Oaktree Specialty Lending Corporation (NASDAQ:OCSL) Q4 2019 Earnings Conference Call - Final Transcript

Nov 20, 2019 • 11:00 am ET


Oaktree Specialty Lending Corporation (NASDAQ:OCSL) Q4 2019 Earnings Conference Call - Final Transcript


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Welcome and thank you for joining Oaktree Specialty Lending Corporation's Fourth Fiscal Quarter 2019 Conference Call. Today's conference call is being recorded. At this time, all participants are in a listen-only mode, but will be prompted for a question-and-answer session following the prepared remarks.

Now I would like to introduce Michael Mosticchio of Investor Relations, who will host today's conference call. Mr. Mosticchio, you may begin.

Michael Mosticchio

Thank you, operator, and welcome to Oaktree Specialty Lending Corporation's fiscal fourth quarter conference call. Our earnings release, which we issued this morning, and the accompanying slide presentation can be accessed on the Investors section of our website at oaktreespecialtylending.com.

Our speakers today are Armen Panossian, Chief Executive Officer and Chief Investment Officer; Matt Pendo, President and Chief Operating Officer; and Mel Carlisle, Chief Financial Officer and Treasurer. We will be happy to take your questions following their prepared remarks.

Before we begin, I want to remind you that comments on today's call include statements reflecting our current views with respect to, among other things, our future operating results and financial performance. Our actual results could differ materially from those implied or expressed in the forward-looking statements. Please refer to our SEC filings for a discussion of these factors in further detail. We undertake no duty to update or revise any forward-looking statements.

I'd also like to remind you that nothing on this call constitutes an offer to sell or solicitation of an offer to purchase any interest in any Oaktree fund. Investors and others should note that Oaktree Specialty Lending uses the Investors section of its corporate website to announce material information. The Company encourages investors, the media, and others to review the information that it shares on its corporate website.

With that, I would now like to turn the call over to Matt Pendo.

Matt Pendo

Thank you, Mike, and welcome everyone to our fourth quarter earnings conference call. We appreciate your interest in and support of OCSL. We are pleased to report that the fourth quarter of fiscal year 2019 completed another strong year for OCSL. We reported NAV per share of $6.60, finishing the year with our seventh consecutive quarter of increased NAV and full-year NAV growth of $0.51 per share or 8.5%.

Net investment income was $0.12 per share for the fourth quarter, consistent with the prior quarter and $0.48 for the fiscal year, up from $0.43 for the previous fiscal year. The annual growth reflected successful investment exits and realizations combined with lower operating and funding expenses. We steadily monetized non-core investments over the fiscal year, which were reduced by $119 million or 37%.

We also made progress reducing non-accruals, following the exits of four investments during the year. In the fourth quarter, we received full repayment on one of our investments that was previously on non-accrual. We also restructured an investment on non-accrual status, when we led the recapitalization of the borrower by converting our debt to equity and investing a modest amount of new capital. I'd like to spend