Paying attention is actual: Stellus Capital Investment Corporation (NYSE: SCM)

On 30 March 2020, Stellus Capital Investment Corporation stock identified change of 78.05% away from 52-week low price and recently located move of -51.46% off 52-week high price. It has market worth of $138.01M and dividend yield of 18.63%. SCM stock has been recorded -40.78% away from 50 day moving average and -45.98% away from 200 day moving average. Moving closer, we can see that shares have been trading -21.20% off 20-day moving average.

Stellus Capital Investment Corporation (SCM) recently reported financial results for its fourth fiscal quarter and year ended December 31, 2019.

Results of Operations

Investment income for the years ended December 31, 2019 and 2018 totaled $58.9M and $53.3M, respectively, most of which was made up of interest income from portfolio investments.

Operating expenses for the years ended December 31, 2019 and 2018, totaled $36.5M and $30.6M, respectively. For the same respective periods, base management fees totaled $9.7M and $8.2M , income incentive fees totaled $5.8M and $5.5M , capital gains incentive fees totaled $0.8M and $0.1M , fees and expenses related to our borrowings totaled $15.0M and $12.3M (including interest and amortization of deferred financing costs), administrative expenses totaled $1.7M and $1.4M , income tax totaled $0.9M and $0.3M , and other expenses totaled $2.6M and $2.8M , respectively.

For the years ended December 31, 2019 and 2018, net investment income was $22.4M and $22.6M, or $1.23 and $1.42 per ordinary share based on weighted average ordinary shares outstanding of 18,275,696 and 15,953,571, respectively.

The capital gains incentive fee of $0.8M and $0.1M for the years ended December 31, 2019 and 2018, respectively, was accrued for U.S. GAAP purposes Because of the increase in realized and unrealized gains over the years.  There can be no assurance that unrealized appreciation or depreciation will be realized in the future. Accordingly, such fees, as calculated and accrued, would not necessarily be payable under the investment advisory contract, and may never be paid based upon the computation of incentive fees in subsequent periods.  The income tax expense accrual of $0.9M and $0.3M for the year ended December 31, 2019 and 2018, respectively, was accrued based on estimates of undistributed taxable income, which was generated largely from capital gains.  Not Including these accruals, net investment income for the year ended December 31, 2019 would be $24.14M, or $1.32 per share; and for the year ended December 31, 2018, net investment income would have been $ 22.99M, or $1.44 per share.

The Company’s investment portfolio had a net change in unrealized appreciation (depreciation) for the years ended December 31, 2019 and 2018, of ($15.5M) and ($1.6M), respectively.  For the years ended December 31, 2019 and 2018, the Company had realized gains of $19.6M and $5.5M, respectively.

For the years ended December 31, 2019 and 2018, net increase in net assets resulting from operations totaled $26.4M and $26.2M , or $1.45 per ordinary share and $1.64 per ordinary share, based on weighted average ordinary shares outstanding of 18,275,696 and 15,953,571, respectively.

Liquidity and Capital Resources

As of December 31, 2019 and 2018, our credit facility provided for borrowings in an aggregate amount up to $220.0 and $180.0M , respectively, on a committed basis.  As of December 31, 2019 , our credit facility had an accordion feature which allowed for potential future expansion of the facility size to $250.0M . As of December 31, 2019, and December 31, 2018, we had $161.6M and $99.6M in outstanding borrowings under the credit facility, respectively.

For the for the year ended December 31, 2019, our operating activities used cash of ($93.3M) primarily in connection with the purchase of portfolio investments, offset by sales and repayments of portfolio investments. For the same period, our financing activities provided cash of $92.0M, primarily made up of proceeds from the issuance of ordinary stock, proceeds from SBA-guaranteed debentures and net borrowings on our credit facility.

For the year ended December 31, 2018 , our operating activities used cash of ($102.4)M , primarily in connection with the purchase of portfolio investments, offset by sales and repayments of portfolio investments, and our financing activities provided cash of $94.8M , primarily related to the repayments under our credit facility and distributions to stockholders, offset by an issuance of ordinary stock

Distributions

During the three and twelve months ended December 31, 2019, we reported aggregate distributions for of $0.34 per share and $1.36 ($6.5M and $25.0M, respectively). During the three and twelve months ended December 31, 2018, we reported aggregate distributions of $0.34 and $1.36 per share ($5.4M and $21.7M, respectively). Tax characteristics of all distributions are stated to stockholders on Form 1099-DIV.  None of these distributions are predictable to include a return of capital.

Equity Offerings

The Company issued 2,952,149 shares during the year ended December 31, 2019 in a secondary offering on March 15, 2019 and the underwriters’ exercise of their overallotment option on April 11, 2019. Gross proceeds resulting from the secondary offering totaled $42,599,510 and underwriting and other expenses totaled $1,296,803. The per share offering price for the secondary offering was $14.43. The Company issued 225,787 shares under the At-the-Market (“ATM”) Program in 2019, for gross proceeds of $3,262,729 and underwriting and other expenses of $240,040. The average per share offering price of shares issued in the ATM Program during 2019 was $14.45.

Recent Portfolio Activity

For the quarter ended December 31, 2019, we funded $73.6M in six new and five existing portfolio companies and received $26.6M from four repayments, twenty-three pay downs, including amounts received from equity investments. The new investment transactions and repayments that occurred during the quarter are summarized as follows:

On October 1, 2019, we converted Wise Holding Corporation’s first lien term loan into ordinary equity of the restructured company and all existing debt obligations were extinguished, and related claims were released as part of the restructuring.

On October 2, 2019, we received full repayment on the first lien term loan of Good Source Solutions, Inc. for total proceeds of $18.9M, including a $0.4M prepayment fee.

On October 18, 2019, we invested $13.3M in the first lien term loan of GS HVAM Intermediate, LLC., before Good Source Solutions, Inc., a marketer and distributor of food products to the corrections, education and other institutional foodservice markets. Additionally, we committed $1.6M in the unfunded delayed draw term loan and $2.7M in the unfunded revolver.  We also invested $0.6M in the equity of the company.

On October 18, 2019, we invested $17.5M in the first lien term loan of Intuitive Health, LLC, an operator of freestanding urgent care/emergency room combination facilities.

The Financial sector company, Stellus Capital Investment Corporation noticed change of -10.21% to $7.3 along volume of 255172 shares in recent session compared to an average volume of 204.25K. SCM’s shares are at -49.52% for the quarter and driving a -48.41% return over the course of the past year and is now at -48.70% since this point in 2018.