Gladstone Investment Corporation - Business Development Company · NASDAQ:GAIN
Gladstone Investment Corporation - Business Development — Gladstone Investment — Q2 2024 Earnings Presentation
22 slides from Gladstone Investment Corporation - Business Development's earnings presentation, Sep 30, 2023
Slide 1: Gladstone Investment Quarterly Overview
GLADSTONE INVESTMENT Quarterly Overview September 30, 2023
Slide 2: Legal Disclaimer
Legal Disclaimer This presentation may include forward-looking statements. These forward-looking statements may involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any futu
Slide 3: Gladstone Investment | Overview
Gladstone Investment | Overview(1) GAIN is differentiated from other BDCs through its buyout investment strategy • Primary equity investor – Lead majority of prospective transactions, often partnering with existing management teams • Differentiated approach – turnkey provider of equity & secured deb
Slide 4: Gladstone Investment | Overview
Gladstone Investment | Overview Delivering to investors consistent and increasing distributions • Senior secured debt provides downside protection, along with the upside potential of GAIN’s equity investments Investment structure creates • No third-party sponsor risk as GAIN is the sponsor attractiv
Slide 5: Investment Focus and Process
Investment Focus and Process Driving performance with a focused and diligent approach to investment selections • Target stable lower middle market companies with EBITDA of $4 – $15 million • Investment size (debt & equity) generally up to $75 million (typically 25% equity & 75% debt) Investment Focu
Slide 6: Risk Management and Value Creation
Risk Management and Value Creation GAIN takes a long-term approach with a strategy to deploy debt & equity designed to streamline post-close value creation 1 2 Certainty and Speed to Close Investment Horizon No third-party capital required to Long term investment horizon as a close transactions, as
Slide 7: Value Creation Across the Portfolio
Value Creation Across the Portfolio Equity ownership allows GAIN to effect change with its investments GAIN helps to establish an effective At the outset of its investment, GAIN, board governance structure at the along with company management, onset of each investment develop a strategic plan • Enab
Slide 8: Upside Potential Driven by Focus on Equity Securities
Upside Potential Driven by Focus on Equity Securities • GAIN’s equity ownership provides further upside to shareholders through prospective capital gains and other income from successful exits which supports supplemental distributions from time to time • Since inception, GAIN has generated approxima
Slide 9: Growing Portfolio
Growing Portfolio From 4/1/2019 to 9/30/2023, we have: • Made investments in 9 new companies, deploying approximately $277 million of new capital(1) • Exited 13 companies for a return of proceeds of $354.0 million(1)(2) FYE March 31 $1,000.0 $915.6 $900.0 $800.0 $753.5 $714.4 Total investments, at f
Slide 10: Portfolio is Broad and Diversified
Portfolio is Broad and Diversified Manufacturing Business/Consumer Services Consumer Products (1) (2) (2) (1) Investment was exited subsequent to 9/30/2023. (2) Investment was previously exited with GAIN retaining a debt and/or equity investment in the entity post-exit. 10
Slide 11: Geographic Diversification
Geographic Diversification 11
Slide 12: Continuous NAV Growth
Continuous NAV Growth • Continuous growth in overall NAV, driven by diligent growth and value creation in investment portfolio • Significant NAV per share growth to $14.03 at 9/30/2023 from $11.17 at 3/31/2020 FYE March 31 $1,000.0 $900.0 $800.0 $700.0 $600.0 $MM $500.0 $915.6 $400.0 $753.5 $714.4 $
Slide 13: Investment Income Growth
Investment Income Growth • Significant growth in Investment Income, driven by growth in investment portfolio, increased yields and other income • Other income is comprised of dividends on preferred investments and success fees from our portfolio companies FYE March 31 $90.0 16.0% $81.5 $72.6 $80.0 1
Slide 14: Successful Realizations Enhance Shareholder Value
Successful Realizations Enhance Shareholder Value History of exits generating significant capital gains. GAIN’s target investment mix of 75% debt and 25% equity provides potential for high returns through consistent current yield and capital appreciation at exit. Since inception, total equity procee
Slide 15: Historical Exits
Historical Exits Manufacturing Business/Consumer Services Consumer Products 15
Slide 16: Strong and Growing Monthly and Supplemental Distributions
Strong and Growing Monthly and Supplemental Distributions • From inception through 9/30/23, GAIN has paid 219 consecutive monthly distributions to common shareholders • GAIN’s regular annual distribution run-rate was increased 6.7% to $0.96 per common share in October 2022 • In addition to regular d
Slide 17: Financial Highlights
Financial Highlights (1) Three Months Ended September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 Net investment (loss) income (NIL/NII) $ (1,730) $ 8,440 $ 9,644 $ 8,569 (+) Capital gains-based incentive fee $ 9,807 $ 67 $ (1,002) $ 1,442 (2) Adjusted NII $ 8,077 $ 8,507 $ 8,642 $ 10,01
Slide 18: History of Driving High Shareholder Returns
History of Driving High Shareholder Returns Return on Equity Outperforming Industry Peers(1) Greater Total Return vs. BDC Peers(2) 30% 5 Year Total Return 200% 75% 26% +22% 160% 25% 53% 25% 120% 80% 20% 40% Sep-18 Sep-19 Sep-20 Sep-21 Sep-22 Sep-23 17% 16% 240% 15% 3 Year Total Return 200% 84% +7% 1
Slide 19: Capital Structure: Conservative Approach
Capital Structure: Conservative Approach • GAIN maintains a conservative balance sheet with low leverage and available liquidity to support needs of the business o Asset coverage ratio on senior securities representing indebtedness of 212% compared to the required 150% o Focus on long-term fixed rat
Slide 20: Why own Gladstone Investment's Common Stock?
Why own Gladstone Investment’s Common Stock? • Annual yield of approximately 6.5% as of November 15, 2023 Consistent Monthly • Increased regular monthly distributions annual run-rate by 28% since April 2016 to $0.96 per share as Distributions of October 2022 • Supplemental distributions to be made f
Slide 21: Why own Gladstone Investment's Registered Notes?
Why own Gladstone Investment’s Registered Notes? • 2026 Notes listed on Nasdaq under the symbol “GAINN,” with an interest rate of 5.00% Daily Liquidity for Investors • 2028 Notes listed on Nasdaq under the symbol “GAINZ,” with an interest rate of 4.875% • 2028 Notes listed on Nasdaq under the symbol
Slide 22: Corporate Data
Corporate Data Key Executive Officers Research Coverage Websites David Gladstone B. Riley Securities Gladstone Investment: Chairman & CEO Bryce Rowe www.gladstoneinvestment.com Terry Lee Brubaker Janney COO Investment Adviser: John Rowan David Dullum www.gladstonemanagement.com President Jefferies &