• Net Asset Value (NAV): Increased by $0.34 per share to $5.55 from $5.21 as of June 30, 2024.

• Net Investment Income: $2.3 million or $0.16 per share, a $1 million increase over the prior quarter.

• Portfolio Fair Value: $190.1 million, up from $184.6 million on June 30, 2024.

• Net Assets: $79.7 million, an increase of $4.9 million from the prior quarter.

• Net Increase in Net Assets from Operations: Approximately $6.6 million.

• Weighted Average Yield of Debt Investments: Approximately 10.7% for the quarter.

• Weighted Average Yield of Debt Portfolio: 10.5%, down from 12.3% in the previous quarter.

• Non-Accruals: Improved to 4.8% of total fair market value from 5% last quarter.

• Median EBITDA of Portfolio: Increased to $61 million from $55 million last quarter.

• Weighted Average Net Leverage: Declined to 4.7 times from 5.1 times last quarter.

• Gross Leverage: 1.39 times as of September 30, 2024.

• Net Leverage: 1.2 times as of September 30, 2024.

• Cash and Restricted Cash: Approximately $10.1 million, with $8.3 million as restricted cash.

• Distribution Declared: $0.12 per share for the quarter ended December 1, 2024, payable on January 8, 2025.

• Warning! GuruFocus has detected 3 Warning Signs with ICMB.

Release Date: November 13, 2024

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) reported a strong quarter with a net asset value increase of $0.34 per share, rising to $5.55.

• The company generated net investment income of $2.3 million, marking a $1 million increase over the prior quarter.

• ICMB successfully deployed $13.1 million across six portfolio companies, indicating an uptick in activity.

• The portfolio's median EBITDA increased from $55 million to $61 million, while the weighted average net leverage declined from 5.1 times to 4.7 times.

• Non-accruals as a percentage of total fair market value improved to 4.8% from 5% in the previous quarter.

Negative Points

• New deal flow in M&A and LBO activity remains subdued, reflecting broader market challenges.

• The weighted average yield of debt investments decreased to 10.5% from 12.3% in the previous quarter.

• Competition for high-quality investment opportunities remains intense, limiting potential deals.

• The company experienced a realized loss due to Crafty Apes being on nonaccrual status.

• Operating expenses are relatively high as a percentage of revenues, prompting a need for improved efficiencies.

Q & A Highlights

Q: Can you clarify the driver of the PIK income for the quarter? A: The primary driver was the reversal of nonaccrual to accrual status for Klein Hersh, which had been on nonaccrual for the last three quarters. The company is performing well, and a significant portion of the coupon is PIK. - Suhail Shaikh, President, Director