Gladstone Capital Corporation · NASDAQ:GLAD

Gladstone Capital — Investor Presentation (September 2021)

16 slides from Gladstone Capital's investor presentation, Sep 30, 2021

  1. Slide 1: Investor Presentation for the Fiscal Quarter Ended September 30, 2021

    Investor Presentation for the Fiscal Quarter Ended September 30, 2021 FINANCING FOR LOWER MIDDLE-MARKET COMPANIES

  2. Slide 2: Legal Disclaimer

    Legal Disclaimer Forward-Looking Statements: This presentation may include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements may include commen

  3. Slide 3: Gladstone Capital Overview

    Gladstone Capital Overview Background: − Founded in 2001, Gladstone Capital was one of the first business development companies (BDC) focused on making loans to lower middle market U.S. businesses ($3-15MM of EBITDA) and today the investment team remains dedicated to the BDC’s activities and perform

  4. Slide 4: Why Invest in a BDC?

    Why Invest in a BDC? BDCs are regulated by the SEC, which mandates asset diversity, investor transparency via quarterly SEC filings including fair value adjustments of all assets and limits financial leverage to a maximum of 2:1 debt to equity leverage. BDCs typically operate as regulated investment

  5. Slide 5: Strategy and Risk Management

    Gladstone Capital Strategy and Risk Management Investment Strategy:  Originate secured debt investments in established lower middle market companies with sustainable margins/cash flows and favorable growth characteristics, which can support a leveraged capital structure  Target companies with oper

  6. Slide 6: Attractive Lower Middle Market Dynamics

    Attractive Lower Middle Market Dynamics Why we target lower middle market (“LMM”) companies  Greater industry diversity and more consistent flow of growth-oriented investment opportunities across the vast array of U.S. based businesses  Lower middle market companies typically sell for lower cash f

  7. Slide 7: 9/30/2021 Quarter Summary

    Gladstone Capital 9/30/2021 Quarter Summary Originations/Portfolio Activity:  Invested $27.6 million during the quarter, all of which represented attractive add-on investments to several performing portfolio companies.  No material repayments for the quarter resulting in net originations of $24.8

  8. Slide 8: Origination Activity

    Gladstone Capital Origination Activity  Originations surged to a record in FY21 with larger unitranche transaction mix/size.  Weighted average yield was 20 bps lower due to increased proportion of 1st lien loans. Gladstone Capital Quarterly Net Investment 9/30/2019 12/31/2019 3/31/2020 6/30/2020 9

  9. Slide 9: Portfolio Trends

    Gladstone Capital Portfolio Trends  Net originations over the last four quarters of $55 million were driven by PE sponsor demand for flexible first lien/unitranche financing and growth within existing portfolio companies.  Repayments were materially lower in the quarter ended September 30 compared

  10. Slide 10: Portfolio Metrics

    Portfolio Metrics GLAD’s core loan portfolio* has an average EBITDA of $9.9 million and consists of 80% in first lien and 20% in second lien loans and an average leverage multiple of 3.6x EBITDA *For the purposes of this presentation, the core loan portfolio excludes certain investments: (i) Broadly

  11. Slide 11: Industry and Deal Sources Are Diversified

    Industry and Deal Sources Are Diversified Portfolio Diversification Across 16 Deal Source Composition - Industries - At 9/30/2021 Fair Value At 9/30/2021 Fair Value Page 11

  12. Slide 12: Portfolio Composition

    Portfolio Composition Portfolio Characteristics As Of: December 31, 2020 March 31, 2021 June 30, 2021 September 30, 2021 Total Portfolio - FV $ 452,359 $ 492,767 $ 506,372 $ 557,612 # of Portfolio Companies 47 47 47 46 Average Investment Size - FV $ 9,625 $ 10,484 $ 10,774 $ 12,122 Top 5 Investments

  13. Slide 13: Representative Portfolio Investments

    Representative Portfolio Investments Page 13

  14. Slide 14: Quarterly Financial Summary

    Quarterly Financial Summary Three Months Ended In Thousands, except per share data December 31, 2020 March 31, 2021 June 30, 2021 September 30, 2021 Income: Interest Income $ 12,082 $ 11,886 $ 12,746 $ 13,245 Other Investment Income 800 999 920 1,116 Total Investment Income 12,882 12,885 13,666 14,3

  15. Slide 15: 9/30/2021 Quarter Summary

    Gladstone Capital 9/30/2021 Quarter Summary Capital Base and Liquidity  Liabilities rose to $248 million as of 9/30/2021, consisting of $150 million of 5.125% senior notes due 2026 and $38.8 million of 5.375% senior notes due 2024. Advances under our floating rate bank line of credit increased to $

  16. Slide 16: Corporate Data

    Corporate Data Executive Officers Research Coverage Websites David Gladstone Gladstone Capital: Chairman & CEO Ladenburg Thalmann www.gladstonecapital.com Terry Lee Brubaker Mickey Schleien Investment Adviser: Vice Chairman & COO www.gladstonemanagement.com Oppenheimer & Co. Bob Marcotte Mitchel Pen

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