 Regular Quarterly Dividend of 0.30 Per Share Declared for Third Quarter 2020EVANSTON, Ill., Aug. 06, 2020 GLOBE NEWSWIRE -- Fidus Investment Corporation NASDAQ:FDUS Fidus or the Company, a provider of customized debt and equity financing solutions, primarily to lower middle-market companies based in the United States, today announced its financial results for the second quarter ended June 30, 2020. Second Quarter 2020 Financial Highlights Total investment income of 20.4 million Net investment income of 9.3 million, or 0.38 per share Adjusted net investment income of 9.0 million, or 0.37 per share1 Net increase in net assets resulting from operations of 8.0 million, or 0.33 per share Invested 16.9 million in debt and equity securities, including two new portfolio companies Received proceeds from repayments and realizations of 2.5 million, recognizing 0.2 million in net realized gains Paid regular quarterly dividend of 0.30 per share on June 26, 2020 Net asset value NAV of 376.2 million, or 15.39 per share, as of June 30, 2020 Estimated spillover income or taxable income in excess of distributions as of June 30, 2020 of 27.4 million, or 1.12 per shareManagement CommentaryOur second quarter performance reflects the strength of our strategy of selectively investing in lower middle market businesses that possess resilient business models and generate excess cash for debt service. Despite ongoing business disruptions and uncertainties associated with the COVID-19 pandemic, our portfolio generated adjusted net investment income of 0.37 with many investments performing materially better than we had expected last quarter, and we were able to remove two of them from non-accrual status, said Edward Ross, Chairman and CEO of Fidus Investment Corporation. Overall, the fair value of the portfolio has stabilized after an approximately 5.7 write-down last quarter and we ended the quarter with NAV per share of 15.39. During this period of challenging economic conditions, we will continue to manage our business conservatively focused on maintaining liquidity and on long-term capital preservation. Supplemental information regarding adjusted net investment income:On a supplemental basis, we provide information relating to adjusted net investment income, which is a non-GAAP measure. This measure is provided in addition to, but not as a substitute for, net investment income. Adjusted net investment income represents net investment income excluding any capital gains incentive fee expense or reversal attributable to realized and unrealized gains and losses. The management agreement with our advisor provides that a capital gains incentive fee is determined and paid annually with respect to cumulative realized capital gains but not unrealized capital gains to the extent such realized capital gains exceed realized and unrealized losses. In addition, we accrue, but do not pay, a capital gains incentive fee in connection with any unrealized capital appreciation, as appropriate. As such, we believe that adjusted net investment income is a useful indicator of operations exclusive of any capital gains incentive fee expense or reversal attributable to realized and unrealized gains and losses. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. Reconciliations of net investment income to adjusted net investment income are set forth in Schedule 1.Second Quarter 2020 Financial ResultsThe following table provides a summary of our operating results for the three months ended June 30, 2020 as compared to the same period in 2019 dollars in thousands, except per share data: Three Months Ended June 30, 2020 2019 Change Change Interest income 18,839 13,847 4,992 36.1 Payment-in-kind interest income 1,181 2,955 1,774 60.0 Dividend income 18 631 613 97.1 Fee income 241 601 360 59.9 Interest on idle funds and other income 154 34 120 352.9 Total investment income 20,433 18,068 2,365 13.1 Net investment income 9,291 9,643 352 3.7 Net investment income per share 0.38 0.39 0.01 2.6 Adjusted net investment income 1 9,028 8,354 674 8.1 Adjusted net investment income per share 1 0.37 0.34 0.03 8.8 Net increase decrease in net assets resulting from operations 7,973 3,202 4,771 149.0 Net increase decrease in net assets resulting from operations per share 0.33 0.13 0.20 153.8 The 2.4 million increase in total investment income for the three months ended June 30, 2020 as compared to the same period in 2019 was primarily attributable to i a 3.2 million increase in total interest income which includes a 1.8 million decrease in payment-in-kind interest income resulting from higher average debt investment balances outstanding, ii a 0.4 million decrease in fee income resulting from a decrease in structuring fees due to a comparative decrease in new investments, a decrease in prepayment fee income, partially offset by an increase in amendment fees, and iii a 0.6 million decrease in dividend income. For the three months ended June 30, 2020, total expenses, including the incentive fee waiver and income tax provision, were 11.1 million, an increase of 2.7 million, or 32.2, from the 8.4 million of total expenses, including the incentive fee waiver and income tax provision, for the three months ended June 30, 2019. The increase was primarily attributable to i a 1.0 million increase in capital gains incentive fee accrued, ii a 0.8 million increase in interest and financing expenses due to an increase in average borrowings outstanding iii a 0.4 increase in income incentive fee net of a one-time incentive fee waiver, iv a 0.2 million increase in the base management fee due to higher average total assets, and v a 0.2 million increase in professional fees.Net investment income decreased by 0.3 million, or 3.7 to 9.3 million during the three months ended June 30, 2020 as compared to the same period in 2019, as a result of the 2.7 million increase in total expenses including incentive fee waiver and income tax provision, partially offset by the 2.4 million increase in total investment income. Adjusted net investment income1, which excludes the capital gains incentive fee accrual, increased by 0.7 million, or 8.1, to 9.0 million.For the three months ended June 30, 2020, the total net realized gain on investments, net of income tax provision on realized gains, was 0.2 million, as compared to total net realized loss on investments, net of income tax provision on realized losses, of 0.4 million for the same period in 2019.Portfolio and Investment ActivitiesAs of June 30, 2020, the fair value of our investment portfolio totaled 732.6 million and consisted of 64 active portfolio companies and three portfolio companies that have sold their underlying operations. Our total portfolio investments at fair value were approximately 98.2 of the related cost basis as of June 30, 2020. As of June 30, 2020, 20 portfolio companies debt investments bore interest at a variable rate, which represented 210.3 million, or 32.0, of our debt investment portfolio on a fair value basis, and the remainder of our debt investment portfolio was comprised of fixed rate investments. As of June 30, 2020, our average active portfolio company investment at amortized cost was 11.6 million, which excludes investments in the three portfolio companies that have sold their underlying operations. The weighted average yield on debt investments was 12.0 as of June 30, 2020. The weighted average yield was computed using the effective interest rates for debt investments at cost as of June 30, 2020, including the accretion of OID and loan origination fees, but excluding investments on non-accrual status, if any.Second quarter 2020 investment activity included the following new portfolio company investments: ECM Industries, LLC a global manufacturer and supplier of electrical products through a wide range of premium brands. Fidus invested 12.5 million in subordinated debt and common equity. Ipro Tech, LLC a provider of end-to-end eDiscovery and information governance software to top law firms, corporations, and specialty service providers. Fidus invested 2.5 million in first lien debt.As of June 30, 2020, we had debt investments in one portfolio company on non-accrual status and a debt investment in one portfolio company on PIK-only non-accrual status, which had an aggregate cost and fair value of 41.6 million and 21.4 million, respectively.Liquidity and Capital ResourcesAs of June 30, 2020, we had 19.3 million in cash and cash equivalents and 57.0 million of unused capacity under our senior secured revolving credit facility the Credit Facility. As of June 30, 2020, we had SBA debentures outstanding of 156.5 million, 50.0 million outstanding of our 5.875 notes due 2023 the 2023 Notes, 69.0 million outstanding of our 6.000 notes due 2024, 63.3 million outstanding of our 5.375 notes due 2024 the November 2024 Notes and collectively with the 2023 Notes and February 2024 Notes, the Public Notes, and 43.0 million outstanding under our Credit Facility. As of June 30, 2020, the weighted average interest rate on total debt outstanding was 4.5.Subsequent EventsOn July 2, 2020, the Company exited its debt investment in Hoonuit, LLC. The Company received payment in full of 7.3 million on its first lien debt, which includes a prepayment penalty. 