Investcorp Credit Management BDC Q1 2026 Earnings Report

Investcorp Credit Management BDC EPS Results

• Actual EPS: -$0.60
• Consensus EPS: $0.04
• Beat/Miss: Missed by -$0.64
• One Year Ago EPS: N/A

Investcorp Credit Management BDC Revenue Results

• Actual Revenue: ($6.95) million
• Expected Revenue: $4.62 million
• Beat/Miss: Missed by -$11.57 million
• YoY Revenue Growth: N/A

Investcorp Credit Management BDC Announcement Details

• Quarter: Q1 2026
• Date: 5/13/2026
• Time: After Market Closes
• Conference Call Date: Wednesday, May 13, 2026
• Conference Call Time: 11:30AM ET

Investcorp Credit Management BDC (NASDAQ:ICMB) Inc. (NASDAQ: ICMB) is a closed-end, non-diversified management investment company that provides investors exposure to private credit markets through direct lending strategies. As a business development company, ICMB focuses on originating, structuring and managing tailored financing solutions for U.S. middle-market corporations. The company’s portfolio includes senior secured loans, second-lien debt, subordinated debt and equity co-investments, with an emphasis on risk-adjusted returns and capital preservation.

The company is externally managed by Investcorp Credit Management US LLC, part of the Investcorp group, a global alternative investment firm founded in 1982. Leveraging Investcorp’s extensive credit platform and research capabilities, ICMB’s investment team sources opportunities across diverse sectors including business services, healthcare, technology, industrials and consumer markets. Through proprietary sourcing networks and rigorous due diligence, ICMB seeks to deliver attractive yield while maintaining a focus on downside protection and portfolio diversification.

Launched in 2018 and headquartered in New York City, ICMB primarily serves borrowers and investors within the United States. The company’s lending activities span sponsor-backed and corporate-backed transactions, providing flexible capital solutions such as cash-flow loans, acquisition financings and growth capital. ICMB’s capital base supports long-term partnerships with borrowers, enabling structural innovations tailored to individual company needs.

Under the oversight of Investcorp’s experienced credit professionals, the management team combines sector expertise, credit structuring skills and active portfolio monitoring. This integrated approach seeks to generate consistent income distributions for shareholders while navigating the complexities of the private credit market. As part of the broader Investcorp platform, ICMB benefits from global resources, proprietary deal flow and a track record of alternative asset management.

Investcorp Credit Management BDC Q1 2026 Earnings Call Transcript

Key Takeaways

• Neutral Sentiment: The board has formed a special committee of independent directors to evaluate strategic alternatives, and the company said the review is ongoing with Fulcrum Multi-Capital serving as financial advisor.
• Positive Sentiment: Management and the investment advisor took steps to support liquidity, including a 56% waiver of base management fees for the quarter and a reduction in revolving credit facility commitments from $100 million to $50 million to lower costs.
• Negative Sentiment: Net asset value per share fell to $2.65 from $4.25 at year-end, driven mainly by fair value changes, lower investment activity, and higher dividends relative to modest NII.
• Neutral Sentiment: Portfolio credit quality was broadly stable, with five non-accrual positions
• Positive Sentiment: The company fully exited three investments during the quarter for $12.7 million in proceeds and a blended IRR of about 10.7%, while the portfolio’s weighted average debt yield rose to 11.95%.

Presentation

[Operator]

Good morning, thank you for joining today's Investcorp Credit Management BDC, Inc earnings release call for the first quarter ended March 31, 2026. It is now my pleasure to turn the floor over to Suhail. Go ahead, please.

[Suhail Shaikh, President and CEO at Investcorp Credit Management BDC]

Okay. Yes. Thank you. Andrew, why don't you please do the opening remarks, and then I'll take over.

[Andrew Muns, CFO at Investcorp Credit Management BDC]

Sure. Thanks, Suhail. Welcome everyone to Investcorp Credit Management BDC's earnings call for the quarter ended March 31st, 2026. As you heard, I'm here with Suhail, President and Chief Executive Officer of the company. I would like to remind everyone that today's call is being recorded and that this call is a property of Investcorp Credit Management BDC. Any unauthorized broadcast of this call in any form is strictly prohibited. An audio replay of the call will be available on the investor relations page of our website at icmbdc.com. I would also like to call your attention to the safe harbor disclosure in our press release regarding forward-looking information and remind everyone that today's call may include forward-looking statements and projections. Actual results may differ materially from these projections. We will not update forward-looking statements unless required by law.

[Andrew Muns, CFO at Investcorp Credit Management BDC]

To obtain copies of the latest SEC filings, please visit the company's registration statement on the SEC EDGAR platform or our investor relations page on our website. The format for today's call is as follows: Suhail will provide an overall business and portfolio summary, and then I'll provide an overview of our results and summarize the financials. At this time, I would like to turn the call back over to Suhail.

[Suhail Shaikh, President and CEO at Investcorp Credit Management BDC]

Thank you, Andrew. Good morning, everyone, and thank you for joining our earnings call for the quarter ended March 31, 2026. We will begin with a business update and review of our first quarter results and portfolio activity. After which Andrew will walk through our financials in greater detail. As previously announced, the board has formed a special committee of independent directors to evaluate strategic alternatives aimed at maximizing shareholder value. The special committee has retained Fulcrum Multi-Capital Inc as financial advisor to assist in this process. The board and management team are committed to conducting a thorough and deliberate review. Given that the strategic review process is ongoing, we will not be taking questions on today's call. We want to share two steps taken to help manage the company's liquidity.

[Suhail Shaikh, President and CEO at Investcorp Credit Management BDC]

Our investment advisors voluntarily agreed to waive 56% of our base management fees for the quarter, resulting in approximately $456,000 in savings. This voluntary waiver reflects the advisor's ongoing commitment to support the company. As noted in our 8-K filing on May 8, 2026, we amended our revolving credit facility to reduce the commitment from $100 million to $50 million. This better aligns the facility with our current needs and reduces our cost structure while maintaining adequate liquidity for our investment strategy. This will save the company approximately $401,000 in undrawn commitment fees annually. Turning to our first quarter results, ICMB reported net investment income before taxes of $0.3 million or $0.02 per share.

[Suhail Shaikh, President and CEO at Investcorp Credit Management BDC]

Net assets declined approximately 14% sequentially, with net asset value per share decreasing to $2.65 from $4.25 at December 31st. This decline was primarily driven by the change in fair value adjustment, lower investment activity, and higher dividends resulting in non-significant growth in NII. Non-accruals remained consistent with the prior quarter, with five positions on non-accruals representing approximately 6.1% of the portfolio fair value compared to 6.9% last quarter. The portfolio remains diversified across 17 GICS industries, with our largest issuer representing 7.6% of fair value. I would also note that our software exposure remains relatively low at 3.1% of fair value at quarter end. Consistent with our hands-on priorities of capital preservation and liquidity management, new investment activity remained muted during the quarter.

[Suhail Shaikh, President and CEO at Investcorp Credit Management BDC]

For the quarter ended March 31st, we funded an incremental $79,000 under the first term loan C of American Nuts, an existing portfolio company, to support the company's working capital requirements as it executes on its near-term growth initiative. American Nuts provides processing, packaging, sourcing, and procurement services for nut seeds and dried fruits. A yield on this position at cost is approximately 12.6%. On the realization side, we fully exited three portfolio company investments during the quarter, generating total proceeds of approximately $12.7 million with a blended IRR of approximately 10.7%. This included the full repayment of our term loan investment in high-end luxury manufacturing, BBI Holdings, and our position with Insurance Term Loan B debt. I'll now turn the call back over to Andrew to review our financial results in more detail.

[Andrew Muns, CFO at Investcorp Credit Management BDC]

Thanks, Suhail. Let me begin by providing you with highlights of our quarterly performance. For the quarter ended March 31st, 2026. The fair value of our portfolio was $151.4 million, compared to $172.7 million on December 31st. Our net assets were $52.7 million, a decrease of $8.6 million from the prior quarter. The quarterly change in net assets consisted of a $0.2 million increase from NII, offset by an $8.8 million decrease from net depreciation of portfolio assets. The weighted average yield of our portfolio, our debt portfolio was 11.95% of fair value, an increase of 139 basis points from the December quarter. As of March 31st, our portfolio consists of 34 borrowers.

[Andrew Muns, CFO at Investcorp Credit Management BDC]

Approximately 83% of our investments were in first lien debt, the remaining 17% was invested in equity, warrants, and other positions. 97.8% of our debt portfolio was invested in floating rate instruments and 2.2% in fixed rate investments. The weighted average cash spread on our floating rate debt investments was 4.5%, relatively unchanged from the prior quarter. The average investment size per portfolio company on a fair market value basis was approximately $4.4 million or approximately 2.9%. Our largest portfolio company investment on a fair market value basis was ArborWorks, $11.6 million or approximately 7.6% of our total fair market value.

[Andrew Muns, CFO at Investcorp Credit Management BDC]

Our largest industry concentrations by fair market value were professional services at 15.7%, commercial services and supplies at 11.2%, diversified consumer services at 9.7%, IT services at 9.2%, and specialty retail at 7.6%. Gross leverage was 2.05x, and net leverage was 1.83x on March 31st, compared to 2.02x gross and 1.78x net, respectively, for the previous quarter. With respect to our liquidity, as of March 31st, we had approximately $11.6 million in cash, of which approximately $8.8 million was restricted cash. In addition, we had $65.1 million of unused commitment under our revolving credit facility with Capital One, of which $3.6 million was available under our borrowing base.

[Andrew Muns, CFO at Investcorp Credit Management BDC]

As discussed previously, subsequent to quarter end, we've reduced our commitment from $100 million to $50 million, which leaves our borrowing base availability unchanged but reduces the ongoing costs as discussed, having a large undrawn fee associated with unneeded availability. Additional information regarding the composition of our portfolio and quarterly financial results are included in our Form 10-Q. With that, I'd like to turn the call back over to Suhail.

[Suhail Shaikh, President and CEO at Investcorp Credit Management BDC]

Thank you, Andrew. As we mentioned in the previous quarter, our priority remains clear: preserving capital and actively managing the portfolio. To summarize, the special committee continues its [audio distortion] to evaluate strategic alternatives to focus on maximizing shareholder value. We appreciate your continued support and look forward to updating you on our progress next quarter. With that, we would like to conclude the call.

[Operator]

This concludes today's conference call. Thank you everyone for attending.

Participants

Executives

• Andrew Muns, CFO
• Suhail Shaikh, President and CEO