Stellus Capital Investment Corporation

Good day, ladies and gentlemen, and thank you for standing by. At this time, I would like to welcome everyone to Stella's Capital Investment Corporation's conference call to report financial results for its third fiscal quarter, ended September 30, 2024. Participants are currently on a listen-only mode, and we will have a question and answer session following the presentation. If you require operator assistance during the call, please press star zero on your telephone keypad. This conference is being recorded today, November 8, 2024. It is now my pleasure to turn the call over to Mr. Robert Ladd, Chief Executive Officer of Stellis Capital Investment Corporation. Mr. Ladd, you may begin your conference.

Thank you, Ali. And good morning, everyone, and thank you for joining the call. Welcome to our conference call covering the quarter ended September 30th of this year. Joining me this morning is Todd Huskinson, our Chief Financial Officer, who will cover important information about forward-looking statements, as well as an overview of our financial information.

Thank you, Rob. I'd like to remind everyone that today's call is being recorded. Please note that this call is the property of Stellis Capital Investment Corporation and that any unauthorized broadcast of this call in any form is strictly prohibited. Audio replay of the call will be available by using the telephone number and PIN provided in our press release announcing this call. I'd also like to call your attention to the customary safe harbor disclosure in our press release regarding forward-looking information. Today's conference call may also include forward-looking statements and projections, and we ask that you refer to our most recent filing with the SEC for important factors that could cause actual results to differ materially from these projections. We will not update any forward-looking statements unless required by law. To obtain copies of our latest SEC filings, please visit our website at www.stalliscapital.com under the Public Investors link, or call us at 713-292-5400. Now I'll cover our operating results for the quarter. I would like to start with our life-to-date activity. Since our IPO in November 2012, we've invested approximately $2.5 billion in over 195 companies and received approximately $1.6 billion of repayments while maintaining stable asset quality. We've paid over $273 million of dividends to our investors, which represents $16.28 per share, to an investor in our IPO in November 2012. which was offered at $15 per share. Turning now to operating results, in the third quarter, we generated 39 cents per share of GAAP net investment income, and core net investment income was 40 cents per share, which excludes estimated excise taxes. Net asset value per share increased 19 cents during the quarter due to unrealized depreciation on our investment portfolio, primarily related to one equity investment. Our ATM program was also active during the quarter. We issued $14.6 million in shares at an average gross price of $13.79. All issuances were above that asset value. With respect to portfolio and asset quality, we ended the quarter with an investment portfolio at fair value of $908.7 million across 99 portfolio companies. up from $899.7 million across 100 companies as of June 30, 2024. During the third quarter, we invested $9.4 million in one new portfolio company and had $8.4 million in other investment activity at par. We also received one full repayment totaling $8.4 million and received $5.5 million of other repayments, both at par. We also received one equity realization that generated proceeds of $2.6 million and a realized gain of $2.2 million. At September 30th, 98% of our loans were secured and 95% were priced at floating rates. The average loan per company is $9.5 million, and the largest overall investment is $19.6 million, both at fair value. All but one of our portfolio companies are backed by a private equity firm. Overall, our asset quality is slightly better than plan. At fair value, 26% of our portfolio is rated a one or ahead of plan, and 18% of the portfolio is marked at an investment category of three or below, meaning not meeting plan or expectations. Currently, we have loans to six portfolio companies that are non-accrual, which comprise 4.7% of the fair value of the total loan portfolio. And with that, I'll turn it back over to Rob to discuss the overall outlook. Okay. Thank you, Todd.