OFS Capital Corporation Announces First Quarter 2019 Financial Results
Net Investment Income of
Declares 26th Consecutive
FINANCIAL HIGHLIGHTS
-
Net investment income of
$4.83 million , or$0.36 per share, an increase of 24% year-over-year and above the$0.34 quarterly distribution. -
Closed investments in the first quarter of 2019
totaled approximately
$63.6 million . -
Net asset value ("NAV") per share decreased to
$13.04 atMarch 31, 2019 from$13.10 atDecember 31, 2018 due to unrealized depreciation of the portfolio. No new non-accruals. -
At
March 31, 2019 , 88% of our loan portfolio consisted of senior secured loans, based on fair value. -
As of
March 31, 2019 , our total debt was 87% fixed rate and 87% of our debt matures in 2024 and beyond. -
On
April 30, 2019, OFS Capital's Board of Directors declared a distribution of$0.34 per share for the second quarter of 2019, payable onJune 28, 2019 to stockholders of record as ofJune 21, 2019 .
"Our net investment income again exceeded our distribution," said
We are working to establish an additional credit facility, which if consummated, would enable the Company to benefit from the incremental leverage permitted under last years’ Small Business Credit Availability Act.”
HIGHLIGHTS
($ in millions, except for per share data)
Portfolio Overview | At March 31, 2019 | ||||
Total assets | $ | 460.2 | |||
Investment portfolio, at fair value | $ | 437.7 | |||
Net assets | $ | 174.3 | |||
Net asset value per share | $ | 13.04 | |||
Weighted average yield on performing debt investments (1) | 11.80 | % | |||
Weighted average yield on total debt investments (2) | 11.45 | % | |||
Weighted average yield on total investments (3) | 10.74 | % | |||
(1) | The weighted average yield on our performing debt and structured finance note investments is computed as (a) the sum of (i) the annual stated accruing interest on our debt investments plus the annualized accretion of loan origination fees, original issue discount, market discount or premium, and loan amendment fees at the balance sheet date, plus the annual effective yield on our structured finance notes at the balance sheet date divided by (b) amortized cost of our debt and structured finance note investments, excluding assets on non-accrual basis as of the balance sheet date. | |
(2) | The weighted average yield on our total debt and structured finance note investments is computed as (a) the sum of (i) the annual stated accruing interest plus the annualized accretion of loan origination fees, original issue discount, market discount or premium, and loan amendment fees on our debt investments at the balance sheet date, plus the annual effective yield on our structured finance notes at the balance sheet date divided by (b) amortized cost of our debt and structured finance note investments, including assets on non-accrual basis as of the balance sheet date. | |
(3) | The weighted average yield on total 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 on our debt investments at the balance sheet date, plus the annual effective yield on our structured finance notes at the balance sheet date, plus the effective cash yield on our performing preferred equity investments divided by (b) amortized cost of our total investment portfolio, including assets on non-accrual basis as of the balance sheet date. The weighted average yield of 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 March 31, |
||||||||
Operating Results | 2019 | 2018 | ||||||
Total investment income | $ | 12.3 | $ | 9.0 | ||||
Net investment income | $ | 4.8 | $ | 3.8 | ||||
Net investment income per common share, basic and diluted | $ | 0.36 | $ | 0.29 | ||||
Net increase in net assets resulting from operations |
$ |
3.7 |
$ |
3.5 |
||||
Quarter Ended March 31, |
||||||||
Portfolio Activity | 2019 | 2018 | ||||||
Number of new portfolio companies | 3 | 7 | ||||||
Investments in new portfolio companies | $ | 35.6 | $ | 73.0 | ||||
Investments in existing portfolio companies | $ | 12.7 | $ | 25.2 | ||||
Investments in structured finance notes | $ | 15.3 | $ | — | ||||
Number of portfolio companies at end of period | 51 | 39 | ||||||
PORTFOLIO AND INVESTMENT ACTIVITIES
During the first quarter of 2019,
The total fair value of OFS Capital’s investment portfolio was
RESULTS OF OPERATIONS
Income
Investment Income
Interest income increased by
Expenses
Interest expense
Interest expense for the three months ended
Management fee
Management fee expense for the three months ended
Incentive fee
Incentive fee expense increased by
Administration fee
Administration fee expense for the three months ended
Net Gain (Loss) on Investments
We recognized net losses of
We recognized net gains of
We recognized net losses of
We recognized net gains of
We recognized net gains of
LIQUIDITY AND CAPITAL RESOURCES
At
RECENT DEVELOPMENTS
Amendment to the PWB Credit Facility
On
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 (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
OFS Capital Corporation and Subsidiaries |
||||||||||
March 31, 2019 |
December 31, 2018 |
|||||||||
(unaudited) | ||||||||||
Assets | ||||||||||
Investments, at fair value: | ||||||||||
Non-control/non-affiliate investments (amortized cost of $323,794
and $312,223, |
$ | 310,090 | $ | 297,749 | ||||||
Affiliate investments (amortized cost of $120,199 and $90,751, respectively) | 117,431 | 89,103 | ||||||||
Control investments (amortized cost of $10,368 and $10,337, respectively) | 10,146 | 9,945 | ||||||||
Total investments at fair value (amortized cost of $454,361 and $413,311, respectively) | 437,667 | 396,797 | ||||||||
Cash | 15,156 | 38,172 | ||||||||
Interest receivable | 3,787 | 2,787 | ||||||||
Prepaid expenses and other assets | 3,592 | 3,665 | ||||||||
Total assets | $ | 460,202 | $ | 441,421 | ||||||
Liabilities | ||||||||||
Revolving line of credit | $ | 35,750 | $ | 12,000 | ||||||
SBA debentures (net of deferred debt issuance costs of $2,188 and $2,280, respectively) | 147,692 | 147,600 | ||||||||
Unsecured notes (net of deferred debt issuance costs of $3,176 and $3,299 respectively) | 95,349 | 95,226 | ||||||||
Interest payable | 1,478 | 2,791 | ||||||||
Payable to adviser and affiliates | 3,767 | 3,700 | ||||||||
Payable for investments purchased | 1,027 | 4,151 | ||||||||
Accrued professional fees | 662 | 637 | ||||||||
Other liabilities | 219 | 293 | ||||||||
Total liabilities | 285,944 | 266,398 | ||||||||
Commitments and contingencies | ||||||||||
Net assets | ||||||||||
Preferred stock, par value of $0.01 per share, 2,000,000 shares
authorized, -0- shares |
$ | — | $ | — | ||||||
Common stock, par value of $0.01 per share, 100,000,000 shares
authorized, 13,361,134 |
134 | 134 | ||||||||
Paid-in capital in excess of par | 187,604 | 187,540 | ||||||||
Total distributable earnings (losses) | (13,480 | ) | (12,651 | ) | ||||||
Total net assets | 174,258 | 175,023 | ||||||||
Total liabilities and net assets | $ | 460,202 | $ | 441,421 | ||||||
Number of shares outstanding | 13,361,134 | 13,357,337 | ||||||||
Net asset value per share | $ | 13.04 | $ | 13.10 | ||||||
OFS Capital Corporation and Subsidiaries |
|||||||||
Three Months Ended |
|||||||||
2019 | 2018 | ||||||||
Investment income | |||||||||
Interest income: | |||||||||
Non-control/non-affiliate investments | $ | 8,642 | $ | 5,758 | |||||
Affiliate investments | 2,333 | 2,085 | |||||||
Control investment | 259 | 239 | |||||||
Total interest income | 11,234 | 8,082 | |||||||
Payment-in-kind interest and dividend income: | |||||||||
Non-control/non-affiliate investments | 97 | 224 | |||||||
Affiliate investments | 252 | 461 | |||||||
Control investment | 27 | 27 | |||||||
Total payment-in-kind interest and dividend income | 376 | 712 | |||||||
Dividend income: | |||||||||
Affiliate investments | 173 | 130 | |||||||
Control investment | — | 33 | |||||||
Total dividend income | 173 | 163 | |||||||
Fee income: | |||||||||
Non-control/non-affiliate investments | 342 | 26 | |||||||
Affiliate investments | 205 | 2 | |||||||
Control investment | 15 | 18 | |||||||
Total fee income | 562 | 46 | |||||||
Total investment income | 12,345 | 9,003 | |||||||
Expenses | |||||||||
Interest and financing expense | 3,455 | 1,634 | |||||||
Management fee | 1,843 | 1,360 | |||||||
Incentive fee | 1,163 | 736 | |||||||
Professional fees | 535 | 201 | |||||||
Administration fee | 437 | 583 | |||||||
Other expenses | 84 | 695 | |||||||
Total expenses before incentive fee waiver | 7,517 | 5,209 | |||||||
Incentive fee waiver | — | (22 | ) | ||||||
Total expenses, net of incentive fee waiver | 7,517 | 5,187 | |||||||
Net investment income | 4,828 | 3,816 | |||||||
Net realized and unrealized gain (loss) on investments | |||||||||
Net realized gain (loss) on non-control/non-affiliate investments | (804 | ) | 461 | ||||||
Net realized loss on affiliate investments | — | (541 | ) | ||||||
Net unrealized appreciation (depreciation) on non-control/non-affiliate investments | 658 | (1,563 | ) | ||||||
Net unrealized appreciation (depreciation) on affiliate investments | (1,120 | ) | 1,245 | ||||||
Net unrealized appreciation on control investment | 170 | 75 | |||||||
Net loss on investments | (1,096 | ) | (323 | ) | |||||
Net increase in net assets resulting from operations | $ | 3,732 | $ | 3,493 | |||||
Net investment income per common share – basic and diluted | $ | 0.36 | $ | 0.29 | |||||
Net increase in net assets resulting from operations per common share – basic and diluted | $ | 0.28 | $ | 0.26 | |||||
Distributions declared per common share | $ | 0.34 | $ | 0.71 | |||||
Basic and diluted weighted average shares outstanding | 13,357,464 | 13,340,502 |
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; the Company's efforts to establish an additional credit
facility and the Company's ability to benefit from increased leverage
permitted under the Small Business Credit Availability Act, when there
can be no assurance that such a facility will be consummated or that the
Company can benefit from additional leverage; 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: https://www.businesswire.com/news/home/20190503005080/en/
Source:
INVESTOR RELATIONS:
Steve Altebrando
646-652-8473
saltebrando@ofsmanagement.com