Attached files
| file | filename |
|---|---|
| 8-K - CURRENT REPORT - Oxford Square Capital Corp. | s131223_8k.htm |
Exhibit 99.1
Oxford Square Capital Corp. Announces Net Asset Value and Selected Financial Results for the Quarter Ended December 31, 2020 and Declaration of Distributions of Common Stock for the Months Ending April 30, May 31, and June 30, 2021.
Oxford Square Capital Corp. also schedules fourth quarter earnings conference call for March 24, 2021.
GREENWICH, CT – 3/22/2021 –Oxford Square Capital Corp. (NasdaqGS: OXSQ) (NasdaqGS: OXSQL) (NasdaqGS: OXSQZ) (the “Company,” “we,” “us” or “our”) announced today its financial results and related information for the quarter ended December 31, 2020.
| · | As of December 31, 2020, net asset value (“NAV”) per share was $4.55, compared with the NAV per share of $3.85 at the prior quarter end. |
| o | For the quarter ended December 31, 2020 we recorded GAAP net investment income of approximately $4.7 million, or $0.10 per share. |
| o | We recorded net unrealized appreciation of approximately $35.7 million and net realized losses on investments of approximately $0.7 million for the quarter ended December 31, 2020, compared to net unrealized appreciation of approximately $20.9 million and net realized losses on investments of approximately $4.4 million for the quarter ended September 30, 2020. |
| o | In total, we had a net increase in net assets from operations of approximately $39.7 million, or $0.80 per share, for the quarter ended December 31, 2020, compared with a net increase in net assets from operations of approximately $20.8 million, or $0.42 per share, for the quarter ended September 30, 2020. |
| · | Total investment income for the quarter ended December 31, 2020 amounted to approximately $8.6 million, compared with approximately $8.2 million for the quarter ended September 30, 2020. For the quarter ended December 31, 2020 the components of investment income were as follows: |
| · | $5.2 million from our debt investments, |
| · | $3.5 million from our CLO equity investments |
| · | Our total expenses for the quarter ended December 31, 2020 were approximately $3.9 million, compared with total expenses of approximately $4.0 million for the third quarter of 2020. |
| · | During the fourth quarter of 2020, we made investments of approximately $46.9 million and recognized proceeds of approximately $25.4 million from sales of investments, and $51.1 million from repayments and amortization payments on our debt investments. |
| · | As of December 31, 2020, the following metrics applied (note that none of these values represents
a total return to shareholders): |
| o | The weighted average yield of our debt investments was 8.0% at current cost, compared with 8.3% as of September 30, 2020. |
| o | The weighted average effective yield of our CLO equity investments at current cost was 8.0%, compared with 7.7% as of September 30, 2020. |
| o | The weighted average cash distribution yield of our cash income producing CLO equity investments at current cost was 19.2%, compared with 11.7% as of September 30, 2020. |
| · | Our weighted average credit rating was 2.1 based on total fair value and 2.4 based on total principal amount as of December 31, 2020, compared to 2.3 based on total fair value and 2.5 based on total principal value as of September 30, 2020. |
| · | As of December 31, 2020, we had two debt investments on non-accrual status, with a combined fair value of $4.2 million. Also, as of December 31, 2020, our preferred equity investments in one of our portfolio companies were on non-accrual status, which had zero fair value. |
| · | On February 23, 2021, our Board of Directors declared the following distributions on our common stock: |
| Month Ending | Record Date | Payment Date | Amount Per Share | |||||
| April 30, 2021 | April 16, 2021 | April 30, 2021 | $ | 0.035 | ||||
| May 31, 2021 | May 14, 2021 | May 28, 2021 | $ | 0.035 | ||||
| June 30, 2021 | June 16, 2021 | June 30, 2021 | $ | 0.035 | ||||
In light of current economic and market conditions, including as a result of the global crisis caused by the spread of the COVID-19 virus, we believe that no reliance should be placed on these distributions representing the prospect for any particular level of common stock distributions for any periods in the future.
We will hold a conference call to discuss fourth quarter 2020 earnings on Wednesday, March 24, 2021 at 9:00 AM Eastern time. The toll free dial-in number is 1-888-339-0740. There will be a recording available for 30 days. If you are interested in hearing the recording, please dial 1-877-344-7529. The replay pass-code number is 10153501.
A presentation containing further detail regarding our quarterly results of operations has been posted under the Investor Relations section of our website at www.oxfordsquarecapital.com.
OXFORD SQUARE CAPITAL CORP.
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
| December 31, 2020 | December 31, 2019 | |||||||
| ASSETS | ||||||||
| Non-affiliated/non-control investments (cost: $407,547,351 and $467,828,907, respectively) | $ | 294,674,000 | $ | 361,985,203 | ||||
| Affiliated investments (cost: $16,836,822 and $16,836,822, respectively) | — | 2,816,790 | ||||||
| Cash equivalents | 59,137,284 | 14,410,486 | ||||||
| Restricted cash | — | 2,050,452 | ||||||
| Interest and distributions receivable | 2,299,259 | 3,480,036 | ||||||
| Securities sold not settled | 950,000 | — | ||||||
| Other assets | 597,238 | 523,626 | ||||||
| Total assets | $ | 357,657,781 | $ | 385,266,593 | ||||
| LIABILITIES | ||||||||
| Notes payable – 6.50% Unsecured Notes, net of deferred issuance costs of $1,055,065 and $1,380,658, respectively | $ | 63,315,160 | $ | 62,989,567 | ||||
| Notes payable – 6.25% Unsecured Notes, net of deferred issuance costs of $1,243,082 and $1,476,878, respectively | 43,547,668 | 43,313,872 | ||||||
| Notes payable – Credit Facility, net of deferred issuance costs of $0 and $10,051, respectively | — | 28,080,550 | ||||||
| Securities purchased not settled | 23,156,556 | — | ||||||
| Base Fee and Net Investment Income Incentive Fee payable to affiliate | 1,159,703 | 1,480,653 | ||||||
| Accrued interest payable | 478,191 | 632,235 | ||||||
| Accrued expenses | 573,977 | 771,174 | ||||||
| Total liabilities | 132,231,255 | 137,268,051 | ||||||
| COMMITMENTS AND CONTINGENCIES (Note 9) | ||||||||
| NET ASSETS | ||||||||
| Common stock, $0.01 par value, 100,000,000 shares authorized; 49,589,607 and 48,448,987 shares issued and outstanding, respectively | 495,895 | 484,489 | ||||||
| Capital in excess of par value | 452,650,210 | 451,839,302 | ||||||
| Total distributable earnings/(accumulated losses) | (227,719,579 | ) | (204,325,249 | ) | ||||
| Total net assets | 225,426,526 | 247,998,542 | ||||||
| Total liabilities and net assets | $ | 357,657,781 | $ | 385,266,593 | ||||
| Net asset value per common share | $ | 4.55 | $ | 5.12 | ||||
2
OXFORD SQUARE CAPITAL CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
| Year Ended December 31, 2020 | Year Ended December 31, 2019 | Year Ended December 31, 2018 | ||||||||||
| INVESTMENT INCOME | ||||||||||||
| From non-affiliated/non-control investments: | ||||||||||||
| Interest income – debt investments | $ | 20,252,055 | $ | 28,000,283 | $ | 25,183,547 | ||||||
| Income from securitization vehicles and investments | 15,014,000 | 25,244,866 | 27,837,032 | |||||||||
| Other income | 676,450 | 1,694,434 | 2,984,773 | |||||||||
| Total investment income from non-affiliated/non-control investments | 35,942,505 | 54,939,583 | 56,005,352 | |||||||||
| From affiliated investments: | ||||||||||||
| Dividend income – non-cash | — | 7,710,805 | — | |||||||||
| Interest income – debt investments | — | — | 271,916 | |||||||||
| Total investment income from affiliated investments | — | 7,710,805 | 271,916 | |||||||||
| Total investment income | 35,942,505 | 62,650,388 | 56,277,268 | |||||||||
| EXPENSES | ||||||||||||
| Interest expense | 7,878,906 | 9,901,426 | 7,181,009 | |||||||||
| Base Fee | 4,525,034 | 6,704,467 | 7,309,435 | |||||||||
| Professional fees | 1,545,279 | 1,454,942 | 1,227,296 | |||||||||
| Compensation expense | 708,350 | 832,256 | 907,995 | |||||||||
| Director’s fees | 441,500 | 417,500 | 441,501 | |||||||||
| Insurance | 330,746 | 281,146 | 247,178 | |||||||||
| Transfer agent and custodian fees | 206,686 | 239,323 | 227,381 | |||||||||
| General and administrative | 591,512 | 829,476 | 644,104 | |||||||||
| Total expenses before incentive fees | 16,228,013 | 20,660,536 | 18,185,899 | |||||||||
| Net investment income incentive fees | — | 3,511,493 | 4,585,151 | |||||||||
| Capital gains incentive fees | — | — | — | |||||||||
| Total incentive fees | — | 3,511,493 | 4,585,151 | |||||||||
| Total expenses | 16,228,013 | 24,172,029 | 22,771,050 | |||||||||
| Net investment income | 19,714,492 | 38,478,359 | 33,506,218 | |||||||||
| Net change in unrealized appreciation/depreciation on investments | ||||||||||||
| Non-Affiliate/non-control investments | (7,029,647 | ) | (50,107,582 | ) | (36,969,481 | ) | ||||||
| Affiliated investments | (2,816,790 | ) | (19,386,212 | ) | (2,323,867 | ) | ||||||
| Total net change in unrealized appreciation/depreciation on investments | (9,846,437 | ) | (69,493,794 | ) | (39,293,348 | ) | ||||||
| Net realized losses | ||||||||||||
| Non-Affiliated/non-control investments | (8,151,553 | ) | (1,709,816 | ) | (3,370,732 | ) | ||||||
| Affiliated investments | — | — | 5,241 | |||||||||
| Extinguishment of debt | (5,211 | ) | (72,666 | ) | (60,752 | ) | ||||||
| Total net realized losses | (8,156,764 | ) | (1,782,482 | ) | (3,426,243 | ) | ||||||
| Net increase/(decrease) in net assets resulting from operations | 1,711,291 | (32,797,917 | ) | (9,213,373 | ) | |||||||
| Net increase in net assets resulting from net investment income per common share: | ||||||||||||
| Basic and Diluted | $ | 0.40 | $ | 0.81 | $ | 0.67 | ||||||
| Net increase/(decrease) in net assets resulting from operations per common share: | ||||||||||||
| Basic | $ | 0.03 | $ | (0.69 | ) | $ | (0.19 | ) | ||||
| Diluted | $ | 0.03 | $ | (0.69 | ) | $ | (0.19 | ) | ||||
| Weighted average shares of common stock outstanding: | ||||||||||||
| Basic | 49,477,215 | 47,756,596 | 49,662,157 | |||||||||
| Diluted | 49,477,215 | 47,756,596 | 49,662,157 | |||||||||
3
FINANCIAL HIGHLIGHTS
| Year Ended December 31, 2020 | Year Ended December 31, 2019 | Year Ended December 31, 2018 | Year Ended December 31, 2017 | Year Ended December 31, 2016 | ||||||||||||||||
| Per Share Data | ||||||||||||||||||||
| Net asset value at beginning of year | $ | 5.12 | $ | 6.60 | $ | 7.55 | $ | 7.50 | $ | 6.40 | ||||||||||
| Net investment income(1) | 0.40 | 0.81 | 0.67 | 0.60 | 0.52 | |||||||||||||||
| Net realized and unrealized gains (losses)(2) | (0.36 | ) | (1.49 | ) | (0.91 | ) | 0.25 | 1.62 | ||||||||||||
| Net change in net asset value from operations | 0.04 | (0.68 | ) | (0.24 | ) | 0.85 | 2.14 | |||||||||||||
| Distributions per share from net investment income | (0.61 | ) | (0.80 | ) | (0.73 | ) | (0.66 | ) | (1.06 | ) | ||||||||||
| Distributions based on weighted average share impact | — | — | 0.01 | — | 0.01 | |||||||||||||||
| Tax return of capital distributions | — | — | (0.07 | ) | (0.14 | ) | (0.10 | ) | ||||||||||||
| Total distributions(3) | (0.61 | ) | (0.80 | ) | (0.79 | ) | (0.80 | ) | (1.15 | ) | ||||||||||
| Effect of shares issued/repurchased, gross | — | — | 0.08 | — | 0.11 | |||||||||||||||
| Net asset value at end of year | $ | 4.55 | $ | 5.12 | $ | 6.60 | $ | 7.55 | $ | 7.50 | ||||||||||
| Per share market value at beginning of year | $ | 5.44 | $ | 6.47 | $ | 5.74 | $ | 6.61 | $ | 6.08 | ||||||||||
| Per share market value at end of year | $ | 3.05 | $ | 5.44 | $ | 6.47 | $ | 5.74 | $ | 6.61 | ||||||||||
| Total return based on Market Value(4) | (31.75 | )% | (4.14 | )% | 26.95 | % | (2.01 | )% | 33.29 | % | ||||||||||
| Total return based on Net Asset Value(5) | 0.82 | % | (10.26 | )% | (1.99 | )% | 11.33 | % | 35.31 | % | ||||||||||
| Shares outstanding at end of year | 49,589,607 | 48,448,987 | 47,650,959 | 51,479,409 | 51,479,409 | |||||||||||||||
| Ratios/Supplemental Data(7) | |||||||||||||||
| Net assets at end of period (000’s) | 225,427 | 247,999 | 314,724 | 388,419 | 385,992 | ||||||||||
| Average net assets (000’s) | 191,137 | 289,373 | 369,258 | 385,947 | 343,328 | ||||||||||
| Ratio of expenses to average net assets | 8.45 | % | 8.35 | % | 6.17 | % | 7.95 | % | 12.38 | % | |||||
| Ratio of net investment income to average net assets | 10.26 | % | 13.30 | % | 9.07 | % | 7.96 | % | 7.80 | % | |||||
| Portfolio turnover rate(6) | 23.72 | % | 12.75 | % | 35.18 | % | 43.02 | % | 25.73 | % |
| ____________ |
| (1) | Represents per share net investment income for the period, based upon weighted average shares outstanding. |
| (2) | Net realized and unrealized gains include rounding adjustments to reconcile change in net asset value per share. |
| (3) | Management monitors available taxable earnings, including net investment income and realized capital gains, to determine if a tax return of capital may occur for the year. To the extent the Company’s taxable earnings fall below the total amount of the Company’s distributions for that fiscal year, a portion of those distributions may be deemed a tax return of capital to the Company’s stockholders. The ultimate tax character of the Company’s earnings cannot be determined until tax returns are prepared after the end of the fiscal year. |
| (4) | Total return based on market value equals the increase or decrease of ending market value over beginning market value, plus distributions, assuming distribution reinvestment prices obtained under the Company’s distribution reinvestment plan, excluding any discounts divided by the beginning market value per share. |
| (5) | Total return based on net asset value equals the increase or decrease of ending net asset value over beginning net asset value, plus distributions, divided by the beginning net asset value. |
| (6) | Portfolio turnover rate is calculated using the lesser of the annual cash investment sales and debt repayments or annual cash investment purchases over the average of the total investments at fair value. |
| (7) | The following table provides supplemental performance ratios measured for the years ended December 31, 2020, 2019, 2018, 2017 and 2016: |
4
| Year Ended December 31, 2020 | Year Ended December 31, 2019 | Year Ended December 31, 2018 | Year Ended December 31, 2017 | Year Ended December 31, 2016 | ||||||||||||||||
| Ratio of expenses to average net assets: | ||||||||||||||||||||
| Expenses before incentive fees | 8.45 | % | 7.14 | % | 4.92 | % | 6.95 | % | 11.57 | % | ||||||||||
| Net Investment Income Incentive Fees | — | % | 1.21 | % | 1.24 | % | 1.00 | % | 0.81 | % | ||||||||||
| Capital Gains Incentive Fees | — | % | — | % | — | % | — | % | — | % | ||||||||||
| Ratio of expenses, excluding interest expense, to average net assets | 4.35 | % | 4.93 | % | 4.21 | % | 4.61 | % | 7.37 | % | ||||||||||
5
About Oxford Square Capital Corp.
Oxford Square Capital Corp. is a publicly-traded business development company principally investing in syndicated bank loans
and debt and equity tranches of collateralized loan obligation (“CLO”) vehicles. CLO investments may also include warehouse
facilities, which are financing structures intended to aggregate loans that may be used to form the basis of a CLO vehicle.
Forward-Looking Statements
This press release contains forward-looking statements subject to the inherent uncertainties in predicting future results and
conditions. Any statements that are not statements of historical fact (including statements containing the words “believes,”
“plans,” “anticipates,” “expects,” “estimates” and similar expressions) should
also be considered to be forward-looking statements. These statements are not guarantees
of future performance, conditions or results and involve a number of risks and uncertainties, including the impact of COVID-19 and
related changes in base interest rates and significant market volatility on our business, our portfolio companies, our industry
and the global economy. Certain factors could cause actual results and conditions to differ materially from those
projected in these forward-looking statements. These factors are identified from time to time in our filings with the Securities
and Exchange Commission. We undertake no obligation to update such statements to reflect subsequent events, except as may be required
by law.
Contact:
Bruce Rubin
203-983-5280
6