OFS Capital Corporation Announces Third Quarter Financial Results
Declares a
FINANCIAL HIGHLIGHTS
-
Net investment income of
$4.4 million , or$0.33 per share. - Closed investments totaled $42.4 million in the third quarter of 2017; as of September 30, 2017, 76% of our loan portfolio was senior secured.
- 73% of the fair value of our loan portfolio was floating rate, and the weighted average yield of our performing loan portfolio was 11.50% as of September 30, 2017(1).
-
At
September 30, 2017 , we had one loan investment on non-accrual. - 90% of our debt is fixed rate with a weighted average cost of 3.43% as of September 30, 2017, with maturities in 2022 and beyond.
-
On
October 31, 2017 ,OFS Capital's Board of Directors declared a distribution of$0.34 per share for the fourth quarter of 2017, payable onDecember 29, 2017 to stockholders of record as ofDecember 15, 2017 .
"We remain focused on generating strong distributions for our
shareholders," said Bilal Rashid, OFS Capital's Chairman and Chief
Executive Officer. "We closed
(1) |
See Highlights contained in this press release for further
information on our weighted average yield. Including assets on non-
accrual, the weighted average yield of our debt investment portfolio
was 11.17% at |
||
HIGHLIGHTS
($ in millions, except for per share data)
Portfolio Overview |
At |
|||||
Total assets | $ | 356.5 | ||||
Investment portfolio, at fair value | $ | 296.6 | ||||
Net assets | $ | 188.7 | ||||
Net asset value per share | $ | 14.15 | ||||
Weighted average yield (1) | 11.50 | % | ||||
Weighted average yield, including loans on non-accrual (1) | 11.17 | % | ||||
(1) | The weighted average yield on our debt investments is computed as (a) the annual stated accruing interest plus the annualized accretion of loan origination fees, original issue discount, market discount or premium, and loan amendment fees, divided by (b) amortized cost of debt investments, excluding assets on non-accrual basis as of the balance sheet date. The weighted average yield of our debt investments is not the same as a return on investment for our stockholders but, rather, relates to a portion of our investment portfolio and is calculated before the payment of all of our fees and expenses. | ||
Quarter ended |
||||||||
Operating Results | 2017 | 2016 | ||||||
Total investment income | $ | 9.1 | $ | 7.4 | ||||
Net investment income | $ | 4.4 | $ | 3.3 | ||||
Net investment income per common share, basic and diluted | $ | 0.33 | $ | 0.34 | ||||
Net increase in net assets resulting from operations per common share, basic and diluted | $ | 0.09 | $ | 0.25 | ||||
Quarter ended |
||||||||
Portfolio Activity | 2017 | 2016 | ||||||
Number of new portfolio companies | 3 | 2 | ||||||
Investments in new portfolio companies | $ | 40.5 | $ | 14.3 | ||||
Investments in existing portfolio companies | $ | 1.9 | $ | 2.1 | ||||
Number of portfolio companies at end of period | 40 | 38 | ||||||
PORTFOLIO AND INVESTMENT ACTIVITIES
During the third quarter of 2017,
The total fair value of OFS Capital's investment portfolio was
RESULTS OF OPERATIONS
Income
Interest Income:
Interest income increased by
Fee Income:
Fee income increased by
Expenses
Interest expense for the three and nine months ended
Management fee expense for the three months ended
Incentive fee expense increased by
Net gain (loss) on investments
Net gain (loss) on investments consists of the sum of: (a) realized gains and losses from the sale of debt or equity securities, or the redemption of equity securities; and (b) changes in net unrealized appreciation/depreciation on debt and equity investments. In the period in which a realized gain or loss is recognized, such gain or loss will generally be offset by the reversal of previously recognized unrealized appreciation or depreciation, and the net gain recognized in that period will generally be smaller. The unrealized appreciation or depreciation on debt securities is also reversed when those investments are redeemed or paid off prior to maturity. In such instances, the reversal of unrealized appreciation or depreciation will be reported as a net loss or gain, respectively, and may be partially offset by the acceleration of any premium or discount on the debt security in interest income and any prepayment fees on the debt security in fee income.
We recognized net losses of
We recognized net losses of
We recognized net gains of
We recognized net gains of
LIQUIDITY AND CAPITAL RESOURCES
At
CONFERENCE CALL
INTERNET: Log on to www.ofscapital.com at least 15 minutes prior to the start time of the call to register, download, and install any necessary audio software. A replay will be available for 90 days on OFS Capital's website at www.ofscapital.com.
TELEPHONE: Dial (877) 510-7674 (Domestic) or (412) 902-4139
(International) approximately 15 minutes prior to the call. A telephone
replay of the conference call will be available through
For more detailed discussion of the financial and other information
included in this press release, please refer to OFS Capital's Form 10-Q
for the third quarter ended
FORWARD-LOOKING STATEMENTS
Statements in this press release regarding management's future
expectations, beliefs, intentions, goals, strategies, plans or
prospects, including statements relating to: OFS Capital's results of
operations, including net investment income, net asset value and net
investment gains and losses and the factors that may affect such
results; management's belief that
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Consolidated Balance Sheets
(Dollar amounts in thousands, except per share data) |
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(unaudited) | |||||||
Assets | |||||||
Investments, at fair value | |||||||
Non-control/non-affiliate investments (amortized cost of |
$ | 212,206 | $ | 173,219 | |||
Affiliate investments (amortized cost of |
73,727 | 81,708 | |||||
Control investments (amortized cost of |
10,697 | 26,700 | |||||
Total investments at fair value (amortized cost of |
296,630 | 281,627 | |||||
Cash and cash equivalents | 53,868 | 17,659 | |||||
Interest receivable | 1,782 | 1,770 | |||||
Prepaid expenses and other assets | 4,229 | 3,974 | |||||
Total assets | $ | 356,509 | $ | 305,030 | |||
Liabilities | |||||||
Revolving line of credit | $ | 17,100 | $ | 9,500 | |||
SBA debentures (net of deferred debt issuance costs of |
147,128 | 146,843 | |||||
Interest payable | 395 | 1,599 | |||||
Management and incentive fees payable | 2,400 | 2,119 | |||||
Administration fee payable | 382 | 435 | |||||
Accrued professional fees | 368 | 477 | |||||
Other liabilities | 80 | 279 | |||||
Total liabilities | 167,853 | 161,252 | |||||
Commitments and Contingencies | |||||||
Net Assets | |||||||
Preferred stock, par value of |
$ | — | $ | — | |||
Common stock, par value of |
133 | 97 | |||||
Paid-in capital in excess of par | 189,278 | 134,300 | |||||
Accumulated undistributed net investment income | 6,942 | 6,731 | |||||
Accumulated undistributed net realized gain (loss) |
(2,269 | ) | 330 | ||||
Accumulated net unrealized appreciation (depreciation) on investments | (5,428 | ) | 2,320 | ||||
Total net assets | 188,656 | 143,778 | |||||
Total liabilities and net assets | $ | 356,509 | $ | 305,030 | |||
Number of shares outstanding | 13,334,851 | 9,700,297 | |||||
Net asset value per share | $ | 14.15 | $ | 14.82 | |||
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Consolidated Statements of Operations (unaudited) (Dollar amounts in thousands, except per share data) |
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Three Months Ended |
Nine Months Ended |
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2017 | 2016 | 2017 | 2016 | |||||||||||||||
Investment income | ||||||||||||||||||
Interest income | ||||||||||||||||||
Non-control/non-affiliate investments | $ | 5,759 | $ | 4,355 | $ | 15,281 | $ | 13,522 | ||||||||||
Affiliate investments | 1,796 | 1,643 | 5,382 | 5,000 | ||||||||||||||
Control investment | 263 | 582 | 1,406 | 1,413 | ||||||||||||||
Total interest income | 7,818 | 6,580 | 22,069 | 19,935 | ||||||||||||||
Dividend income | ||||||||||||||||||
Non-control/non-affiliate investments | 77 | 102 | 289 | 264 | ||||||||||||||
Affiliate investments | 242 | 343 | 944 | 1,166 | ||||||||||||||
Control investments | 92 | 83 | 262 | 194 | ||||||||||||||
Total dividend income | 411 | 528 | 1,495 | 1,624 | ||||||||||||||
Fee income | ||||||||||||||||||
Non-control/non-affiliate investments | 679 | 169 | 1,004 | 1,164 | ||||||||||||||
Affiliate investments | 197 | 48 | 431 | 87 | ||||||||||||||
Control investments | 17 | 34 | 135 | 75 | ||||||||||||||
Total fee income | 893 | 251 | 1,570 | 1,326 | ||||||||||||||
Total investment income | 9,122 | 7,359 | 25,134 | 22,885 | ||||||||||||||
Expenses | ||||||||||||||||||
Interest expense | 1,503 | 1,320 | 4,229 | 3,936 | ||||||||||||||
Management fees | 1,310 | 1,120 | 3,726 | 3,324 | ||||||||||||||
Incentive fee | 1,090 | 817 | 2,249 | 2,407 | ||||||||||||||
Professional fees | 284 | 260 | 840 | 877 | ||||||||||||||
Administration fee | 274 | 255 | 982 | 1,009 | ||||||||||||||
General and administrative expenses | 259 | 290 | 1,050 | 923 | ||||||||||||||
Total expenses | 4,720 | 4,062 | 13,076 | 12,476 | ||||||||||||||
Net investment income | 4,402 | 3,297 | 12,058 | 10,409 | ||||||||||||||
Net realized and unrealized gain (loss) on investments | ||||||||||||||||||
Net realized gain (loss) on non-control/non-affiliate investments | (5,204 | ) | 58 | (5,041 | ) | 2,624 | ||||||||||||
Net realized gain on affiliate investments | 3,617 | — | 4,491 | — | ||||||||||||||
Net unrealized appreciation (depreciation) on non-control/non-affiliate investments | 1,196 | (538 | ) | (7,350 | ) | (3,668 | ) | |||||||||||
Net unrealized appreciation (depreciation) on affiliate investments | (2,901 | ) | (363 | ) | (2,243 | ) | 79 | |||||||||||
Net unrealized appreciation (depreciation) on control investment | 65 | (66 | ) | 1,845 | (439 | ) | ||||||||||||
Net loss on investments | (3,227 | ) | (909 | ) | (8,298 | ) | (1,404 | ) | ||||||||||
Net increase in net assets resulting from operations | $ | 1,175 | $ | 2,388 | $ | 3,760 | $ | 9,005 | ||||||||||
Net investment income per common share - basic and diluted | $ | 0.33 | $ | 0.34 | $ | 1.00 | $ | 1.07 | ||||||||||
Net increase in net assets resulting from operations per common share - basic and diluted | $ | 0.09 | $ | 0.25 | $ | 0.31 | $ | 0.93 | ||||||||||
Distributions declared per common share | $ | 0.34 | $ | 0.34 | $ | 1.02 | $ | 1.02 | ||||||||||
Basic and diluted weighted average shares outstanding | 13,331,690 | 9,694,353 | 12,089,895 | 9,692,634 | ||||||||||||||
ABOUT
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INVESTOR RELATIONS:
saltebrando@ofsmanagement.com
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