The following is a summary of the OFS Capital (OFS) Q2 2024 Earnings Call Transcript:

Financial Performance:

• Net asset value per share increased by 3.9% to $11.51 from the prior quarter.

• Net investment income decreased to $0.26 per share this quarter from $0.42 per share in the previous quarter.

• Total investment income decreased by approximately $3.1 million to $11.2 million this quarter, influenced by nonrecurring dividends and a smaller asset base due to deleveraging.

• Quarterly distribution maintained at $0.34 per share, representing a 15.3% annualized yield based on end-quarter stock price.

Business Progress:

• Focus on converting non-interest earning equity positions to interest-earning assets, particularly the minority equity investment in Pfanstiehl.

• Maintained a stable investment portfolio with no new non-accruals; ongoing support for existing portfolio companies.

• Capital structure is fortified with 72% of debt being fixed-rate and long-term maturities (2026 or later).

• Commitments to fund investments in portfolio companies stood at $8.9 million at quarter end.

Opportunities:

• Potential increase in M&A activity later in the year could present new origination opportunities.

• Conversion of non-interest earning positions like the minority equity stake in Pfanstiehl into interest-earning assets to boost net investment income.

Risks:

• Ongoing uncertainty in the interest rate environment could impact financing costs and investment returns.

More details: OFS Capital IR

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