OFS Capital Corporation Announces Third Quarter 2023 Financial Results
Declares Fourth Quarter Distribution of
THIRD QUARTER FINANCIAL HIGHLIGHTS
-
Net investment income increased to
$0.40 per common share for the quarter endedSeptember 30, 2023 from$0.38 per common share for the quarter endedJune 30, 2023 . -
Net loss on investments of
$0.25 per common share for the quarter endedSeptember 30, 2023 , primarily comprised of net unrealized depreciation. -
Net asset value (“NAV”) per common share of
$12.74 , as ofSeptember 30, 2023 . -
As of
September 30, 2023 , based on fair value, 94% of our loan portfolio consisted of floating rate loans and approximately 99% of our loan portfolio consisted of senior secured loans. -
For the quarter ended
September 30, 2023 , the investment portfolio’s weighted-average performing income yield increased to 14.6% from 13.8% during the prior quarter, primarily due to non-recurring interest income.
OTHER RECENT EVENTS
-
On
October 31, 2023 , our Board of Directors declared a distribution of$0.34 per common share for the fourth quarter of 2023, payable onDecember 29, 2023 to stockholders of record as ofDecember 22, 2023 .
SELECTED FINANCIAL HIGHLIGHTS (unaudited) |
Three Months Ended |
||||||
(Per common share) |
|
|
|
||||
Net Investment Income |
|
|
|
||||
Net investment income |
$ |
0.40 |
|
|
$ |
0.38 |
|
|
|
|
|
||||
Net Realized/Unrealized Gain (Loss) |
|
|
|
||||
Net realized gain (loss) on investments, net of taxes |
$ |
0.01 |
|
|
$ |
(0.78 |
) |
Net unrealized appreciation (depreciation) on investments, net of taxes |
|
(0.26 |
) |
|
|
0.25 |
|
Loss on extinguishment of debt |
|
(0.01 |
) |
|
|
— |
|
Net realized/unrealized loss |
$ |
(0.26 |
) |
|
$ |
(0.53 |
) |
|
|
|
|
||||
Earnings (Loss) |
|
|
|
||||
Earnings (loss) |
$ |
0.14 |
|
|
$ |
(0.15 |
) |
|
|
|
|
||||
Net Asset Value |
|
|
|
||||
Net asset value |
$ |
12.74 |
|
|
$ |
12.94 |
|
Distributions paid |
$ |
0.34 |
|
|
$ |
0.33 |
|
|
As of |
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(in millions) |
|
|
|
||
Balance Sheet Highlights (unaudited) |
|
|
|
||
Investment portfolio, at fair value |
$ |
457.2 |
|
$ |
494.6 |
Total assets |
|
477.0 |
|
|
505.9 |
Net assets |
|
170.7 |
|
|
173.4 |
“We are pleased to announce our fourth consecutive increase in our quarterly net investment income,” said
PORTFOLIO AND INVESTMENT ACTIVITIES ($ in millions) |
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|
|
As of and for the Three Months Ended |
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Portfolio Overview |
|
|
|
|
||||
Average performing interest-bearing investments, at cost |
|
$ |
388.5 |
|
|
$ |
406.5 |
|
Weighted-average performing income yield - interest-bearing investments(1) |
|
|
14.6 |
% |
|
|
13.8 |
% |
Weighted-average realized yield - interest-bearing investments(2) |
|
|
13.3 |
% |
|
|
12.5 |
% |
For the three months ended
(1) |
Performing income yield is calculated as (a) the actual amount earned on performing interest-bearing investments, including interest, prepayment fees and amortization of net loan fees, divided by (b) the weighted-average of total performing interest-bearing investments at amortized cost. |
|
(2) |
Realized yield is calculated as (a) the actual amount earned on interest-bearing investments, including interest, prepayment fees and amortization of net loan fees, divided by (b) the weighted-average of total interest-bearing investments at amortized cost, in each case, including debt investments on non-accrual status and non-income producing structured finance securities. |
|
|
Three Months Ended |
||||
Portfolio Activity |
|
|
|
|
||
Investments in debt and equity investments |
|
$ |
0.7 |
|
$ |
16.4 |
Investments in structured finance securities |
|
|
7.6 |
|
|
— |
Total investment purchases and originations |
|
$ |
8.3 |
|
$ |
16.4 |
As of
-
Total investments of
$457.2 million , which was equal to approximately 106% of amortized cost; -
Debt investments of
$279.2 million in 43 portfolio companies; -
Equity investments of
$94.7 million in 15 portfolio companies; -
Structured finance securities of
$83.3 million in 23 investments; and -
Unfunded commitments of
$14.1 million to 9 portfolio companies.
During the quarter ended
RESULTS OF OPERATIONS
Investment Income
For the quarter ended
Expenses
For the quarter ended
For the quarter ended
LIQUIDITY AND CAPITAL RESOURCES
As of
As of
CONFERENCE CALL
INTERNET: Go 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 (844) 763-8274 (Domestic) or (412) 717-9224 (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
Consolidated Statements of Assets and Liabilities (Dollar amounts in thousands, except per share data) |
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|
|
|
|
||||
|
(unaudited) |
|
|
||||
Assets |
|
|
|
||||
Total investments, at fair value (amortized cost of |
$ |
457,247 |
|
|
$ |
500,576 |
|
Cash |
|
15,942 |
|
|
|
14,937 |
|
Interest receivable |
|
1,779 |
|
|
|
2,202 |
|
Prepaid expenses and other assets |
|
2,014 |
|
|
|
3,002 |
|
Total assets |
$ |
476,982 |
|
|
$ |
520,717 |
|
|
|
|
|
||||
Liabilities |
|
|
|
||||
Revolving lines of credit |
$ |
91,100 |
|
|
$ |
104,700 |
|
SBA debentures (net of deferred debt issuance costs of |
|
31,870 |
|
|
|
50,697 |
|
Unsecured Notes (net of deferred debt issuance costs of |
|
177,088 |
|
|
|
176,353 |
|
Interest payable |
|
1,990 |
|
|
|
3,947 |
|
Payable to adviser and affiliates |
|
3,797 |
|
|
|
3,909 |
|
Accrued professional fees |
|
321 |
|
|
|
444 |
|
Other liabilities |
|
148 |
|
|
|
244 |
|
Total liabilities |
|
306,314 |
|
|
|
340,294 |
|
|
|
|
|
||||
Net assets |
|
|
|
||||
Preferred stock, par value of |
$ |
— |
|
|
$ |
— |
|
Common stock, par value of |
|
134 |
|
|
|
134 |
|
Paid-in capital in excess of par |
|
184,841 |
|
|
|
184,841 |
|
Total distributable losses |
|
(14,307 |
) |
|
|
(4,552 |
) |
Total net assets |
|
170,668 |
|
|
|
180,423 |
|
|
|
|
|
||||
Total liabilities and net assets |
$ |
476,982 |
|
|
$ |
520,717 |
|
|
|
|
|
||||
Number of shares outstanding |
|
13,398,078 |
|
|
|
13,398,078 |
|
Net asset value per share |
$ |
12.74 |
|
|
$ |
13.47 |
|
Consolidated Statements of Operations (unaudited) (Dollar amounts in thousands, except per share data) |
|||||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Investment income |
|
|
|
|
|
|
|
||||||||
Interest income |
$ |
14,291 |
|
|
$ |
12,550 |
|
|
$ |
41,785 |
|
|
$ |
32,738 |
|
Dividend income |
|
334 |
|
|
|
279 |
|
|
|
1,453 |
|
|
|
1,042 |
|
Fee income |
|
26 |
|
|
|
539 |
|
|
|
222 |
|
|
|
966 |
|
Total investment income |
|
14,651 |
|
|
|
13,368 |
|
|
|
43,460 |
|
|
|
34,746 |
|
Expenses |
|
|
|
|
|
|
|
||||||||
Interest expense |
|
4,913 |
|
|
|
4,657 |
|
|
|
14,798 |
|
|
|
12,224 |
|
Management fee |
|
1,796 |
|
|
|
1,986 |
|
|
|
5,573 |
|
|
|
6,062 |
|
Income Incentive Fee |
|
1,348 |
|
|
|
1,093 |
|
|
|
3,866 |
|
|
|
1,093 |
|
Capital Gains Fee |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,916 |
) |
Professional fees |
|
397 |
|
|
|
396 |
|
|
|
1,262 |
|
|
|
1,155 |
|
Administration fee |
|
380 |
|
|
|
435 |
|
|
|
1,302 |
|
|
|
1,309 |
|
Other expenses |
|
427 |
|
|
|
429 |
|
|
|
1,196 |
|
|
|
1,194 |
|
Total expenses |
|
9,261 |
|
|
|
8,996 |
|
|
|
27,997 |
|
|
|
21,121 |
|
Net investment income |
|
5,390 |
|
|
|
4,372 |
|
|
|
15,463 |
|
|
|
13,625 |
|
Net realized and unrealized gain (loss) on investments |
|
|
|
|
|
|
|
||||||||
Net realized gain (loss), net of taxes |
|
117 |
|
|
|
(530 |
) |
|
|
(10,295 |
) |
|
|
(503 |
) |
Net unrealized depreciation, net of taxes |
|
(3,512 |
) |
|
|
(13,400 |
) |
|
|
(1,312 |
) |
|
|
(22,999 |
) |
Net loss on investments |
|
(3,395 |
) |
|
|
(13,930 |
) |
|
|
(11,607 |
) |
|
|
(23,502 |
) |
Loss on extinguishment of debt |
|
(194 |
) |
|
|
— |
|
|
|
(213 |
) |
|
|
(144 |
) |
Net increase (decrease) in net assets resulting from operations |
$ |
1,801 |
|
|
$ |
(9,558 |
) |
|
$ |
3,643 |
|
|
$ |
(10,021 |
) |
Net investment income per common share – basic and diluted |
$ |
0.40 |
|
|
$ |
0.33 |
|
|
$ |
1.15 |
|
|
$ |
1.01 |
|
Net increase (decrease) in net assets resulting from operations per common share – basic and diluted |
$ |
0.14 |
|
|
$ |
(0.71 |
) |
|
$ |
0.27 |
|
|
$ |
(0.75 |
) |
Distributions declared per common share |
$ |
0.34 |
|
|
$ |
0.29 |
|
|
$ |
1.00 |
|
|
$ |
0.86 |
|
Basic and diluted weighted average shares outstanding |
|
13,398,078 |
|
|
|
13,428,410 |
|
|
|
13,398,078 |
|
|
|
13,425,466 |
|
ABOUT
The Company is an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company. The Company's investment objective is to provide stockholders with both current income and capital appreciation primarily through debt investments and, to a lesser extent, equity investments. The Company invests primarily in privately held middle-market companies in
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 the Company’s balance sheet is well positioned in the current interest rate environment due to a high percentage of floating rate loans in the portfolio and a majority of liabilities that have a fixed rate of interest, when there can be no assurance that such a composition will lead to future success; 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
(3) Registration does not imply a certain level of skill or training
View source version on businesswire.com: https://www.businesswire.com/news/home/20231102024080/en/
INVESTOR RELATIONS CONTACT:
646-652-8473
saltebrando@ofsmanagement.com
Source: