OFS Capital Corporation Announces Third Quarter 2024 Financial Results
OFS Capital (Nasdaq: OFS) reported its Q3 2024 financial results with net investment income increasing to $0.27 per share from $0.26 in Q2 2024. The company experienced a net loss on investments of $0.15 per share, and net asset value decreased to $11.29 from $11.51. The investment portfolio's weighted-average performing income yield improved to 13.6% from 13.4%. The Board declared a Q4 distribution of $0.34 per share. As of September 30, 2024, the portfolio consisted of 91% floating rate loans, with total investments of $394.7 million, comprising debt investments ($231.1M), equity investments ($89.8M), and structured finance securities ($73.8M).
OFS Capital (Nasdaq: OFS) ha riportato i risultati finanziari per il terzo trimestre del 2024, registrando un reddito netto da investimenti aumentato a $0,27 per azione, rispetto a $0,26 nel secondo trimestre del 2024. L'azienda ha subito una perdita netta sugli investimenti di $0,15 per azione e il valore netto degli attivi è diminuito a $11,29 da $11,51. Il rendimento medio ponderato del portafoglio di investimenti è migliorato al 13,6% rispetto al 13,4%. Il Consiglio ha dichiarato una distribuzione per il quarto trimestre di $0,34 per azione. Al 30 settembre 2024, il portafoglio consisteva in prestiti a tasso variabile per il 91%, con investimenti totali di $394,7 milioni, comprendenti investimenti in debito ($231,1 milioni), investimenti in equity ($89,8 milioni) e titoli di finanza strutturata ($73,8 milioni).
OFS Capital (Nasdaq: OFS) informó sobre sus resultados financieros del tercer trimestre de 2024, con un ingreso neto por inversiones que aumentó a $0.27 por acción desde $0.26 en el segundo trimestre de 2024. La empresa experimentó una pérdida neta en inversiones de $0.15 por acción, y el valor neto de los activos disminuyó a $11.29 desde $11.51. El rendimiento promedio ponderado del portafolio de inversiones mejoró al 13.6% desde el 13.4%. La Junta declaró una distribución para el cuarto trimestre de $0.34 por acción. A 30 de septiembre de 2024, el portafolio consistía en un 91% de préstamos a tasa variable, con inversiones totales de $394.7 millones, que incluyen inversiones en deuda ($231.1M), inversiones en capital ($89.8M) y valores de finanzas estructuradas ($73.8M).
OFS Capital (Nasdaq: OFS)는 2024년 3분기 재무 결과를 보고하였으며, 순투자수익이 0.26달러에서 0.27달러로 증가했습니다. 회사는 투자에 대한 순손실이 주당 0.15달러였으며, 순자산가치가 11.51달러에서 11.29달러로 감소했습니다. 투자 포트폴리오의 가중평균 수익률은 13.4%에서 13.6%로 개선되었습니다. 이사회는 4분기에 대한 배당금을 주당 0.34달러로 선언했습니다. 2024년 9월 30일 기준으로, 포트폴리오는 91%가 변동금리 대출로 구성되었으며, 총 투자액은 3억 9470만 달러로, 부채 투자(2억 3110만 달러), 주식 투자(8천980만 달러), 구조화 금융 증권(7천380만 달러)을 포함합니다.
OFS Capital (Nasdaq: OFS) a annoncé ses résultats financiers pour le troisième trimestre de 2024, avec un revenu net d'investissement en hausse à 0,27 $ par action contre 0,26 $ pour le deuxième trimestre de 2024. L'entreprise a enregistré une perte nette sur les investissements de 0,15 $ par action, et la valeur nette des actifs a diminué à 11,29 $ contre 11,51 $. Le rendement moyen pondéré du portefeuille d'investissements s'est amélioré à 13,6 % contre 13,4 %. Le Conseil a déclaré une distribution de 0,34 $ par action pour le quatrième trimestre. Au 30 septembre 2024, le portefeuille se composait de 91 % de prêts à taux variable, pour des investissements totaux de 394,7 millions de dollars, comprenant des investissements en dette (231,1 millions de dollars), des investissements en actions (89,8 millions de dollars) et des titres de finance structurée (73,8 millions de dollars).
OFS Capital (Nasdaq: OFS) hat seine finanziellen Ergebnisse für das 3. Quartal 2024 bekannt gegeben, wobei das Nettoergebnis aus Investitionen auf 0,27 USD pro Aktie von 0,26 USD im 2. Quartal 2024 gestiegen ist. Das Unternehmen erlitten einen Nettoverlust aus Investitionen von 0,15 USD pro Aktie, und der Nettovermögenswert sank auf 11,29 USD von 11,51 USD. Die gewichtete durchschnittliche Ertragsrendite des Investitionsportfolios verbesserte sich auf 13,6% von 13,4%. Der Vorstand erklärte eine Ausschüttung für das 4. Quartal in Höhe von 0,34 USD pro Aktie. Zum 30. September 2024 bestand das Portfolio zu 91% aus variabel verzinsten Krediten, mit Gesamtinvestitionen von 394,7 Millionen USD, bestehend aus Schuldeninvestitionen (231,1 Millionen USD), Eigenkapitalinvestitionen (89,8 Millionen USD) und strukturierten Finanzwertpapieren (73,8 Millionen USD).
- Net investment income increased to $0.27 per share from $0.26 quarter-over-quarter
- Portfolio's weighted-average performing income yield improved to 13.6% from 13.4%
- Maintained stable quarterly distribution of $0.34 per share
- Net asset value decreased to $11.29 from $11.51 per share
- Total investment income decreased to $10.9M from $11.2M quarter-over-quarter
- Reported net loss on investments of $1.9M
- New loan placed on non-accrual status with $4.5M amortized cost
Insights
OFS Capital's Q3 2024 results show mixed performance with some concerning trends. Net investment income increased slightly to
The portfolio yield improvement to
The company maintains solid liquidity with
The credit quality metrics reveal increasing stress in the portfolio. The placement of a new first lien loan on non-accrual and the write-off of a subordinated debt investment signal deteriorating credit conditions. While
The
Declares Fourth Quarter Distribution of
THIRD QUARTER FINANCIAL HIGHLIGHTS
-
Net investment income increased to
per common share for the quarter ended September 30, 2024 from$0.27 per common share for the quarter ended June 30, 2024.$0.26 -
Net loss on investments was
per common share for the quarter ended September 30, 2024. See additional information under “Results of Operations” below.$0.15 -
Net asset value per common share decreased to
as of September 30, 2024 from$11.29 as of June 30, 2024.$11.51 -
As of September 30, 2024, based on fair value,
91% of our loan portfolio consisted of floating rate loans and100% of our loan portfolio consisted of first lien and second lien loans. -
For the quarter ended September 30, 2024, the investment portfolio’s weighted-average performing income yield increased to
13.6% from13.4% during the prior quarter, primarily due to the sale of certain structured finance securities and the redeployment of proceeds into higher yielding CLO subordinated note securities. - The number of issuers with loans on non-accrual status, and the percentage of non-accrual investments to total investments at fair value, remained stable quarter-over-quarter. See additional information under “Portfolio and Investment Activities” below.
OTHER RECENT EVENTS
-
On October 29, 2024, our Board of Directors declared a distribution of
per common share for the fourth quarter of 2024, payable on December 31, 2024 to stockholders of record as of December 20, 2024.$0.34
SELECTED FINANCIAL HIGHLIGHTS (unaudited) |
Three Months Ended |
||||||
(Per common share) |
September 30, 2024 |
|
June 30, 2024 |
||||
Net Investment Income |
|
|
|
||||
Net investment income |
$ |
0.27 |
|
|
$ |
0.26 |
|
|
|
|
|
||||
Net Realized/Unrealized Gain (Loss) |
|
|
|
||||
Net realized loss on investments, net of taxes |
$ |
(0.83 |
) |
|
$ |
(0.32 |
) |
Net unrealized appreciation on investments, net of taxes |
|
0.68 |
|
|
|
0.83 |
|
Net realized/unrealized gain (loss) |
$ |
(0.15 |
) |
|
$ |
0.51 |
|
|
|
|
|
||||
Earnings (Loss) |
|
|
|
||||
Earnings (loss) |
$ |
0.12 |
|
|
$ |
0.77 |
|
|
|
|
|
||||
Net Asset Value |
|
|
|
||||
Net asset value |
$ |
11.29 |
|
|
$ |
11.51 |
|
Distributions paid |
$ |
0.34 |
|
|
$ |
0.34 |
|
|
As of |
||||
(in millions) |
September 30, 2024 |
|
June 30, 2024 |
||
Balance Sheet Highlights (unaudited) |
|
|
|
||
Investment portfolio, at fair value |
$ |
394.7 |
|
$ |
398.2 |
Total assets |
|
418.5 |
|
|
407.9 |
Net assets |
|
151.3 |
|
|
154.2 |
PORTFOLIO AND INVESTMENT ACTIVITIES ($ in millions) |
||||||||
|
|
Three Months Ended |
||||||
Portfolio Yields(1) |
|
September 30, 2024 |
|
June 30, 2024 |
||||
Average performing interest-bearing investments, at cost |
|
$ |
309.4 |
|
|
$ |
322.6 |
|
Weighted-average performing income yield - interest-bearing investments(2) |
|
|
13.6 |
% |
|
|
13.4 |
% |
Weighted-average realized yield - interest-bearing investments(3) |
|
|
11.8 |
% |
|
|
11.8 |
% |
(1) |
The weighted-average yield of our investments is not the same as a return on investment for our stockholders, but rather relates to our investment portfolio and is calculated before the payment of all of our fees and expenses. |
|
(2) |
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. |
|
(3) |
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 Purchase Activity |
|
September 30, 2024 |
|
June 30, 2024 |
||
Investments in debt and equity investments |
|
$ |
30.4 |
|
$ |
5.0 |
Investments in structured finance securities |
|
|
18.0 |
|
|
— |
Total investment purchases and originations |
|
$ |
48.4 |
|
$ |
5.0 |
As of September 30, 2024, based on fair value, our investment portfolio was comprised of the following:
-
Total investments of
, which was equal to approximately$394.7 million 106% of amortized cost; -
Debt investments of
, of which approximately$231.1 million 82% and18% were first lien and second lien loans, respectively; -
Equity investments of
; and$89.8 million -
Structured finance securities of
.$73.8 million
During the quarter ended September 30, 2024, a first lien debt investment with an amortized cost and fair value of
During the quarter ended September 30, 2024, we wrote-off a subordinated debt investment, which was previously on non-accrual status, following a partial-recovery payment of
RESULTS OF OPERATIONS (unaudited) |
|
|
|
|||
(in thousands) |
Three Months Ended |
|||||
|
September 30, 2024 |
|
June 30, 2024 |
|||
Total investment income |
$ |
10,918 |
|
|
$ |
11,165 |
Expenses: |
|
|
|
|||
Interest expense |
|
4,022 |
|
|
|
4,117 |
Base management and incentive fees |
|
2,373 |
|
|
|
2,337 |
Professional, administration and other expenses |
|
920 |
|
|
|
1,274 |
Total expenses |
|
7,315 |
|
|
|
7,728 |
Net investment income |
|
3,603 |
|
|
|
3,437 |
Net gain (loss) on investments |
|
(1,915 |
) |
|
|
6,891 |
Net increase in net assets resulting from operations |
$ |
1,688 |
|
|
$ |
10,328 |
Investment Income
For the quarter ended September 30, 2024, total investment income decreased to
Expenses
For the quarter ended September 30, 2024, total expenses decreased by
Net Gain (Loss) on Investments
For the quarter ended September 30, 2024, we recognized a net loss on investments of
The net realized and unrealized loss of
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2024, we had
As of September 30, 2024, we had no outstanding balance and an unused commitment of
CONFERENCE CALL
OFS Capital will host a conference call to discuss these results on Friday, November 1, 2024, at 10:00 AM Eastern Time. Interested parties may participate in the call via the following:
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 (833) 816-1364 (Domestic) or (412) 317-5699 (International) approximately 15 minutes prior to the call. A telephone replay of the conference call will be available through November 11, 2024 and may be accessed by calling (877) 344-7529 (Domestic) or (412) 317-0088 (International) and utilizing conference ID #5732379.
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 September 30, 2024.
OFS Capital Corporation and Subsidiaries Consolidated Statements of Assets and Liabilities (unaudited) (Dollar amounts in thousands, except per share data) |
|||||||
|
September 30,
|
|
December 31,
|
||||
Assets |
|
|
|
||||
Total investments, at fair value (amortized cost of |
$ |
394,734 |
|
|
$ |
420,287 |
|
Cash and cash equivalents |
|
20,278 |
|
|
|
45,349 |
|
Interest receivable |
|
1,464 |
|
|
|
2,217 |
|
Receivable for investments sold |
|
795 |
|
|
|
— |
|
Prepaid expenses and other assets |
|
1,267 |
|
|
|
1,965 |
|
Total assets |
$ |
418,538 |
|
|
$ |
469,818 |
|
|
|
|
|
||||
Liabilities |
|
|
|
||||
Revolving lines of credit |
$ |
69,100 |
|
|
$ |
90,500 |
|
Unsecured Notes (net of deferred debt issuance costs of |
|
178,067 |
|
|
|
177,333 |
|
SBA debentures (net of deferred debt issuance costs of |
|
— |
|
|
|
31,900 |
|
Interest payable |
|
1,739 |
|
|
|
3,712 |
|
Payable to adviser and affiliates |
|
2,936 |
|
|
|
3,556 |
|
Payable for investments purchased |
|
14,680 |
|
|
|
— |
|
Other liabilities |
|
711 |
|
|
|
813 |
|
Total liabilities |
$ |
267,233 |
|
|
$ |
307,814 |
|
|
|
|
|
||||
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 accumulated losses |
|
(33,670 |
) |
|
|
(22,971 |
) |
Total net assets |
|
151,305 |
|
|
|
162,004 |
|
|
|
|
|
||||
Total liabilities and net assets |
$ |
418,538 |
|
|
$ |
469,818 |
|
|
|
|
|
||||
Number of common shares outstanding |
|
13,398,078 |
|
|
|
13,398,078 |
|
Net asset value per share |
$ |
11.29 |
|
|
$ |
12.09 |
|
OFS Capital Corporation and Subsidiaries Consolidated Statements of Operations (unaudited) (Dollar amounts in thousands, except per share data) |
|||||||||||||||
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Investment income |
|
|
|
|
|
|
|
||||||||
Interest income |
$ |
10,613 |
|
|
$ |
14,291 |
|
|
$ |
32,860 |
|
|
$ |
41,785 |
|
Dividend income |
|
290 |
|
|
|
334 |
|
|
|
3,281 |
|
|
|
1,453 |
|
Fee income |
|
15 |
|
|
|
26 |
|
|
|
175 |
|
|
|
222 |
|
Total investment income |
|
10,918 |
|
|
|
14,651 |
|
|
|
36,316 |
|
|
|
43,460 |
|
Expenses |
|
|
|
|
|
|
|
||||||||
Interest expense |
|
4,022 |
|
|
|
4,913 |
|
|
|
12,711 |
|
|
|
14,798 |
|
Base management fee |
|
1,472 |
|
|
|
1,796 |
|
|
|
4,473 |
|
|
|
5,573 |
|
Income Incentive Fee |
|
901 |
|
|
|
1,348 |
|
|
|
3,159 |
|
|
|
3,866 |
|
Professional fees |
|
391 |
|
|
|
397 |
|
|
|
1,219 |
|
|
|
1,262 |
|
Administration fee |
|
337 |
|
|
|
380 |
|
|
|
1,184 |
|
|
|
1,302 |
|
Other expenses |
|
192 |
|
|
|
427 |
|
|
|
934 |
|
|
|
1,196 |
|
Total expenses |
|
7,315 |
|
|
|
9,261 |
|
|
|
23,680 |
|
|
|
27,997 |
|
Net investment income |
|
3,603 |
|
|
|
5,390 |
|
|
|
12,636 |
|
|
|
15,463 |
|
Net realized and unrealized gain (loss) on investments |
|
|
|
|
|
|
|
||||||||
Net realized gain (loss), net of taxes |
|
(11,116 |
) |
|
|
117 |
|
|
|
(14,622 |
) |
|
|
(10,295 |
) |
Net unrealized appreciation (depreciation), net of taxes |
|
9,201 |
|
|
|
(3,512 |
) |
|
|
4,953 |
|
|
|
(1,312 |
) |
Net loss on investments |
|
(1,915 |
) |
|
|
(3,395 |
) |
|
|
(9,669 |
) |
|
|
(11,607 |
) |
Loss on extinguishment of debt |
|
— |
|
|
|
(194 |
) |
|
|
— |
|
|
|
(213 |
) |
Net increase in net assets resulting from operations |
$ |
1,688 |
|
|
$ |
1,801 |
|
|
$ |
2,967 |
|
|
$ |
3,643 |
|
Net investment income per common share – basic and diluted |
$ |
0.27 |
|
|
$ |
0.40 |
|
|
$ |
0.94 |
|
|
$ |
1.15 |
|
Net increase in net assets resulting from operations per common share – basic and diluted |
$ |
0.12 |
|
|
$ |
0.14 |
|
|
$ |
0.22 |
|
|
$ |
0.27 |
|
Distributions declared per common share |
$ |
0.34 |
|
|
$ |
0.34 |
|
|
$ |
1.02 |
|
|
$ |
1.00 |
|
Basic and diluted weighted-average common shares outstanding |
|
13,398,078 |
|
|
|
13,398,078 |
|
|
|
13,398,078 |
|
|
|
13,398,078 |
|
ABOUT OFS CAPITAL
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; 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 December 31, 2023 filed with the Securities and Exchange Commission under the section “Risk Factors,” as well as other documents that may be filed by OFS Capital from time to time with the Securities and Exchange Commission. As a result of such risks, uncertainties and factors, actual results may differ materially from any future results, performance or achievements discussed in or implied by the forward-looking statements contained herein. OFS Capital is providing the information in this press release as of this date and assumes no obligations to update the information included in this press release or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
(4) |
Registration does not imply a certain level of skill or training |
OFS® and OFS Capital® are registered trademarks of Orchard First Source Asset Management, LLC
View source version on businesswire.com: https://www.businesswire.com/news/home/20241031667769/en/
INVESTOR RELATIONS CONTACT:
Steve Altebrando
847-734-2084
investorrelations@ofscapital.com
Source: OFS Capital Corporation
FAQ
What was OFS Capital's net investment income per share in Q3 2024?
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