OHA Investment Corporation
Aug 10, 2017

OHA Investment Corporation Announces Second Quarter 2017 Results

NEW YORK, Aug. 10, 2017 (GLOBE NEWSWIRE) -- OHA Investment Corporation (NASDAQ:OHAI) (the "Company") today announced its financial results for the quarter ended June 30, 2017. Management will discuss the Company's results summarized below on a conference call on Friday, August 11, 2017, at 10:00 a.m. (Eastern Time).

Summary results for the quarter ended June 30, 2017:
Total investment income:  $2.5 million, or $0.12 per share
Net investment income:  $0.1 million, or $0.01 per share
Net realized and unrealized losses:  $5.0 million, or $0.25 per share
Net asset value:  $55.7 million, or $2.76 per share
New portfolio investments during the quarter:  $1.4 million
Fair value of portfolio investments:  $84.5 million
Investment in Castex Energy 2005, LP written down by $4.7 million, or $0.23 per share

Portfolio Activity
The fair value of our investment portfolio was $84.5 million at June 30, 2017, decreasing 4.7% compared to March 31, 2017. During the second quarter of 2017, the Company had realizations totaling $1.4 million and made one new investment in the amount of $1.4 million. The concentration of our investment portfolio in the energy sector at June 30, 2017 was 18%. The current weighted average yield of our portfolio based on the cost and fair value of our yielding investments was 12.6% and 13.0%, respectively, as of June 30, 2017.

During the second quarter, we added $1.4 million of second lien term loan to PAE Holding Corporation, or PAE, adding to our $5.5 million position that was previously acquired in November 2016.  The $1.4 million PAE loan was purchased at a 1% discount and earns interest payable in cash at a rate of 10.50% per annum (LIBOR+9.50% with a 1% floor) and matures in October 2023.

In April 2017, we received $0.9 million remittance from our investment in Gramercy Park CLO Ltd., which we applied to our cost basis.

In May 2017, Talos Production, LLC repaid a portion of its senior unsecured notes in the amount of $0.5 million at par.

Operating Results
Investment income totaled $2.5 million for the second quarter of 2017, decreasing 43.4% compared to $4.4 million in the corresponding quarter of 2016. The decrease was primarily attributable to a $1.5 million decrease in investment income related to non-accruals assets and a decrease in average portfolio balance.

Operating expenses for the second quarter of 2017 were $2.3 million, a decrease of $0.7 million, or 22.9%, compared to operating expenses for the second quarter of 2016. The decrease in operating expenses is related to lower base management and incentive fees, professional fees and other general and administrative expenses.

The resulting net investment income was $0.1 million or $0.01 per share, for the second quarter of 2017, compared to $1.3 million, or $0.06 per share, for the second quarter of 2016.

We recorded net realized and unrealized losses on investments totaling $5.0 million, or $0.25 per share, during the second quarter of 2017, compared to $1.1 million, or $0.06 per share, during the second quarter of 2016. Total losses recorded in the second quarter of 2017 was driven primarily by the $4.7 million write-down in Castex, a legacy energy portfolio investment.

Overall, we experienced a net decrease in net assets resulting from operations of $4.9 million, or $0.24 per share, for the second quarter of 2017. After declaring a quarterly dividend during the period of $0.02 per share, our net asset value decreased 8.6%, from $3.02 per share as of March 31, 2017 to $2.76 per share as of June 30, 2017.

Liquidity and Capital Resources
At June 30, 2017, we had cash and cash equivalents totaling $12.0 million. The total amount outstanding under our credit facility at June 30, 2017 was $40.5 million with $16.0 million available to draw.

Webcast / Conference Call at 10:00 a.m. Eastern Time on August 11, 2017
We invite all interested persons to participate in our conference call on Friday, August 11, 2017, at 10:00 a.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 61891354. 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.




OHA INVESTMENT CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
 
  June 30, 2017 December 31, 2016
  (unaudited)  
Assets    
Investments in portfolio securities at fair value    
Affiliate investments  (cost: $21,386 and $19,724, respectively) $18,350  $17,150 
Non-affiliate investments  (cost: $144,367 and $154,772, respectively) 66,151  87,855 
Total portfolio investments  (cost: $165,753 and $174,496, respectively) 84,501  105,005 
Investments in U.S. Treasury Bills at fair value  (cost: $44,994 and $39,997, respectively) 44,994  39,997 
Total investments 129,495  145,002 
Cash and cash equivalents 12,002  16,533 
Accounts receivable and other current assets 31  33 
Interest receivable 667  1,313 
Prepaid assets 1  17 
Total current assets 12,701  17,896 
    Total assets $142,196  $162,898 
     
Liabilities    
Current liabilities    
Distributions payable $403  $1,210 
Accounts payable and accrued expenses 1,760  1,999 
Due to affiliate 39  220 
Management and incentive fees payable 496  635 
Income taxes payable 12  28 
Repurchase agreement 44,093  39,200 
Short-term debt, net of debt issuance costs 39,694   
Total current liabilities 86,497  43,292 
Long-term debt, net of debt issuance costs   39,113 
   Total liabilities 86,497   82,405 
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 235,703  235,703 
Undistributed net investment loss (3,342) (2,873)
Undistributed net realized capital loss (98,543) (85,979)
Net unrealized depreciation on investments (78,139) (66,378)
   Total net assets  55,699  80,493 
   Total liabilities and net assets $142,196  $162,898 
Net asset value per share $2.76  $3.99 



OHA INVESTMENT CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
 
  Three months ended
June 30,
 Six months ended
June 30,
  2017 2016 2017 2016
Investment income:        
Interest income:        
Interest income $2,465  $3,396  $4,869  $7,209 
Dividend income   970    2,283 
Other income 10   7  61  38 
Total investment income  2,475  4,373  4,930  9,530 
Operating expenses:        
Interest expense and bank fees 984  975  1,958  2,063 
Management and incentive fees 496  767  1,066  1,697 
Professional fees 401  669  672  1,389 
Other general and administrative expenses 377  538  759  1,044 
Director fees 62  62  123  123 
Total operating expenses 2,320  3,011  4,578  6,316 
Income tax provision, net 10  99  14  116 
Net investment income 145  1,263  338  3,098 
          
Net realized capital gain on investments, net of tax (12,659) (9,943)  (12,564) (9,919)
Total net realized capital gain (loss) on investments (12,659) (9,943) (12,564) (9,919)
         
Net unrealized depreciation on investments, net of tax 7,618  8,795  (11,761) (4,728)
Total net unrealized depreciation on investments 7,618  8,795  (11,761) (4,728)
         
Net increase (decrease) in net assets resulting from operations $(4,896) $115  $(23,987) $(11,549)
         
Net increase (decrease) in net assets resulting from operations per common share $(0.24) $0.01  $(1.19) $(0.57)
         
Distributions declared per common share $0.02  $0.06  $0.04  $0.12 
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 $3.02  $4.85  $3.99  $5.49 
         
Net investment income 0.01  0.06  0.01  0.15 
Net realized and unrealized loss on investments (2) (0.25) (0.05) (1.21)  (0.72)
Net increase (decrease) in net assets resulting from operations (0.24) 0.01  (1.19)  (0.57)
Distributions to common stockholders        
Distributions from net investment income (0.02) (0.06) (0.04) (0.12)
Net decrease in net assets from distributions (0.02) (0.06) (0.04) (0.12)
         
Net asset value, end of period $2.76  $4.80  $2.76  $4.80 
         
(1)  Per share data is based on weighted average number of common shares outstanding for the period.  
(2)  May include a balancing amount necessary to reconcile the change in net asset value per share with other per share presented.


About OHA Investment Corporation
OHA 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 over $4 billion in over 125 direct lending investments over the past 14 years.

Forward-Looking Statements
This press release may contain forward-looking statements. 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 the timing or likelihood of transaction closings, changes in interest rates, availability of transactions, the future operating results of our portfolio companies, regulatory factors, changes in regional or national economic conditions and their impact on the industries in which we invest, other changes in the conditions of the industries in which we invest and other factors enumerated in our filings with the Securities and Exchange Commission (the "SEC"). You should not place undue reliance on such forward-looking statements, which speak only as of the date they are made. We undertake no obligation to update our forward-looking statements made herein, unless required by law.

 

CONTACTS:

Steven T. Wayne - President and Chief Executive Officer

Cory E. Gilbert - Chief Financial Officer

Lisa R. Price - Chief Compliance Officer

OHAICInvestorRelations@oakhilladvisors.com



For media inquiries, contact Kekst and Company, (212) 521-4800

Jeremy Fielding - Jeremy-Fielding@kekst.com

Ethan Lyle - Ethan.Lyle@kekst.com

Source: OHA Investment Corporation

News Provided by Acquire Media