Gladstone Capital Corporation · NASDAQ:GLAD
Gladstone Capital — Investor Presentation (December 2023)
16 slides from Gladstone Capital's investor presentation, Dec 31, 2023
Slide 1: Investor Presentation for the Fiscal Quarter Ended December 31, 2023
Investor Presentation for the Fiscal Quarter Ended December 31, 2023 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 the investment team remains dedicated to the BDC’s activities − Gladsto
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
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: 12/31/2023 Quarter Summary
Gladstone Capital 12/31/2023 Quarter Summary Originations/Portfolio Activity: New investments totaled $58 million during the quarter, including one new platform investment along with $47 million of add-on investments in support of the growth of existing portfolio companies. Repayments and net pr
Slide 8: Origination Activity
Gladstone Capital Origination Activity Net originations of $36 million for the December 31, 2023 quarter demonstrated the benefit of our incumbent position supporting growth-oriented businesses across a variety of industries in an otherwise slow deal environment. Gladstone Capital Quarterly Net In
Slide 9: Portfolio Trends
Gladstone Capital Portfolio Trends While deal activity has been volatile in the past few quarters, deal flow has improved and our investment portfolio has grown to ~$750 million as of December 31, 2023. PE sponsor demand for unitranche financings has lifted 1st lien investments to 72.9% of the p
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. $13.9 million and an average leverage attachment point of <4.0x EBITDA *For the purposes of this presentation, certain investments have been excluded from th
Slide 11: Industry and Deal Sources Are Diversified
Industry and Deal Sources Are Diversified Portfolio Diversification Across 12 Deal Source Composition - Industries - At 12/31/2023 Fair Value At 12/31/2023 Fair Value Page 11
Slide 12: Portfolio Composition
Portfolio Composition Portfolio Characteristics As Of: March 31, 2023 June 30, 2023 September 30, 2023 December 31, 2023 Total Portfolio - FV $ 678,759 $ 715,324 $ 704,815 $ 749,985 # of Portfolio Companies 51 52 51 51 Average Investment Size - FV $ 13,309 $ 13,756 $ 13,820 $ 14,706 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 December 31, 2022 March 31, 2023 June 30, 2023 September 30, 2023 December 31, 2023 Income: Interest Income $ 18,367 $ 19,578 $ 21,816 $ 23,269 $ 22,996 Other Investment Income 927 983 1,007 487 225
Slide 15: 12/31/2023 Quarter Summary
Gladstone Capital 12/31/2023 Quarter Summary Capital Base and Liquidity Total Assets increased to $766.6 million as of December 31, 2023, consisting of $750.0 million in investments at fair value and $16.6 million in cash and other assets. Leverage as of December 31, 2023 increased with the asse
Slide 16: Corporate Data
Corporate Data Executive Officers Research Coverage Websites David Gladstone Janney Montgonery Scott LLC Gladstone Capital: Chairman & CEO John Rowan www.gladstonecapital.com Terry Lee Brubaker Jefferies Investment Adviser: COO Kyle Joseph www.gladstonemanagement.com Bob Marcotte Ladenburg Thalmann
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