Oxford Square Capital Q1 2024 Earnings Report

Oxford Square Capital EPS Results

• Actual EPS: $0.11
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Oxford Square Capital Revenue Results

• Actual Revenue: $10.68 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Oxford Square Capital Announcement Details

• Quarter: Q1 2024
• Date: 5/2/2024
• Time: N/A
• Conference Call Date: Thursday, May 2, 2024
• Conference Call Time: 9:00AM ET

Oxford Square Capital (NASDAQ:OXSQ) is a business development company, operates as a closed-end, non-diversified management investment company. It is a private equity and mezzanine firm. The firm invests in both public and private companies. It invests in secured and unsecured senior debt, subordinated debt, junior subordinated debt, preferred stock, common stock and syndicated bank loans. The firm primarily invests in debt and/or equity securities of technology-related companies that operate in the computer software, Internet, information technology infrastructure and services, media, telecommunications and telecommunications equipment, semiconductors, hardware, technology-enabled services, semiconductor capital equipment, medical device technology, diversified technology, and networking systems sectors. It concentrates its investments in companies having annual revenues of less than $200 million and a market capitalization or enterprise value of less than $300 million. The firm invests between $5 million and $30 million per transaction. It seeks to exit its investments within 7 years. It serves as the investment adviser to TICC. Oxford Square Capital Corp., formerly known as TICC Capital Corp., was founded in 2003 and is headquartered in Greenwich, Connecticut.

Oxford Square Capital Q1 2024 Earnings Call Transcript

[Operator]

Please note that this call is being recorded and I will be standing by should you need any assistance.

[Operator]

It is now my pleasure to turn the conference over to Jonathan Cohen. Please go ahead.

[Speaker 1]

Good morning, everyone, and welcome to the Oxford Square Capital Corp. Q1 2024 Earnings Conference Call. I'm joined today by Saul Rosenthal, our President Bruce Rubin, our Chief Financial Officer and Kevin Yonan, Managing Director and Portfolio Manager. Bruce, could you open the call with a disclosure regarding forward looking statements?

[Speaker 2]

Sure, Jonathan. Today's conference call is being recorded. In order to replay of the conference call will be available for 30 days. Replay information is included in our press release that was issued this morning. Please note that this call is the property of Oxford Square Capital Corp.

[Speaker 2]

Any unauthorized rebroadcast of this call in any form is strictly prohibited. At this point, please direct your attention to the customary disclosure in this morning's press release regarding forward looking information. Today's conference call includes forward looking statements and projections that reflect the company's current views with respect to, among other things, future events and financial performance. We ask that you refer to our most recent filings with the SEC for important factors that can cause actual results to differ materially from those indicated in these projections. We do not undertake to update our forward looking statements unless required to do so by law.

[Speaker 2]

To obtain copies of our latest SEC filings, please visit our website at www.oxfordsquarecapital.com. With that, I'll turn the presentation back to Jonathan.

[Speaker 1]

Thank you, Bruce. For the quarter ended March 31, Oxford Square's net investment income was approximately 6 $500,000 or $0.11 per share compared with $7,800,000 or $0.13 per share in the prior quarter. Our net asset value per share stood at $2.42 compared to a net asset value per share of $2.55 for the prior quarter. During the quarter, we distributed $0.105 per share. For the Q1, we recorded total investment income of approximately $10,700,000 as compared to approximately $12,200,000 in the prior quarter.

[Speaker 1]

In the Q1, we recorded net unrealized depreciation on investments of approximately $210,000 compared to net unrealized depreciation on investments of approximately $14,800,000 in the prior quarter. In the Q1, we recorded realized losses of approximately $8,100,000 or $0.14 per share. In the prior quarter, we recorded realized losses on investments of approximately $270,000 During the Q1, our investment activity consisted of approximately $12,100,000 sales of approximately $1,400,000 and repayments of approximately 17 $900,000 During the quarter ended March, we issued a total of approximately 324,000 shares of our common stock pursuant to an at the market offering, resulting in net proceeds of approximately $924,000 On April 25, 2024, our Board of Directors declared monthly distributions of $0.035 per share for each of the months ending July, August September of 2024. Additional details regarding record and payment date information can be found in our press release that was issued this morning. With that, I'll turn the call over to our portfolio manager, Kevin Yonon.

[Speaker 3]

Thank you, Jonathan. During the quarter ended March 31, 2024, U. S. Loan market performance improved versus the prior quarter. U.

[Speaker 3]

S. Loan prices as defined by the Morningstar LSTA US Leveraged Loan Index increased from 96.23 percent of par as of December 31, 2023 to 96.69 percent of par as of March 31, 2024. According to LCD, during the quarter, there was some pricing dispersion with BB rated loan prices decreasing 5 basis points, B rated loan prices increasing 32 basis points and CCC rated loan prices decreased to 1.14% by principal amount at the end of the quarter from 1.53% at the end of December 2023. We note that we have seen higher default rates amongst issuers of the type we invest in. Additionally, the distress ratio defined as a percentage of loans with a price below 80% of par ended the quarter at 3.51% compared to 4.54% at the end of December 2023.

[Speaker 3]

During the quarter ended March 31, 2024, U. S. Leverage loan primary market issuance was $138,000,000,000 representing a 163% increase versus the quarter ended March 31, 2023. This was driven by opportunistic activity, including refinancings and add ons, while M and A and LVO activity remained relatively slow, but showed some recovery. At the same time, U.

[Speaker 3]

S. Loan fund inflows as measured by Lipper were approximately $2,000,000,000 for the quarter ended March 31, 2024. We continue to focus on portfolio management strategies designed maximize our long term total return. And as a permanent capital vehicle, we historically have been able to take a longer term view towards our investment strategy. With that, I will turn the call back over to Jonathan.

[Speaker 1]

Thanks, Kevin. We note that additional information about Oxford Square's Q1 performance has been posted to our website atwww.oxfordsquarecapital.com. With that, operator, we're happy to open the call for any questions.