Financial Data and Key Metrics Changes - The net asset value increased by 5.55 from 2.3 million or approximately 1 million increase over the prior quarter [7] - The fair value of the portfolio rose to 184.6 million, with net assets increasing by 79.7 million [21][25] - The weighted average of the debt portfolio decreased to 10.5% from 12.3% in the previous quarter, influenced by declining SOFR and tighter spreads [22] Business Line Data and Key Metrics Changes - The median EBITDA of the portfolio increased from approximately 61 million, while the weighted average net leverage declined from 5.1 times to 4.7 times [11] - Non-accruals as a percentage of total fair market value improved to 4.8% from 5% in the previous quarter [11] Market Data and Key Metrics Changes - New deal flow in M&A and LBO activity remained subdued, but origination volumes increased due to refinancing deposits [8] - The investment pipeline is described as robust, with a focus on high-quality sponsors and companies in defensible industries [10] Company Strategy and Development Direction - The company aims to build a business around core middle market companies, focusing on those with 75 million in EBITDA [35][38] - The strategy includes increasing the average EBITDA of the portfolio, decreasing leverage, and sourcing more directly from sponsors [38] - The company is also looking to improve operating efficiencies and reduce expenses over time [40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating economic uncertainties and delivering value to shareholders [5] - The company is optimistic about future opportunities despite intense competition and a challenging market environment [10][27] Other Important Information - The Board of Directors declared a distribution of 10.1 million in cash, with $52.5 million of capacity under its revolving credit facility [25] Q&A Session Summary Question: What was the driver of the PIK income for the quarter? - The primary driver was the reversal of non-accrual to accrual of Klein Hersh, which had been on non-accrual for the previous three quarters [28] Question: Were there any timing issues affecting the quarter's results? - Yes, some deals that were expected to close last quarter spilled over into this quarter, which is common in this business [29] Question: Can you provide details on realized loss and unrealized gain? - The realized loss was due to Crafty Apes, while unrealized gains were attributed to the markups of Klein Hersh and Bioplan [33] Question: What is the vision for sourcing deals in the market? - The focus is on core middle market companies, with a significant portion of transactions sourced directly from sponsors [35][36] Question: Are there plans to improve operating efficiencies? - The company is conducting a deep dive into managing expenses efficiently, with expectations that the expense ratio will decrease as the business grows [40]
Investcorp Credit Management BDC(ICMB) - 2025 Q1 - Earnings Call Transcript