Gladstone Capital Corporation · NASDAQ:GLAD
Gladstone Capital — Q1 FY2023 Earnings Presentation
16 slides from Gladstone Capital's earnings presentation, Dec 31, 2022
Slide 1: Investor Presentation for the Fiscal Quarter Ended December 31, 2022
Investor Presentation for the Fiscal Quarter Ended December 31, 2022 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: − 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
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 and favorable growth characteristics, which can support a leveraged capital structure Target companies with oper
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
Slide 7: 12/31/2022 Quarter Summary
Gladstone Capital 12/31/2022 Quarter Summary Originations/Portfolio Activity: Originations totaled $11 million during the quarter and represented add-on investments to existing portfolio companies while amortization, repayments, and exits totaled $39 million, resulting in a net asset reduction of
Slide 8: Origination Activity
Gladstone Capital Origination Activity Originations for the quarter ended December 31, 2022 declined with overall market activity and net of exits and repayments resulted in a $26 million decline in investments for the period. Gladstone Capital Quarterly Net Investment 3/31/2021 6/30/2021 9/30/202
Slide 9: Portfolio Trends
Gladstone Capital Portfolio Trends Originations have outpaced portfolio exits and refinancings over the past several quarters, resulting in a modest $45 million increase in total investments in the past four quarters. PE sponsor demand for flexible 1st lien/unitranche financing continues to driv
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. $12.0 million and an average leverage attachment point of 3.3x 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 12/31/2022 Fair Value At 12/31/2022 Fair Value Page 11
Slide 12: Portfolio Composition
Portfolio Composition Portfolio Characteristics As Of: March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 Total Portfolio - FV $ 537,703 $ 586,462 $ 649,615 $ 621,739 # of Portfolio Companies 45 49 52 50 Average Investment Size - FV $ 11,949 $ 11,969 $ 12,493 $ 12,435 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 In Thousands, except per share data March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 Income: Interest Income $ 12,962 $ 12,593 $ 15,567 $ 18,367 Other Investment Income 4,298 1,191 372 927 Total Investment Income 17,260 13,784 15,939 19
Slide 15: 12/31/2022 Quarter Summary: Capital Base and Liquidity
Gladstone Capital 12/31/2022 Quarter Summary Capital Base and Liquidity Total Assets were $640 million as of December 31, 2022, consisting of $622 million in investments at fair value and $18 million in cash and other assets. Leverage as of December 31, 2022 decreased to 97.2% of Net Assets whic
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 Ladenburg Thalmann Investment Adviser: Vice Chairman & COO Mickey Schleien www.gladstonemanagement.com Bob