OFS Capital Corporation Announces Second Quarter 2025 Financial Results
Declares Third Quarter Distribution of
SECOND QUARTER FINANCIAL HIGHLIGHTS
-
Net investment income decreased to
$0.25 per common share for the quarter endedJune 30, 2025 from$0.26 per common share for the quarter endedMarch 31, 2025 . -
Net loss on investments was
$0.97 per common share for the quarter endedJune 30, 2025 . See additional information under “Results of Operations” below. -
Net asset value per common share decreased from
$11.97 as ofMarch 31, 2025 to$10.91 as ofJune 30, 2025 . -
As of
June 30, 2025 , based on fair value, 90% of our loan portfolio consisted of floating rate loans and 100% of our loan portfolio consisted of first lien and second lien loans. -
For the quarter ended
June 30, 2025 , the investment portfolio’s weighted-average performing income yield increased to 13.6% from 13.4% during the prior quarter, primarily due to an increase in earned yields on our debt investments. - No new loans were placed on non-accrual status during the second quarter.
OTHER RECENT EVENTS
-
On
July 11, 2025 , we caused notices to be issued to the holders of our 4.75% unsecured notes dueFebruary 10, 2026 (the “Unsecured Notes Due February 2026”) regarding the exercise of our option to redeem onAugust 11, 2025 $25.0 million of the issued and outstanding Unsecured Notes DueFebruary 2026 , plus accrued interest and any required make-whole premium payment. -
On
July 22, 2025 , we caused notices to be issued to the holders of our Unsecured Notes DueFebruary 2026 regarding the exercise of our option to redeem onAugust 21, 2025 $69.0 million of the issued and outstanding Unsecured Notes DueFebruary 2026 , plus accrued interest and any required make-whole premium payment. -
On
July 23, 2025 , we closed the public offering of$69.0 million aggregate principal amount of our 7.50% unsecured notes dueJuly 31, 2028 (the “Unsecured Notes Due July 2028”), which included$9.0 million of aggregate principal amount related to the underwriters’ option to cover overallotments. The estimated net proceeds to us from the Unsecured Notes DueJuly 2028 , after deducting underwriting fees of$1.4 million and estimated offering expenses of$0.3 million , was approximately$67.3 million . -
On
July 29, 2025 , our Board of Directors declared a distribution of$0.34 per common share for the third quarter of 2025, payable onSeptember 30, 2025 to stockholders of record as ofSeptember 19, 2025 .
SELECTED FINANCIAL HIGHLIGHTS |
Three Months Ended |
||||||
(Per common share) |
|
|
|
||||
Net Investment Income |
|
|
|
||||
Net investment income |
$ |
0.25 |
|
|
$ |
0.26 |
|
|
|
|
|
||||
Net Realized/Unrealized Gain (Loss) |
|
|
|
||||
Net realized loss on investments, net of taxes |
$ |
(0.31 |
) |
|
$ |
(0.19 |
) |
Net unrealized depreciation on investments, net of taxes |
|
(0.66 |
) |
|
|
(0.61 |
) |
Net realized/unrealized loss |
$ |
(0.97 |
) |
|
$ |
(0.80 |
) |
|
|
|
|
||||
Earnings (Loss) |
|
|
|
||||
Earnings (loss) |
$ |
(0.72 |
) |
|
$ |
(0.54 |
) |
|
|
|
|
||||
Net Asset Value |
|
|
|
||||
Net asset value |
$ |
10.91 |
|
|
$ |
11.97 |
|
Distributions paid |
$ |
0.34 |
|
|
$ |
0.34 |
|
|
As of |
||||||
(in millions) |
|
|
|
||||
Balance Sheet Highlights |
|
|
|
||||
Total investments, at fair value |
$ |
382.7 |
|
$ |
403.1 |
||
Total outstanding debt - principal |
|
243.4 |
|
|
|
248.1 |
|
Total net assets |
|
146.2 |
|
|
|
160.4 |
|
PORTFOLIO AND INVESTMENT ACTIVITIES ($ in millions) |
||||||||
|
|
Three Months Ended |
||||||
Portfolio Yields(1) |
|
|
|
|
||||
Average performing interest-bearing investments, at cost |
|
$ |
293.1 |
|
|
$ |
294.8 |
|
Weighted-average performing income yield - interest-bearing investments(2) |
|
|
13.6 |
% |
|
|
13.4 |
% |
Weighted-average realized yield - interest-bearing investments(3) |
|
|
11.9 |
% |
|
|
11.6 |
% |
(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-performing structured finance securities. |
|
|
Three Months Ended |
||||||
Portfolio Purchase Activity |
|
|
|
|
||||
Investments in debt and equity investments |
|
$ |
8.8 |
|
$ |
4.6 |
||
Investments in structured finance securities |
|
|
3.7 |
|
|
|
5.8 |
|
Total investment purchases and originations |
|
$ |
12.5 |
|
|
$ |
10.4 |
|
As of
-
Total investments of
$382.7 million , which was equal to approximately 108% of amortized cost; -
Debt investments of
$211.2 million , of which approximately 85% and 15% were first lien and second lien loans, respectively; -
Equity investments of
$98.9 million ; and -
Structured finance securities of
$72.6 million .
During the quarter ended
OUTSTANDING DEBT
During the three months ended
Three Months Ended |
|
Average Dollar Borrowings |
|
Weighted-Average Effective Interest Rate |
|||
|
|
$ |
248.3 |
|
6.21 |
% |
|
|
|
|
248.7 |
|
|
6.29 |
|
RESULTS OF OPERATIONS |
|||||||
(in thousands) |
Three Months Ended |
||||||
|
|
|
|
||||
Total investment income |
$ |
10,476 |
|
|
$ |
10,295 |
|
Expenses: |
|
|
|
||||
Interest expense |
|
3,842 |
|
|
|
3,858 |
|
Base management and incentive fees |
|
2,300 |
|
|
|
1,879 |
|
Professional, administration and other expenses |
|
1,051 |
|
|
|
1,093 |
|
Total expenses |
|
7,193 |
|
|
|
6,830 |
|
Net investment income |
|
3,283 |
|
|
|
3,465 |
|
Net loss on investments |
|
(12,914 |
) |
|
|
(10,752 |
) |
Net decrease in net assets resulting from operations |
$ |
(9,631 |
) |
|
$ |
(7,287 |
) |
Investment Income
For the quarter ended
Expenses
For the quarter ended
For the quarter ended
For the quarter ended
LIQUIDITY AND CAPITAL RESOURCES
As of
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 (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
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 second quarter ended
Consolidated Statements of Assets and Liabilities (Unaudited) (Dollar amounts in thousands, except per share data) |
|||||||
|
2 025 |
|
2 024 |
||||
Assets |
|
|
|
||||
Total investments, at fair value (amortized cost of |
$ |
382,748 |
|
|
$ |
409,665 |
|
Cash and cash equivalents |
|
10,238 |
|
|
|
6,068 |
|
Interest and dividend receivable |
|
1,316 |
|
|
|
1,774 |
|
Receivable for investments sold |
|
— |
|
|
|
9,247 |
|
Prepaid expenses and other assets |
|
1,140 |
|
|
|
1,369 |
|
Total assets |
$ |
395,442 |
|
|
$ |
428,123 |
|
|
|
|
|
||||
Liabilities |
|
|
|
||||
Revolving lines of credit |
$ |
63,400 |
|
|
$ |
68,350 |
|
Unsecured Notes (net of deferred debt issuance costs of |
|
178,801 |
|
|
|
178,312 |
|
Interest payable |
|
3,159 |
|
|
|
3,195 |
|
Payable to adviser and affiliates |
|
2,859 |
|
|
|
3,145 |
|
Payable for investments purchased |
|
— |
|
|
|
1,802 |
|
Other liabilities |
|
1,027 |
|
|
|
1,094 |
|
Total liabilities |
$ |
249,246 |
|
|
$ |
255,898 |
|
|
|
|
|
||||
Net assets |
|
|
|
||||
Preferred stock, par value of |
$ |
— |
|
|
$ |
— |
|
Common stock, par value of |
|
134 |
|
|
|
134 |
|
Paid-in capital in excess of par |
|
184,912 |
|
|
|
184,912 |
|
Total accumulated losses |
|
(38,850 |
) |
|
|
(12,821 |
) |
Total net assets |
|
146,196 |
|
|
|
172,225 |
|
|
|
|
|
||||
Total liabilities and net assets |
$ |
395,442 |
|
|
$ |
428,123 |
|
|
|
|
|
||||
Number of common shares outstanding |
|
13,398,078 |
|
|
|
13,398,078 |
|
Net asset value per share |
$ |
10.91 |
|
|
$ |
12.85 |
|
Consolidated Statements of Operations (Unaudited) (Dollar amounts in thousands, except per share data) |
|||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
|
|
|
|
|
|
||||||||
Investment income |
|
|
|
|
|
|
|
||||||||
Interest income |
$ |
10,019 |
|
|
$ |
9,968 |
|
|
$ |
19,987 |
|
|
$ |
22,247 |
|
Dividend income |
|
307 |
|
|
|
298 |
|
|
|
605 |
|
|
|
2,991 |
|
Fee income |
|
150 |
|
|
|
29 |
|
|
|
179 |
|
|
|
160 |
|
Total investment income |
|
10,476 |
|
|
|
10,295 |
|
|
|
20,771 |
|
|
|
25,398 |
|
Expenses |
|
|
|
|
|
|
|
||||||||
Interest expense |
|
3,842 |
|
|
|
3,858 |
|
|
|
7,700 |
|
|
|
8,689 |
|
Base management fee |
|
1,479 |
|
|
|
1,549 |
|
|
|
3,028 |
|
|
|
3,001 |
|
Income Incentive Fee |
|
821 |
|
|
|
330 |
|
|
|
1,151 |
|
|
|
2,258 |
|
Professional fees |
|
403 |
|
|
|
436 |
|
|
|
839 |
|
|
|
828 |
|
Administration fee |
|
382 |
|
|
|
394 |
|
|
|
776 |
|
|
|
847 |
|
Other expenses |
|
266 |
|
|
|
263 |
|
|
|
529 |
|
|
|
742 |
|
Total expenses |
|
7,193 |
|
|
|
6,830 |
|
|
|
14,023 |
|
|
|
16,365 |
|
Net investment income |
|
3,283 |
|
|
|
3,465 |
|
|
|
6,748 |
|
|
|
9,033 |
|
Net realized and unrealized gain (loss) on investments |
|
|
|
|
|
|
|
||||||||
Net realized loss, net of taxes |
|
(4,191 |
) |
|
|
(2,587 |
) |
|
|
(6,778 |
) |
|
|
(3,506 |
) |
Net unrealized depreciation, net of taxes |
|
(8,723 |
) |
|
|
(8,165 |
) |
|
|
(16,888 |
) |
|
|
(4,248 |
) |
Net loss on investments |
|
(12,914 |
) |
|
|
(10,752 |
) |
|
|
(23,666 |
) |
|
|
(7,754 |
) |
Net increase (decrease) in net assets resulting from operations |
$ |
(9,631 |
) |
|
$ |
(7,287 |
) |
|
$ |
(16,918 |
) |
|
$ |
1,279 |
|
|
|
|
|
|
|
|
|
||||||||
Net investment income per common share – basic and diluted |
$ |
0.25 |
|
|
$ |
0.26 |
|
|
$ |
0.50 |
|
|
$ |
0.67 |
|
Net increase (decrease) in net assets resulting from operations per common share – basic and diluted |
$ |
(0.72 |
) |
|
$ |
(0.54 |
) |
|
$ |
(1.26 |
) |
|
$ |
0.10 |
|
Distributions declared per common share |
$ |
0.34 |
|
|
$ |
0.34 |
|
|
$ |
0.68 |
|
|
$ |
0.68 |
|
Basic and diluted weighted-average common shares outstanding |
|
13,398,078 |
|
|
|
13,398,078 |
|
|
|
13,398,078 |
|
|
|
13,398,078 |
|
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; 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
(4) |
Registration does not imply a certain level of skill or training |
OFS® and OFS Capital® are registered trademarks of
OFS Capital Management™ is a trademark of
View source version on businesswire.com: https://www.businesswire.com/news/home/20250731185190/en/
INVESTOR RELATIONS CONTACT:
847-734-2084
investorrelations@ofscapital.com
Source: