Q1 2020 Earnings Call
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Our one on your touch-tone telephone. Thank you. Mr. He's you may begin the conference call.
Nissan Quest
you believe this at this strategy will result in improved return on equity and bring the earnings power of the top of the in line with acceptable or driving enhance shareholder expense.
Good morning, and welcome to Black Rock capital investment Corporation first quarter of 2020 earnings conference call before we begin our remarks today and would like to point out that certain comments came during this conference call and we've been corresponding documents contain forward-looking statements subject to risks and uncertainties. Many of these forward-looking statements can be identified by the use of words such as anticipate believe expect intend will should May and similar expression we call to your attention the fact that BlackRock Investment corporation actual results, May differ from these statements as you know, Black Rock capital investment Corporation has filed with the SEC reports, which left some unknown factors, which may prompt BlackRock capital investment corporations results to differ materially from the statements BlackRock capital investment Corporation as soon as no duty to and does not undertake dead.
Good morning. My name is Vicky and I will be your conference facilitator today for the Black Rock capital investment Corporation first quarter 2020 earnings call back hosting the call will be chairman and interim chief executive Platinum from Chief Financial Officer and Treasurer Michelangelo general counsel and corporate secretary.
Trying to test results investment income for the quarter was fourteen cents per share nearly unchanged from the from the previous quarter ton Dodge Ram recorder, which was offset by $37 every payment and other exits resulting in no change in the portfolio be to invest connectivity.
During the quarter. We added a total of $5 to the portfolio, which included for first name. And once we also receive an eleven point six million return of cap senior long Partners power joint venture.
Are going to reduce the equity investment in the joint venture overtime and we before we Capital senior security.
The deployment three payments are detailed in our earnings press release.
Weighted average yield of income-producing Securities at fair market value was 10.3% as of March 31st down sixty basis points since the last quarter primarily driven by Define enviable rate.
Update any forward-looking additionally certain information discussed and presented may have been derived from third-party sources and has not been independently verified really BlackRock capital investment Corporation makes no representation or warranty with respect to such information. Please note we have posted to our website and investor presentation to accomplish this call shortly. Jim will highlight some of the information contained in the presentation. The presentation can be accessed by going to our website at www.ge.com and clicking the May 2020 investor presentation Link in the presentation section of the investors page that will now like to turn the call over to Jim.
Order and beverage. Was it up from $75 for the prior quarter?
I have to tell you the credit from six dollars and thirty cents per share last quarter to $5.05 per share as of March Thirty One.
Chemically related economic stress fighting a credit card and the current comparable multiples.
The Legacy non-core book which represents 14% of the portfolio by fair market value debt and income producing security at 11% of their value with a g y first name MBS per saying and Red Apple Stores doing the three largest holder.
Good morning, and thank you for joining our first quarter earnings call. I know this is a difficult time for many people the first and foremost. I have you your family and your friends are dead and help you.
Second non-running Equity under 1% value primarily consisting of us. Well Equity Investments on non-accrual at 3% per month, including a July 2nd and preferred stock Advantage insurance preferred stock and advanced lighting second name.
I would like to begin by saying that our investments and business teams are fully operational and engage with our portfolio companies during this time of unprecedented business economic and social distortion.
We have been in regular and frequent contact with our portfolio companies to assess the impact on their finances and operations the strength of Black Box technology platform and business company that have a lot of teams to work remotely in a seamless manner.
Sure, no problem with the only new non-accrual into one has Nationwide mall closes impacted the retailer significantly except for Monica Investments, which totaled 3.2% of total debt and preferred stock at their value had paid their interest on time during the first quarter and subsequently as of April 30th.
I will provide an overview of key first quarter update and the progress of our strategy. I will then turn to go over to Mike Mondello our interim CFO to discuss the financial results in their life before providing some closing remarks and opening the call to question.
As of March 31st 86% of the company's Investment Portfolio by fair market value was comprised of Investments made by glass.
report that the company stockholders approved and reduction in minimum after coverage ratio requirement from 200% to 150% which became the factor on May 2nd June 2007 just provide the company with significant additional operating flexibility other our long-term desired leverage ranging point nine five or 1% of the time you remain cautious about increasing leverage in this uncertain environment
No, please.
During the pandemic driven uncertainty. We took the conservative step of reducing our dividend paying a portion of activity in stock and they're pretty remains adequate and unfunded commitments are small she has to be available.
Our elections to pay a portion of our dividend in stock is not driven by any requirement or request from our lenders. We have position recorded even paid the dividend in cash paying a portion of the Dead in stock Insurance cash and build net assets providing additional Christian and operating flexibility in the event of additional pressures and Mark stood as a broader Market weakness in the future.
I note that our decision to seek shareholder approval proceeded any coded related development and was a natural evolution of our strategy
Consistent with our strategy of reshaping the portfolio to provide a stable screen of income is limited liability. Our current priorities are focused on reducing our equity and non-core position with you before in capital into any competition in your security.
Hello depends on the market prices in the first quarter. We expect the phone back on company's financial performance in coming.
However related on certain on the financial Market stabilized our goal will be featuring addition to an all cash dividend and eventually grow the dividend level.
It's the beginning of 2019. We have any personal second to 30 increasing the total number of the Polar companies 252. What was that ma'am. Wesley Investments have increased from 24% to 37% fair market value in Total Security investment increased from 47% to 60% off you talking as an encore exposure declined to 14% a fair market value compared with Thirty 3% of the beginning of 2019.
Definitely, you know working with our bank lenders to reset our financial covenants level and incorporate the newly adopted 150% coverage ratio framework into our bar and based off.
Additionally, I'm a second are based on an Infinity race or lowered as the stores near me.
Before I turn the call over to Mike and I'd like to emphasize that while the impact of the shutdown are many businesses remain on the company has continued to increase diversity and it's for a limited exposure to certain address the impact that the inspector Retail Energy restaurants Leisure and hotels near historically operated the company that modest home. I reach management Protocols are strong and are working papers all these are fantastic. Please leave the property remains defensively position to whether this economic crisis.
Follow me integration of Pentagon Capital Partners. The adviser now has over fifty investment professionals dedicated to our
Thank you. Give me I will take a few minutes to review additional financial and portfolio information for the first quarter of 2020.
Yep, that investment income and I was nine point six million would just over fourteen cents per share for the three months ended.
2020
relative to distributions of $0.14 per share are and I I did too covered with one hundred and 1% for the quarter.
Total investment income decreased point six million or 3.2% as compared to the first quarter a year ago, excluding being coming other income total investing can be created by approximately 4% primarily due to a lower rate environment and a decreased in dividend income. Over. The impact of which was pissed off that by a 12.5% increase in the average Investment Portfolio at amortized cost for the comparative. The increase in portfolio is primarily due to Acquisitions throughout 2019.
What are NBA with five non-accrual Investments representing 3.2% and 9.8% of total debt and preferred stock investment at fair value and cost-effectively is compared to non-accrual Investments of approximately 2.4% and 6.9% of total debt and preferred stock investment at fair value age cost-effectively at December 31st, 2019.
our average internal investment rating at fair market value and it said March 31st 2020 with 1.86 as compared to 1.39 as of the month by a quarter in
Total expenses increased 1.2 million or 14.8% with the 3 months ended March 31st, 2020 from the comparable. 2019 primarily due to the increase in interest in credit facility fees and base management fees in the first quarter. We voluntarily waived off instead of being with 1.9 million bringing our cumulative incentive fees waived since March two thousand Seventeen to twenty five point three million dollars during the quarter. There was no approval for incentive management fees based on games.
In the first quarter net realized and unrealized losses was 68.8 million dollars the dominantly driven by depreciation in our Equity investment in BC. I'm not seeing you alone partner then you as well our debt investments in Agy holding and sewer and overall valuation depreciation across our portfolio as a result of macroeconomic conditions impacted by the covid-19 outlet.
During the first quarter of 2020. We repurchased $986,554 of our shares with three point six million dollars on an average price to $3.68 per share including brokerage commission, as of March thirty first two thousand 24013456 years were made available for we purchased under the current program as of March 31st, 2020. We had approximately 62 million dollars of availability under our credit facility as well as in cash and cash equivalents.
You said I would like to turn the call back to Jimmy.
Thank you. Like I would like to take a moment to thank you for the continued support and they're can I help you out of work most of all.
Thank you. If you would like to ask a question, please, press the star key followed by the digit one on your touchtone phone. And also make sure your mute button is turned off to allow your signal to reach our equipment off again, that is star one if you'd like to ask question.
and
We will take our first question a day from ricocheting with JPMorgan, please go ahead this morning. I woke up a lot moving around with moment. When we look at sort of your top five or ten investment. There were some pretty significant Mar first off instructions and a g l a g y holding just curious and also think George Webb's I'm curious if this is more marked cash flow or this is really spread widening and what you're seeing amongst your top investments in terms of actual funding performance.
Rick this is marshmello Century Tom in your question. Let me just speak generally to a couple of the main that you mentioned. It's been thinking about evaluations and performance with respect. The first off performance continues to be steady there. The valuation change was a change in with a reflection of the change in the valuation of the cop set for that business. And you know, this is Faith in valuation approach it and giving some what type of trading multiple for the concept. That's what accounts for that Agy. You know, that is a company that Off The Top Line performance of that company is continuing to hold up with profitability is under pressure as we have discussed before due to a significant in a typical spike in one of the metals used in the production process. And so that has impacted profitability which has been impacted devaluation of the business in the market. I think you had also wage.
About George that you can imagine you play George says shipping and logistics company that deals with ocean Freight. So it was one of the earliest companies received impacts from because the situation which was reflected in its performance in the quarter and so was reflected in the evaluation been generally speaking. I would say this evaluation evaluations move around or a result of two things one the concept from these businesses are generally down at least we all understand it all has said yes and cratic reasons for their performance burying over the last quarter.
Got it. Okay. Well, thank you for actually really different that helps us understand the thought process and what's going on. So I really value those things.
You're welcome.
And once again, if you have a question, please press star one at this time. Once again, that is star one to ask a question and we'll pause for a moment.
And that will conclude our question-and-answer session. I'll turn the conference back over to James Keenan for any additional or closing remarks.
Thank you. And again just like to thank everyone cuz according to continue to work through these uncertain times and and every month I get sometimes and sometimes we continue to be happy and out the during this evening. Thank you for your time today.
And thank you very much that does conclude our conference for today. I'd like to thank everyone for your participation and you may now disconnect.
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