OFS Capital Corporation (NASDAQ:OFS) Q3 2019 Earnings Conference Call - Final Transcript

Nov 08, 2019 • 10:00 am ET


OFS Capital Corporation (NASDAQ:OFS) Q3 2019 Earnings Conference Call - Final Transcript


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Good day and welcome to the OFS Capital Corporation Third Quarter 2019 Earnings Conference Call and Webcast. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Mr. Steve Altebrando, Investor Relations. Please go ahead.

Stephen Altebrando

Good morning, everyone and thank you for joining us. With me today is Bilal Rashid, Chairman and Chief Executive Officer of OFS Capital and Jeff Cerny, the Company's Chief Financial Officer and Treasurer.

Please note that we issued a press release this morning announcing our third quarter results. This press release was subsequently filed on Form 8-K with the SEC. Both documents can be obtained under the Investor Relations section of our website at ofscapital.com.

Before we begin, please note that the statements made on this call and webcast may constitute forward-looking statements as defined under applicable securities laws. Such statements reflect various assumptions, expectations and opinions by OFS Capital Management concerning anticipated results are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from such statements. The uncertainties and other factors are in some way beyond management's control, including the risk factors described from time to time in our filings with the SEC. Although we believe these assumptions are reasonable, any of those assumptions could prove inaccurate. And as a result, the forward-looking statements based on those assumptions also could be incorrect. You should not place undue reliance on those forward-looking statements. OFS Capital undertakes no duty to update any forward-looking statements made herein and all forward-looking statements speak only as of the date of this call.

With that, I'll turn the call over to our Chairman and Chief Executive Officer, Bilal Rashid.

Bilal Rashid

Thank you, Steve. Good morning and welcome. Our net investment income per share was $0.36 for the third quarter, again above our $0.34 quarterly distribution. We have now declared 28 straight quarterly distributions of $0.34 per share, since our IPO in late 2012. In addition, we have declared $9.38 per share in distributions over this time, including $0.37 per share of special dividends.

And over the last five years, our total net investment income has exceeded our total regular distribution. We believe that maintaining our distribution and out earning it over this period of time puts us in select company within the BDC sector.

We made significant progress in the quarter, ramping up our senior loan subsidiary. We invested $41.3 million in the quarter, of which $22.7 million was in the senior loan subsidiary.

Jeff, will provide more specifics on our investment activities in this quarter, later in the call. We believe the senior loan subsidiary will increase our ROE, while further improving the overall risk profile of the BDC. The flexibility and incremental leverage permitted under the Small Business Credit Availability Act enables us to invest