Barings BDC (BBDC) Q1 2025 Earnings Call May 09, 2025 09:00 AM ET Speaker0 At this time, I'd like to welcome everyone to the Barings BDC, Inc. Conference Call for the Quarter Ended 03/31/2025. All participants are in a listen only mode. A question and answer session will follow the company's formal remarks. Today's call is being recorded and a replay will be available approximately two hours after the conclusion of the call on the company's website at www.baringsbdc.com under the Investor Relations section. ...

Barings BDC (BBDC) came out with quarterly earnings of $0.25 per share, missing the Zacks Consensus Estimate of $0.28 per share. This compares to earnings of $0.28 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -10.71%. A quarter ago, it was expected that this business development company would post earnings of $0.29 per share when it actually produced earnings of $0.28, delivering a surprise of -3.45%.Over the last four quar ...

Barings BDC, Inc. First Quarter 2025 Earnings Presentation MAY 8, 2025 Important Information & Cautionary Notice Regarding Forward-Looking Statements Cautionary Notice: Certain statements contained in this presentation are "forward-looking" statements. Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made and which reflect management's current estimates, projections, expectations or beliefs, and which are subject to risks an ...

Washington, D.C. 20549 __________________________________________________________ Form 10-Q __________________________________________________________ (Mark One) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Securities registered pursuant to Section 12(b) of the Act: | Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered | | --- | --- | --- | | Common Stock, par value $0.001 per share | BBDC | The New York Stock Exchange | ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF ...

Exhibit 99.1 BARINGS BDC, INC. REPORTS FIRST QUARTER 2025 RESULTS AND ANNOUNCES QUARTERLY CASH DIVIDEND OF $0.26 PER SHARE CHARLOTTE, N.C., May 8, 2025 - Barings BDC, Inc. (NYSE: BBDC) ("Barings BDC" or the "Company") today reported its financial and operating results for the first quarter of 2025 and announced that the Company's Board of Directors (the "Board") declared a quarterly cash dividend of $0.26 per share. Highlights | | Three Months Ended | | Three Months Ended | | | --- | --- | --- | --- | --- | ...

Group 1 - Barings BDC (BBDC) experienced a significant sell-off, dropping from over $10 per share to the $8-$9 range due to President Trump's tariffs, reflecting a broader decline in the BDC sector [1] - The article emphasizes the importance of dividend investing as a pathway to financial freedom, highlighting its accessibility and potential for long-term wealth accumulation [1] - The author has extensive experience in M&A and business valuation, focusing on sectors such as tech, real estate, software, finance, and consumer staples, which are also the core of their investment portfolio [1]

Financial Data and Key Metrics Changes - The net asset value (NAV) per share was $11.29, a slight decrease of 0.2% from the previous quarter and an increase of 0.1% year-over-year [33] - Net investment income for the quarter was $0.28 per share, exceeding the dividend of $0.26 per share by $0.02, or 8% [34] - The weighted average yield at fair value was 10.4%, with a net leverage ratio of 1.16 times, slightly up from 1.09 in the previous quarter [18][38] Business Line Data and Key Metrics Changes - BBDC deployed $298 million of capital in the quarter, with net sales and deployment of $76 million, marking one of the most active deployment quarters in recent history [22] - The non-accrual rate declined from 50 basis points in September to 30 basis points as of December, with total non-accruals at 0.3% on a fair value basis [17][29] - The portfolio composition remains highly diversified, with 72% consisting of secured investments and approximately 69% being first lien securities [26] Market Data and Key Metrics Changes - Lending activity was muted in the first three quarters of 2024, but there was a meaningful uptick in deployment during the fourth quarter [7] - Economic data appears overwhelmingly positive, with credit fundamentals such as cash flows, revenue growth, and margins exhibiting positive trends [12] Company Strategy and Development Direction - The company continues to focus on the core of the middle market, reflecting lower leverage levels and more attractive risk-adjusted returns [8] - The strategy includes simplifying the portfolio and selectively investing in compelling middle-market direct lending opportunities [22] - The company remains cautious about the pace of new buyout opportunities due to regulatory and trade uncertainties [14] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for 2025, noting that while the economic indicators are positive, regulatory uncertainties have created a pause in private market activities [12][13] - The company anticipates continued strength in portfolio performance, with a focus on credit quality and underwriting [20][29] Other Important Information - The board declared a fourth-quarter dividend of $0.26 per share and special dividends totaling $0.15 per share, equating to an 11% yield based on NAV [19][41] - The company repurchased over 650,000 shares in 2024 and authorized a new $30 million share repurchase plan for 2025 [42] Q&A Session Summary Question: Can you outline the spirit of a PIK non-accrual and how it compares to regular definitions? - Management explained that a PIK non-accrual indicates that while cash payments are being made, the full value including PIK may not be recoverable [46][50] Question: How much of the CSA marks were interest rate or timing related versus fundamental? - The majority of the change was associated with the valuation of Black Angus Steakhouse, with some impacts from interest rate and timing [52] Question: What are the expectations for portfolio rotation in 2025? - Management indicated a focus on rotating out non-Barings names and maximizing value from income-producing assets, while remaining cautious about market timing [58] Question: How much of the portfolio is exposed to regulatory uncertainty? - Preliminary indications suggest that 60% to 75% of the portfolio will be unimpacted by regulatory uncertainty, with ongoing monitoring of the most impacted issuers [63] Question: Will fee and other income be flat to down in 2025? - Management expects fee income to be flat, with potential for amendment fees to offset any losses from OID acceleration [70][72] Question: Was there a one-time deal that contributed to higher fee income in Q4? - Yes, there was a transaction with a substantive fee component that created an outlier dynamic for the fourth quarter [74]

FEBRUARY 20, 2025 Barings BDC, Inc. Fourth Quarter 2024 Earnings Presentation Important Information & Cautionary Notice Regarding Forward-Looking Statements Cautionary Notice: Certain statements contained in this presentation are "forward-looking" statements. Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made and which reflect management's current estimates, projections, expectations or beliefs, and which are subject to r ...

Financial Performance - The company paid $0.2 million in brokerage commissions during the fiscal year ended December 31, 2024, compared to no commissions in the previous two fiscal years[73]. - The company intends to distribute substantially all of its income to stockholders to minimize U.S. federal income taxes, having met distribution requirements for 2022, 2023, and 2024[103]. - The company may face challenges in meeting the Annual Distribution Requirement if it recognizes taxable income without corresponding cash receipts[145]. - If the company fails to satisfy the Annual Distribution Requirement, it will be subject to corporate-level U.S. federal income tax on all taxable income[153]. - The company is authorized to borrow funds and sell assets to satisfy distribution requirements, but this may limit its ability to make advantageous investment decisions[152]. Investment Management - The Base Management Fee paid to Barings is calculated at an annual rate of 1.25% based on the company's gross assets, excluding cash and cash equivalents[89]. - The Income-Based Fee is calculated quarterly based on the Pre-Incentive Fee Net Investment Income exceeding a Hurdle Amount, which is 2.0625% of the NAV at the beginning of each quarter[90]. - The Catch-Up Amount is determined quarterly as 2.578125% of the NAV, allowing Barings to receive a 20% incentive fee on Pre-Incentive Fee Net Investment Income once it reaches this threshold[91]. - If Pre-Incentive Fee Net Investment Income exceeds the Catch-Up Amount, the Income-Based Fee equals 20% of the excess amount[92]. - The Capital Gains Fee is calculated annually, equal to 20% of cumulative realized capital gains minus cumulative realized capital losses, starting from the year ended December 31, 2018[92]. Compliance and Regulation - The company is regulated as a Business Development Company (BDC) under the 1940 Act, requiring a majority of directors to be non-interested persons[110]. - The company must ensure that qualifying assets represent at least 70.0% of total assets at the time of acquisition[112]. - The company is required to maintain a coverage ratio of total assets to total senior securities of at least 150% due to its BDC status[106]. - The company must provide significant managerial assistance to portfolio companies to count portfolio securities as qualifying assets[119]. - The company is subject to compliance with the Securities Exchange Act of 1934 and the Sarbanes-Oxley Act, including filing quarterly and annual reports[131]. Corporate Governance - The company has adopted a Global Code of Ethics Policy and corporate governance guidelines applicable to its directors and employees[122]. - The Barings BDC Advisory Agreement was re-approved for an additional one-year term ending June 24, 2025, and can be terminated with 60 days' notice[96]. - The Administration Agreement allows Barings to perform necessary administrative services, with costs reimbursed by the company, capped at a mutually agreed quarterly amount[98]. - The company is prohibited from making certain negotiated co-investments with affiliates without prior SEC approval[128]. - The company is required to review its compliance policies and procedures annually for adequacy and effectiveness[124]. Investment Strategy - The company assists portfolio companies in developing exit strategies, including sales or mergers[70]. - The company competes with various investment funds and financial services companies, some of which have greater resources and fewer regulatory restrictions[71]. - The company estimates the fair value of investments in certain entities using the NAV and ownership percentage as a practical expedient[68]. - The company has wholly-owned taxable subsidiaries to hold certain portfolio investments, preserving its RIC status and tax advantages[104]. - The company has qualified and elected to be treated as a RIC under Subchapter M of the Code since the taxable year ended December 31, 2007[138]. Debt and Financing - As of December 31, 2024, approximately $1,881.9 million of the debt portfolio investments bore interest at variable rates, primarily SOFR-based[543]. - Approximately 50.5% of total borrowings, amounting to $738.6 million, bore interest at variable rates under the February 2019 Credit Facility and the February 2029 Notes[543]. - A hypothetical increase of 300 basis points in interest rates would result in an increase in net income by $34,299 thousand[545]. - A hypothetical decrease of 50 basis points in interest rates would result in a decrease in net income by $5,717 thousand[545]. - The balance of unused commitments to extend financing as of December 31, 2024, was reported, indicating adequate financial resources to satisfy unfunded commitments[548]. Shareholder Returns - A new 12-month share repurchase program was authorized, allowing the company to repurchase up to $30.0 million of its common stock starting March 1, 2025[557]. - The Board declared a quarterly distribution of $0.26 per share, payable on March 12, 2025, along with three special dividends totaling $0.15 per share throughout 2025[558]. - The first special dividend of $0.05 per share will be paid on March 12, 2025, with subsequent payments scheduled for June 11 and September 10, 2025[559].

Financial Performance - Barings BDC reported net investment income of $29.5 million, or $0.28 per share, for Q4 2024, with a total investment income of $70.6 million[6]. - Net investment income after taxes for the full year 2024 was $131,194,000, compared to $134,660,000 for the previous year, reflecting a decrease of about 3.5%[29]. - Total investment income for the full year 2024 was $286,169,000, a decrease from $286,169,000 in the previous year[29]. - The company reported a total dividend/distribution per share of $1.04 for the full year 2024, consistent with the previous year[31]. - The company recorded net unrealized appreciation of $9.2 million in Q4 2024, despite a net unrealized depreciation of $46.0 million on its current portfolio[9]. Assets and Liabilities - Total assets increased to $2,695.7 million, while total net assets (equity) decreased slightly to $1,190.4 million[4]. - Total liabilities increased from $1,480,894,000 in 2023 to $1,505,306,000 in 2024, representing an increase of approximately 1.6%[27]. - Total debt as of December 31, 2024, was $1,463,590,000, up from $1,372,811,000 as of September 30, 2024[36]. - The debt-to-equity ratio as of December 31, 2024, was 1.23x, up from 1.15x as of September 30, 2024[4]. - The total net debt-to-equity ratio increased to 1.16x as of December 31, 2024, compared to 1.09x as of September 30, 2024[36]. Cash and Investments - Cash and cash equivalents increased from $57,187,000 in 2023 to $74,381,000 in 2024, an increase of approximately 29.9%[27]. - Cash and foreign currencies at the end of the period increased to $91,339,000 from $70,528,000 in 2023[33]. - The investment portfolio at fair value as of December 31, 2024, was $2,449.3 million, with a weighted average yield on performing debt investments of 10.2%[4]. - Total investments at fair value decreased from $2,488,715,000 in 2023 to $2,449,272,000 in 2024, a decline of approximately 1.6%[27]. - Purchases of portfolio investments totaled $637,440,000 in 2024, compared to $614,648,000 in 2023, indicating a slight increase of 3.0%[33]. Shareholder Actions - The company declared a quarterly cash dividend of $0.26 per share and special dividends totaling $0.15 per share, to be paid in three equal installments in 2025[1]. - The company authorized a new share repurchase program allowing for the repurchase of up to $30.0 million of its common stock over the next 12 months[12]. - The company did not report any cash consideration paid for the Sierra merger in 2024, while it had $101,896,000 in 2023[33]. Operational Highlights - During Q4 2024, Barings BDC made 15 new investments totaling $137.9 million and invested an additional $156.5 million in existing portfolio companies[8]. - Net cash provided by operating activities for 2024 was $122,161,000, an increase of 58.8% compared to $76,944,000 in 2023[33]. - The company reported a net increase in net assets resulting from operations of $110,289,000 for 2024, down from $127,999,000 in 2023[33]. - The net realized losses on investments for the full year 2024 amounted to $23,773,000, compared to $6,129,000 in the previous quarter, indicating a significant increase in losses[31]. - Subsequent to December 31, 2024, Barings BDC made approximately $81.3 million of new commitments, with $49.9 million closed and funded[16].