THL Credit, Inc. (NASDAQ:TCRD) Q1 2019 Earnings Conference Call Transcript

May 10, 2019 • 10:30 am ET

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THL Credit, Inc. (NASDAQ:TCRD) Q1 2019 Earnings Conference Call Transcript

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Q & A
Operator
Operator

Thank you. (Operator Instructions) And our first question comes from the line of Leslie Vandegrift with Raymond James. Your line is now open.

Analyst
Leslie Vandegrift

Hi. Good morning. My first question is on LAI and the deterioration there. I know you'd discuss the sale next week. Now the extra $10 million that you put in the quarter, what -- I guess the -- why was that needed this quarter to push it over the line? And also on the mark, how close do you feel that last quarter's mark is to what you've -- you're going to get on that sale price?

Executive
Christopher J. Flynn

Hi, Leslie, it's Chris. Appreciate the question. The business needed incremental capital and we wanted to stabilize it to ensure a smooth sale process. That was, if you will, the sources and uses of the $10 million. And we feel very good about the mark as it relates to our expectations as it relates to the proceeds next week.

Analyst
Leslie Vandegrift

Okay. And then on OEM, you talked about looking to sell it in 2020. Is that something in that -- or by 2020. Is that something that you are actively involved in sale process already or just an outlook that, that might occur?

Executive
Christopher J. Flynn

No. Again, appreciate the question. We're very active. We're the majority owner of the business. Each one of these credits that's gone through stress has a life cycle, if you will. We need to restructure the balance sheet, stabilize the business and then hopefully either provide guidance or capital to start to show growth in EBITDA. We're at the later stage of that cycle in OEM. And based on where we sit today, we feel a 2020 exit is reasonable. Obviously, that's all subject to market conditions and continued performance. But as we sit here today, we feel like we've taken care of three of the four main items to position the business to be transitioned to a new owner.

Analyst
Leslie Vandegrift

Okay. And then the last question on the portfolio, Loadmaster. You talked about Charming Charlie as well. Both of them improving and mark in the quarter. But what were the improvements in Loadmaster that led to that?

Executive
Christopher J. Flynn

Yes. Loadmaster is the -- it's in energy space. It's got a few different initiatives and projects that we've been supportive of. We're reflecting in our marked confidence that these are going to start to pay dividends. I don't want to go into too much specifics as it's a privately held business. But again, it's not the largest position in our portfolio. It's a fairly small one on Loadmaster, but we've continued to back the team that we put in place and feel good about how it's proceeding.

Analyst
Leslie Vandegrift

Okay. Thank you.

Operator
Operator

Thank you. And our next question comes from the line of Christopher Testa with National Securities. Your line is now open.

Analyst
Christopher Testa

Hi. Good morning guys. Thanks for taking my questions. Aside from the three non-accruals, obviously, LAI is going away. So you have those, you have Copperweld and OEM. Is there