Gladstone Capital Corporation · NASDAQ:GLAD

Gladstone Capital — Investor Presentation (December 2020)

16 slides from Gladstone Capital's investor presentation, Dec 31, 2020

  1. Slide 1: Investor Presentation for the Fiscal Quarter Ended December 31, 2020

    Investor Presentation for the Fiscal Quarter Ended December 31, 2020 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) with a dedicated investment team, which continues to be focused on the BDC’s activi

  4. Slide 4: Why Invest in a BDC?

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

  5. Slide 5: Strategy and Risk Management

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

  6. Slide 6: Attractive Lower Middle Market Dynamics

    Attractive Lower Middle Market Dynamics Why we target lower middle market 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 flow mult

  7. Slide 7: 12/31/2020 Quarter Summary

    Gladstone Capital 12/31/2020 Quarter Summary Originations/Portfolio Activity:  Invested $29.9 million during the quarter, including two new first lien proprietary debt investments in the healthcare and marine maintenance sector.  Repayments totaled $34.1 million, including the repayment of a propr

  8. Slide 8: Origination Activity

    Gladstone Capital Origination Activity  Repayments/exits offset originations and appreciation so net assets were unchanged for the 12/31/20 quarter.  Weighted average yield was largely unchanged as Libor floors are in effect across the floating rate asset base. Gladstone Capital Quarterly Net Inve

  9. Slide 9: Portfolio Trends

    Gladstone Capital Portfolio Trends  Net originations over the last four quarters of $36.2 million supporting an increase in the core interest income and improved expense efficiencies.  The combination of larger unitranche investments and smaller second lien investments to larger businesses has ena

  10. Slide 10: Portfolio Metrics

    Portfolio Metrics GLAD’s core loan portfolio* has a weighted average EBITDA of $10.4 million and consists of 57% in first lien and 43% in second lien loans with a weighted average leverage multiple of EBITDA of 3.86x Portfolio Company EBITDA and Leverage Statistics $12,000 6.00x $10,000 5.00x $8,000

  11. Slide 11: Industry and Deal Sources Are Diversified

    Industry and Deal Sources Are Diversified Portfolio Diversification Across 18 Deal Source Composition - Industries - At 12/31/2020 Fair Value At 12/31/2020 Fair Value 2.3% 3.4% Automobile Other (Under 3% 7.1% (4.0%) of FV) - (11.2%) Aerospace and Defense 4.7% (3.8%) Diversified/Conglomerate Service

  12. Slide 12: Portfolio Composition

    Portfolio Composition Portfolio Characteristics As Of: December 31, 2019 March 31, 2020 June 30, 2020 September 30, 2020 December 31, 2020 Total Portfolio - FV $ 429,007 $ 398,316 $ 446,676 $ 450,400 $ 452,359 # of Portfolio Companies 51 48 48 48 47 Average Investment Size - FV $ 8,412 $ 8,298 $ 9,3

  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, 2019 March 31, 2020 June 30, 2020 September 30, 2020 December 31, 2020 Income: Interest Income $ 11,456 $ 11,002 $ 11,628 $ 11,935 $ 12,082 Other Investment Income 703 490 101 644 800 Total Investment Inc

  15. Slide 15: 12/31/2020 Quarter Summary

    Gladstone Capital 12/31/2020 Quarter Summary Capital Base and Liquidity  Liabilities declined to $212 million as of 12/31/2020, consisting of $16 million in borrowings on our credit facility, $57.5 million of 6.125% 2023 senior notes, $38.8 million of 5.375% 2024 senior notes and $100 million of 5.

  16. Slide 16: Corporate Data

    Corporate Data Executive Officers Research Coverage Websites David Gladstone Janney Montgomery Scott Gladstone Capital: Chairman & CEO Mitchel Penn www.gladstonecapital.com Terry Lee Brubaker Investment Adviser: Vice Chairman & COO Ladenburg Thalmann www.gladstonemanagement.com Mickey Schleien Bob M

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