Prospect Capital Corporation (NASDAQ:PSEC) Q1 2023 Earnings Conference Call November 10, 2022 10:00 AM ET

Company Participants

John Barry – Chairman and Chief Executive Officer

Grier Eliasek – President and Chief Operating Officer

Kristin Van Dask – Chief Financial Officer

Conference Call Participants

Operator

Good day and welcome to the Prospect Capital First Quarter Fiscal Year 2023 Earnings Release and Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note that this event is being recorded.

And I would now like to turn the conference over to Mr. John Barry, Chairman and CEO. Please go ahead, sir.

John Barry

Thank you, Chuck. Joining me on the call today are Grier Eliasek, our President and Chief Operating Officer; and Kristin Van Dask, our Chief Financial Officer. Kristin?

Kristin Van Dask

Thanks, John. This call is the property of Prospect. Unauthorized use is prohibited. This call contains forward-looking statements that are intended to be subject to safe harbor protection. Actual developments and results are highly likely to vary materially, and we do not undertake to update our forward-looking statements unless required by law. For additional disclosure, see our earnings press release and 10-Q filed previously and available on our website, prospectstreet.com.

Now I’ll turn the call back over to John.

John Barry

Thank you, Kristin. In the September quarter, our net investment income, or NII, was $99.3 million, or basic NII of $0.22 per common share exceeding our distribution rate per common share by $0.04 and 22%. Our basic net income applicable to common stockholders was a loss of $105.2 million, or $0.27 per common share, largely due to unrealized mark to market depreciation from macro conditions. Our NAV stood at $10.01 cent per common share in September, down $0.47 and 4.5% from the prior quarter, largely due to unrealized mark to market depreciation from macro condition. Over the 10 quarters from the pre-pandemic December 2019 quarter to the June 2022 quarter, Prospect delivered the highest growth in the business development company industry in net asset value per common share with NAV per common share increasing by 21% over that time period. Since inception in 2004, Prospect has invested $19.6 billion across 403 investments exiting 274 of these investments.

We have outperformed our peers during past periods of macro volatility as a direct result of our previous de-risking not chasing leverage as well as other risk management controls including avoidance of cyclical industries and utilization of longer dated flexible financing. We are staying true to the strategy that has served us well since 1988. Controlling and reducing portfolio and balance sheet risk both to protect the capital entrusted to us and to protect the ability of such capital to generate earnings for our shareholders.