OFS Capital(US:OFS)2025-05-02 14:00Financial Data and Key Metrics Changes - The company reported net investment income of $3,500,000 or $0.26 per share for the first quarter, down from $0.30 per share in the prior quarter, primarily due to a decrease in nonrecurring dividend and fee income [4][11] - The net asset value per share decreased to $11.97 from $12.85, representing a decline of approximately 7% or $0.88, mainly due to net unrealized depreciation on the investment portfolio [4][12] - Total investment income decreased by approximately 12% to $10,300,000, driven by lower interest income on the loan portfolio and the absence of nonrecurring income [12][13] Business Line Data and Key Metrics Changes - The loan portfolio remains stable with no new non-accrual loans during the quarter, and 85% of loan holdings are in first lien positions [12][14] - The weighted average performing investment income yield declined to 13.4%, down about 0.4% quarter over quarter, primarily due to last year's interest rate cuts [15] Market Data and Key Metrics Changes - The overall economic outlook is uncertain, with potential impacts from global tariffs and a possible slowdown in economic activity, which could affect portfolio companies' earnings [6][17] - M&A activity has been quiet, more than expected, due to macroeconomic uncertainty dampening prospects for increased activity [9] Company Strategy and Development Direction - The company is focused on rotating non-interest earning equity positions into interest-earning assets to improve long-term net investment income [5][18] - The strategy includes maintaining a diversified portfolio across multiple industries and investing higher in the capital structure [7][17] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about the macroeconomic environment's impact on the economy but believes the portfolio is generally stable and defensively positioned [17][19] - The company is committed to capital preservation during uncertain economic times and has a long-standing experience that has served it well [19][20] Other Important Information - The company maintains a quarterly distribution of $0.34 per share, representing a 14.6% annualized yield based on the market price of its common stock [11] - Approximately 73% of outstanding debt is unsecured, providing additional liquidity and flexibility [8][12] Q&A Session Summary - There were no questions during the Q&A session, and the conference concluded without any inquiries [22]