Gladstone Capital Corporation · NASDAQ:GLAD
Gladstone Capital — Investor Presentation (March 2023)
16 slides from Gladstone Capital's investor presentation, Mar 31, 2023
Slide 1: Investor Presentation for the Fiscal Quarter Ended March 31, 2023
Investor Presentation for the Fiscal Quarter Ended March 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 ($3-15MM of EBITDA) and today the investment team remains dedicated to the BDC’s activities and perfo
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: Gladstone Capital 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: 3/31/2023 Quarter Summary
Gladstone Capital 3/31/2023 Quarter Summary Originations/Portfolio Activity: New investments totaled $64 million during the quarter, including two new platform investments along with $16 million of add-on investments to existing portfolio companies. Repayments and net proceeds totaled $10 millio
Slide 8: Origination Activity
Gladstone Capital Origination Activity Net originations of $54 million for the March 31, 2023 quarter continue demonstrate LMM momentum over the past year and market demand for one-stop 1st lien financing solutions. Gladstone Capital Quarterly Net Investment 6/30/2021 9/30/2021 12/31/2021 3/31/202
Slide 9: Portfolio Trends
Gladstone Capital Portfolio Trends Originations have exceeded portfolio exits and refinancings for the past several quarters lifting portfolio net asset growth by more than $150 million over the past twelve months. PE sponsor demand for unitranche financings has lifted 1st lien investments to 74
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. $11.1 million and an average leverage attachment point of under 3.5x EBITDA *For the purposes of this presentation, certain investments have been excluded fr
Slide 11: Industry and Deal Sources Are Diversified
Industry and Deal Sources Are Diversified Portfolio Diversification Across 13 Deal Source Composition - Industries - At 3/31/2023 Fair Value At 3/31/2023 Fair Value Page 11
Slide 12: Portfolio Composition
Portfolio Composition Portfolio Characteristics As Of: June 30, 2022 September 30, 2022 December 31, 2022 March 31, 2023 Total Portfolio - FV $ 586,462 $ 649,615 $ 621,739 $ 678,759 # of Portfolio Companies 49 52 50 51 Average Investment Size - FV $ 11,969 $ 12,493 $ 12,435 $ 13,309 Top 5 Investment
Slide 13: Representative Portfolio Investments
Representative Portfolio Investments ANTENNA RESEARCH ASSOCIATES, INC. designs HH-I NSPIRE 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 fo
Slide 14: Quarterly Financial Summary
Quarterly Financial Summary Three Months Ended In Thousands, except per share data June 30, 2022 September 30, 2022 December 31, 2022 March 31, 2023 Income: Interest Income $ 12,593 $ 15,567 $ 18,367 $ 19,578 Other Investment Income 1,191 372 927 983 Total Investment Income 13,784 15,939 19,294 20,5
Slide 15: 3/31/2023 Quarter Summary
Gladstone Capital 3/31/2023 Quarter Summary Capital Base and Liquidity Total Assets increased to $700 million as of March 31, 2023, consisting of $679 million in investments at fair value and $21 million in cash and other assets. Leverage as of March 31, 2023 increased slightly with new investme
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: COO Mickey Schleien www.gladstonemanagement.com Bob Marcotte Oppenh
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