Stellus Capital Investment Corporation Reports Results for its First Fiscal Quarter Ended March 31, 2025

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Stellus showed solid but slightly declining financial performance with reduced NII per share and NAV despite growing investment portfolio.

Looking at Stellus Capital's Q1 2025 results, we see a mixed financial performance despite management's "solid operating results" characterization. The BDC reported net investment income (NII) of $0.35 per share, down from $0.42 in Q1 2024, representing a 16.7% year-over-year decline on a per-share basis. Core NII, which excludes capital gains incentive fees and income taxes, also decreased to $0.37 per share from $0.44.

The investment portfolio expanded significantly to $991.1 million at fair value, up from $953.5 million at year-end 2024, with $55.4 million in new investments partially offset by $15 million in repayments. This resulted in net portfolio growth of $40.4 million for the quarter. The company added 5 new portfolio companies, bringing the total to 110 investments.

Despite the portfolio growth, the net asset value (NAV) per share declined from $13.46 to $13.25, a 1.6% decrease quarter-over-quarter. This NAV erosion occurred despite raising $9.3 million through equity issuance at an average price of $14.11 per share, which was accretive to NAV.

The investment yield held steady at 10.3% on income-producing investments, though the weighted average yield across all investments decreased slightly to 9.6% from 9.7%. The company reported $6.0 million in realized losses, a significant improvement from the $20.4 million in realized losses during the same quarter last year.

Notably, the leverage increased during the quarter, with outstanding borrowings under the Credit Facility rising to $221.8 million from $175.4 million at year-end. This increased leverage helped fund the portfolio growth but also contributed to higher interest expenses, which rose to $8.3 million from $7.8 million year-over-year.

The $0.40 quarterly dividend remained unchanged, but the distribution coverage ratio weakened to 87.5% based on NII (NII/dividend = 0.35/0.40) or 92.5% based on core NII. This suggests the current dividend may not be fully supported by ongoing earnings, though management continues to highlight that shareholders have received $295 million in total distributions since inception.

05/12/2025 - 04:10 PM

HOUSTON, May 12, 2025 /PRNewswire/ -- Stellus Capital Investment Corporation (NYSE:SCM) ("Stellus", "we", or the "Company") today announced financial results for its fiscal quarter ended March 31, 2025.

Robert T. Ladd, Chief Executive Officer of Stellus, stated, "I am pleased to report solid operating results for the quarter ended March 31, 2025, in which we earned U.S. GAAP net investment income of $0.35 per share and core net investment income of $0.37 per share. During the quarter, we funded $55 million of investments and received $15 million of repayments, bringing the total portfolio to $991 million at fair value. Notably, we raised over $9 million of equity during the quarter under the at-the-market equity program. I'm also pleased to report that our investors have received a total of $295 million in distributions, equivalent to $16.95 per share, since we began operations."

FINANCIAL HIGHLIGHTS
($ in millions, except data relating to per share amounts and shares outstanding)


	Three Months Ended
	March 31, 2025		March 31, 2024
	Amount	Per Share	Amount	Per Share
Net investment income	$9.79	$0.35	$10.24	$0.42
Core net investment income⁽¹⁾	10.29	0.37	10.61	0.44
Net realized loss on investments	(5.97)	(0.21)	(20.38)	(0.85)
Net realized loss on foreign currency translation	(0.03)	—	(0.03)	—
Total realized income⁽²⁾	$3.79	$0.14	($10.17)	($0.43)
Distributions	(11.09)	(0.40)	(9.65)	(0.40)
Net unrealized change in appreciation on investments	1.19	0.04	23.52	0.98
Net unrealized change in appreciation on foreign currency translation	0.01	—	—	—
Provision for taxes on unrealized appreciation on investments in taxable subsidiaries	—	—	(0.20)	(0.01)
Net increase in net assets resulting from operations	$4.99	$0.18	$13.15	$0.54
Weighted average shares outstanding		27,602,612		24,125,642


(1)	Core net investment income, as presented, excludes the impact of capital gains incentive fees (reversal) and income taxes, the majority of which are excise taxes. The Company believes presenting core net investment income and the related per share amount is a useful supplemental disclosure for analyzing its financial performance. However, core net investment income is not a U.S. generally accepted accounting principles ("U.S. GAAP") measure and should not be considered as a replacement for net investment income and other earnings measures presented in accordance with U.S. GAAP. A reconciliation of net investment income in accordance with U.S. GAAP to core net investment income is presented in the table below the financial statements.
(2)	Total realized income is the sum of net investment income, net realized losses on investments, net realized losses on foreign currency translations, and losses on debt extinguishment, all U.S. GAAP measures.

PORTFOLIO ACTIVITY
($ in millions, except data relating to per share amounts, shares outstanding, and number of portfolio companies)


	As of	As of
	March 31, 2025	December 31, 2024
Investments at fair value	$991.1	$953.5
Total assets	$1,011.7	$980.9
Net assets	$372.8	$369.9
Shares outstanding	28,137,203	27,481,118
Net asset value per share	$13.25	$13.46

	Three Months Ended
	March 31, 2025	March 31, 2024
New investments	$55.4	$28.5
Repayments of investments	(15.0)	(31.2)
Net activity	$40.4	($2.7)

	As of	As of
	March 31, 2025	December 31, 2024
Number of portfolio company investments	110	105
Number of debt investments	97	92

Weighted average yield of debt and other income producing investments ⁽³⁾
Cash	9.4 %	9.5 %
Payment-in-kind ("PIK")	0.5 %	0.4 %
Fee amortization	0.4 %	0.4 %
Total	10.3 %	10.3 %

Weighted average yield on total investments⁽⁴⁾
Cash	8.7 %	8.9 %
PIK	0.5 %	0.4 %
Fee amortization	0.4 %	0.4 %
Total	9.6 %	9.7 %


(3)	The dollar-weighted average annualized effective yield is computed using the effective interest rate for the Company's debt investments and other income producing investments, including cash and PIK interest, as well as the accretion of deferred fees. The individual investment yields are then weighted by the respective cost of the investments (as of the date presented) in calculating the weighted average effective yield of the portfolio. The dollar-weighted average annualized yield on the Company's investments for a given period will generally be higher than what investors in the Company's common stock would realize in a return over the same period because the dollar-weighted average annualized yield does not reflect the Company's expenses or any sales load that may be paid by investors.
(4)	The dollar-weighted average yield on total investments takes the same yields as calculated in the footnote above but weights them to determine the weighted average effective yield as a percentage of the Company's total investments, including non-income producing equity positions and debt investments on non-accrual status.

Results of Operations

Investment income for the three months ended March 31, 2025 and 2024 totaled $25.0 million and $26.0 million, respectively, most of which was interest income from portfolio investments.

Gross operating expenses for the three months ended March 31, 2025 and 2024 totaled $16.4 million and $16.0 million, respectively. For the same respective periods, base management fees totaled $4.1 million and $3.9 million, income incentive fees totaled $2.1 million and $2.5 million, fees and expenses related to our borrowings totaled $8.3 million and $7.8 million (including interest and amortization of deferred financing costs), administrative expenses totaled $0.4 million and $0.5 million, income tax totaled $0.5 million and $0.4 million, and other expenses totaled $1.0 million and $0.9 million. The Company waived $1.2 million and $0.2 million of income incentive fees due to the total return limitation contained in the Investment Advisory Agreement between the Company and the Advisor (as defined below) for the three months ended March 31, 2025 and 2024, respectively.

Net investment income was $9.8 million and $10.2 million, or $0.35 and $0.42 per common share based on weighted average common shares outstanding of 27,602,612 and 24,125,642 for the three months ended March 31, 2025 and 2024, respectively. Core net investment income, which is not a U.S. GAAP measure and excludes the capital gains incentive fee (reversal) and income tax expense accruals, for the three months ended March 31, 2025 and 2024 was $10.3 million and $10.6 million, or $0.37 and $0.44 per share, respectively.

For the three months ended March 31, 2025 and 2024, the Company's investment portfolio had a net change in unrealized appreciation of $1.2 million and $23.5 million, respectively, and the Company had net realized losses of ($6.0) million and ($20.4) million, respectively.

Net increase in net assets resulting from operations totaled $5.0 million and $13.1 million, or $0.18 and $0.54 per common share, based on weighted average common shares outstanding of 27,602,612 and 24,125,642 for the three months ended March 31, 2025 and 2024, respectively.

Liquidity and Capital Resources

As of March 31, 2025, the Company's amended senior secured revolving credit agreement with certain bank lenders and Zions Bancorporation, N.A. dba Amegy Bank, as administrative agent (as amended from time to time, the "Credit Facility") provided for borrowings in an aggregate amount of up to $315.0 million on a committed basis. As of March 31, 2025 and December 31, 2024, the Credit Facility had an accordion feature which allowed for potential future expansion of the facility size up to $350.0 million.

As of March 31, 2025 and December 31, 2024, the Company had $221.8 million and $175.4 million in outstanding borrowings under the Credit Facility, respectively.

The Company issued 656,085 shares during the three months ended March 31, 2025 under the At-the-Market Program ("ATM Program") for gross proceeds of $9.3 million. The average per share offering price of shares issued under the ATM Program during the three months ended March 31, 2025 was $14.11. Stellus Capital Management, LLC, the Company's investment adviser (the "Advisor"), agreed to reimburse the Company for underwriting fees to the extent the per share price of the shares to the public, less underwriting fees, was less then net asset value per share. For the three months ended March 31, 2025, the Advisor was not required to reimburse underwriting fees as all shares were issued at a premium to net asset value.

Distributions

For both the three months ended March 31, 2025 and 2024, the Company declared aggregate distributions of $0.40 per share for the period ($11.1 million and $9.6 million in the aggregate, respectively). Tax characteristics of all distributions will be reported to stockholders on Form 1099-DIV after the end of the calendar year. None of these dividends are expected to include a return of capital.

Recent Portfolio Activity

The Company invested in the following portfolio companies during the three months ended March 31, 2025:


Activity Type	Date	Company Name	Company Description	Investment Amount		Instrument Type
Add-On Investment	January 3, 2025	Service Minds Company, LLC*	Provider of residential electrical services	$	10,000	Revolver Commitment
New Investment	January 10, 2025	Pacific Shoring Products, LLC	Manufacturer of trench shoring and safety equipment sold to equipment rental companies	$	8,500,000	Senior Secured – First Lien
				$	100,000	Revolver Commitment
				$	498,491	Equity
New Investment	January 15, 2025	Environmental Remedies, LLC	Residential asbestos abatement provider	$	7,330,762	Senior Secured – First Lien
				$	2,681,986	Delayed Draw Term Loan Commitment
				$	100,000	Revolver Commitment
				$	163,109	Equity
New Investment	January 16, 2025	Plus Delta Partners, Inc.	Provider of fundraising training and tools for higher education institutions and other nonprofits	$	7,400,000	Senior Secured – First Lien
				$	3,753,955	Delayed Draw Term Loan Commitment
				$	100,000	Revolver Commitment
				$	325,764	Equity
New Investment	January 27, 2025	Strategus, LLC	Provider of connected television advertising services	$	7,801,439	Senior Secured – First Lien
				$	2,524,737	Delayed Draw Term Loan Commitment
				$	100,000	Revolver Commitment
				$	170,362	Equity
Add-On Investment	January 31, 2025	Monitorus Holding, LLC*	Provider of media monitoring and evaluation services	$	9,710	Unsecured Convertible Bond
Add-On Investment	February 7, 2025	Service Minds Company, LLC*	Provider of residential electrical services	$	31,000	Revolver Commitment
Add-On Investment	February 10, 2025	Florachem Corporation*	Distiller and supplier of natural citrus, pine, and specialty inputs	$	877,716	Senior Secured – First Lien
New Investment	February 28, 2025	Identity Theft Guard Solutions, Inc.	Cyber breach response and monitoring services	$	8,722,887	Senior Secured – First Lien
				$	100,000	Revolver Commitment
				$	352,915	Equity
New Investment	February 28, 2025	MoboTrex, LLC	Distributor and manufacturer of intelligent traffic solution equipment	$	5,137,070	Senior Secured – First Lien
				$	109,312	Delayed Draw Term Loan Commitment
				$	100,000	Revolver Commitment
Add-On Investment	March 7, 2025	Elliott Aviation, LLC*	Provider of maintenance, repair, and overhaul and fixed-base operator services to the business aviation sector	$	915,125	Revolver Commitment
New Investment	March 21, 2025	Simpler Trading, LLC	Online education platform for retail investors	$	281,936	Equity
Add-On Investment	March 28, 2025	Advanced Barrier Extrusions, LLC*	Manufacturer of flexible packaging	$	2,607,637	Senior Secured – First Lien
				$	2,249,694	Revolver Commitment

______________________________________

*Existing portfolio company

The Company realized investments in the following portfolio companies during the three months ended March 31, 2025:


Activity Type	Date	Company Name	Company Description	Proceeds Received			Realized Loss		Instrument Type
Restructured Investment	March 21, 2025	Trade Education Acquisition, L.L.C.	Online education platform for retail investors	$	—	$		(5,605,668)	Senior Secured – First Lien
				$	—	$		(46,000)	Revolver
				$	—	$		(662,660)	Equity
Full Repayment	3/28/2025	DRS Holdings III, Inc.	Provider of a wide variety of products across the insole, custom fit orthotic and foot care category	$	8,542,830	$		—	Senior Secured – First Lien

Events Subsequent to March 31, 2025

The Company's management has evaluated subsequent events through May 12, 2025. There have been no subsequent events that require recognition or disclosure except for the following described below.

Investment Portfolio

The Company invested in the following portfolio companies subsequent to March 31, 2025:


Activity Type	Date	Company Name	Company Description	Investment Amount		Instrument Type
Add-On Investment	April 8, 2025	TriplePoint Acquisition Holdings LLC*	Provider of HVAC, plumbing, and other mechanical and industrial services	$	1,773,809	Senior Secured – First Lien
Add-On Investment	May 5, 2025	FairWave Holdings, LLC*	Specialty coffee platform	$	19,336	Equity
Add-On Investment	May 8, 2025	Unicat Catalyst Holdings, LLC*	Manufacturer and distributor of catalysts and other industrial products	$	13,961	Equity

______________________________________

*Existing portfolio company

The Company realized investments in the following portfolio companies subsequent to March 31, 2025:


Activity Type	Date	Company Name	Company Description	Proceeds Received		Realized Gain		Instrument Type
Full Repayment	April 8, 2025	Florachem Corporation	Distiller and supplier of natural citrus, pine, and specialty inputs	$	9,725,000	$	—	Senior Secured – First Lien
				$	53,078	$	—	Delayed Draw Term Loan Commitment
				$	100,000	$	—	Revolver Commitment
				$	514,107	$	151,674	Equity

Credit Facility

The outstanding balance under the Credit Facility as of May 12, 2025 was $147.8 million.

7.250% Notes due 2030

On April 1, 2025, the Company issued $75.0 million in aggregate principal amount of 7.250% Notes due 2030 (the "7.250% Notes"). The 7.250% Notes bear interest at a rate of 7.250% per year payable semi-annually in arrears on April 1 and October 1 of each year, commencing October 1, 2025. The 7.250% Notes will mature on April 1, 2030, unless previously redeemed or repurchased in accordance with their terms. The 7.250% Notes are the direct unsecured obligations of the Company and rank pari passu with the Company's existing and future unsecured, unsubordinated indebtedness, including the Notes Payable; senior to any series of preferred stock that the Company may issue in the future; senior to any of the Company's future indebtedness that expressly provides it is subordinated to the 7.250% Notes; effectively subordinated to all of the Company's existing and future secured indebtedness (including indebtedness that is initially unsecured to which the Company subsequently grants security), to the extent of the value of the assets securing such indebtedness, including, without limitation, borrowings under the Credit Facility; and structurally subordinated to all existing and future indebtedness and other obligations of any of the Company's existing or future subsidiaries.

In connection with the 7.250% Notes, the Company and U.S. Bank Trust Company, National Association (as successor-in-interest to U.S. Bank National Association), as trustee (the "Trustee"), entered into a Fourth Supplemental Indenture (the "Fourth Supplemental Indenture") to the Base Indenture, dated May 5, 2014, between the Company and the Trustee (together with the Fourth Supplemental Indenture, the "Indenture").

The Indenture contains certain covenants, including covenants requiring the Company to comply with Section 18(a)(1)(A) as modified by Section 61(a)(2) of the Investment Company Act of 1940, as amended (the "1940 Act"), or any successor provisions, whether or not the Company continues to be subject to such provisions of the 1940 Act, but giving effect, in either case, to any exemptive relief granted to the Company by the U.S. Securities and Exchange Committee and certain other exceptions, and to provide financial information to the holders of the 7.250% Notes and the Trustee if the Company should no longer be subject to the reporting requirements under the Securities Exchange Act of 1934, as amended. These covenants are subject to important limitations and exceptions that are set forth in the Indenture.

Distributions Declared

On April 4, 2025, the Board of Directors of the Company declared a regular monthly dividend for each of April 2025, May 2025, and June 2025 as follows:


	Ex-Dividend	Record	Payment	Amount per
Declared	Date	Date	Date	Share
4/4/2025	4/30/2025	4/30/2025	5/15/2025	$	0.1333
4/4/2025	5/30/2025	5/30/2025	6/13/2025	$	0.1333
4/4/2025	6/30/2025	6/30/2025	7/15/2025	$	0.1333

Conference Call Information

Stellus Capital Investment Corporation will host a conference call to discuss these results on Tuesday, May 13, 2025 at 10:00 AM, Central Time. The conference call will be led by Robert T. Ladd, Chief Executive Officer, and W. Todd Huskinson, Chief Financial Officer, Chief Compliance Officer, Treasurer, and Secretary.

For those wishing to participate by telephone, please dial (888) 506-0062. Use passcode 260621. Starting approximately two hours after the conclusion of the call, a replay will be available through Tuesday, May 27, 2025 by dialing (877) 481-4010 and entering passcode 52407. The replay will also be available on the Company's website.

For those wishing to participate via Live Webcast, connect via the Public (SCIC) section of our website at www.stelluscapital.com, under the Events tab. A replay of the conference will be available on our website for approximately 90 days.

About Stellus Capital Investment Corporation

The Company is an externally managed, closed-end, non-diversified investment management company that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. The Company's investment objective is to maximize the total return to its stockholders in the form of current income and capital appreciation by investing primarily in private middle-market companies (typically those with $5.0 million to $50.0 million of EBITDA (earnings before interest, taxes, depreciation and amortization)) through first lien (including unitranche) loans, second lien loans and unsecured debt financing, with corresponding equity co-investments. The Company's investment activities are managed by its investment adviser, Stellus Capital Management. To learn more about Stellus Capital Investment Corporation, visit www.stelluscapital.com under the "Public (SCIC)" tab.

Forward-Looking Statements

Statements included herein may contain "forward-looking statements" which relate to future performance or financial condition. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of assumptions, risks and uncertainties, which change over time. Actual results may differ materially from those anticipated in any forward-looking statements as a result of a number of factors, including those described from time to time in filings by the Company with the Securities and Exchange Commission including the final prospectus that will be filed with the Securities and Exchange Commission. The Company undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release.

Contacts

Stellus Capital Investment Corporation
W. Todd Huskinson, Chief Financial Officer
(713) 292-5414
thuskinson@stelluscapital.com

STELLUS CAPITAL INVESTMENT CORPORATION CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

	March 31, 2025
	(unaudited)		December 31, 2024
ASSETS
Controlled investments at fair value (amortized cost of $17,934,808 for both periods)	$	7,707,712	$	7,652,436
Non-controlled, non-affiliated investments, at fair value (amortized cost of $979,896,856 and $943,853,898, respectively)		983,396,065		945,845,252
Cash and cash equivalents		10,888,821		20,058,594
Receivable for sales and repayments of investments		446,586		335,689
Interest receivable		6,229,272		4,947,765
Income tax receivable		2,383,725		1,301,965
Other receivables		108,750		87,995
Related party receivable		—		3,687
Prepaid expenses		576,553		666,866
Total Assets	$	1,011,737,484	$	980,900,249
LIABILITIES
Notes Payable	$	99,554,505	$	99,444,355
Credit Facility payable		219,057,554		172,314,315
SBA-guaranteed debentures		305,190,923		321,251,939
Dividends payable		3,750,689		3,663,233
Management fees payable		4,054,726		4,034,109
Income incentive fees payable		1,651,506		3,109,560
Interest payable		1,492,428		5,281,343
Related party payable		1,290,893		—
Unearned revenue		620,803		548,626
Administrative services payable		380,523		393,513
Other accrued expenses and liabilities		1,926,752		937,316
Total Liabilities	$	638,971,302	$	610,978,309
Commitments and contingencies (Note 7)
Net Assets	$	372,766,182	$	369,921,940
NET ASSETS
Common stock, par value $0.001 per share (100,000,000 shares authorized; 28,137,203 and 27,481,118 issued and outstanding, respectively)	$	28,137	$	27,481
Paid-in capital		388,486,702		379,549,272
Total distributable loss		(15,748,657)		(9,654,813)
Net Assets	$	372,766,182	$	369,921,940
Total Liabilities and Net Assets	$	1,011,737,484	$	980,900,249
Net Asset Value Per Share	$	13.25	$	13.46

STELLUS CAPITAL INVESTMENT CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

	For the three months ended
	March 31, 2025		March 31, 2024
INVESTMENT INCOME
From controlled investments:
Interest income	$	—	$	81,636
From non-controlled, non-affiliated investments
Interest income		24,127,116		24,956,851
Other income		824,542		958,262
Total Investment Income	$	24,951,658	$	25,996,749
OPERATING EXPENSES
Management fees	$	4,054,726	$	3,852,233
Valuation fees		157,889		156,507
Administrative services expenses		449,298		490,901
Income incentive fees		2,136,491		2,509,110
Professional fees		418,031		339,627
Directors' fees		111,250		108,250
Insurance expense		97,090		124,989
Interest expense and other fees		8,263,019		7,767,573
Income tax expense		499,547		370,719
Other general and administrative expenses		218,351		245,275
Total Operating Expenses	$	16,405,692	$	15,965,184
Income incentive fee waiver		(1,242,843)		(204,351)
Total Operating Expenses, net of fee waivers	$	15,162,849	$	15,760,833
Net Investment Income	$	9,788,809	$	10,235,916
Net realized loss on non-controlled, non-affiliated investment	$	(5,967,221)	$	(20,384,731)
Net realized loss on foreign currency translations		(29,655)		(25,106)
Net change in unrealized appreciation on controlled investments		55,276		536,570
Net change in unrealized appreciation on non-controlled, non-affiliated investments		1,138,017		22,982,020
Net change in unrealized appreciation (depreciation) on foreign currency translations		8,319		(3,602)
Provision for taxes on net unrealized appreciation on investments		—		(192,607)
Net Increase in Net Assets Resulting from Operations	$	4,993,545	$	13,148,460
Net Investment Income Per Share—basic and diluted	$	0.35	$	0.42
Net Increase in Net Assets Resulting from Operations Per Share – basic and diluted	$	0.18	$	0.54
Weighted Average Shares of Common Stock Outstanding—basic and diluted		27,602,612		24,125,642
Distributions Per Share—basic and diluted	$	0.40	$	0.40

STELLUS CAPITAL INVESTMENT CORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS (unaudited)

	Common Stock					Total
	Number	Par		Paid-in		distributable
	of shares	value		capital		(loss)		Net Assets
Balances at December 31, 2023	24,125,642	$	24,125	$	335,918,984	$	(16,003,321)	$	319,939,788
Net investment income	—		—		—		10,235,916		10,235,916
Net realized loss on investments	—		—		—		(20,384,731)		(20,384,731)
Net realized loss on foreign currency translations	—		—		—		(25,106)		(25,106)
Net change in unrealized appreciation on investments	—		—		—		23,518,590		23,518,590
Net change in unrealized depreciation on foreign currency translations	—		—		—		(3,602)		(3,602)
Provision for taxes on unrealized appreciation on investments	—		—		—		(192,607)		(192,607)
Distributions from net investment income	—		—		—		(9,647,844)		(9,647,844)
Balances at March 31, 2024	24,125,642	$	24,125	$	335,918,984	$	(12,502,705)	$	323,440,404

Balances at December 31, 2024	27,481,118	$	27,481	$	379,549,272	$	(9,654,813)	$	369,921,940
Net investment income	—		—		—		9,788,809		9,788,809
Net realized loss on investments	—		—		—		(5,967,221)		(5,967,221)
Net realized loss on foreign currency translations	—		—		—		(29,655)		(29,655)
Net change in unrealized appreciation on investments	—		—		—		1,193,293		1,193,293
Net change in unrealized depreciation on foreign currency translations	—		—		—		8,319		8,319
Distributions from net investment income	—		—		—		(11,087,389)		(11,087,389)
Issuance of common stock, net of offering costs⁽¹⁾	656,085		656		8,937,430		—		8,938,086
Balances at March 31, 2025	28,137,203	$	28,137	$	388,486,702	$	(15,748,657)	$	372,766,182

STELLUS CAPITAL INVESTMENT CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

	For three months ended
	March 31, 2025		March 31, 2024
Cash flows from operating activities
Net increase in net assets resulting from operations	$	4,993,545	$	13,148,460
Adjustments to reconcile net increase in net assets from operations to net cash used in operating activities:
Purchases of investments		(55,415,263)		(28,516,430)
Proceeds from sales and repayments of investments		14,986,423		31,169,595
Net change in unrealized appreciation on investments		(1,193,293)		(23,518,590)
Net change in unrealized (appreciation) depreciation on foreign currency translations		(8,319)		3,602
Increase in investments due to PIK		(976,479)		(750,054)
Amortization of premium and accretion of discount, net		(715,755)		(702,543)
Deferred tax provision		—		192,607
Amortization of loan structure fees		315,618		264,707
Amortization of deferred financing costs		110,150		111,374
Amortization of loan fees on SBA-guaranteed debentures		188,984		314,055
Net realized loss on investments		5,967,221		20,384,731
Changes in other assets and liabilities
Increase in interest receivable		(1,281,507)		(1,602,062)
Increase in income tax receivable		(1,081,760)		(1,085,022)
Increase in other receivables		(20,755)		—
Decrease in related party receivables		3,687		—
Decrease in prepaid expenses		90,313		21,256
Increase (decrease) in management fees payable		20,617		(1,066,303)
Decrease in income incentive fees payable		(1,458,054)		(140,107)
(Decrease) increase in administrative services payable		(12,990)		22,897
Decrease in interest payable		(3,788,915)		(3,748,120)
Increase in related party payable		1,290,893		—
Increase in unearned revenue		72,177		14,589
Increase (decrease) in other accrued expenses and liabilities		989,436		(61,688)
Net Cash (Used) Provided in Operating Activities	$	(36,924,026)	$	4,456,954
Cash flows from Financing Activities
Proceeds from the issuance of common stock	$	9,256,982	$	—
Sales load for common stock issued		(138,908)		—
Offering costs paid for common stock issued		(179,988)		(5,209)
Stockholder distributions paid		(10,999,933)		(6,431,896)
Repayments of SBA-guaranteed debentures		(16,250,000)		—
Financing costs paid on Credit Facility		—		(49,969)
Borrowings under Credit Facility		67,700,000		50,000,000
Repayments of Credit Facility		(21,633,900)		(25,333,900)
Net Cash Provided by Financing Activities	$	27,754,253	$	18,179,026
Net (Decrease) Increase in Cash and Cash Equivalents	$	(9,169,773)	$	22,635,980
Cash and Cash Equivalents Balance at Beginning of Period	$	20,058,594	$	26,125,741
Cash and Cash Equivalents Balance at End of Period	$	10,888,821	$	48,761,721
Supplemental and Non-Cash Activities
Cash paid for interest expense	$	11,437,182	$	10,825,557
Income and excise tax paid		1,581,307		1,455,741
Increase in distributions payable		87,456		3,215,948
Increase in deferred offering costs		—		5,209
Exchange of investments		1,663,301		8,256,411

Reconciliation of Core Net Investment Income⁽¹⁾ (Unaudited)

	Three Months Ended
	March 31, 2025	March 31, 2024
Net investment income	$9,788,809	$10,235,916
Income tax expense	499,547	370,719
Core net investment income	$10,288,356	$10,606,635

Per share amounts:
Net investment income per share	$0.35	$0.42
Core net investment income per share	$0.37	$0.44

Reconciliation of Realized Net Investment Income⁽²⁾ (Unaudited)

	Three Months Ended
	March 31, 2025	March 31, 2024
Net investment income	$9,788,809	$10,235,916
Net realized loss on investments	(5,967,221)	(20,384,731)
Net realized loss on foreign currency translation	(29,655)	(25,106)
Total Realized Net Investment Income (Loss)	$3,791,933	($10,173,921)

Per share amounts:
Net investment income per share	$0.35	$0.42
Realized net investment income (loss) per share	$0.14	($0.42)

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SOURCE Stellus Capital Investment Corporation

FAQ

What was Stellus Capital's (SCM) earnings per share in Q1 2025?

Stellus Capital reported GAAP net investment income of $0.35 per share and core net investment income of $0.37 per share in Q1 2025.

How much did Stellus Capital (SCM) pay in dividends for Q1 2025?

SCM declared distributions of $0.40 per share for Q1 2025, totaling $11.1 million.

What is Stellus Capital's (SCM) portfolio size and composition as of Q1 2025?

SCM's portfolio reached $991.1 million at fair value, consisting of 110 portfolio companies, with 97 being debt investments.

What was Stellus Capital's (SCM) net asset value per share in Q1 2025?

SCM's net asset value per share was $13.25 as of March 31, 2025, down from $13.46 at the end of December 2024.

How much new capital did Stellus Capital (SCM) raise in Q1 2025?

SCM raised $9.3 million in gross proceeds through its At-the-Market Program, issuing 656,085 shares at an average price of $14.11 per share.

Stellus Capital Investment Corporation Reports Results for its First Fiscal Quarter Ended March 31, 2025

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Stellus Capital Investment Corporation Reports Results for its First Fiscal Quarter Ended March 31, 2025

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