OFS Capital Corporation Announces First Quarter Financial Results
Declares a
FINANCIAL HIGHLIGHTS
-
Net investment income of
$3.3 million , or$0.34 per share. -
Adjusted net investment income of
$3.6 million , or$0.37 per share, which approximated 110% of our distribution for the first quarter, representing the eighth straight quarter our adjusted net investment income covered the distribution(1). - Net asset value ("NAV") increased to $14.98 per share at March 31, 2017 from $14.82 per share at December 31, 2016 and there were no cash non-accruals.
- Two-thirds of our loan portfolio was floating rate and the weighted average yield of our loan portfolio was 12.03% as of March 31, 2017.
- 100% of our debt is fixed rate with a weighted average cost of 3.60% as of March 31, 2017; 95% of our debt matures in 2022 and beyond.
-
Closed investments totaled $6.1 million in the first quarter of 2017;
as of
May 5, 2017 , we closed approximately$29.0 million of additional new investments during the second quarter of 2017. -
On
May 2, 2017 ,OFS Capital's Board of Directors declared a distribution of$0.34 per share for the second quarter of 2017, payable onJune 30, 2017 to stockholders of record as ofJune 16, 2017 .
"We are pleased that our NAV increased from the end of 2016," said Bilal
Rashid, OFS Capital's Chairman and Chief Executive Officer. "At the end
of the first quarter, we raised approximately
(1) Supplemental information regarding adjusted net investment income:
On a supplemental basis, we disclose adjusted net investment income
("Adjusted NII") (including on a per share basis), which is a financial
measure calculated and presented on a basis of methodology other than in
accordance with generally accepted accounting principles of
HIGHLIGHTS |
||||
($ in millions, except for per share data) |
||||
Portfolio Overview |
At |
|||
Total assets | $ | 307.4 | ||
Investment portfolio, at fair value | $ | 258.3 | ||
Net assets | $ | 145.4 | ||
Net asset value per share | $ | 14.98 | ||
Weighted average yield (1) | 12.03 | % | ||
(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 | $ | 8.0 | $ | 7.8 | |||
Net investment income | $ | 3.3 | $ | 3.7 | |||
Net investment income per common share, basic and diluted | $ | 0.34 | $ | 0.38 | |||
Adjusted net investment income (a Non-GAAP measure described below) | $ | 3.6 | $ | 3.5 | |||
Adjusted net investment income (a Non-GAAP measure described below) per share, basic and diluted | $ | 0.37 | $ | 0.36 | |||
Net increase in net assets resulting from operations | $ | 4.9 | $ | 2.3 | |||
Quarter ended |
|||||||
Portfolio Activity | 2017 | 2016 | |||||
Number of new portfolio companies | — | — | |||||
Investments in new portfolio companies | $ | — | $ | — | |||
Investments in existing portfolio companies | $ | 6.1 | $ | 6.5 | |||
Number of portfolio companies at end of period | 38 | 36 | |||||
PORTFOLIO AND INVESTMENT ACTIVITIES
During the first quarter of 2017,
The total fair value of OFS Capital's investment portfolio was
RESULTS OF OPERATIONS
Interest Income:
Interest income increased by
Fee Income:
Fee income decreased by
Expenses
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 on 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
RECENT DEVELOPMENTS
In
CONFERENCE CALL
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 first quarter ended
|
|||||||
Consolidated Balance Sheets |
|||||||
(Dollar amounts in thousands, except per share data) |
|||||||
2017 |
2016 |
||||||
(unaudited) | |||||||
Assets | |||||||
Investments, at fair value: | |||||||
Non-control/non-affiliate investments (amortized cost of |
$ | 146,989 | $ | 173,219 | |||
Affiliate investments (amortized cost of |
84,140 | 81,708 | |||||
Control investments (amortized cost of |
27,182 | 26,700 | |||||
Total investments at fair value (amortized cost of |
258,311 | 281,627 | |||||
Cash and cash equivalents | 44,087 | 17,659 | |||||
Interest receivable | 1,064 | 1,770 | |||||
Prepaid expenses and other assets | 3,967 | 3,974 | |||||
Total assets | $ | 307,429 | $ | 305,030 | |||
Liabilities | |||||||
Revolving line of credit | $ | 8,000 | $ | 9,500 | |||
SBA debentures (net of deferred debt issuance costs of |
146,938 | 146,843 | |||||
Interest payable | 410 | 1,599 | |||||
Management and incentive fees payable | 2,374 | 2,119 | |||||
Administration fee payable | 587 | 435 | |||||
Payable for investment purchased | 2,943 | — | |||||
Accrued professional fees | 656 | 477 | |||||
Other liabilities | 134 | 279 | |||||
Total liabilities | 162,042 | 161,252 | |||||
Commitments and Contingencies | |||||||
Net assets | |||||||
Preferred stock, par value of |
|||||||
issued and outstanding as of |
$ | — | $ | — | |||
Common stock, par value of |
|||||||
and 9,700,297 shares issued and outstanding as of |
|||||||
|
97 | 97 | |||||
Paid-in capital in excess of par | 134,359 | 134,300 | |||||
Accumulated undistributed net investment income | 6,786 | 6,731 | |||||
Accumulated undistributed net realized gain | 299 | 330 | |||||
Net unrealized appreciation on investments | 3,846 | 2,320 | |||||
Total net assets | 145,387 | 143,778 | |||||
Total liabilities and net assets | $ | 307,429 | $ | 305,030 | |||
Number of shares outstanding | 9,703,216 | 9,700,297 | |||||
Net asset value per share | $ | 14.98 | $ | 14.82 |
|
|||||||
Consolidated Statements of Operations (unaudited) |
|||||||
(Dollar amounts in thousands, except per share data) |
|||||||
Three Months Ended |
|||||||
2017 | 2016 | ||||||
Investment income | |||||||
Interest income: | |||||||
Non-control/non-affiliate investments | $ | 4,841 | $ | 4,736 | |||
Affiliate investments | 1,878 | 1,686 | |||||
Control investment | 562 | 341 | |||||
Total interest income | 7,281 | 6,763 | |||||
Dividend income: | |||||||
Non-control/non-affiliate investments | 83 | 28 | |||||
Affiliate investments | 390 | 529 | |||||
Control investments | 33 | — | |||||
Total dividend income | 506 | 557 | |||||
Fee income: | |||||||
Non-control/non-affiliate investments | 156 | 478 | |||||
Affiliate investments | 58 | 32 | |||||
Control investments | 33 | 13 | |||||
Total fee income | 247 | 523 | |||||
Total investment income | 8,034 | 7,843 | |||||
Expenses | |||||||
Interest expense | 1,387 | 1,308 | |||||
Management fees | 1,192 | 1,115 | |||||
Incentive fee | 1,181 | 733 | |||||
Professional fees | 263 | 314 | |||||
Administration fee | 401 | 428 | |||||
General and administrative expenses | 270 | 290 | |||||
Total expenses | 4,694 | 4,188 | |||||
Net investment income | 3,340 | 3,655 | |||||
Net realized and unrealized gain (loss) on investments | |||||||
Net realized gain on non-control/non-affiliate investments | — | 2,566 | |||||
Net change in unrealized appreciation/depreciation on non-control/non-affiliate investments | (3,041 | ) | (4,092 | ) | |||
Net change in unrealized appreciation/depreciation on affiliate investments | 4,024 | 146 | |||||
Net change in unrealized appreciation/depreciation on control investment | 543 | 4 | |||||
Net gain (loss) on investments | 1,526 | (1,376 | ) | ||||
Net increase in net assets resulting from operations | $ | 4,866 | $ | 2,279 | |||
Net investment income per common share - basic and diluted | $ | 0.34 | $ | 0.38 | |||
Net increase in net assets resulting from operations per common share - basic and diluted | $ | 0.50 | $ | 0.24 | |||
Distributions declared per common share | $ | 0.34 | $ | 0.34 | |||
Basic and diluted weighted average shares outstanding | 9,700,329 | 9,691,183 | |||||
Schedule I
Non-GAAP Financial Measure - Adjusted NII
On a supplemental basis, we disclose Adjusted NII (including on a per share basis), which is a financial measure calculated and presented on a non-GAAP basis. Adjusted NII represents net investment income excluding the net capital gains incentive fee (fee adjustments) in periods in which they occur. Our management agreement with OFS Advisor provides that a capital gains incentive fee is determined and paid annually with respect to realized capital gains (but not unrealized capital gains) to the extent such realized capital gains exceed realized and unrealized capital losses for such year. Management believes that Adjusted NII is a useful indicator of operations exclusive of any net capital gains incentive fee, as net investment income does not include gains associated with the capital gains incentive fee. In addition, management believes that providing Adjusted NII may facilitate a more complete analysis and greater transparency into OFS Capital's ongoing operations, particularly in comparing underlying results from period to period, and afford investors a view of results that may be more easily compared to those of other companies.
The following table provides a reconciliation from net investment income (the most comparable GAAP measure) to Adjusted NII for the periods presented (dollar amounts in thousands, except per share data):
Quarter ended |
||||||||
2017 | 2016 | |||||||
Net investment income | $ | 3,340 | $ | 3,655 | ||||
Capital gains incentive fee | 283 | (139 | ) | |||||
Adjusted net investment income | $ | 3,623 | $ | 3,516 | ||||
Adjusted net investment income per common share: | ||||||||
Basic and diluted | $ | 0.37 | $ | 0.36 | ||||
Weighted average shares outstanding: | ||||||||
Basic and diluted | 9,700,329 | 9,691,183 | ||||||
ABOUT
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 a larger equity base improves the
Company's risk profile and scale; the strength of the direct origination
and underwriting platform; and other factors may constitute
forward-looking statements for purposes of the safe harbor protection
under applicable securities laws. Forward-looking statements can be
identified by terminology such as "anticipate," "believe," "could,"
"could increase the likelihood," "estimate," "expect," "intend," "is
planned," "may," "should," "will," "will enable," "would be expected,"
"look forward," "may provide," "would" or similar terms, variations of
such terms or the negative of those terms. Such forward-looking
statements involve known and unknown risks, uncertainties and other
factors including those risks, uncertainties and factors referred to in
OFS Capital's Annual Report on Form 10-K for the year ended
View source version on businesswire.com: http://www.businesswire.com/news/home/20170505005203/en/
Investor Relations:
saltebrando@ofsmanagement.com
Source:
News Provided by Acquire Media