-U.S. GAAP measure and should not be considered as a replacement for net investment income and other earnings measures presented in accordance with U.S. GAAP. A reconciliation of net investment income in accordance with U.S. GAAP to core net investment income is presented in the table below the financial statements.                          |
(2) | Total realized income is the sum of net investment income, net realized gains (losses) on investments, net realized gains (losses) on foreign currency, and losses on debt extinguishment, all U.S. GAAP measures. |
PORTFOLIO ACTIVITY
($ in millions, except data relating to per share amounts, shares outstanding, and number of portfolio companies)
As of | As of | |||
March 31, 2026 | December 31, 2025 | |||
Investments at fair value | $990.0 | $1,007.6 | ||
Total assets | $1,001.3 | $1,041.3 | ||
Net assets | $363.0 | $371.2 | ||
Shares outstanding | 28,947,254 | 28,947,254 | ||
Net asset value per share | $12.54 | $12.82 | ||
Three Months Ended | ||||
March 31, 2026 | March 31, 2025 | |||
New investments | $27.7 | $55.4 | ||
Repayments of investments | (41.7) | (15.0) | ||
Net activity | ($14.0) | $40.4 | ||
As of | As of | |||
March 31, 2026 | December 31, 2025 | |||
Number of portfolio company investments | 116 | 115 | ||
Number of debt investments | 100 | 100 | ||
Weighted average yield of debt and other income producing | ||||
Cash | 8.1Â % | 8.5Â % | ||
Payment-in-kind ("PIK") | 0.6Â % | 0.5Â % | ||
Fee amortization | 0.3Â % | 0.3Â % | ||
Total | 9.0Â % | 9.3Â % | ||
Weighted average yield of total investments(4) | ||||
Cash | 7.6Â % | 7.9Â % | ||
PIK | 0.6Â % | 0.5Â % | ||
Fee amortization | 0.3Â % | 0.3Â % | ||
Total | 8.5Â % | 8.7Â % | ||
(3) | The dollar-weighted average annualized effective yield is computed using the effective interest rate for our debt investments and other income producing investments, including cash and PIK interest, as well as the accretion of deferred fees. The individual investment yields are then weighted by the respective cost of the investments (as of the date presented) in calculating the weighted average effective yield of the portfolio. The dollar-weighted average annualized yield on the Company's investments for a given period will generally be higher than what investors in the Company's common stock would realize in a return over the same period because the dollar-weighted average annualized yield does not reflect the Company's expenses or any sales load that may be paid by investors. |
(4) | The dollar-weighted average yield on total investments takes the same yields as calculated in the footnote above but weights them to determine the weighted average effective yield as a percentage of the Company's total investments, including non-income producing equity positions and debt investments on non-accrual status. |
Results of Operations
Investment income for the three months ended March 31, 2026 and 2025 totaled $23.3 million and $25.0 million, respectively, most of which was interest income from portfolio investments.
Gross operating expenses for the three months ended March 31, 2026 and 2025 totaled $15.8 million and $16.4 million, respectively. For the same respective periods, base management fees totaled $4.4 million and $4.1 million, income incentive fees totaled $0.1 million and $2.1 million, fees and expenses related to our borrowings totaled $8.9 million and $8.3 million (including interest and amortization of deferred financing costs), administrative expenses totaled $0.6 million and $0.4 million, income tax totaled $0.4 million and $0.5 million and other expenses totaled $1.4 million and $1.0 million. The Company waived $0.0 million and $1.2 million of income incentive fees due to the total return limitation pursuant to the provisions of the Investment Advisory Agreement between the Company and the Advisor (as defined below) for the three months ended March 31, 2026 and 2025, respectively, for net operating expenses of $15.8 million and $15.2 million, respectively.
Net investment income was $7.5 million and $9.8 million, or $0.26 and $0.35 per common share based on 28,947,254 and 27,602,612 weighted average common shares outstanding for the three months ended March 31, 2026 and 2025, respectively. Core net investment income, which is a non-U.S. GAAP measure that excludes capital gains incentive fees (reversals) and income tax expense accruals, for the three months ended March 31, 2026 and 2025 was $7.9 million and $10.3 million, or $0.27 and $0.37 per share, respectively.
For the three months ended March 31, 2026 and 2025, the Company's investment portfolio had a net change in unrealized (depreciation) appreciation of ($6.5) million and $1.2 million, respectively, and the Company had net realized gains (losses) of $0.8 million and ($6.0) million, respectively.
Net increase in net assets resulting from operations totaled $1.7 million and $5.0 million, or $0.06 and $0.18 per common share, based on 28,947,254 and 27,602,612 weighted average common shares outstanding for the three months ended March 31, 2026 and 2025, respectively.
Liquidity and Capital Resources
As of March 31, 2026, 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 $335.0 million on a committed basis. As of both March 31, 2026 and December 31, 2025, the Credit Facility had an accordion feature which allowed for potential future expansion of the facility size up to $365.0 million.
As of March 31, 2026 and December 31, 2025, the Company had $241.5 million and $236.6 million in outstanding borrowings under the Credit Facility, respectively.
Distributions
For the three months ended March 31, 2026 and 2025, the Company declared aggregate distributions of $0.34 per share and $0.40 per share, respectively ($9.8 million and $11.1 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, 2026:
Activity Type | Date | Company Name | Company Description | Investment Amount | Instrument Type | ||||||
Add-On Investment | January 2, 2026 | Bart & Associates, LLC* | Provider of content, information, tech-enabled services, and hosts | $ | 2,000,000 | Senior Secured – First Lien | |||||
$ | 43,413 | Equity | |||||||||
New Investment | January 9, 2026 | Silver Corporate Holdings LLC | Senior-care focused placement platform | $ | 7,130,301 | Senior Secured – First Lien | |||||
$ | 100,000 | Revolver Commitment | |||||||||
$ | 498,641 | Equity | |||||||||
Add-On Investment | January 15, 2026 | GRC Java Holdings, LLC* | Specialty coffee platform | $ | 42,783 | Equity | |||||
Add-On Investment | January 20, 2026 | EH Real Estate Services, LLC* | Offers residential property brokerage, title & settlement, and | $ | 380,186 | Senior Secured – First Lien | |||||
Add-On Investment | January 21, 2026 | evolv Holdco, LLC* | Digital transformation consulting firm | $ | 8,036 | Equity | |||||
Add-On Investment | February 2, 2026 | BI Investors, LLC* | Provider of center-based applied behavioral analysis therapy | $ | 5,743 | Equity | |||||
Add-On Investment | February 3, 2026 | Green Topco Holdings, LLC* | Cyber-security focused value-added reseller and associated service provider | $ | 16,598 | Equity | |||||
Add-On Investment | February 3, 2026 | Venbrook Buyer, LLC* | An independent insurance services broker | $ | 628,201 | Senior Secured – First Lien | |||||
Add-On Investment | February 6, 2026 | SP MWM Holdco LLC* | Provider of test and measurement services and equipment | $ | 194,667 | Equity | |||||
Add-On Investment | February 18, 2026 | EH Real Estate Services, LLC* | Offers residential property brokerage, title & settlement, and | $ | 190,093 | Senior Secured – First Lien | |||||
Add-On Investment | February 25, 2026 | Venbrook Buyer, LLC* | An independent insurance services broker | $ | 1,256,415 | Senior Secured – First Lien | |||||
Add-On Investment | March 3, 2026 | EH Real Estate Services, LLC* | Offers residential property brokerage, title & settlement, and | $ | 190,093 | Senior Secured – First Lien | |||||
New Investment | March 3, 2026 | Precision Strategies, LLC | Strategic communications and marketing agency | $ | 6,176,011 | Senior Secured – First Lien | |||||
$ | 100,000 | Revolver Commitment | |||||||||
New Investment | March 6, 2026 | Synergy Health Partners MSO, LLC | Provider of orthopedic and musculoskeletal care | $ | 4,000,000 | Senior Secured – First Lien | |||||
$ | 500,000 | Delayed Draw Term Loan Commitment | |||||||||
$ | 100,000 | Revolver Commitment | |||||||||
$ | 136,634 | Equity | |||||||||
Add-On Investment | March 24, 2026 | Eskola LLC* | Provider of commercial re-roofing services | $ | 101,429 | Equity | |||||
_________________________ *Existing portfolio company |
The Company realized investments in the following portfolio companies during the three months ended March 31, 2026:
Activity Type | Date | Company Name | Company Description | Proceeds Received | Realized Gain | Â Instrument Type | ||||||||
Full Repayment | January 23, 2026 | Camp Profiles LLC | Provider of digital marketing | $ | 12,041,875 | $ | — | Senior Secured – First Lien | ||||||
Full Realization | $ | 969,138 | $ | 719,138 | Equity | |||||||||
Full Repayment | January 30, 2026 | Luxium Solutions, LLC | Manufacturer and distributor of | $ | 8,169,324 | $ | — | Senior Secured – First Lien | ||||||
$ | ||||||||||||||
