Harvest Capital Credit Corporation (NASDAQ:HCAP) Q1 2020 Earnings Conference Call - Final Transcript

May 13, 2020 • 11:00 am ET

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Harvest Capital Credit Corporation (NASDAQ:HCAP) Q1 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen, and welcome to Harvest Capital Credit Corporation Quarter One 2020 Earnings Call. [Operator Instructions]. Later we will conduct a Q&A session and instructions will be given at that time.

I would now like to turn the call over to William Alvarez, Chief Financial Officer of Harvest Credit Corporation. Sir, the floor is yours.

Executive
William Alvarez

Okay. Thank you, Operator. Good morning, everyone, and thank you for participating in this conference call to discuss our financial results for the quarter ended March 31, 2020. I'm joined today by our Chairman and Chief Executive Officer, Joseph Jolson; and by Richard Buckanavage, our President.

Before we start, I'll provide a disclaimer regarding any forward-looking statements that we make during this presentation. This presentation contains forward-looking statements, which relate to future events or Harvest Capital Credit's future performance or financial condition. These statements are not guarantees of future performance, condition or results and involve a number of risks and uncertainties.

Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in our filings with the Securities and Exchange Commission, including in our most recently filed Annual Report on Form 10-K and Quarterly Report on Form 10-Q. Harvest Capital Credit undertakes no duty to update any forward-looking statements made herein unless required to do so by law.

Now I will turn the call over to Joe.

Executive
Joseph Jolson

Thanks, Bill. Given the severe negative impact on the US economy from the COVID-19 pandemic since late February, we quickly shifted our strategy from growing our investment portfolio to increasing and preserving our capital, while actively managing our current investments to limit the negative impact from the downturn. We continue to negotiate with our lenders to extend our revolving line of credit, which until the end of July or at a later date. Otherwise it will term out over the next 18 month period unless further extended or replaced with a new agreement. Because we will likely be in this mode for the next few quarters, our board of directors decided to preserve our cash and capital and defer the payment of our March and April cash dividends and suspend future dividends until we have better visibility to the depth and duration of this economic crisis.

Bill is going to take you through some of the financial results from the quarter and then Rich will provide some color on our portfolio before I make some concluding remarks. Bill?

Executive
William Alvarez

Okay. Thanks Joe. Net investment income for the quarter was $1 million or $0.17 per share, compared to $0.8 million or $0.12 per share in the first quarter of 2019. Net investment income increased by $0.2 million in the 2020 period as compared to 2019, primarily as a result of an increase in investment income.

Net operating loss for the quarter was $3.7 million or $0.62 per share compared to net operating income of $61,000 or $0.01 per share in the first quarter