OFS Capital Corporation Q3 FY2025 earnings call

• Net investment income decline was primarily due to higher interest costs from refinancing efforts. • Net asset value decrease was largely driven by markdowns on equity investments, including Pfanstiehl and CLO equity. • Credit portfolio is stable with one loan placed on nonaccrual and one loan moved to performing status. • Completed refinancing of $125 million unsecured notes, including a $69 million public bond offering maturing in July 2028 and a $25 million private note maturing in August 2029, repaid $94 million of the February 2026 notes. • Actively engaged with existing portfolio companies and prepared to deploy additional capital if needed. • Focused on monetizing minority equity position in Pfanstiehl, with initial $200,000 investment generating ~$4.2 million in distributions to date.

Net investment income for the third quarter was $2.9 million or $0.22 per share, down from $0.25 per share in the prior quarter. Net asset value at September 30 was $10.17 per share, a decrease from $10.91 per share in the prior quarter. Based on amortized costs as of quarter end, the investment portfolio was comprised of approximately 69% senior secured loans, 23% structured finance securities and 8% equity securities.

• Reduced quarterly distribution to $0.17 per share for the fourth quarter of 2025. • Anticipate net interest margin compression due to further Fed rate cuts affecting the floating rate loan portfolio. • Expect higher interest costs related to refinancing of the February 2026 unsecured notes. • Plan to repay remaining $31 million of the February 2026 notes ahead of maturity. • Delevering the balance sheet by reducing the floating rate facility from $150 million to $80 million.

• Continued Fed rate cuts could reduce net investment income. • Challenging market conditions for monetizing Pfanstiehl equity may impact net investment income and concentration risk. • Middle market M&A activity below expectations may affect new originations. • Uncertain economic outlook poses risks to portfolio performance.