Exhibit 99.1
Gladstone Capital Reports Third Quarter Financial Results for June 30, 2003
Net Increase in Stockholders' Equity Resulting From Operations in the
Third Quarter Was $0.23 Per Diluted Common Share, a 4.6% Increase
From the Prior Year's Quarter of $0.22 Per Diluted Common Share;
Net Investment Income Increased From $2,224,574 or $0.22 to $3,115,736
Or $0.30 Per Diluted Common Share, a 40% Increase
MCLEAN, Va., Aug. 14 /PRNewswire-FirstCall/ -- Gladstone Capital Corp.
(Nasdaq: GLAD) announced today that its Net Increase in Stockholders' Equity
Resulting from Operations for the third quarter ended June 30, 2003 was
$2,370,899 or $0.23 per diluted common share for the quarter as compared to
$2,224,574 or $0.22 per diluted common share for the quarter ended June 30,
2002, an increase of $146,325 or 4.6%. As stated above, the Net Investment
Income for the quarter ended June 30, 2003, increased from $2,224,574 or $0.22
to $3,115,736 or $0.30 per diluted common share, a 40% increase from the prior
year's quarter. Total assets were $199,857,436 at the end of June 2003 and
$172,922,039 at the end of September 2002.
Net Increase in Stockholders' Equity Resulting from Operations for the
nine months ended June 30, 2003 was $8,445,069 or $0.83 per diluted common
share as compared to $4,830,036 or $0.47 per diluted common share for the
previous nine months ended June 30, 2002. This was an increase of $3,615,033
or 74.8%. Net Investment Income for the nine months ended June 30, 2003 was
$8,447,482 or $0.83 per diluted common share as compared to $4,830,036 or
$0.47 per diluted common share for the previous nine months ended June 30,
2002. This was an increase of $3,617,446 or 74.9%.
Information about investments is on our web site,
www.GladstoneCapital.com.
The attached financial statements are without footnotes so readers should
obtain our Form 10-Q for the period ended June 30, 2003 and review the notes
as well. We have filed this Form 10-Q with the Securities and Exchange
Commission ('SEC') which can be retrieved at the SEC website at www.SEC.gov or
from Gladstone Capitals web site at www.GladstoneCapital.com. A paper copy
can be obtained by writing to us at 1616 Anderson Road, McLean, VA 22102.
For further information please contact Skye Breeden or Harry Brill at
703-286-7000. The company will have a conference call at 10:30am EDT, August
15, 2003. Please call 1-800-513-1181 and use the ID code 234811 and you will
be placed on hold until the conference starts. An operator will monitor the
call and set a queue for the questions. The replay number will be available
for approximately 30 days. The replay number is 1-800-615-3210 and use ID
code 234811.
This press release may include statements that may constitute "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, including statements with regard to the future performance of the
Company. Words such as "believes," "expects," "projects" and "future" or
similar expressions are intended to identify forward-looking statements.
These forward-looking statements inherently involve certain risks and
uncertainties, although they are based on the Company's current plans that are
believed to be reasonable as of the date of this press release. Factors that
may cause the Company's actual results, levels of activity, performance or
achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by such forward-
looking statements include, among others, those factors listed under the
caption "Risk factors" of the Company's Form 10-K for the Fiscal Year Ended
September 30, 2002, as filed with the Securities and Exchange Commission on
December 11, 2002. The Company undertakes no obligation to publicly update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise.
GLADSTONE CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS
June 30, September 30,
2003 2002
(Unaudited)
ASSETS
Investments at fair value
(Cost 6/30/2003: $104,977,557;
9/30/2002: $79,718,354) $104,975,144 $79,718,354
Cash and cash equivalents 27,066,673 51,930,529
Cash and cash equivalents pledged
as collateral 65,006,677 39,998,799
Interest receivable - investments
in debt securities 1,088,168 685,274
Interest receivable - cash and
cash equivalents - 4,389
Interest receivable - officers 109,736 109,874
Prepaid assets 1,432,593 357,955
Other assets 178,445 116,865
TOTAL ASSETS $199,857,436 $172,922,039
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accounts payable $330,269 $-
Dividends payable 2,920,835 2,115,087
Accrued expenses and deferred
liabilities 1,547,310 944,960
Repurchase agreement 63,706,000 39,198,719
Total Liabilities $68,504,414 $42,258,766
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value,
50,000,000 shares authorized and
10,071,844 shares issued and
outstanding $10,072 $10,072
Capital in excess of par value 140,266,684 140,266,684
Notes receivable - officers (8,983,796) (8,983,796)
Net unrealized depreciation on
investments (2,413) -
Undistributed/(overdistributed) net
investment income 62,475 (629,687)
Total Stockholders' Equity $131,353,022 $130,663,273
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $199,857,436 $172,922,039
GLADSTONE CAPITAL CORPORATION
SCHEDULE OF INVESTMENTS
AS OF JUNE 30, 2003
(UNAUDITED)
COMPANY (1) INDUSTRY INVESTMENT COST FAIR VALUE
America's Water heater Senior
Water Heater rentals Term Debt
Rentals, and (2)(4)
LLC servicing $12,000,000 $12,015,000
ARI Holdings, Manufacturing Junior
Inc. auto Subordinated
parts Term Debt (3) 8,565,416 8,565,416
Coyne Industrial Senior
International services Term Debt
Enterprises (2)(3)(4) 20,334,866 20,233,192
Corp.
Finn Manufacturing Senior
Corporation landscape Subordinated
equipment Term Debt (4) 10,500,000 10,479,000
Common
Stock
Warrants
for 2%
Ownership 37,000 431,111
Fugate & Imaging Senior
Associates, supplies Term Debt 2,000,000 2,000,000
Inc. Senior
Term Debt 3,500,000 3,500,000
Home Care Medical Senior
Supply, Inc. equipment Term Debt
rental (2)(4)(5) 18,000,000 18,405,900
Inca Metal Material Senior
Products handling Term Debt
Corp. and (2)(4)
Kingway storage
Acquisition, products
Inc.
Clymer
Acquisitions,
Inc. 5,850,000 5,191,875
Kozy Shack Food Senior
Enterprises, production Term Debt
Inc. and (2)(4)
sales 2,400,000 2,406,000
Marcal Paper Manufacturing Senior
Mills, Inc. paper Subordinated
products Term Debt
(2)(4) 7,150,000 7,114,250
First
Mortgage
Debt (3) 9,140,275 9,140,275
Wingstop Restaurant - Senior
Restaurants fast food Term Debt
International, (4) 2,000,000 1,997,500
Inc. Senior
Term Debt
(4) 3,500,000 3,495,625
$104,977,557 $104,975,144
(1) We do not "Control," and are not an "Affiliate" of, any of our
portfolio companies, each as defined in the Investment
Company Act of 1940, as amended (the "1940 Act"). In general, under the
1940 Act, we would "Control" a portfolio company if we owned 25% or more
of its voting securities and would be an "Affiliate" of a portfolio
company if we owned 5% or more of its voting securities.
(2) Last Out Tranche of senior debt, meaning if the company is liquidated
then the holder of the Last Out Tranche is paid after the senior debt.
(3) Has some paid in kind (PIK) interest. Refer to Note 2 "Summary of
Significant Accounting Policies" of Form 10-K for the fiscal year ended
September 30, 2002.
(4) Fair value was based on valuation prepared and provided by Standard &
Poor's Loan Evaluation Services.
(5) Includes a success fee with a fair value of $473,400.
GLADSTONE CAPITAL CORPORATION
SCHEDULE OF INVESTMENTS
AS OF SEPTEMBER 30, 2002
COMPANY (1) INDUSTRY INVESTMENT COST FAIR VALUE
ARI Holdings, Manufacturing Junior
Inc. auto Subordinated
parts Term Debt
(3) $8,250,803 $8,250,803
Coyne
International Industrial Senior Term
Enterprises services Debt
Corp. (2)(3) 16,054,268 16,054,268
Finn Manufacturing Senior
Corporation landscape Subordinated
equipment Term Debt 10,500,000 10,500,000
Common
Stock
Warrants
for 2%
Ownership 37,000 37,000
Home Care Medical Senior Term
Supply, Inc. equipment Debt (2)
rental 18,000,000 18,000,000
Inca Metal Material Senior Term
Products handling Debt (2)
Corp. and
storage
products 6,000,000 6,000,000
Kozy Shack Food Senior Term
Enterprises, production Debt (2)
Inc. and
sales 4,300,000 4,300,000
Marcal Paper Manufacturing Senior
Mills, Inc. paper Subordinated
products Term Debt (2) 7,500,000 7,500,000
First
Mortgage
Debt (3) 9,076,283 9,076,283
$79,718,354 $79,718,354
(1) We do not "Control," and are not an "Affiliate" of, any of our
portfolio companies, each as defined in the Investment Company Act of
1940, as amended (the "1940 Act"). In general, under the 1940 Act, we
would "Control" a portfolio company if we owned 25% or more of its voting
securities and would be an "Affiliate" of a portfolio company if we owned
5% or more of its voting securities.
(2) Last Out Tranche of senior debt, meaning if the company is liquidated
then the holder of the Last Out Tranche is paid after the senior debt.
(3) Has some paid in kind (PIK) interest. Refer to Note 2 "Summary of
Significant Accounting Policies" of Form 10-K for the fiscal year ended
September 30, 2002.
GLADSTONE CAPITAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
Three Months Three Months
Ended Ended
June 30, June 30,
2003 2002
INVESTMENT INCOME
Interest income - investments $3,684,284 $1,808,834
Interest income - cash and
cash equivalents 79,073 351,726
Interest income - notes
receivable from officers 109,737 108,691
Managerial assistance fees 125,000 645,898
Other income 61,650 -
Total Investment Income $4,059,744 $2,915,149
EXPENSES
Salaries and benefits $493,901 $364,253
Rent 54,899 36,095
Professional fees 101,211 119,322
Directors fees 20,290 7,000
Insurance 71,883 49,802
Stockholder related costs 12,227 7,210
Financing fees 62,355 -
General and administrative 127,242 106,893
Total Expenses $944,008 $690,575
NET INVESTMENT INCOME $3,115,736 $2,224,574
Net unrealized appreciation
on investments (744,837) -
NET INCREASE IN STOCKHOLDERS'
EQUITY RESULTING FROM
OPERATIONS $2,370,899 $2,224,574
NET INCREASE IN STOCKHOLDERS'
EQUITY RESULTING FROM OPERATIONS
PER COMMON SHARE
Basic $0.24 $0.22
Diluted $0.23 $0.22
WEIGHTED AVERAGE SHARES OF
COMMON STOCK OUTSTANDING
Basic 10,071,844 10,071,844
Diluted 10,256,790 10,201,052
GLADSTONE CAPITAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
Nine Months Nine Months
Ended Ended
June 30, June 30,
2003 2002
INVESTMENT INCOME
Interest income - investments $9,887,909 $3,735,461
Interest income - cash and
cash equivalents 390,577 1,360,811
Interest income - notes
receivable from officers 329,078 323,518
Managerial assistance fees 483,000 1,286,809
Other income 63,906 47,500
Total Investment Income $11,154,470 $6,754,099
EXPENSES
Salaries and benefits $1,405,002 $968,595
Rent 164,044 83,375
Professional fees 302,478 334,804
Directors fees 54,647 14,000
Insurance 216,724 147,466
Stockholder related costs 123,659 78,472
Financing fees 62,355 -
General and administrative 378,079 297,351
Total Expenses $2,706,988 $1,924,063
NET INVESTMENT INCOME $8,447,482 $4,830,036
Net unrealized appreciation
on investments (2,413) -
NET INCREASE IN STOCKHOLDERS'
EQUITY RESULTING FROM
OPERATIONS $8,445,069 $4,830,036
NET INCREASE IN STOCKHOLDERS'
EQUITY RESULTING FROM OPERATIONS
PER COMMON SHARE
Basic $0.84 $0.48
Diluted $0.83 $0.47
WEIGHTED AVERAGE SHARES OF
COMMON STOCK OUTSTANDING
Basic 10,071,844 10,071,844
Diluted 10,160,350 10,176,944
GLADSTONE CAPITAL CORPORATION
FINANCIAL HIGHLIGHTS
(UNAUDITED)
Three Months Three Months
Ended Ended
June 30, June 30,
2003 2002
Per Share Data (1)
Net asset value at beginning of period $13.09 $12.91
Net investment income 0.31 0.22
Net unrealized (loss)/gain on
investments (0.07) -
Distributions from net investment
income (0.29) (0.21)
Net asset value at end of period $13.04 $12.92
Per share market value at beginning
of period $16.18 $17.80
Per share market value at end of
period 20.48 18.05
Total return (2)(3) 28.37% 2.58%
Shares outstanding at end of period 10,071,844 10,071,844
Ratios/Supplemental Data
Net assets at end of period $131,353,022 $129,991,136
Average net assets $132,823,516 $130,560,626
Ratio of operating expenses to
average net assets - annualized 2.86% 2.12%
Ratio of net investment income to
average net assets - annualized 7.18% 6.82%
Nine Months Nine Months
Ended Ended
June 30, June 30,
2003 2002
Per Share Data (1)
Net asset value at beginning of period $12.97 $13.05
Net investment income 0.84 0.48
Net unrealized (loss)/gain on
investments - -
Distributions from net investment
income (0.77) (0.60)
Offering costs - (0.01)
Effect of anti-dilution - (0.01)
Net asset value at end of period $13.04 $12.91
Per share market value at beginning
of period $16.88 $16.38
Per share market value at end of
period 20.48 18.05
Total return (2)(3) 25.89% 13.86%
Shares outstanding at end of period 10,071,844 10,071,844
Ratios/Supplemental Data
Net assets at end of period $131,353,022 $129,991,136
Average net assets $132,170,641 $130,888,323
Ratio of operating expenses to
average net assets - annualized 2.74% 1.96%
Ratio of net investment income to
average net assets - annualized 8.54% 4.92%
(1) Basic per share data.
(2) Amounts were not annualized for the results of the three and nine
month periods ended June 30, 2003 and June 30, 2002.
(3) Total return equals the increase of the ending market value over the
beginning market value plus distributions divided by the beginning market
value.
SOURCE Gladstone Capital Corp.
-0- 08/14/2003
/CONTACT: Skye Breeden or Harry Brill of Gladstone Capital Corp.,
+1-703-286-7000/
/Web site: http;//www.gladstonecapital.com/
(GLAD)
CO: Gladstone Capital Corp.
ST: Virginia
IN: FIN
SU: ERN