BCP Investment Corporation

Welcome to BCP Investment Corporation's first quarter-ended March 31, 2026 earnings conference call. An earnings press release was distributed yesterday, May 7, after market closed. A copy of the release along with an earnings presentation is available on the company's website at www.bcpinvestmentcorporation.com in the Investor Relations section. and should be reviewed in conjunction with the company's Form 10-Q filed yesterday with the SEC. As a reminder, this conference call is being recorded for replay purposes. Please note that today's conference call may contain forward-looking statements which are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described in the company's filings with the SEC. BCP Investment Corporation assumes no obligation to update any such forward-looking statements unless required by law. Speaking on today's call will be Ted Goldthorpe, Chief Executive Officer, President and Director of BCP Investment Corporation, Brandon Satoran, Chief Financial Officer, and Patrick Schaefer, Chief Investment Officer. With that, I would now like to turn the call over to Ted Goldthorpe, Chief Executive Officer of BCP Investment Corp. Please go ahead, Ted.

Good morning. Welcome to our first quarter 2026 earnings call. I'm joined today by our Chief Financial Officer, Brandon Satorin, and our Chief Investment Officer, Patrick Schaefer. Following my opening remarks on the company's performance and activities, During the first quarter, Patrick will provide commentary on our investment portfolio and our markets, and Brandon will discuss our operating results and financial condition in greater detail. 2025 is an important year of execution for us, and we entered 2026 on stronger footing. The key strategic and shareholder-focused actions we outlined in connection with the Logan Ridge merger are now largely in place, including our rebranding, tender offer, share repurchase program, and transition to monthly dividends. while preserving flexibility for the quarterly supplemental distributions. We also executed liability management actions that diversified our funding base and extended our maturity profile. Taken together, these actions have improved our financial flexibility, reduced near-term refinancing risk, and better positioned the company to support more consistent shareholder return framework and long-term value creation. During the quarter, we continue to execute against our plan and delivered growth in both total investment income and core investment income relative to the prior quarter and first quarter of 2025. We generated net investment income of $6.9 million, or $0.55 per share, which exceeded our base distribution, and our share repurchase activity in the first quarter of 2026 was accreted to NAV by $0.07 per share. We also saw improvement in underlying credit performance, with non-accruals declining to 6.2% of the portfolio amortized costs, from 7.1% in the prior quarter, and the number of portfolio companies on non-accrual declining to 9 from 10. Reflecting that earnings profile, our board declared a supplemental cash distribution of 3 cents per share for the second quarter, bringing total second quarter distributions to 30 cents per share. In addition, our board approved a third quarter 2026 base distribution of 27 cents per share, payable in monthly installments of 9 cents per share, in July, August, and September. With our monthly dividend structure now in place and the first monthly distribution paid in April, we believe this framework provides shareholders with a more regular cadence of cash distributions while maintaining flexibility to declare supplemental distributions when supported by earnings. We also continue to enhance our capital structure through proactive liability management. During the first quarter, we issued 50 million of 7.5% notes due 2029 and in April used a portion of the proceeds to redeem $40 million of the LFRC 5.25% notes due 2026. These actions further diversified our funding base, extended our maturity profile, and enhanced our financial flexibility. Turning to net asset value, net asset value declined during the quarter, driven primarily by unrealized markdowns on our portfolio. Approximately 40% of the quarter's unrealized markdowns were attributable to investments classified as software and are consolidated scheduled investments, and approximately 70% when including software or AI exposed names. Furthermore, 70% of these markdowns are from portfolio investments without at least one publicly quoted security, which negatively impacted the valuation of all securities in the capital structure. We believe the majority of these markdowns reflect sector-specific valuation pressure and broader mid-market dislocation rather than fundamental credit deterioration. Importantly, underlying credit performance remain relatively stable as most of our software exposure is in mission critical, vertically specialized businesses that we believe are well positioned to weather the current AI driven uncertainty. Despite continued macroeconomic uncertainty and volatility in portions of the software market, we remain disciplined in our deployment across the lower middle market, prioritizing credit quality, strong documentation, and downside protection. We continue to see more attractive opportunities in smaller and more complex transactions where structure and selectivity are critical, and we are actively managing and reposition the portfolio in response to evolving market conditions. Competition remains more pronounced in larger and more commoditized transactions, which reinforces our focus on selectivity over volume. As we look ahead, we remain focused on active portfolio management, discipline underwriting, and prudent capital allocation with the goal of driving long-term value for shareholders. As noted last quarter, we've begun to see increased M&A activity and expect to capitalize on opportunities in our pipeline throughout the remainder of 2026. With that, I will turn the call over to Patrick Schaefer, our Chief Investment Officer, for a review of our investment activity.

Thanks, Ted. Before getting into the specifics of the quarter, I would like to make a few comments on our core market as a whole. Deal activity has remained fairly active and orderly over the course of 2026, despite public headlines around private credit, software, and AI. Excluding the software sector, the M&A markets and private credit markets remain wide open for business, and we continue to see attractive opportunities in both our sponsor and non-sponsor segments. With respect to software, we do continue to see certain high-quality software businesses being acquired and financed with minor lender concessions relative to 2025 transactions. Regardless of industry, we continue to focus on our core market of 15 to 50 of EBITDA in industries or business models where we have an edge and ideally non-sponsored or non-traditionally sponsored transactions where competition is lower and we have the ability to drive pricing and structure. During the first quarter of 2026, our investment activity remained measured and selective. we completed two new portfolio investments and one fall-on investment during the period. At the same time, we experienced a higher level of repayments and sales, which we believe is consistent with a more active realization environment and the increased M&A activity that Ted and myself mentioned earlier. As a result, originations for the quarter were $13.3 million and repayments and sales were $28.3 million, resulting in net repayments and sales of approximately $15 million. Turn to slide 11 of our presentation. the overall yield on par of new investments during the quarter was 10.7%. This compares to 12.8% weighted average annualized yield, excluding income from non-accruals and collateralized loan obligations as of March 31st, 2026. Given the limited number of transactions completed during the quarter, we view the yield on new investments in the context of the specific mix of deals executed rather than as a broader indicator of the opportunity set. Our focus remains on credit quality, structure, and overall risk-adjusted return. Our investment portfolio, as of March 31st, 2026, remained highly diversified. We ended the quarter with a debt investment portfolio, excluding our investments in COO funds, equities, and joint ventures, spread across 72 different portfolio companies and 33 different industries, with an average par balance of $3.3 million per investment. Turning to slide 11, we saw improvement in our non-accrual profile during the quarter, reflecting improved underlying credit performance. At the end of the quarter, we had 12 investments on non-accrual status attributable to nine portfolio companies, representing 2.6% and 6.2% of the portfolio at fair value and cost, respectively. This compares to 13 investments attributable to 10 portfolio companies on non-accrual status as of December 31, 2025, representing 4% and 7.1% of the portfolio at fair value and cost, respectively. On slide 12, excluding our non-accrual investments, we had an aggregate debt investment portfolio of $371.8 million at fair value, representing a blended price of 90.3% of par value, and 81.3% of that portfolio was comprised of first lien loans at par value. Assuming par recovery, Our March 31, 2026 fair values imply approximately $40.1 million of incremental NAV value, or a 20.8% increase to NAV. Applying an illustrative 10% default rate and 70% recovery rate, the debt portfolio would imply approximately $2.24 per share of incremental NAV, or a 14.4% increase as it rotates. And I'll turn the call over to Brandon to further discuss our financial results for the period.