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BCP Investment Corp (BCIC)·Q3 2025 Earnings Summary

Executive Summary

  • BCIC delivered a clean beat: Q3 total investment income (revenue) was $18.94m vs consensus $15.69m*, and diluted EPS (NII/share) was $0.70 vs $0.51*; management cited LRFC merger scale and purchase accounting accretion as key drivers . Values retrieved from S&P Global*.
  • Capital return accelerated: base distribution maintained at $0.47/share for Q4; company announced a modified Dutch auction tender up to $9.0m and expects total repurchases (company + management/adviser/affiliates) plus ownership to approximate 10% of shares by year-end .
  • Balance sheet actions de‑risk maturities: issued $35m 7.50% notes due 2028 and $75m 7.75% notes due 2030; notified full redemption of $108m 4.875% notes due 2026; asset coverage improved to 171% and net leverage eased to 1.3x .
  • Watchlist: non‑accruals rose to 10 positions (3.8% FV/6.3% cost); management outlined case‑by‑case resolutions with 2–3 names targeted for near‑term outcomes; PIK contribution declined to ~14.3% from ~19.5% QoQ .

What Went Well and What Went Wrong

  • What Went Well

    • Revenue and EPS beat consensus on first quarter post‑LRFC close; CFO quantified LRFC’s contribution ($7.4m GAAP income, $3.8m core) and highlighted expense scaling in line with a larger footprint .
    • Capital return and confidence signals: “we anticipate total repurchases when combined with management’s, the Adviser’s and its affiliates’ ownership … could approximate 10% by year-end” (CEO) .
    • Funding laddered and diversified: “issuing $75 million of 7.75% notes due October 2030 and $35 million of 7.50% notes due October 2028, while initiating the redemption of our 4.875% notes due 2026” (CEO) .

  • What Went Wrong

    • Non‑accruals increased to 10 investments (3.8% FV / 6.3% cost) vs 6 in Q2; management noted some were acquired with LRFC; two investments remain cash‑basis .
    • NAV/share declined to $17.55 from $17.89 QoQ; CFO cited core NII not fully covering the dividend and ~ $4m mark‑to‑market loss .
    • Net repayments of ~$29.6m (originations $14.2m vs repayments/sales $43.8m) reduced earning assets; portfolio deployment was selective amid tighter spreads .

Financial Results

Headline results vs prior periods and estimates

MetricQ3 2024Q2 2025Q3 2025 (Actual)Q3 2025 Consensus
Total investment income (Revenue, $m)15.177 12.630 18.940 15.6915*
NII per share (Diluted, $)0.63 0.50 0.70 0.5075*
Net Investment Income ($m)5.802 4.557 8.848 n/a

Values retrieved from S&P Global*.

Quarterly trajectory (oldest → newest)

MetricQ1 2025Q2 2025Q3 2025
Total investment income ($m)12.118 12.630 18.940
Net Investment Income ($m)4.340 4.557 8.848
NII per share (Diluted, $)0.47 0.50 0.70
NAV per share ($)18.85 17.89 17.55

Segment/portfolio composition (fair value)

Security Type12/31/2024 FV ($m)12/31/2024 %9/30/2025 FV ($m)9/30/2025 %
First Lien Debt289.957 71.6% 386.403 71.6%
Second Lien Debt28.996 7.2% 38.994 7.2%
Subordinated Debt1.740 0.4% 24.832 4.6%
CLOs5.193 1.3% 2.179 0.4%
Joint Ventures54.153 13.4% 46.301 8.6%
Equity24.762 6.1% 40.793 7.6%
Total405.021 100% 539.701 100%

KPIs and balance sheet

KPIQ2 2025Q3 2025
Weighted avg annualized yield (ex‑non‑accruals/CLOs)10.7% 13.8%
Non‑accruals (% FV / % Cost)2.1% / 4.8% 3.8% / 6.3%
Net leverage1.4x 1.3x
Asset coverage ratio165% 171%
Portfolio FV ($m)395.109 539.701
NAV ($m) / NAV per share ($)164.729 / 17.89 231.304 / 17.55
Share repurchases (10/1–11/4)—103,690 shares; $1.2m at $11.62 avg
Q4 base distribution declared—$0.47/share (payable 11/25/25)
Deployments / Repayments ($m)14.191 / 17.049 14.2 / 43.8
Borrowings par ($m) / weighted avg rate255.4 / 6.0% 324.6 / 6.1%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Base quarterly distributionQ4 2025Policy of $0.47 base established earlier in 2025 Declared $0.47 (pay 11/25/25; DoR 11/17/25) Maintained
Share repurchases/tenderQ4 2025None explicitModified Dutch auction up to $9.0m; company expects at least $7.5m from issuer and remainder by management/adviser/affiliates; targeting ~10% of shares combined by year‑end New
Debt capital structureQ4 2025$108m 4.875% due 2026 outstandingIssued $35m 7.50% 2028 & $75m 7.75% 2030; notified full redemption of $108m 4.875% 2026 (expected 11/13/25) Maturities extended/laddered

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q1 2025)Current Period (Q3 2025)Trend
Capital returnBase dividend policy at $0.47; supplemental tied to NII; buybacks contemplated post‑merger Dutch auction up to $9m; total repurchases + insider ownership to approximate 10% by year‑end Improving
Non‑accruals/creditQ1: 6 non‑accruals (2.6% FV/4.7% cost); selective, case‑by‑case plans 10 non‑accruals (3.8% FV/6.3% cost); 2–3 names targeted for near‑term resolutions; 2 cash‑basis Worsening headline; active remediation
Portfolio yield & purchase accountingQ1 portfolio yield ~11% (par); PIK ~24% of income with non‑recurring items Weighted avg yield 13.8% (10.3% core ex‑accretion); purchase accretion $3.618m; PIK down to ~14.3% (from ~19.5%) Improving core mix; higher reported yield
Macro/tariffs/private creditCaution on economy; low consumer exposure; tariff impacts second/third‑order “More settled tariff framework” aided activity; management disputes systemic private credit fears Stabilizing
Expenses/run‑rateQ1 expenses eased; noted some one‑offs $10.3m gross/$10.1m net; CFO said run‑rate reasonable; some professional fees elevated Normalizing

Management Commentary

  • “We are pleased to report strong results for the third quarter, our first earnings as a combined company following the completion of our merger with LRFC … leverage our expanded scale, broader portfolio diversification, and enhanced operating efficiency” — Ted Goldthorpe, CEO .
  • “We anticipate total repurchases … could approximate 10% by year‑end. These actions underscore our continued focus on driving shareholder value and narrowing the discount to NAV” — CEO .
  • “Accordingly, our net investment income … was $8.8 million, or $0.71 per share … Core net investment income … $5.3 million, or $0.42 per share” — Brandon Satoren, CFO .
  • “We proactively extended and laddered our unsecured debt maturities, issuing a $75 million 7.75% note … and a $35 million 7.5% note … while … redeeming our 4.875% notes due 2026” — CFO and CEO .

Q&A Highlights

  • Buybacks vs deployment: Management prefers accretive buybacks at current prices; fund will buy ~$7.5m, management/adviser to fill remaining; leverage constraints acknowledged .
  • Non‑accrual resolution pipeline: 2–3 companies targeted for near‑term outcomes; strategies include restructurings, sales, or additional capital; two assets on cash‑basis .
  • Yield and purchase accounting: 13.8% reported yield uplift due to purchase accretion; “on a core basis, it's about 10.3%” (CEO) .
  • PIK trend: PIK contributed ~14.3% of income, down from ~19.5% last quarter; mix includes pre‑planned structures (cash + PIK) .
  • Expense outlook: CFO called the quarter a “pretty decent run rate,” with some elevated professional fees from integration .

Estimates Context

  • Q3 2025 results beat consensus: Revenue $18.94m vs $15.69m*; EPS (diluted NII/share) $0.70 vs $0.51*; both based on 4 estimates*. Values retrieved from S&P Global*.
  • Implication: Street likely to lift forward NII and revenue run‑rate, but some normalization expected as purchase accounting accretion ($3.62m in Q3) fades .

Key Takeaways for Investors

  • Beat and momentum: Strong beat on both revenue and EPS, aided by LRFC scale and purchase accretion; core earnings improving but still trailed the base dividend this quarter .
  • Capital return catalyst: Q4 $0.47 base distribution affirmed, plus $9m tender and ongoing buybacks point to multiple near‑term stock support levers and potential discount‑to‑NAV narrowing .
  • Credit watch: Non‑accruals rose post‑merger; management is actively working several names with near‑term resolution targets; monitor trajectory into Q4/Q1 .
  • Yield mix normalization: Reported yield elevated by accretion; core yield ~10.3% is the better indicator; PIK trending lower, a positive for cash earnings quality .
  • De‑risking maturities: New 2028/2030 notes plus 2026 redemption reduce near‑term refinancing risk; asset coverage improved to 171% and net leverage at 1.3x .
  • Trading setup: Combination of estimate beat, tender/buyback flow, and improved funding profile offers near‑term support; credit outcomes on non‑accruals are the key swing factor for NAV and multiple .

Citations:

  • Press release & 8‑K 2.02 with exhibits:
  • 10‑Q Q3 2025:
  • 8‑K (Debt issuance/redemption):
  • Earnings call transcript Q3 2025:
  • Q1 2025 transcript (policy context):

Estimates: Values retrieved from S&P Global*.