On November 2, 2023, OFS Capital Corp (OFS, Financial) announced its financial results for the fiscal quarter ended September 30, 2023. The company reported an increase in net investment income to $0.40 per common share for Q3 2023, up from $0.38 per common share in Q2 2023. The net asset value (NAV) per common share stood at $12.74 as of September 30, 2023.
Financial Highlights
The company reported a net loss on investments of $0.25 per common share for Q3 2023, primarily due to net unrealized depreciation. As of September 30, 2023, based on fair value, 94% of OFS's loan portfolio consisted of floating rate loans and approximately 99% of the loan portfolio consisted of senior secured loans.
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. The company's Board of Directors declared a distribution of $0.34 per common share for Q4 2023, payable on December 29, 2023 to stockholders of record as of December 22, 2023.
Portfolio and Investment Activities
As of September 30, 2023, the company's investment portfolio was comprised of total investments of $457.2 million, which was equal to approximately 106% of amortized cost. The portfolio included debt investments of $279.2 million in 43 portfolio companies, equity investments of $94.7 million in 15 portfolio companies, and structured finance securities of $83.3 million in 23 investments.
Results of Operations
For Q3 2023, total investment income increased to $14.7 million from $14.5 million in the prior quarter, primarily due to an increase in interest income of $0.2 million. Total expenses decreased by $0.1 million to $9.3 million compared to the prior quarter, primarily due to a decrease in interest expense stemming from a decrease in the average outstanding debt balance.
Liquidity and Capital Resources
As of September 30, 2023, OFS had $15.9 million in cash and no outstanding balance and an unused commitment of $25.0 million under its senior secured revolving credit facility with Pacific Western Bank. The company also had an unused commitment of $58.9 million under its revolving credit facility with BNP Paribas.
"We are pleased to announce our fourth consecutive increase in our quarterly net investment income", said Bilal Rashid, OFS Capital’s Chairman and Chief Executive Officer. "We believe our balance sheet is well positioned in the current interest rate environment with the vast majority of our loan portfolio being floating rate and the majority of our debt being fixed-rate."
Explore the complete 8-K earnings release (here) from OFS Capital Corp for further details.
