Financial Performance - For the three months ended September 30, 2020, net investment income was $8.5 million, resulting in a net investment income per share of $0.12, while basic earnings per share were $(0.39)[229]. - Total investment income for the three months ended September 30, 2020 decreased by $3.7 million, or 18.3%, to $16.3 million compared to $19.96 million for the same period in 2019[239]. - Net investment income was $8.5 million for the three months ended September 30, 2020, a decrease of $1.1 million, or 11.5%, from $9.6 million in the same period in 2019[247]. - Total investment income for the nine months ended September 30, 2020 decreased by $6.4 million, or 10.9%, to $52.5 million compared to $58.9 million for the same period in 2019[253]. - Net investment income for the nine months ended September 30, 2020 was $26.9 million, a decrease of $5.4 million from $32.3 million in the same period in 2019[260]. - The net increase in net assets from operations for the three months ended September 30, 2020, was $(27.2) million[229]. - The net increase in net assets resulting from operations for the nine months ended September 30, 2020 was $(113.8) million, a significant decrease from $(5.3) million in 2019, reflecting a net realized and unrealized loss of $(140.7) million compared to a gain of $(37.6) million in the prior year[263]. Investment Portfolio - As of September 30, 2020, the investment portfolio at fair value was $609.0 million, with net assets of $306.6 million and indebtedness of $306.6 million[227]. - The company invested approximately $24.8 million during the three months ended September 30, 2020, with 69.8% in senior secured loans, 20.2% in unsecured or subordinated debt securities, and 10.0% in equity securities[230]. - At September 30, 2020, the portfolio consisted of 55 companies, with 61% in senior secured loans, 27% in unsecured or subordinated debt securities, and 12% in equity investments[231]. - The largest portfolio company investment at fair value was approximately $116.8 million, with the five largest investments comprising about 44% of the total portfolio[231]. - The company’s top three industry concentrations at fair value included Diversified Financial Services (31.3%), Road & Rail (7.6%), and Health Care Equipment & Supplies (6.0%)[232]. - The weighted average yield at fair market value for total portfolio as of September 30, 2020, was 9.7%[233]. Expenses and Losses - Total expenses, net of incentive management fee waiver, decreased by $2.5 million, or 24.7%, to $7.77 million for the three months ended September 30, 2020 from $10.32 million in 2019[242]. - Net realized loss for the three months ended September 30, 2020 was approximately $(59.2) million, primarily due to the restructure of AGY Holding Corp.[248]. - Net realized loss for the nine months ended September 30, 2020 was $(115.3) million, primarily due to the restructure of AGY Holding Corp. and the sale of equity investment in U.S. Well Services, Inc.[261]. - Total expenses, net of incentive management fee waiver, decreased by $1.1 million, or 4.0%, for the nine months ended September 30, 2020 from the comparable period in 2019[256]. - Base management fees decreased approximately $0.7 million, or 23.2%, for the three months ended September 30, 2020 due to a decrease in total assets[244]. - Interest and credit facility fees decreased approximately $0.6 million, or 14.9%, for the three months ended September 30, 2020 primarily due to a lower rate environment[245]. Cash Flow and Financing - Operating cash flows generated during the nine months ended September 30, 2020 amounted to $25.6 million, primarily from interest and fees received on senior secured loans and other debt securities[268]. - Net cash used in financing activities for the nine months ended September 30, 2020 was $(34.8) million, which included cash distributions of $(21.3) million and net debt repayments of $(9.9) million[270]. - As of September 30, 2020, the company had total contractual obligations of $164.5 million under its Credit Facility, with $135.5 million remaining undrawn[271]. - The company had unfunded commitments of $16.8 million to existing portfolio companies as of September 30, 2020, down from $23.8 million at the end of 2019[272]. Distributions and Tax Treatment - The company declared a quarterly distribution of $0.10 per share on September 29, 2020, with the entire amount coming from net investment income[278]. - The company must distribute at least 90% of its ordinary income and realized net short-term capital gains to maintain favorable tax treatment as a RIC[274]. - The Company may face adverse tax consequences if it does not distribute a certain percentage of its income annually, potentially affecting its RIC tax treatment[282]. - The Company may have difficulty meeting the requirement to distribute at least 90% of its investment company taxable income to obtain tax benefits as a RIC[283]. Shareholder Actions - The Company authorized the purchase of up to 7,500,000 shares on November 3, 2020, following the expiration of a previous repurchase plan with 4,013,446 shares remaining unpurchased[285]. - The Company maintains an "opt out" dividend reinvestment plan for common stockholders, allowing them to receive cash distributions unless they choose to reinvest[279]. - The Company declared a distribution of $0.10 per share on November 3, 2020, payable on December 30, 2020, with cash limited to 20% of total distributions[284]. Leadership Changes - The Company appointed Abby Miller as CFO and Treasurer and Nik Singhal as President on November 3, 2020, to enhance its leadership team[287]. Other Considerations - The Company may issue shares of common stock at a price below net asset value per share, which could lead to dilution for stockholders[281]. - The Company did not engage in any interest rate hedging activity during the three and nine months ended September 30, 2020 and 2019[291]. - Gordon Brothers Finance Company received a partial repayment of $77.7 million on unsecured debt held by the Company, reducing the outstanding balance from $130.7 million[286]. - At September 30, 2020, 89% of the Company's yielding debt investments bore interest based on floating rates, with 85% of those containing an interest rate floor[290]. - The Company funded $25.0 million in a new senior secured loan issued by an affiliate of Callodine as part of the transaction involving GBFC[286].
BlackRock Capital Investment (BKCC) - 2020 Q3 - Quarterly Report