OFS Capital Corp Q2 FY2024 earnings call

• Net asset value per share up 3.9% to $11.51. - 72% debt fixed rate, 92% loan portfolio at fair value floating rate. - Net investment income down due to non-recurring items and delevered balance sheet. - Focus on increasing net investment income by converting non-interest earning equity to interest earning assets, exploring Pfanstiehl equity alternatives. - Portfolio well-positioned, diversified, no new non-accruals, portfolio quality stable (4.6% of investments at fair value on non-accrual). - Total investment income down, total expenses down due to lower debt balances and fees. - Quarterly distribution remains $0.34 per share.

Net asset value per share increased by 3.9% to $11.51, up $0.43 from prior quarter. 72% of debt is fixed rate and 92% of loan portfolio at fair value is floating rate. Net investment income per share decreased from $0.42 in Q1 to $0.26 in Q2. Net asset value increase was due to unrealized depreciation in certain segments. Total investment income down ~$3.1 million to $11.2 million, total expenses down 10.5% to $7.7 million. Regulatory asset coverage ratio at 162% at quarter end. Portfolio investments: 69% senior secured loans, 1% subordinated debt, 23% structured finance securities, 7% equity securities; 68 unique issuers with $398.2 million fair value; weighted average performing investment income yield on interest-bearing portion improved to 13.4%.

• Focus on increasing net investment income by monetizing non-interest-bearing investments. - Quarterly distribution remains at $0.34 per share for third quarter. - Aim to exceed distribution rate by improving net investment income.

• Uncertain interest rate environment. - Risks associated with forward-looking statements and factors beyond management's control that could affect actual results.