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BOSTON, May 8, 2019--Bain Capital Specialty Finance, Inc. (“BCSF” or the “Company” ) (NYSE:BCSF) today announced that its Board of Directors has declared a dividend of $0.41 per share for the second quarter of 2019 and announced its financial results for the first quarter ended March 31, 2019.
“We’re pleased with the company’s results in the first quarter, driven by the performance of our underlying portfolio companies, which reflects our rigorous underwriting approach driven by the experience of our broader investment platform,” said Michael Ewald, Chief Executive Officer of Bain Capital Specialty Finance, Inc. “At the same time, we also continue to focus on structuring our liabilities as efficiently as possible to help ensure the future success of the company.”
QUARTERLY HIGHLIGHTS
Selected Financial Highlights
| (dollar amounts in thousands) | Q1 2019 | Q4 2018 | ||||||||
| Net investment income per share | $ | 0.41 | $ | 0.41 | ||||||
| Net investment income | $ | 21,243 | $ | 19,774 | ||||||
| Earnings per share | $ | 0.76 | ($0.21 | ) | ||||||
| Dividends declared and payable | $ | 0.41 | $ | 0.41 | ||||||
| As of March 31, | As of December 31, | ||||||||
| (dollar amounts in thousands) | 2019 | 2018 | |||||||
| Total fair value of investments | $ | 1,829,940 | $ | 1,727,806 | |||||
| Total assets | 1,995,944 | 1,791,014 | |||||||
| Total net assets | 1,019,834 | 1,001,629 | |||||||
| Net asset value per share | $ | 19.81 | $ | 19.46 | |||||
PORTFOLIO AND INVESTMENT ACTIVITY
| (dollar amounts in millions) | Q1 2019 | Q4 2018 | |||||||
| Investment Fundings | $ | 273.9 | $ | 451.8 | |||||
| Sales and Repayments | 190.6 | 42.7 | |||||||
| Net Investment Activity | 83.3 | 409.1 | |||||||
| Investment Portfolio at FV | $ in Millions | % of Total | |||||||
| First lien senior secured | $ | 1,131.8 | 61.9 | % | |||||
| First lien last out | 28.4 | 1.6 | |||||||
| Second lien senior secured | 232.6 | 12.7 | |||||||
| Subordinated debt | 39.6 | 2.2 | |||||||
| Corporate bonds | 27.8 | 1.5 | |||||||
| Investment vehicle | 335.4 | 18.3 | |||||||
| Equity interest | 26.5 | 1.4 | |||||||
| Preferred equity | 7.7 | 0.4 | |||||||
| Warrants | 0.1 | - | |||||||
| Total | $ | 1,829.9 | 100.0 | % | |||||
FIRST QUARTER 2019 OPERATING RESULTS
CAPITAL and LIQUIDITY
CONFERENCE CALL INFORMATION
A conference call to discuss the Company’s financial results will be held live at 9:00 a.m. Eastern Time on May 9, 2019. Please visit BCSF’s webcast link located on the Events & Presentation page of the Investor Resources section of BCSF’s website http://www.baincapitalbdc.com for a slide presentation that complements the Earnings Conference Call.
Participants are also invited to access the conference call by dialing one of the following numbers:
All callers will need to enter the Conference ID followed by the # sign and reference “Bain Capital Specialty Finance” once connected with the operator. All callers are asked to dial in 10-15 minutes prior to the call so that name and company information can be collected.
Replay Information:
An archived replay will be available approximately three hours after the conference call concludes through May 16, 2019 via a webcast link located on the Investor Resources section of BCSF’s website, and via the dial-in numbers listed below:
| ENDNOTES | ||
| (1) | The $0.41 per share dividend is payable on July 29, 2019 to holders of record as of June 28, 2019. | |
| (2) | Information through March 31, 2019. Computed for debt investments based upon the annual interest rate as of March 31, 2019, divided by the total par amount of investments. For investments with floating interest rates, the yield calculation is computed using the contract rate data as of March 31, 2019. Weighted average yield for the Company’s Equity Interest in ABCS (Antares Bain Capital Complete Financing Solution LLC) represents the weighted average levered yield of the Company’s proportionate investment in ABCS at March 31, 2019. Weighted average yield for Equity Interest in ABCS is computed based upon the sum of (i) the weighted average of the interest rate of investments held by ABCS less (ii) the weighted average interest rate of the ABCS Facility, divided by the Company’s par amount in ABCS. Total weighted average gross yield is the weighted average of the yields of the Company’s debt investments and its Equity Interest in ABCS. The weighted average gross yield does not represent the total return to our stockholders. Gross yield does not reflect fees and expenses of the Company and does not represent the return a stockholder would receive. If fees and expenses were included in the calculation, the yield would be lower. | |
| Bain Capital Specialty Finance, Inc. | |||||||||||||
| Consolidated Statements of Assets and Liabilities | |||||||||||||
| As of | As of | ||||||||||||
| March 31, 2019 | December 31, 2018 | ||||||||||||
| (Unaudited) | |||||||||||||
| Assets | |||||||||||||
| Investments at fair value: | |||||||||||||
| Non-controlled/non-affiliate investments (amortized cost of $1,481,673,496 and $1,449,749,445, respectively) | $ | 1,469,128,402 | $ | 1,422,837,431 | |||||||||
| Controlled affiliate investment (amortized cost of $348,095,945 and $296,647,530, respectively) | 354,091,548 | 298,248,240 | |||||||||||
| Non-controlled/affiliate investment (amortized cost of $6,720,000 and $6,720,000, respectively) | 6,720,000 | 6,720,000 | |||||||||||
| Cash and cash equivalents | 79,140,512 | 14,692,877 | |||||||||||
| Foreign cash (cost of $1,657,573 and $588,622, respectively) | 1,478,627 | 591,113 | |||||||||||
| Restricted Cash | 14,009,400 | 17,986,541 | |||||||||||
| Collateral on forward currency exchange contracts | 403,790 | 3,790 | |||||||||||
| Deferred financing costs | 3,872,902 | 4,017,802 | |||||||||||
| Interest receivable on investments | 7,973,786 | 6,250,621 | |||||||||||
| Prepaid insurance | - | 1,517 | |||||||||||
| Receivable for sales and paydowns of investments | 40,235,589 | 1,633,739 | |||||||||||
| Other assets | 3,701,001 | - | |||||||||||
| Unrealized appreciation on forward currency exchange contracts | 6,038,508 | 9,321,758 | |||||||||||
| Dividend receivable | 9,150,109 | 8,708,670 | |||||||||||
| Total Assets | $ | 1,995,944,174 | $ | 1,791,014,099 | |||||||||
| Liabilities | |||||||||||||
| Revolving credit facilities | $ | 551,194,090 | $ | 271,264,902 | |||||||||
| 2018-1 Notes (net of unamortized debt issuance costs of $1,997,725 and $2,040,320, respectively) | 363,702,275 | 363,659,680 | |||||||||||
| Offering costs payable | 1,730,959 | 1,819,892 | |||||||||||
| Interest payable | 5,095,949 | 4,835,339 | |||||||||||
| Payable for investments purchased | 24,370,068 | 119,165,882 | |||||||||||
| Base management fee payable | 4,500,941 | 2,950,412 | |||||||||||
| Incentive fee payable | 2,103,341 | 3,300,398 | |||||||||||
| Accounts payable and accrued expenses | 2,304,869 | 1,280,770 | |||||||||||
| Distributions payable | 21,107,677 | 21,107,677 | |||||||||||
| Total Liabilities | 976,110,169 | 789,384,952 | |||||||||||
| Commitments and Contingencies (See Note 10) | |||||||||||||
| Net Assets | |||||||||||||
|
Preferred stock, $0.001 par value per share, 10,000,000,000 shares
authorized, none issued and outstanding
as of March 31, 2019 and December 31, 2018, respectively |
$ | - | $ | - | |||||||||
|
Common stock, par value $0.001 per share, 100,000,000,000 and
100,000,000,000 shares authorized,
51,482,137 and 51,482,137 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively |
51,482 | 51,482 | |||||||||||
| Paid in capital in excess of par value | 1,034,255,352 | 1,034,255,352 | |||||||||||
| Total distributable earnings (loss) | (14,472,829 | ) | (32,677,687 | ) | |||||||||
| Total Net Assets | 1,019,834,005 | 1,001,629,147 | |||||||||||
| Total Liabilities and Total Net assets | $ | 1,995,944,174 | $ | 1,791,014,099 | |||||||||
| Net asset value per share | $ | 19.81 | $ | 19.46 | |||||||||
| Bain Capital Specialty Finance, Inc. | ||||||||||||
| Consolidated Statements of Operations | ||||||||||||
| (Unaudited) | ||||||||||||
|
For the Three Months Ended |
For the Three Months Ended |
|||||||||||
| 2019 | 2018 | |||||||||||
| Income | ||||||||||||
| Investment income from non-controlled/non-affiliate investments: | ||||||||||||
| Interest from investments | $ | 30,387,622 | $ | 12,615,297 | ||||||||
| Dividend income | 15,533 | - | ||||||||||
| Other income | 21,731 | 114,004 | ||||||||||
| Total investment income from non-controlled/non-affiliate investments | 30,424,886 | 12,729,301 | ||||||||||
| Investment income from controlled affiliate investments: | ||||||||||||
| Interest from investments | 107,293 | 21,288 | ||||||||||
| Dividend income | 9,357,644 | 4,707,978 | ||||||||||
| Total investment income from controlled affiliate investments | 9,464,937 | 4,729,266 | ||||||||||
| Total investment income | 39,889,823 | 17,458,567 | ||||||||||
| Expenses | ||||||||||||
| Interest and debt financing expenses | $ | 10,545,687 | $ | 4,288,897 | ||||||||
| Base management fee | 6,751,412 | 3,247,562 | ||||||||||
| Incentive fee | 4,085,628 | 2,004,548 | ||||||||||
| Professional fees | 550,432 | 523,677 | ||||||||||
| Directors fees | 105,140 | 68,250 | ||||||||||
| Other general and administrative expenses | 841,177 | 174,692 | ||||||||||
| Total expenses before fee waivers | 22,879,476 | 10,307,626 | ||||||||||
| Base management fee waiver | (2,250,471 | ) | (1,623,781 | ) | ||||||||
| Incentive fee waiver | (1,982,287 | ) | - | |||||||||
| Total expenses, net of fee waivers | 18,646,718 | 8,683,845 | ||||||||||
| Net investment income before taxes | 21,243,105 | 8,774,722 | ||||||||||
| Excise tax expense | - | 309 | ||||||||||
| Net investment income after taxes | 21,243,105 | 8,774,413 | ||||||||||
| Net realized and unrealized gains (losses) | ||||||||||||
| Net realized gain (loss) on non-controlled/non-affiliate investments | (849,933 | ) | 257,702 | |||||||||
| Net realized gain on foreign currency transactions | 5,885 | 279,145 | ||||||||||
| Net realized gain (loss) on forward currency exchange contracts | 3,633,076 | (3,317,385 | ) | |||||||||
| Net change in unrealized depreciation on foreign currency translation | (198,161 | ) | (17,344 | ) | ||||||||
| Net change in unrealized appreciation (depreciation) on forward currency exchange contracts | (3,283,250 | ) | 941,491 | |||||||||
| Net change in unrealized appreciation on non-controlled/non-affiliate investments | 14,366,920 | 2,575,854 | ||||||||||
| Net change in unrealized appreciation on controlled affiliate investments | 4,394,893 | 1,865,229 | ||||||||||
| Total net gains | 18,069,430 | 2,584,692 | ||||||||||
| Net increase in net assets resulting from operations | $ | 39,312,535 | $ | 11,359,105 | ||||||||
| Per Common Share Data | ||||||||||||
| Basic and diluted net investment income per common share | $ | 0.41 | $ | 0.30 | ||||||||
| Basic and diluted increase in net assets resulting from operations per common share | $ | 0.76 | $ | 0.39 | ||||||||
| Basic and diluted weighted average common shares outstanding | 51,482,137 | 29,133,586 | ||||||||||
About Bain Capital Specialty Finance, Inc.
Bain Capital Specialty Finance, Inc. is an externally managed specialty finance company focused on lending to middle-market companies. BCSF is managed by BCSF Advisors, L.P., an SEC-registered investment adviser and a subsidiary of Bain Capital Credit, L.P. Since commencing investment operations on October 13, 2016, and through March 31, 2019, BCSF has invested approximately $2,463.5 million in aggregate principal amount of debt and equity investments prior to any subsequent exits or repayments. BCSF’s investment objective is to generate current income and, to a lesser extent, capital appreciation through direct originations of secured debt, including first lien, first lien/last out, unitranche and second lien debt, investments in strategic joint ventures, equity investments and, to a lesser extent, corporate bonds. BCSF has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended.
Forward-Looking Statements
Certain information contained herein may constitute “forward-looking statements,” which can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “seek,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue,” “target,” or “believe” or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events may differ materially from those reflected or contemplated in such forward-looking statements. These statements are not guarantees of future events and are subject to risks, uncertainties, and other factors, some of which are beyond BCSF’s control and are difficult to predict, that could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements including, without limitation, the risks, uncertainties and other factors identified in BCSF’s filings with the SEC. Investors should not place undue reliance on these forward-looking statements, which apply only as of the date on which BCSF makes them. BCSF does not undertake any obligation to update or revise any forward-looking statements or any other information contained herein, except as required by applicable law.
