OFS Credit Company Announces Financial Results for the Third Fiscal Quarter 2025
THIRD QUARTER HIGHLIGHTS
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Net investment income (“NII”) of
$6.1 million , or$0.22 per common share, for the fiscal quarter endedJuly 31, 2025 . This compares to NII of$5.2 million , or$0.21 per common share, for the fiscal quarter endedApril 30, 2025 . During the fiscal quarter endedJuly 31, 2025 , NII increased by$0.9 million , or 17.0%, primarily due to an increase in the size of our investment portfolio and an increase in our interest income yield1. See additional information under “Results of Operations” below. -
Core net investment income (“Core NII”)2 of
$8.5 million , or$0.31 per common share, for the fiscal quarter endedJuly 31, 2025 . This compares to Core NII of$9.2 million , or$0.37 per common share, for the fiscal quarter endedApril 30, 2025 . Core NII decreased for the fiscal quarter endedJuly 31, 2025 , primarily due to lower cash flows on our CLO equity investments attributable to the tightening of loan spreads driven by strong investor demand for CLOs and leveraged loans. -
Net asset value (“NAV”) per common share of
$6.13 atJuly 31, 2025 , a decrease of$0.04 from NAV of$6.17 atApril 30, 2025 . This decrease in NAV was primarily due to distributions of$0.345 per common share paid during the quarter which exceeded our quarterly NII of$0.22 per common share, partially offset by a net gain on investments of$0.07 per common share. See additional information under “Results of Operations” below. -
During the fiscal quarter ended
July 31, 2025 , the interest income yield1 of our investment portfolio was 14.38%, based on average amortized cost. -
During the fiscal quarter ended
July 31, 2025 , we issued 1,538,496 shares of common stock through our At-the-Market offering, for net proceeds of$10.0 million , after deducting commissions, fees and offering costs.
OTHER RECENT EVENTS
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As previously announced, on
July 16, 2025 , our board of directors (the “Board”) declared monthly cash distributions of$0.115 per common share for each of the three months in the fiscal quarter endingOctober 31, 2025 , which implies an annualized cash distribution rate of 22.9% based on the closing market price of$6.02 per common share onJuly 31, 2025 . The Board also declared monthly distributions on our outstanding preferred stock throughJanuary 31, 2026 . See additional information under “Distributions” below.
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SELECTED FINANCIAL HIGHLIGHTS |
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(in millions, except per share data) |
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At |
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Balance Sheet Highlights |
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Total investments, at fair value |
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$ |
279.4 |
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$ |
252.2 |
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Total outstanding preferred stock - principal |
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115.9 |
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115.9 |
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Total net assets |
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170.0 |
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160.3 |
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NAV per common share |
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6.13 |
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6.17 |
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Operating Highlights |
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For the Fiscal Quarter Ended |
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(Per common share) |
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Net investment income |
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$ |
0.22 |
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$ |
0.21 |
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Net realized loss on investments |
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(0.07 |
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(0.04 |
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Net change in unrealized appreciation (depreciation) on investments |
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0.14 |
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(0.67 |
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Net earnings (loss) |
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$ |
0.29 |
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$ |
(0.50 |
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Reconciliation of Core NII — Non-GAAP2 |
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Net investment income |
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$ |
0.22 |
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$ |
0.21 |
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CLO equity adjustments |
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0.09 |
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0.16 |
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Core NII |
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$ |
0.31 |
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$ |
0.37 |
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1 Interest income yield is calculated as total investment income earned on the investment portfolio (excluding idle cash interest income) divided by the average total investments at cost (annualized). |
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2 On a supplemental basis, we disclose Core NII, which is a financial measure calculated and presented on a basis of methodology other than in accordance with accounting principles generally accepted in |
MANAGEMENT COMMENTARY
“We had a solid third fiscal quarter highlighted by a 17.0% increase in net investment income compared to the prior quarter,” said
PORTFOLIO AND INVESTMENT ACTIVITIES
As of
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At |
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Portfolio Overview ($ in millions) |
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Total investments, at fair value |
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$ |
279.4 |
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$ |
252.2 |
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Total number of issuers |
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89 |
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85 |
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Weighted-average effective yield4 |
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14.04 |
% |
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14.07 |
% |
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3 Calculated as CLO equity and equity-related cash distributions received during the quarter, excluding distributions on CLO equity investments that have been optionally redeemed, divided by average CLO equity and equity-related investments at amortized cost. |
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4 Based on amortized cost at period end; excludes discount accretion on CLO debt investments. |
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For the Fiscal Quarter Ended |
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Portfolio Purchases ($ in millions) |
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CLO equity investments |
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$ |
36.8 |
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$ |
39.5 |
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CLO debt investments |
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2.0 |
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— |
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Loan accumulation facility investments |
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2.2 |
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2.2 |
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Other CLO equity-related investments (i.e., fee rebates) |
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0.2 |
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0.2 |
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Total investments |
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$ |
41.2 |
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$ |
41.9 |
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Weighted-average effective yield - period end |
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19.05 |
% |
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20.96 |
% |
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At |
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Portfolio Composition ($ in millions) |
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Amortized Cost |
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Fair Value |
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CLO equity investments |
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$ |
311.8 |
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$ |
256.1 |
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CLO debt investments |
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14.6 |
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15.3 |
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Loan accumulation facility investments |
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6.0 |
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6.0 |
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Other CLO equity-related investments (i.e., fee rebates) |
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1.5 |
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2.0 |
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Total investments |
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$ |
333.9 |
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$ |
279.4 |
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RESULTS OF OPERATIONS
Interest Income
During the fiscal quarter ended
Expenses
During the fiscal quarter ended
Net Realized and Unrealized Gain (Loss) on Investments
During the fiscal quarter ended
DISTRIBUTIONS
Fourth Fiscal Quarter 2025 Common Stock Distributions
The following schedule applies to distributions for common stockholders of record on the close of business of each specific record date:
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Month |
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Record Date |
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Payment Date |
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Cash Distribution Per Share |
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Dividend Reinvestment Plan (“DRIP”) – DRIP Shares Issued at 95% of Market Price
Common stockholders who participate in our DRIP have the opportunity to receive a 5% discount to the market price per share of common stock at the close of regular trading on The Nasdaq Capital Market on the valuation date fixed by the
Common stockholders that are interested in participating in our DRIP should contact their broker or financial intermediary.
Additional information about our DRIP and how to participate can be found at https://ir.ofscreditcompany.com/shareholder-services/dividend-reinvestment-plan. We make our website content available for informational purposes only. It should not be relied upon for investment purposes, nor is it incorporated by reference into this press release.
Preferred Stock Distributions
The following schedule applies to distributions for preferred stockholders of record on the close of business of each specific record date:
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Preferred Stock Series |
Month |
Record Date |
Payment Date |
Cash
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6.125% Series C Term Preferred Stock (Nasdaq: OCCIO) |
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6.00% Series D Term Preferred Stock |
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5.25% Series E Term Preferred Stock (Nasdaq: OCCIN) |
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7.875% Series F Term Preferred Stock (Nasdaq: OCCIM) |
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8.00% Series G Term Preferred Stock |
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Statement of Assets and Liabilities (Unaudited) |
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As of |
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Assets: |
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Investments, at fair value (amortized cost of |
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$ |
279,413,462 |
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Cash and cash equivalents |
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7,332,005 |
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Interest receivable |
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345,365 |
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Other assets |
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313,117 |
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Total assets |
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287,403,949 |
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Liabilities: |
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Preferred stock (net of deferred issuance costs of |
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113,711,807 |
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Payable to adviser and affiliates |
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3,420,647 |
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Other liabilities |
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242,000 |
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Total liabilities |
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117,374,454 |
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Net assets |
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$ |
170,029,495 |
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Net assets consist of: |
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Common stock, par value of |
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$ |
27,716 |
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Paid-in capital in excess of par |
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241,806,374 |
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Total accumulated losses |
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(71,804,595 |
) |
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Total net assets |
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$ |
170,029,495 |
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Net asset value per common share |
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$ |
6.13 |
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Statements of Operations (Unaudited) |
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Three Months Ended |
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Nine Months Ended |
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Investment income: |
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Interest income |
$ |
11,875,174 |
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$ |
32,177,892 |
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Operating expenses: |
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Interest expense |
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2,148,056 |
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5,544,385 |
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Incentive fees |
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1,512,696 |
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4,093,485 |
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Base management fees |
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1,263,086 |
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3,609,133 |
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Administration fees |
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402,998 |
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1,086,561 |
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Professional fees |
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270,419 |
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791,537 |
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Other expenses |
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227,136 |
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678,850 |
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Total operating expenses |
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5,824,391 |
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15,803,951 |
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Net investment income |
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6,050,783 |
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16,373,941 |
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Net realized and unrealized gain (loss) on investments: |
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Net realized loss on investments |
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(1,934,404 |
) |
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(2,775,095 |
) |
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Net change in unrealized appreciation (depreciation) on investments |
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3,813,971 |
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(14,443,821 |
) |
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Net gain (loss) on investments |
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1,879,567 |
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(17,218,916 |
) |
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Net increase (decrease) in net assets resulting from operations |
$ |
7,930,350 |
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$ |
(844,975 |
) |
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Weighted-average common shares outstanding |
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27,179,615 |
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24,785,225 |
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About
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5 Registration does not imply a certain level of skill or training |
Forward-Looking Statements
Statements in this press release regarding management’s future expectations, beliefs, intentions, goals, strategies, plans or prospects, including statements relating to: the Company’s results of operations, including NII, Core NII, earnings per share and net asset value and the factors that may affect such results; and other factors may constitute forward-looking statements. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about us, our current and prospective portfolio investments, our industry, our beliefs, and our assumptions. Words such as “anticipates,” “expects,” “intends,” “plans,” “will,” “may,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “should,” “targets,” “projects,” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including those risks, uncertainties and factors referred to in documents that may be filed by
Supplemental Information Regarding Core Net Investment Income
We provide information relating to Core NII (a non-GAAP measure) on a supplemental basis. This measure is not provided as a substitute for GAAP NII, but in addition to it. Our non-GAAP measures may differ from similar measures by other companies, even if similar terms are used to identify such measures. Core NII represents GAAP NII adjusted for differences in applicable cash distributions received on our CLO equity and equity-related investments that have not been optionally redeemed relative to income recognized in accordance with GAAP.
Income from investments in the “equity” class securities of CLO vehicles, for GAAP purposes, is recorded using the effective interest method; this is based on an estimated effective yield, at current amortized cost, to the expected redemption of the security utilizing assumed cash flows, including those CLO equity investments that have not made their inaugural distribution for the relevant period end. The result is an estimated effective yield for the investment in which the respective investment’s cost basis is adjusted quarterly based on the difference between the actual cash received, or distributions entitled to be received, and the income recognized via the estimated effective yield calculation. Accordingly, investment income recognized on CLO equity and equity-related securities in the GAAP statement of operations differs from the cash distributions actually received by the Company during the period (referred to below as “CLO equity adjustments”). Therefore, management believes that Core NII may provide a useful indicator of distributable operating income, as this reflects a measure of potential cash availability, net of operating expenses, that could be utilized to cover distributions to common stockholders. We note that this non-GAAP measure has no bearing on the tax character of the common stock distributions made during the period, and future distributions are not guaranteed. A portion of current and future common stock distributions may consist of a return of capital for tax purposes. The actual tax character of our earnings cannot be finally determined until our tax return is prepared after the close of our taxable year.
The following table provides a reconciliation of GAAP NII to Core NII for the fiscal quarters ended
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For the Fiscal Quarter Ended
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For the Fiscal Quarter Ended
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Amount |
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Per Common
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Amount |
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Per Common
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Net investment income |
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$ |
6,050,783 |
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$ |
0.22 |
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$ |
5,172,411 |
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$ |
0.21 |
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CLO equity adjustments |
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2,476,308 |
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0.09 |
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4,049,003 |
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0.16 |
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Core NII |
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$ |
8,527,091 |
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$ |
0.31 |
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$ |
9,221,414 |
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$ |
0.37 |
The following table provides a reconciliation of GAAP NII to Core NII for the nine months ended
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For the Nine Months Ended
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For the Nine Months Ended
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Amount |
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Per Common
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Amount |
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Per Common
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Net investment income |
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$ |
16,373,941 |
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$ |
0.66 |
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$ |
12,952,411 |
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$ |
0.81 |
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CLO equity adjustments |
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8,891,204 |
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0.36 |
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10,275,605 |
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0.64 |
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Core NII |
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$ |
25,265,145 |
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$ |
1.02 |
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$ |
23,228,016 |
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$ |
1.45 |
OFS® and OFS Credit® are registered trademarks of
OFS Capital Management™ is a trademark of
View source version on businesswire.com: https://www.businesswire.com/news/home/20250912220833/en/
INVESTOR RELATIONS:
847-734-2085
investorrelations@ofscreditcompany.com
Source: