Gladstone Capital Corporation · NASDAQ:GLAD

Gladstone Capital — Investor Presentation (March 2021)

16 slides from Gladstone Capital's investor presentation, Mar 31, 2021

  1. Slide 1: Investor Presentation for the Fiscal Quarter Ended March 31, 2021

    Investor Presentation for the Fiscal Quarter Ended March 31, 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: 3/31/2021 Quarter Summary

    Gladstone Capital 3/31/2021 Quarter Summary Originations/Portfolio Activity:  Invested a record $72.0 million during the quarter, including three new proprietary debt investments in the aerospace, defense and software industry sectors.  Repayments totaled $47.9 million, including the repayment of

  8. Slide 8: Origination Activity

    Gladstone Capital Origination Activity  Origination levels continue to outpace elevated refinancing activity for the LTM period.  Weighted average yield was largely unchanged as Libor floors are in effect across the floating rate asset base. Gladstone Capital Quarterly Net Investment 3/31/2019 6/3

  9. Slide 9: Portfolio Trends

    Gladstone Capital Portfolio Trends  Net originations over the last four quarters of $57 million were driven by PE sponsor demand for flexible first lien/unitranche financing which represented more than 90% of last quarter investments.  The bulk of the prepayments last quarter were second lien inve

  10. Slide 10: Portfolio Metrics

    Portfolio Metrics GLAD’s core loan portfolio* has an average EBITDA of $10.2 million and consists of 64% in first lien and 36% in second lien loans and an average leverage multiple of 4.1x EBITDA Portfolio Company EBITDA and Leverage Statistics $12,000 6.00x $10,000 5.00x $8,000 4.00x $6,000 3.00x $

  11. Slide 11: Industry and Deal Sources Are Diversified

    Industry and Deal Sources Are Diversified Portfolio Diversification Across 17 Deal Source Composition - Industries - At 3/31/2021 Fair Value At 3/31/2021 Fair Value Automobile (3.9%) 2.3% 3.1% Other (Under 3% 6.8% Diversified/Conglomerate of FV) - (8.9%) Manufacturing (3.3%) 8.1% Diversified Natural

  12. Slide 12: Portfolio Composition

    Portfolio Composition Portfolio Characteristics As Of: June 30, 2020 September 30, 2020 December 31, 2020 March 31, 2021 Total Portfolio - FV $ 446,676 $ 450,400 $ 452,359 $ 492,767 # of Portfolio Companies 48 48 47 47 Average Investment Size - FV $ 9,306 $ 9,383 $ 9,625 $ 10,484 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 June 30, 2020 September 30, 2020 December 31, 2020 March 31, 2021 Income: Interest Income $ 11,628 $ 11,935 $ 12,082 $ 11,886 Other Investment Income 101 644 800 999 Total Investment Income 11,729 12,579 12,882 12,885

  15. Slide 15: 3/31/2021 Quarter Summary: Capital Base and Liquidity

    Gladstone Capital 3/31/2021 Quarter Summary Capital Base and Liquidity  Liabilities increased to $233 million as of 3/31/2021, 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 declined

  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 Wedbush Securities Bob Marcotte Henry J Co

Gladstone Capital — Investor Presentation (March 2021) on 6ix