Gladstone Capital Corporation · NASDAQ:GLAD

Gladstone Capital — Investor Presentation (June 2022)

16 slides from Gladstone Capital's investor presentation, Jun 30, 2022

  1. Slide 1: Investor Presentation for the Fiscal Quarter Ended June 30, 2022

    Investor Presentation for the Fiscal Quarter Ended June 30, 2022 FINANCING FOR LOWER MIDDLE MARKET COMPANIES

  2. 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

  3. 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

  4. 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

  5. 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

  6. 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

  7. Slide 7: 6/30/2022 Quarter Summary

    Gladstone Capital 6/30/2022 Quarter Summary Originations/Portfolio Activity:  New investments totaled $67 million during the quarter, which consisted of three new platform investments and several add-on investments to existing portfolio companies.  Repayments and net proceeds amounted to $6.3 mill

  8. Slide 8: Origination Activity

    Gladstone Capital Origination Activity  New investment activity outpaced amortization and reduced repayment activity during the June 30, 2022 quarter resulting in a $61 million increase in investments.  Originations continue to favor 1st lien assets and through 9 months of FY22 the total invested

  9. Slide 9: Portfolio Trends

    Gladstone Capital Portfolio Trends  Originations have outpaced portfolio exits and refinances over the past several quarters, generating a net $75 million increase in total investments on the past four quarters.  PE sponsor demand for flexible first lien/unitranche financing continues to dominate

  10. Slide 10: Portfolio Metrics

    Portfolio Metrics Consistent with GLAD’s LMM focus, the core loan portfolio continues to represent companies with and average EBITDA of approx. $11.1 million and an average leverage multiple of 3.5x EBITDA *For the purposes of this presentation, certain investments have been excluded from the data u

  11. Slide 11: Industry and Deal Sources Are Diversified

    Industry and Deal Sources Are Diversified Portfolio Diversification Across 14 Deal Source Composition - Industries - At 6/30/2022 Fair Value At 6/30/2022 Fair Value Page 11

  12. Slide 12: Portfolio Composition

    Portfolio Composition Portfolio Characteristics As Of: September 30, 2021 December 31, 2021 March 31, 2022 June 30, 2022 Total Portfolio - FV $ 557,612 $ 576,595 $ 537,703 $ 586,462 # of Portfolio Companies 46 47 45 49 Average Investment Size - FV $ 12,122 $ 12,268 $ 11,949 $ 11,969 Top 5 Investment

  13. 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

  14. Slide 14: Quarterly Financial Summary

    Quarterly Financial Summary Three Months Ended In Thousands, except per share data September 30, 2021 December 31, 2021 March 31, 2022 June 30, 2022 Income: Interest Income $ 13,245 $ 12,866 $ 12,962 $ 12,593 Other Investment Income 1,116 3,301 4,298 1,191 Total Investment Income 14,361 16,167 17,26

  15. Slide 15: 6/30/2022 Quarter Summary

    Gladstone Capital 6/30/2022 Quarter Summary Capital Base and Liquidity  Total assets grew to $597 million as of June 30, 2022, consisting of $586 million in investments at fair value and $11 million in cash and other assets.  Leverage remains modest as of June 30, 2022 at 91% of Net Assets, up sli

  16. 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 Ladenburg Thalmann Investment Adviser: Vice Chairman & COO Mickey Schleien www.gladstonemanagement.com Bob

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