Gladstone Capital Corporation · NASDAQ:GLAD
Gladstone Capital — Investor Presentation (June 2024)
16 slides from Gladstone Capital's investor presentation, Jun 30, 2024
Slide 1: Investor Presentation for the Fiscal Quarter Ended June 30, 2024
Investor Presentation for the Fiscal Quarter Ended June 30, 2024 FINANCING FOR LOWER MIDDLE MARKET COMPANIES
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
Slide 3: Gladstone Capital Overview
Gladstone Capital Overview Background: − Gladstone Capital was founded in 2001 as one of the first business development companies (BDC) focused on making loans to lower middle market U.S. businesses ($3-25MM of EBITDA) and today maintains an investment team exclusively dedicated to the BDC’s activit
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. BDCs typically operate as regulated investment companie
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 to support a leveraged capital structure and favorable growth characteristics to deleverage risk profile Target
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 LMM companies typically sell for lower cash flow multiples, which translates into reduced financial leverage
Slide 7: 6/30/2024 Quarter Summary
Gladstone Capital 6/30/2024 Quarter Summary Originations/Portfolio Activity: New investments totaled $46 million during the quarter as new deal buyout activity was building over the period, including two new platform investments along with $19 million of add-on investments in support of the growth
Slide 8: Origination Activity
Gladstone Capital Origination Activity Net originations for the June 30, 2024 quarter declined with the market spike in refinancing activity for larger middle market credits, which eclipsed the new platform and follow on fundings of $46 million. Gladstone Capital Quarterly Net Investment 6/30/2022
Slide 9: Portfolio Trends
Gladstone Capital Portfolio Trends While new deal buyout activity has been volatile in the past several quarters, we have absorbed significant repayments while reseeding or growing our platform investments to maintain our AUM and portfolio diversity. PE sponsor demand for unitranche financings h
Slide 10: Portfolio Metrics
Portfolio Metrics Consistent with GLAD’s LMM focus, the core loan portfolio continues to represent companies with an average EBITDA of approx. $11.4 million and an average leverage attachment point of 4.0x EBITDA *For the purposes of this presentation, certain investments have been excluded from the
Slide 11: Industry and Deal Sources Are Diversified
Industry and Deal Sources Are Diversified Portfolio Diversification Across 13 Deal Source Composition - Industries - At 6/30/2024 Fair Value At 6/30/2024 Fair Value Page 11
Slide 12: Portfolio Composition
Portfolio Composition Portfolio Characteristics As Of: September 30, 2023 December 31, 2023 March 31, 2024 June 30, 2024 Total Portfolio - FV $ 704,815 $ 749,985 $ 791,588 $ 757,745 # of Portfolio Companies 51 51 51 51 Average Investment Size - FV $ 13,820 $ 14,706 $ 15,521 $ 14,858 Top 5 Investment
Slide 13: Representative Portfolio Investments
Representative Portfolio Investments ANTENNA RESEARCH ASSOCIATES, INC. designs HH-INSPIRE ACQUISITION, INC. is a plastic and manufactures radio frequency based surgery and aesthetic center offering a antenna sub-systems and integrated antenna comprehensive range of cosmetic surgeries and systems for
Slide 14: Quarterly Financial Summary
Quarterly Financial Summary Three Months Ended Three Months Ended In Thousands, except per share data June 30, 2023 September 30, 2023 December 31, 2023 March 31, 2024 June 30, 2024 Income: Interest Income $ 21,816 $ 23,269 $ 22,996 $ 23,715 $ 23,199 Other Investment Income $ 1,007 $ 487 $ 225 $ 282
Slide 15: 6/30/2024 Quarter Summary
Gladstone Capital 6/30/2024 Quarter Summary Capital Base and Liquidity Total Assets decreased to $775 million as of June 30, 2024, consisting of $758 million in investments at fair value and $17 million in cash and other assets. We ended the quarter with a conservative leverage position of 75% o
Slide 16: Corporate Data
Corporate Data Executive Officers Research Coverage Websites David Gladstone Janney Montgomery Scott LLC Gladstone Capital: Chairman & CEO John Rowan www.gladstonecapital.com Terry Lee Brubaker Jefferies Investment Adviser: COO Matt Hurwit www.gladstonemanagement.com Bob Marcotte Ladenburg Thalmann
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