OHA Investment Corporation (NASDAQ: OHAI) (the “Company”) today
announced its financial results for the quarter ended September 30,
2019. Management will discuss the Company's results summarized
below on a conference call on Wednesday, November 13, 2019, at 1:00
p.m. (Eastern Time).
Summary results for the quarter ended
September 30, 2019:Total investment income: $1.5
million, or $0.08 per shareNet investment loss: ($0.6)
million, or ($0.03) per shareNet realized and unrealized
loss: ($0.5) million, or ($0.03) per shareNet asset
value: $35.5 million, or $1.76 per shareInvestments added
during the quarter: $4.4 million (par value)Fair value of
portfolio investments: $62.4 million
Operating ResultsInvestment
income totaled $1.5 million for the third quarter of 2019,
decreasing 20% compared to $1.9 million in the corresponding
quarter of 2018. The decrease in investment income was primarily
attributable to placing our investment in OCI subordinated notes on
full non-accrual in October 2018, which was partially offset by an
increase of $0.1 million in non-affiliate investment interest
income. In the third quarter of 2018, OCI subordinated notes
contributed $0.5 million of investment income.
Operating expenses for the third quarter of 2019
were $2.1 million, an increase of $0.2 million, or 14%, compared to
operating expenses for the third quarter of 2018. This was largely
due to $754 thousand, or $0.04 per share, of costs incurred in
connection with the strategic review process during the third
quarter of 2019. The increase in the strategic review costs were
partially offset by lower interest expense and management fees
during the quarter. During the quarter, interest expense and bank
fees decreased by 19% to $0.6 million from $0.8 million compared to
the same period in the prior year largely due to lower amount
outstanding on our Credit Facility, as well as lower amortization
of debt issuance costs. Management fees decreased by 23% to $0.3
million from $0.4 million due to lower average asset base subject
to the base management fee.
The resulting net investment loss was ($560)
thousand or ($0.03) per share, for the third quarter of 2019,
compared to net investment income of $56 thousand, or $0.00 per
share, for the third quarter of 2018.
We recorded net realized and unrealized losses
on investments totaling ($0.5) million, or ($0.03) per share, for
the third quarter of 2019, compared to net realized and unrealized
losses of ($6.0) million, or ($0.30) per share, for the third
quarter of 2018.
Overall, we experienced a net decrease in net
assets resulting from operations of ($1.1) million, or ($0.05) per
share, for the third quarter of 2019. After declaring a quarterly
distribution during the period of $0.02 per share, our net asset
value decreased 4% from $1.83 per share as of June 30, 2019 to
$1.76 per share as of September 30, 2019.
Portfolio ActivityThe fair
value of our investment portfolio was $62.4 million at September
30, 2019, decreasing 6.0% compared to June 30, 2019. In the third
quarter of 2019, the Company added $4.3 million to existing OHA
portfolio investments and had realizations of $7.8 million. The
current weighted average yield of our portfolio based on the cost
and fair value of our yielding investments was 10.1% and 10.1%,
respectively, as of September 30, 2019.
In July 2019, Allied Universal repaid its second
lien term loan in the amount of $1.9 million. This investment was
initiated in March 2018 and generated a gross unlevered internal
rate of return of 12.0%.
In August 2019, MyEyeDr repaid its second lien
term loan in the amount of $5.0 million. This investment was
initiated in February 2018 and generated a gross unlevered internal
rate of return of 10.6%.
In September 2019, we purchased $4.3 million of
second lien term loan in NAVEX adding to our $0.4 million position
that was previously acquired in August 2018. The $4.3 million NAVEX
term loan add-on was purchased at an 0.875% discount to par, earns
interest payable in cash at a rate of LIBOR +7.00%, and matures in
September 2026.
Liquidity and Capital
ResourcesAt September 30, 2019, we had cash and cash
equivalents totaling $4.5 million, with $0.2 million due to a
broker for unsettled trades, and a total of $2.3 million of
unfunded commitments on our investments in two revolving credit
facilities and two delayed draw term loans. The total amount
outstanding under our Credit Facility at September 30, 2019 was
$30.0 million. On August 5, 2019, we exercised our option to extend
the maturity date on our Credit Facility to March 9, 2020.
Review of Strategic
AlternativesOn July 31, 2019, we entered into an Agreement
and Plan of Merger (the “Merger Agreement”) with Portman Ridge
Finance Corporation (“PTMN”), Storm Acquisition Sub Inc.
(“Acquisition Sub”), and Sierra Crest Investment Management LLC,
the investment adviser to PTMN and an affiliate of BC
Partners Advisors L.P. and LibreMax Capital LLC. (“PTMN
Adviser”). The transaction is the result of OHAI’s previously
announced review of strategic alternatives and has been approved by
a unanimous vote of the Special Committee of the Board of Directors
of OHAI, the Board of Directors of OHAI (other than directors
affiliated with Oak Hill Advisors, L.P., the external adviser to
OHAI, who abstained from voting) and the Board of Directors of
PTMN.
Under the terms of the proposed transaction,
OHAI stockholders will receive a combination of (i) a minimum
of $8 million in cash (approximately $0.40 per share) from
PTMN (as may be adjusted as described below); (ii) PTMN shares
valued at 100% of PTMN’s net asset value per share at the time of
closing of the transaction in an aggregate number equal to OHAI’s
net asset value at closing minus the $8 million PTMN cash
merger consideration (as may be adjusted as described below); and
(iii) an additional cash payment from Sierra Crest, the
external adviser to PTMN, of $3 million in the aggregate, or
approximately $0.15 per share.
If the aggregate number of shares of PTMN stock
to be issued in connection with the merger would exceed 19.9% of
the issued and outstanding shares of PTMN common stock immediately
prior to the transaction closing, then the cash consideration
payable by PTMN will be increased to the minimum extent necessary
such that the aggregate number of shares of PTMN common stock to be
issued in connection with the merger does not exceed such
threshold. The exact exchange ratio for the stock component of the
merger will be determined by the net asset value of OHAI and PTMN
as of the closing, calculated as of 5:00 p.m. New York City time on
the day prior to the closing of the transaction. In addition to
approval by OHAI’s stockholders, the closing of the merger is
subject to customary conditions. The parties currently expect the
transaction to be completed in the fourth calendar quarter of
2019.
On November 4, 2019, PTMN filed an amended
registration statement on Form N-14, which included a joint
prospectus and proxy statement of OHAI and PTMN. The
registration statement on Form N-14 was declared effective by the
SEC on November 6, 2019. The special meeting for our stockholders
is scheduled for December 12, 2019 to vote on the matters described
in the proxy statement as required by the Merger Agreement.
Webcast / Conference Call at 1:00 p.m.
Eastern Time on November 13, 2019We invite all interested
persons to participate in our conference call on Wednesday,
November 13, 2019, at 1:00 p.m. Eastern Time. The dial-in number
for the call is (877) 303-7617. International callers can access
the conference by dialing (760) 666-3609. Conference ID is 7482529.
Callers are encouraged to dial in at least 5-10 minutes prior to
the call. The presentation materials for the call will be
accessible on the Investor Relations page of the Company’s website
at www.ohainvestmentcorporation.com.
About OHA Investment
CorporationOHA Investment Corporation (NASDAQ: OHAI) is a
specialty finance company designed to provide its investors with
current income and capital appreciation. OHAI focuses primarily on
providing creative direct lending solutions to middle market
private companies across industry sectors. OHAI is externally
managed by Oak Hill Advisors, L.P., a leading independent
investment firm (www.oakhilladvisors.com). Oak Hill Advisors has
deep experience in direct lending, having invested approximately
$7.4 billion in over 165 direct lending investments over the past
17 years.
OHAI’s filings with the Securities and Exchange
Commission (“SEC”), earnings releases, press releases and other
financial, operational and governance information are available on
OHAI’s website at http://ir.ohainvestmentcorporation.com/home.
About Portman Ridge Finance
CorporationPortman Ridge Finance Corporation (NASDAQ:
PTMN) is a publicly traded, externally managed investment company
that has elected to be regulated as a business development company
under the Investment Company Act of 1940. PTMN’s middle market
investment business originates, structures, finances and manages a
portfolio of term loans, mezzanine investments and selected equity
securities in middle market companies. PTMN’s investment activities
are managed by its investment adviser, Sierra Crest Investment
Management LLC, an affiliate of BC Partners Advisors, LP and
LibreMax Capital LLC.
PTMN's filings with the SEC, earnings releases,
press releases and other financial, operational and governance
information are available on PTMN's website at
www.portmanridge.com.
Forward-Looking StatementsThis
press release may contain forward-looking statements that involve
substantial risks and uncertainties, including statements regarding
the completion of the transaction between OHAI and PTMN. We may use
words such as "anticipates," "believes," "intends," "plans,"
"expects," "projects," "estimates," "will," "should," "may" and
similar expressions to identify forward-looking statements. These
forward-looking statements are subject to various risks and
uncertainties. Certain factors could cause actual results and
conditions to differ materially from those projected, including the
uncertainties associated with (i) the timing or likelihood of the
transaction closing, (ii) the expected synergies and savings
associated with the transaction, (iii) the expected elimination of
certain expenses and costs due to the transaction, (iv) the
percentage of OHAI stockholders voting in favor of the transaction,
(v) the possibility that competing offers or acquisition proposals
for OHAI will be made; (vi) the possibility that any or all of the
various conditions to the consummation of the merger may not be
satisfied or waived; (vii) risks related to diverting management’s
attention from OHAI’s ongoing business operations, (viii) the risk
that stockholder litigation in connection with the transactions
contemplated by the merger agreement may result in significant
costs of defense and liability, (ix) the future operating results
of our portfolio companies or the combined company, (x) regulatory
factors, (xi) changes in regional or national economic conditions
and their impact on the industries in which we invest, and (xii)
other changes in the conditions of the industries in which we
invest and other factors enumerated in our filings with the SEC.
You should not place undue reliance on such forward-looking
statements, which speak only as of the date of this press release.
We undertake no obligation to update our forward-looking statements
made herein, unless required by law. You should, therefore, not
rely on these forward-looking statements as representing our views
as of any date subsequent to the date of this press release. You
should read this communication and the documents that we reference
in this communication completely and with the understanding that
our actual future results may be materially different from what we
expect. We qualify all of our forward-looking statements by these
cautionary statements.
Additional Information and Where to Find
ItThis communication relates to a proposed business
combination involving OHAI and PTMN for which OHAI stockholder
approval will be sought (the “Proposal”). In connection with the
Proposal, each of OHAI and PTMN have filed relevant materials with
the SEC, including a registration statement on Form N-14, which
include a proxy statement of OHAI and a prospectus of PTMN. This
communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval. No offer of securities shall be made except
by means of a prospectus meeting the requirements of Section 10 of
the Securities Act. STOCKHOLDERS OF OHAI ARE URGED TO READ ALL
RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE PROXY
STATEMENT OF OHAI REGARDING THE PROPOSAL (THE “PROXY STATEMENT”)
WHEN IT BECOMES AVAILABLE, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS
THERETO, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
OHAI, PTMN, THE MERGER AND THE PROPOSAL. Investors and security
holders will be able to obtain the documents filed with the SEC
free of charge at the SEC’s web site, http://www.sec.gov or, for
documents filed by OHAI, from OHAI’s website at
http://ir.ohainvestmentcorporation.com/home.
Participants in the
SolicitationOHAI and PTMN and their respective directors,
executive officers and certain other members of management,
employees of Oak Hill Advisors, L.P and its affiliates and
employees of Sierra Crest Investment Management LLC and its
affiliates, may be deemed to be participants in the solicitation of
proxies from the stockholders of OHAI in connection with the
Proposal. Information regarding the persons who may, under the
rules of the SEC, be considered participants in the solicitation of
the OHAI stockholders in connection with the Proposal will be
contained in the Proxy Statement when such document becomes
available. This document may be obtained free of charge from the
sources indicated above.
CONTACTS:Steven T. Wayne –
President and Chief Executive OfficerCory E. Gilbert – Chief
Financial OfficerKahyeong Lee – Chief Compliance
OfficerOHAICInvestorRelations@oakhilladvisors.com
For media inquiries, contact Kekst and Company,
(212) 521-4800Jeremy Fielding – jeremy.fielding@kekstcnc.com
OHA INVESTMENT
CORPORATIONCONSOLIDATED BALANCE
SHEETS(in thousands, except share and per share
amounts)
|
|
September 30, 2019 |
|
December 31, 2018 |
|
|
(unaudited) |
|
|
Assets |
|
|
|
|
Investments in portfolio
securities at fair value |
|
|
|
|
Affiliate investments (cost: $26,028 and $26,028,
respectively) |
|
$ |
2,422 |
|
|
$ |
2,271 |
|
Non-affiliate investments (cost: $80,722 and $85,306,
respectively) |
|
59,982 |
|
|
63,335 |
|
Total portfolio investments (cost: $106,750 and $111,334,
respectively) |
|
62,404 |
|
|
65,606 |
|
Investments in U.S. Treasury Bills at fair value (cost:
$9,999 and $14,989, respectively) |
|
9,999 |
|
|
14,989 |
|
Total investments |
|
72,403 |
|
|
80,595 |
|
Cash and cash equivalents |
|
4,497 |
|
|
3,124 |
|
Accounts receivable and other
current assets |
|
492 |
|
|
499 |
|
Interest receivable |
|
425 |
|
|
224 |
|
Other prepaid assets |
|
34 |
|
|
19 |
|
Deferred tax asset |
|
158 |
|
|
316 |
|
Total current assets |
|
5,606 |
|
|
4,182 |
|
Total assets |
|
$ |
78,009 |
|
|
$ |
84,777 |
|
|
|
|
|
|
Liabilities |
|
|
|
|
Current liabilities |
|
|
|
|
Distributions payable |
|
$ |
403 |
|
|
$ |
403 |
|
Accounts payable and accrued expenses |
|
1,697 |
|
|
683 |
|
Due to broker |
|
199 |
|
|
3,251 |
|
Due to affiliate |
|
122 |
|
|
571 |
|
Management and incentive fees payable |
|
351 |
|
|
366 |
|
Income taxes payable |
|
39 |
|
|
39 |
|
Repurchase agreement |
|
9,800 |
|
|
14,689 |
|
Short-term debt, net of debt issuance costs |
|
29,894 |
|
|
— |
|
Total current liabilities |
|
42,505 |
|
|
20,002 |
|
Long-term debt, net of debt
issuance costs |
|
— |
|
|
28,866 |
|
Total liabilities |
|
42,505 |
|
|
48,868 |
|
Commitments and
contingencies |
|
|
|
|
Net
assets |
|
|
|
|
Common stock, $.001 par value,
250,000,000 shares authorized; 20,172,392 and 20,172,392 shares
issued and outstanding, respectively |
|
20 |
|
|
20 |
|
Paid-in capital in excess of
par |
|
211,907 |
|
|
211,907 |
|
Total distributable earnings
(loss) |
|
(176,423 |
) |
|
(176,018 |
) |
Total net assets |
|
35,504 |
|
|
35,909 |
|
Total liabilities and net assets |
|
$ |
78,009 |
|
|
$ |
84,777 |
|
Net asset value per
share |
|
$ |
1.76 |
|
|
$ |
1.78 |
|
|
OHA INVESTMENT
CORPORATIONCONSOLIDATED STATEMENTS OF
OPERATIONS(in thousands, except per share
data)
|
|
For the three months ended September 30, |
|
For the nine months ended September 30, |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Investment
income: |
|
|
|
|
|
|
|
|
Interest income: |
|
|
|
|
|
|
|
|
Interest income |
|
$ |
1,496 |
|
|
$ |
1,819 |
|
|
$ |
4,499 |
|
|
$ |
6,572 |
|
Money market interest |
|
18 |
|
|
50 |
|
|
50 |
|
|
190 |
|
Other income |
|
4 |
|
|
17 |
|
|
18 |
|
|
34 |
|
Total investment income |
|
1,518 |
|
|
1,886 |
|
|
4,567 |
|
|
6,796 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Interest expense and bank fees |
|
620 |
|
|
767 |
|
|
1,860 |
|
|
2,391 |
|
Management fees |
|
305 |
|
|
397 |
|
|
925 |
|
|
1,181 |
|
Incentive fees |
|
(32 |
) |
|
6 |
|
|
46 |
|
|
6 |
|
Costs related to strategic alternatives review |
|
754 |
|
|
— |
|
|
1,063 |
|
|
75 |
|
Professional fees |
|
(31 |
) |
|
260 |
|
|
406 |
|
|
1,120 |
|
Allocation of administrative expenses from advisor |
|
371 |
|
|
298 |
|
|
1,113 |
|
|
962 |
|
Other general and administrative expenses |
|
29 |
|
|
40 |
|
|
161 |
|
|
210 |
|
Director fees |
|
62 |
|
|
61 |
|
|
184 |
|
|
184 |
|
Total operating expenses |
|
2,078 |
|
|
1,829 |
|
|
5,758 |
|
|
6,129 |
|
Incentive fee waiver |
|
— |
|
|
(6 |
) |
|
— |
|
|
(6 |
) |
Net operating expenses |
|
2,078 |
|
|
1,823 |
|
|
5,758 |
|
|
6,123 |
|
Income tax provision, net |
|
— |
|
|
7 |
|
|
15 |
|
|
45 |
|
Net investment income
(loss) |
|
(560 |
) |
|
56 |
|
|
(1,206 |
) |
|
628 |
|
|
|
|
|
|
|
|
|
|
Net realized capital gain
(loss) on investments |
|
— |
|
|
— |
|
|
629 |
|
|
(55,952 |
) |
Benefit (provision) for
taxes |
|
— |
|
|
3 |
|
|
— |
|
|
(39 |
) |
Total net realized
capital gain (loss) on investments |
|
— |
|
|
3 |
|
|
629 |
|
|
(55,991 |
) |
|
|
|
|
|
|
|
|
|
Total net unrealized
appreciation (depreciation) on investments |
|
(539 |
) |
|
(6,008 |
) |
|
1,382 |
|
|
52,154 |
|
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in net assets resulting from operations |
|
$ |
(1,099 |
) |
|
$ |
(5,949 |
) |
|
$ |
805 |
|
|
$ |
(3,209 |
) |
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net
assets resulting from operations per common share |
|
$ |
(0.05 |
) |
|
$ |
(0.29 |
) |
|
$ |
0.04 |
|
|
$ |
(0.16 |
) |
|
|
|
|
|
|
|
|
|
Distributions declared per
common share |
|
$ |
0.02 |
|
|
$ |
0.02 |
|
|
$ |
0.06 |
|
|
$ |
0.06 |
|
Weighted average shares
outstanding - basic and diluted |
|
20,172 |
|
|
20,172 |
|
|
20,172 |
|
|
20,172 |
|
|
|
|
|
|
|
|
|
|
Per Share
Data(1) |
|
|
|
|
|
|
|
|
Net asset value, beginning of
period |
|
$ |
1.83 |
|
|
$ |
2.46 |
|
|
$ |
1.78 |
|
|
$ |
2.37 |
|
|
|
|
|
|
|
|
|
|
Net investment income
(loss) |
|
(0.03 |
) |
|
— |
|
|
(0.06 |
) |
|
0.03 |
|
Net realized and unrealized gain (loss) on investments |
|
(0.03 |
) |
|
(0.30 |
) |
|
0.10 |
|
|
(0.19 |
) |
Net increase (decrease) in net
assets resulting from operations |
|
(0.06 |
) |
|
(0.30 |
) |
|
0.04 |
|
|
(0.16 |
) |
Distributions to common
stockholders |
|
(0.02 |
) |
|
(0.02 |
) |
|
(0.06 |
) |
|
(0.06 |
) |
Net decrease in net assets
from distributions |
|
(0.02 |
) |
|
(0.02 |
) |
|
(0.06 |
) |
|
(0.06 |
) |
|
|
|
|
|
|
|
|
|
Net asset value, end of
period |
|
$ |
1.76 |
|
|
$ |
2.15 |
|
|
$ |
1.76 |
|
|
$ |
2.15 |
|
|
|
|
|
|
|
|
|
|
(1) Per share data is based on weighted average
number of common shares outstanding for the period. Per share data
may not total due to rounding.
Grafico Azioni OHA Investment (NASDAQ:OHAI)
Storico
Da Mag 2024 a Giu 2024
Grafico Azioni OHA Investment (NASDAQ:OHAI)
Storico
Da Giu 2023 a Giu 2024