Stellus Capital Investment Corporation Reports Results for its First Fiscal Quarter Ended March 31, 2023.

HOUSTON, Texas: Stellus Capital Investment Corporation (NYSE:SCM) ("Stellus" or the "Company") today announced financial results for its first fiscal quarter ended March 31, 2023.

Robert T. Ladd, Chief Executive Officer of Stellus, stated, "I am pleased to report strong results for the quarter ended March 31, 2023, in which both U.S. GAAP net investment income of $0.46 per share and Non-U.S. GAAP Core net investment income of $0.45 per share, which excludes the impact of capital gains incentive fees and income taxes, the majority of which are excise taxes, covered the regular dividend of $0.40 per share. Our portfolio grew by $33 million to $878 million at fair value and the loan portfolio was yielding 11.4%, on average at March 31, 2023."

FINANCIAL HIGHLIGHTS

($ in millions, except data relating to per share amounts and shares outstanding)

Three Months Ended

Three Months Ended

March 31, 2023

March 31, 2022

Amount

Per Share

Amount

Per Share

Net investment income

$9.07

$0.46

$5.51

$0.28

Core net investment income(1)

8.87

0.45

5.75

0.29

Net realized gain on investments

0.03

-

3.46

0.18

Net realized loss on foreign currency translation

(0.04)

-

(0.01)

-

Total realized income(2)

$9.06

$0.46

$8.96

$0.46

Distributions

(7.95)

(0.40)

(5.46)

(0.28)

Net unrealized depreciation on investments

(4.25)

(0.22)

(3.72)

(0.19)

Provision for taxes on unrealized appreciation on investments in taxable subsidiaries

(0.08)

-

(0.02)

-

Net increase in net assets resulting from operations

$4.74

0.24

$5.22

0.27

Weighted average shares outstanding

19,779,988

19,517,761

(1)

Core net investment income, as presented, excludes the impact of capital gains incentive fees and income taxes, the majority of which are excise taxes. The Company believes presenting core net investment income and the related per share amount is a useful supplemental disclosure for analyzing its financial performance. However, core net investment income is a non-U.S. GAAP measure and should not be considered as a replacement for net investment income and other earnings measures presented in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"). A reconciliation of net investment income in accordance with U.S. GAAP to core net investment income is presented in the table below the financial statements.

(2)

Total realized income is the sum of net investment income, net realized gains (losses) on investments, net realized gains (losses) on foreign currency, and loss on debt extinguishment; all U.S. GAAP measures.

PORTFOLIO ACTIVITY

($ in millions, except data relating to per share amounts and number of portfolio companies)

As of

As of

March 31, 2023

December 31, 2022

Investments at fair value

$877.5

$844.7

Total assets

$900.9

$898.2

Net assets

$280.9

$275.8

Shares outstanding

20,248,383

19,666,769

Net asset value per share

$13.87

$14.02

Three Months Ended

Three Months Ended

March 31, 2023

March 31, 2022

New investments

$41.2

$74.5

Repayments of investments

(5.9)

(10.0)

Net activity

$35.3

$64.5

As of

As of

March 31, 2023

December 31, 2022

Number of portfolio company investments

88

85

Number of debt investments

76

73

Weight average yield of debt and other income producing investments(3)

Cash

10.6 %

10.3 %

Payment-in-kind ("PIK")

0.4 %

0.4 %

Fee amortization

0.4 %

0.4 %

Total

11.4 %

11.1 %

Weighted average yield on total investments(4)

Cash

10.0 %

9.7 %

Payment-in-kind ("PIK")

0.4 %

0.3 %

Fee amortization

0.4 %

0.4 %

Total

10.8 %

10.4 %

(3)

The dollar-weighted average annualized effective yield is computed using the effective interest rate for our debt investments and other income producing investments, including cash and PIK interest, as well as the accretion of deferred fees. The individual investment yields are then weighted by the respective cost of the investments (as of the date presented) in calculating the weighted average effective yield of the portfolio. The dollar-weighted average annualized yield on the Company's investments for a given period will generally be higher than what investors of our common stock would realize in a return over the same period because the dollar-weighted average annualized yield does not reflect the Company's expense or any sales load that may be paid by investors.

(4)

The dollar-weighted average yield on total investments takes the same yields as calculated in the footnote above, but weights them to determine the weighted...