Investcorp Credit Management BDC, Inc. Q4 FY2025 earnings call

• Appointed Andrew Muns as CFO effective July 16, 2025. - Net investment income before taxes increased 1% QoQ, with an annualized return on equity of 4.3%. - Net assets declined modestly, net asset value per share decreased due to fair value adjustments. - Origination activity picked up to $19 million from $5.1 million last quarter, concentrated in existing portfolio companies. - Realized investments with IRRs such as 64.1% on RESA Power. - Board authorized a stock repurchase program up to $5M and declared a $0.12 per share distribution with a $0.02 supplemental distribution.

For the quarter ended June 30, 2025, net investment income before taxes was $0.8 million or $0.06 per share, an increase of 1% from the previous quarter. Net assets declined modestly, with net asset value per share decreasing to $5.27 from $5.42 due to fair value adjustments. Nonaccruals as a percentage of the total portfolio at fair value remained stable at 1.6%. The portfolio consisted of 43 borrowers, with approximately 79% of investments in first lien debt and 21% in equity, warrants, etc. The weighted average yield of the portfolio was 10.6%, and largest industry concentrations by fair market value were professional services (13.8%), insurance (9.9%), etc.

• Board authorized a stock repurchase program up to $5M, effective until August 7, 2026. - Declared a $0.12 per share distribution and $0.02 supplemental distribution, payable October 9, 2025. - Expect renewed momentum in the middle market, with the pipeline beginning to rebuild in July.

• Fair value adjustments could impact net asset value. - Market conditions may affect origination activity and portfolio performance. - Leverage ratio monitoring and potential portfolio contraction if not managed properly.

Q: What was the spillover income for the quarter?

A: The net income before taxes of $0.06 a share was about $0.04 a share after taxes and negative $0.03 a share after taking into account losses. The distribution of $0.12 a share with the supplemental of $0.02 is in excess of that, related to spill back.

Q: Strategy to improve returns?

A: Focus on the expense base; as we grow assets under management for Investcorp's private credit business, it will improve the company's profitability.

Q: Expect portfolio contraction to lower leverage?

A: Expect repayments to pick up in the second half of the year, some positions to be refinanced, and we watch the leverage number carefully, measuring deployments against total leverage.

Q: Consider wrapping up BDC?

A: Our primary focus is to improve shareholder value, starting with stabilizing the book; we will study the mentioned transaction but that's not our immediate focus