OFS Capital Corporation functions as a business development company, delivering adaptable capital solutions, predominantly through debt financing and, to a lesser degree, ...
OFS Capital Corporation (NASDAQ: OFS) is a publicly traded business development company (BDC) that offers flexible capital solutions to U.S.-based middle-market businesses. The company primarily invests in senior secured, floating-rate loans, and also makes minority equity investments. OFS Capital targets companies with revenues between $10 million and $200 million, EBITDA ...OFS Capital Corporation (NASDAQ: OFS) is a publicly traded business development company (BDC) that offers flexible capital solutions to U.S.-based middle-market businesses. The company primarily invests in senior secured, floating-rate loans, and also makes minority equity investments. OFS Capital targets companies with revenues between $10 million and $200 million, EBITDA above $5 million, and enterprise values from $10 million to $500 million. Investment sizes typically range from $5 million to $35 million. The firm provides a variety of financial structures, including senior secured loans, unitranche facilities, first and second lien debt, subordinated debt, warrants, and preferred equity. It focuses on industries such as aerospace, business services, healthcare, specialty chemicals, and niche manufacturing. OFS Capital is externally managed by OFS Capital Management, which has a 25-year history in leveraged finance. As of recent data, the company has 47 employees and is headquartered in Chicago, Illinois. Financial metrics indicate a market cap of about $48.6 million, a price-to-book ratio of 0.43, and a dividend yield of 23.4%. The company has experienced net losses and negative returns, but continues to focus on investment opportunities in the middle market.
YoYYoY means Year-over-Year. It compares the latest annual value with the previous annual value to show long-term trend strength.
QoQQoQ means Quarter-over-Quarter. It compares the latest quarter with the immediately previous quarter to show short-term momentum changes.
RevenueThe total money that came through the front door from selling things, before paying a single bill. Think of it as the grand total of every credit card swipe from customers. (YoY compares this year to last year's performance, while QoQ compares the current three months to the previous three).
$-11.8M
-123.8%
+134.2%
Net IncomeThe absolute bottom line. If the company paid every single supplier, employee, banker, and tax collector, this is the actual money left in their pocket at the end of the day.
$-33.1M
-216.4%
+148.0%
Gross MarginThe basic markup. If they sell a $100 pair of sneakers, this percentage tells you how much of that price tag is profit right after paying for the rubber and shoelaces, but before paying for things like store rent or TV commercials.
+239.8%
+261.2%
-146.1%
Operating MarginThe 'day job' efficiency score. Out of every dollar a customer spends, this shows how many cents the company keeps after making the product AND paying for all the everyday corporate overhead (like salaries, marketing, and keeping the lights on).
+280.2%
+387.9%
+276.8%
Net MarginThe final take-home percentage. When you strip away every conceivable cost, tax, and interest payment, this is the exact number of cents the company truly gets to keep from every dollar in sales.
+280.2%
+387.9%
+40.6%
Free Cash FlowThe holy grail of corporate cash. It's the spendable, physical money left over after the business pays for its daily operations AND buys the big, expensive upgrades (like new factories or servers) it needs to survive. This is the 'free' money they can use to pay dividends or buy back stock.
$43.6M
+32.2%
-20.2%
FCF MarginThe ultimate cash conversion rate. It shows how good the company is at turning regular sales directly into cold, hard, spendable cash. A high percentage means the business is an absolute cash-printing machine.
-369.5%
-654.4%
+333.6%
Debt / EquityThe financial risk gauge. It compares how much of the company's empire was built using borrowed money (loans) versus the owners' own money (shareholders). A high number means they are heavily leveraged and playing a riskier game; a low number means they are playing it safe.
176.7%
+23.4%
-10.9%
Current RatioThe 12-month survival check. It simply compares the cash they have right now (plus things they can quickly turn into cash) against the immediate bills they absolutely must pay this year. A score above 1 means they have enough in the wallet to cover the upcoming bills without panicking.
0.74x
-64.7%
+2.0%
Total AssetsThe absolute size of the company's empire. It bundles together absolutely everything of value they own—from the cash in the register and the inventory in the warehouse, to the software patents in the vault and the factories on the ground.
Operator: Good day, and welcome to the OFS Capital Corporation's Second Quarter 2026 Earnings Conference Call. All participants will be in listen-only mode. By pressing the star key followed by 0. After today's presentation, there will be an opportunity to ask questions. Note today's event is being recorded. I would now like to turn the conference over to Steve Altebrando. Please go ahead.
Stephen Altebrando: Good morning, everyone, and thank you for joining us. Also on the call today are Bilal Rashid, our chairman and chief executive Officer and Kyle Spina, the company's Chief Financial Officer and Treasurer. Before we begin, please note that the statements made on this call and webcast may constitute forward-looking statements as defined under applicable securities laws. Such statements reflect various assumptions, expectations and opinions by OFS Capital Management concerning anticipated results, are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from such statements. The uncertainties and other factors are in some way beyond management's control, including the risk factors described from time to time in our filings with the SEC. Although we believe these assumptions are reasonable, any of those assumptions could prove incorrect. And as a result, the forward-looking statements based on those assumptions also could be incorrect. You should not place undue reliance on these forward-looking statements. OFS Capital undertakes no duty to update any forward-looking statements made herein and all forward-looking statements speak only as of the date of this call. With that, I will turn the call over to Chairman and Chief Executive Officer, Bilal Rashid.
Bilal Rashid: Thank you, Steve. Yesterday afternoon, we reported our second quarter results. Net investment income totaled $0.08 per share compared to $0.18 per share in the prior quarter. As we discussed on our last call, the prior quarter's results benefited from a large nonrecurring dividend from our equity position in Fansteel. We also anticipated additional net interest margin compression following the final redemption of our 4.75% February 2026 unsecured notes last quarter. In addition, we experienced some pressure from our ongoing efforts to delever our balance sheet. Net investment income was also impacted by 1 new loan being placed on nonaccrual during the quarter. Our net asset value at quarter end was $8.41 per share compared to $8.16 per share in the prior quarter. The increase was primarily driven by the performance of our equity investment in Fansteel, During the quarter, Fansteel delivered another period of strong operating results. As I mentioned, we placed 1 new loan on nonaccrual during the quarter. The loan was marked at 79% of par at quarter end. Representing 3.5% of our total portfolio at fair value. While the loan is currently on nonaccrual, we are actively …
