Oxford Square Capital Q2 2024 Earnings Report

Oxford Square Capital EPS Results

• Actual EPS: $0.13
• Consensus EPS: $0.13
• Beat/Miss: Met Expectations
• One Year Ago EPS: $0.13

Oxford Square Capital Revenue Results

• Actual Revenue: $11.45 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Oxford Square Capital Announcement Details

• Quarter: Q2 2024
• Date: 8/13/2024
• Time: Before Market Opens
• Conference Call Date: Tuesday, August 13, 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 Q2 2024 Earnings Call Transcript

[Operator]

Please note today's call will be recorded and I'll be standing by if you should need any assistance.

[Operator]

It is now my pleasure to turn the call over to Jonathan Cohen, CEO. Please go ahead.

[Speaker 1]

Thanks very much. Good morning, everyone. Welcome to the Oxford Square Capital Corp. 2nd quarter 2024 earnings conference call. I'm joined today by Saul Rosenthal, our President Bruce Rubin, our Chief Financial Officer and Kevin Yonan, our Managing Director and Portfolio Manager.

[Speaker 1]

Bruce, could you open the call with a discussion regarding forward looking statements? Sure, Jonathan. Today's conference call

[Speaker 2]

is being recorded. An audio 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. And the unauthorized rebroadcast of this call in any form is strictly prohibited.

[Speaker 2]

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. To obtain copies of our latest SEC filings, please visit our website at www.oxfordsquarecapital.com.

[Speaker 2]

With that, I'll turn the presentation back to Jonathan.

[Speaker 1]

Thanks, Bruce. For the quarter ended June, Oxford Square's net investment income was approximately $7,700,000 or $0.13 per share compared with $6,500,000 or $0.11 per share in the prior quarter. Our net asset value per share stood at $2.43 compared to a net asset value of $2.42 for the prior quarter. During the quarter, we distributed $0.105 per share in common stock distributions. For the Q2, we recorded total investment income of approximately $11,400,000 as compared to approximately $10,700,000 in the prior quarter.

[Speaker 1]

In the 2nd quarter, we recorded net unrealized and realized losses on investments of approximately $2,500,000 or $0.04 per share, compared to net unrealized and realized losses on investments of approximately $8,300,000 or $0.14 per share in the prior quarter. During the quarter, our investment activity consisted of purchases of approximately $28,800,000 sales of approximately $3,400,000 and repayments of approximately $15,800,000 During the quarter ended June, we issued a total of approximately point 9,000,000 shares of our common stock pursuant to an at the market offering, resulting in net proceeds of approximately $8,900,000 On August 8, our Board of Directors declared monthly distributions of $0.035 per share for each of the months ending November, October December 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. Kevin?

[Speaker 3]

Thank you, Jonathan. During the quarter ended June 30, 2024, U. S. Loan market performance modestly weakened versus the prior quarter. U.

[Speaker 3]

S. Loan prices as defined by the Morningstar LSTA U. S. Leverage loan index decreased from 96.69 percent of par as of March 28, 2024 to 96.54 percent of par as of June 28, 2024. According to LCD, during the quarter there was some pricing dispersion with BB rated loan prices decreasing 19 basis points, B rated loan prices decreasing 18 basis points and CCC rated loan increasing 187 basis points on average.

[Speaker 3]

The 12 month trailing market default rate for the Morningstar LSTA U. S. Leverage Loan Index decreased to 0.92% by principal amount at the end of the quarter from 1.14% at the end of March 2024. The 12 month trailing market default rate increased to 4.31% as of the end of June 2024 when including out of court liability management transactions. Additionally, the distress ratio defined as the percentage of loans with prices below 80% of par into the quarter at 4.42% compared to 3.51% at the end of March 2024.

[Speaker 3]

During the quarter ended June 30, 2024, U. S. Leverage loan primary market issuance excluding amendments and repricing transactions was $145,000,000,000 representing a 204% increase versus the quarter ended June 30, 2023. This was driven by opportunistic activity, including refinancings and add ons, while M and A and LBO activity remained relatively limited. At the same time, U.

[Speaker 3]

S. Loan fund inflows, as measured by Lipper, were approximately 4 point $6,000,000,000 for the quarter ended June 30, 2024. We continue to focus on portfolio management strategies designed to maximize our long term total return. 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 2nd quarter performance has been posted to our website atwww.oxfordsquarecapital.com. And operator, we're happy to now poll for any questions.

[Operator]

At this time, I show no questions in queue. I would like to turn the call back to Mr. Jonathan Cohen, CEO. Please go ahead.

[Speaker 1]

Thanks very much. We'd like to thank everybody for their interest in Oxford

[Operator]

Thank you. This does conclude today's Oxford Square Capital Corp. 2nd quarter 2024 earnings conference call. You may disconnect your line at this time and have a wonderful day.