• Net Investment Income: $0.8 million or $0.06 per share, down from $0.16 per share in the prior quarter.
• Net Asset Value (NAV) per Share: Decreased by $0.16 to $5.39 from $5.55 as of September 30, 2024.
• Portfolio Fair Value: $191.6 million, up from $190.1 million on September 30.
• Net Assets: $77.6 million, a decline of $2.3 million from the prior quarter.
• Weighted Average Yield of Debt Portfolio: 10.4%, a slight decrease from 10.5% in the previous quarter.
• Investment Activity: $9.9 million invested in new and existing portfolio companies; $7.6 billion realized from two portfolio company investments.
• Gross Leverage: 1.5x, compared to 1.39x in the previous quarter.
• Net Leverage: 1.42x, compared to 1.26x in the previous quarter.
• Cash and Liquidity: $12.1 million in cash, with $11.3 million as restricted cash and $41.5 million capacity under a revolving credit facility.
• Distribution Declared: $0.12 per share for the quarter ended March 31, 2025, payable on May 16, 2025.

• Warning! GuruFocus has detected 4 Warning Signs with ICMB.

Release Date: March 26, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Investcorp Credit Management BDC Inc (NASDAQ:ICMB) appointed Andrew Muns as Chief Operating Officer, bringing extensive experience to the executive team.
• The company reported net investment income of $0.8 million for the quarter, indicating continued profitability.
• ICMB's portfolio credit quality improved, evidenced by a lower approval rate on a fair market value basis compared to the prior quarter.
• The company successfully invested in two new and two existing portfolio companies, with a total funding of approximately $9.9 million.
• ICMB's portfolio consists of 96.4% floating rate instruments, which can be advantageous in a rising interest rate environment.

Negative Points

• Net investment income per share decreased to $0.06 from $0.16 in the prior quarter, indicating a decline in earnings.
• Net asset value per share decreased by $0.16 to $5.39, reflecting a decline in the company's overall value.
• The company experienced a decrease in the weighted average yield of its debt portfolio from 10.5% to 10.4%.
• ICMB's leverage ratio increased, which may limit flexibility in managing earnings and sustaining dividends.
• Approximately 30% of the portfolio may be affected by tariffs, posing a risk to future performance.

Q & A Highlights

Q: What caused the drop in PIK income quarter over quarter? A: Suhail Shaikh, President and Director, explained that the increase in PIK income for the September quarter was due to reversing the non-approval for one of the portfolio companies, which made the PIK income appear higher than usual. The December quarter reflects a normalization rather than a drop.

Q: How sustainable is the dividend given the current leverage ratio and market conditions? A: Suhail Shaikh acknowledged the pressure from non-income generating assets, which constitute about 18% of the portfolio. The company is continuously evaluating the situation and will discuss with the Board if a reevaluation of the dividend is necessary, but no decision has been made yet.

Q: Is Investcorp Credit Management BDC changing to a calendar fiscal year? A: Yes, Suhail Shaikh confirmed that the fiscal year has been changed from June to December, which is why the recent filing was a 10-KT instead of a 10-Q.

Q: What is the expected trend for investment yields in the upcoming quarters? A: Suhail Shaikh anticipates that investment yields will remain similar, around 10.5%, unless there is an economic shock or significant market changes. The company is closely monitoring potential impacts from tariffs and the M&A market.

Q: Are there any other questions from participants? A: The operator confirmed there were no further questions, and Suhail Shaikh thanked everyone for their participation, looking forward to the next discussion at the end of the March quarter.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.