Exhibit 99.1
Gladstone Capital Corporation Reports Fiscal Year End Results for 2006
-- Net Investment Income was $19.4 million or $1.67 per diluted
common share, an increase of 11.9% per diluted common share
-- Net Increase in Net Assets Resulting from Operations was $24.4
million or $2.10 per diluted common share, an increase of
57.6% per diluted common share
Business Editors
MCLEAN, Va.--(BUSINESS WIRE)--xx--Gladstone Capital Corp.
(NASDAQ:GLAD) (the "Company") today announced earnings for the fiscal
year and three months ended September 30, 2006. All share references
are based on weighted average common shares outstanding, unless
otherwise noted.
Net Investment Income for the fiscal year ended September 30, 2006
increased 11.9% to $19,350,580, or $1.70 per basic share and $1.67 per
diluted share, as compared to $17,286,145, or $1.53 per basic share
and $1.49 per diluted share for the fiscal year ended September 30,
2005. Net Investment Income for the three months ended September 30,
2006 increased 29.2% to $4,916,268, as compared to $3,805,057, for the
three months ended September 30, 2005. Net Investment Income for the
three months ended September 30, 2006 was $0.42 per basic and diluted
share and $0.34 per basic share and $0.33 per diluted share for the
three months ended September 30, 2005.
Net Increase in Net Assets Resulting from Operations for the
fiscal year ended September 30, 2006 increased nearly 58% to
$24,430,235, or $2.15 per basic share and $2.10 per diluted share, as
compared to $15,490,682 or $1.37 per basic share and $1.33 per diluted
share for the fiscal year ended September 30, 2005. For the three
months ended September 30, 2006, Net Increase in Net Assets Resulting
from Operations was $5,063,429 or $0.44 per basic share and $0.43 per
diluted share, as compared to $2,336,203 or $0.21 per basic share and
$0.20 per diluted share for the same period one year ago.
Total assets were $225,783,215 at September 30, 2006, as compared
to $205,793,094 at September 30, 2005. Net asset value was
$172,570,487 or $14.02 per actual common share outstanding, at
September 30, 2006 as compared to $151,610,683, or $13.41 per actual
common share outstanding, at September 30, 2005.
For the fiscal year ended September 30, 2006, the Company reported
the following activity:
-- Purchased approximately $136.0 million of new loans in 22
companies;
-- Received principal repayments of $124.0 million, which
included scheduled principal repayments;
-- Received $1.3 million of success fees in connection with the
full repayment of three investments; and
-- Received prepayment penalties of approximately $0.8 million.
At September 30, 2006, the Company had investments in debt and
equity securities and loans to syndicated loan participants in 32
private companies having an aggregate cost basis of $216.2 million and
a fair value of $217.6 million.
Subsequent to September 30, 2006, the Company:
-- Purchased additional debt securities in 12 syndicated
participations of approximately $25.2 million;
-- Received principal repayments of approximately $1.7 million;
-- Received full repayment of 2 loans of approximately $20.0
million;
-- Entered into an amended and restated investment advisory
agreement with Gladstone Management Corporation and an
administration agreement with Gladstone Administration, LLC as
approved by our stockholders on December 2, 2005.
"Fiscal year 2006 produced double-digit growth, with nearly a 12%
increase in Net Investment Income and nearly 8% growth in the annual
dividend. Our year over year results reflect the dedication and hard
work of our Gladstone team," said Chip Stelljes, President and Chief
Investment Officer. "We are proud of these accomplishments and will
strive to produce even greater results in 2007."
The financial statements below are without footnotes. We have
filed a Form 10-K today for the fiscal year ended September 30, 2006
with the Securities and Exchange Commission (the "SEC"), which can be
retrieved from the SEC's website at www.SEC.gov or from the Company's
web site at www.GladstoneCapital.com. A paper copy can be obtained
free of charge by writing to us at 1521 Westbranch Drive, Suite 200,
McLean, VA 22102.
Gladstone Capital will host a conference call at 8:30 a.m. EST,
December 7, 2006. Please call 877-407-8031 to enter the conference. An
operator will monitor the call and set a queue for the questions. The
replay number will be available two hours after the call for
approximately 30 days. To hear the replay, please dial 877-660-6853
and use Access Code 286 and ID code 221530.
For further information contact Investor Relations at
703-287-5835.
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 "should,"
"believes," "feel," "expects," "projects," "strive," "goals," 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, 2006, as filed with the
Securities and Exchange Commission on December 6, 2006. 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 STATEMENTS OF ASSETS & LIABILITIES
September 30, September 30,
2006 2005
------------- -------------
ASSETS
Investments at fair value (Cost 9/30/2006:
$216,202,986; 9/30/2005: $205,375,554) $217,642,750 $200,846,763
Cash and cash equivalents 731,744 503,776
Interest receivable - investments in debt
securities 1,394,942 1,406,212
Interest receivable - employees 37,396 27,067
Due from custodian 3,587,152 2,624,074
Deferred financing fees 145,691 70,000
Prepaid assets 226,747 177,848
Due from employees 1,803,283 -
Other assets 213,510 137,354
------------- -------------
TOTAL ASSETS $225,783,215 $205,793,094
============= =============
LIABILITIES
Accounts payable $4,072 $21,893
Interest payable 247,530 183,707
Fees due to Adviser 240,363 391,322
Borrowings under lines of credit 49,993,000 53,034,064
Withholding taxes payable 1,803,283 -
Accrued expenses and deferred liabilities 721,287 350,665
Funds held in escrow 203,193 200,760
------------- -------------
TOTAL LIABILITIES 53,212,728 54,182,411
------------- -------------
NET ASSETS $172,570,487 $151,610,683
============= =============
ANALYSIS OF NET ASSETS
Common stock, $0.001 par value, 50,000,000
shares authorized and 12,305,008 and
11,303,510 shares issued and outstanding,
respectively $12,305 $11,304
Capital in excess of par value 181,270,565 164,610,873
Notes receivable - employees (10,248,308) (8,745,781)
Net unrealized appreciation (depreciation)
on investments 1,439,764 (4,528,791)
Unrealized depreciation on derivative (253,716) (253,747)
Realized (loss) gain on sale of
investments (861,695) 42,250
Realized gain on settlement of derivative 15,014 -
Distributions less than net investment
income 1,196,558 474,575
------------- -------------
TOTAL NET ASSETS $172,570,487 $151,610,683
============= =============
NET ASSETS PER SHARE $14.02 $13.41
------------- -------------
GLADSTONE CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended September 30,
2006 2005
------------ ------------
INVESTMENT INCOME
Interest income - investments $25,646,746 $22,407,605
Interest income - cash and cash equivalents 38,381 32,807
Interest income - notes receivable from
employees 441,341 444,170
Prepayment fees and other income 773,378 1,065,177
------------ ------------
Total investment income 26,899,846 23,949,759
------------ ------------
EXPENSES
Loan servicing 2,907,875 2,549,728
Management fee 1,266,875 1,359,643
Professional fees 548,326 725,336
Amortization of deferred financing fees 140,143 385,737
Interest expense 3,238,615 1,774,629
Stockholder related costs 303,709 220,445
Directors fees 116,212 101,843
Insurance expense 206,554 178,214
Stock option compensation 285,318 -
Other expenses 484,722 235,861
------------ ------------
Expenses before credit from Gladstone
Management 9,498,349 7,531,436
------------ ------------
Credit to management fee for fees collected
by Gladstone Management (2,051,000) (1,077,100)
------------ ------------
Total expenses net of credit to
management fee 7,447,349 6,454,336
------------ ------------
NET INVESTMENT INCOME BEFORE INCOME TAXES 19,452,497 17,495,423
------------ ------------
Income tax expense 101,917 209,278
------------ ------------
NET INVESTMENT INCOME 19,350,580 17,286,145
------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized (loss) gain on sale of
investments (903,945) 29,750
Realized gain on settlement of derivative 15,014 -
Unrealized appreciation (depreciation) on
derivative 31 (39,488)
Net unrealized appreciation (depreciation)
on investments 5,968,555 (1,785,725)
------------ ------------
Net gain (loss) on investments 5,079,655 (1,795,463)
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $24,430,235 $15,490,682
============ ============
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS PER COMMON SHARE:
Basic $2.15 $1.37
============ ============
Diluted $2.10 $1.33
============ ============
WEIGHTED AVERAGE SHARES OF COMMON STOCK
OUTSTANDING:
Basic 11,381,378 11,292,466
Diluted 11,615,922 11,609,146
GLADSTONE CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
September 30,
2006 2005
------------ ------------
INVESTMENT INCOME
Interest income - investments $7,148,853 $5,735,849
Interest income - cash and cash equivalents 16,667 3,706
Interest income - notes receivable from
employees 118,338 107,788
Prepayment fees and other income 62,153 10,260
------------ ------------
Total investment income 7,346,011 5,857,603
------------ ------------
EXPENSES
Loan servicing 763,851 745,263
Management fee 314,755 283,703
Professional fees 148,568 196,726
Amortization of deferred financing fees 45,571 101,250
Interest expense 935,922 600,042
Stockholder related costs 30,539 27,660
Directors fees 34,500 24,219
Insurance expense 54,598 44,161
Stock option compensation 5,700 -
Other expenses 333,059 58,922
------------ ------------
Expenses before credit from Gladstone
Management 2,667,063 2,081,946
------------ ------------
Credit to management fee for fees collected
by Gladstone Management (289,000) (100,000)
------------ ------------
Total expenses net of credit to
management fee 2,378,063 1,981,946
------------ ------------
NET INVESTMENT INCOME BEFORE INCOME TAXES 4,967,948 3,875,657
------------ ------------
Income tax expense 51,680 70,600
------------ ------------
NET INVESTMENT INCOME 4,916,268 3,805,057
------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Realized gain on settlement of derivative 13,647 -
Unrealized appreciation (depreciation) on
derivative (65,221) 18,519
Net unrealized appreciation (depreciation)
on investments 198,735 (1,487,373)
------------ ------------
Net gain (loss) on investments 147,161 (1,468,854)
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $5,063,429 $2,336,203
============ ============
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS PER COMMON SHARE:
Basic $0.44 $0.21
============ ============
Diluted $0.43 $0.20
============ ============
WEIGHTED AVERAGE SHARES OF COMMON STOCK
OUTSTANDING:
Basic 11,573,200 11,303,510
Diluted 11,767,902 11,628,555
GLADSTONE CAPITAL CORPORATION
FINANCIAL HIGHLIGHTS
(Unaudited)
Three Months Ended
September 30,
2006 2005
------------- -------------
Per Share Data (1)
Net asset value at beginning of period $13.95 $13.61
------------- -------------
Income from investment operations:
Net investment income (2) 0.42 0.34
Net unrealized gain (loss) on
investments (2) 0.02 (0.13)
Net unrealized gain on derivatives (2) (0.01) -
------------- -------------
Total from investment operations 0.43 0.21
------------- -------------
Less distributions:
Distributions from net investment
income (0.42) (0.41)
------------- -------------
Total distributions (0.42) (0.41)
------------- -------------
Issuance of common stock under stock
option plan 1.10 -
Dilutive effect of share issuance (7) (1.04) -
------------- -------------
Net asset value at end of period $14.02 $13.41
============= =============
Per share market value at beginning of
period $21.39 $23.40
Per share market value at end of period 22.01 22.55
Total return (3) 4.85% -1.99%
Shares outstanding at end of period 12,305,008 11,303,510
Ratios/Supplemental Data
Net assets at end of period $172,570,487 $151,610,683
Average net assets - not annualized (4) $162,057,242 $151,387,098
Ratio of expenses to average net assets
- annualized (5) 6.71% 5.69%
Ratio of net expenses to average net
assets - annualized (6) 6.00% 5.42%
Ratio of net investment income to
average net assets - annualized 12.13% 10.05%
Fiscal Year Ended September
30,
2006 2005
------------- -------------
Per Share Data (1)
Net asset value at beginning of period $13.41 $13.50
------------- -------------
Income from investment operations:
Net investment income (2) 1.70 1.53
Realized (loss) gain on sale of
investments (2) (0.08) -
Net unrealized gain (loss) on
investments (2) 0.53 (0.16)
------------- -------------
Total from investment operations 2.15 1.37
------------- -------------
Less distributions:
Distributions from net investment
income (1.64) (1.52)
------------- -------------
Total distributions (1.64) (1.52)
------------- -------------
Issuance of common stock under stock
option plan 1.19 0.02
Stock compensation expense 0.02 -
Repayment of principal on notes
receivable 0.02 0.07
Offering costs - (0.01)
Dilutive effect of share issuance (7) (1.13) (0.02)
------------- -------------
Net asset value at end of period $14.02 $13.41
============= =============
Per share market value at beginning of
period $22.55 $22.71
Per share market value at end of period 22.01 22.55
Total return (3) 5.21% 5.93%
Shares outstanding at end of period 12,305,008 11,303,510
Ratios/Supplemental Data
Net assets at end of period $172,570,487 $151,610,683
Average net assets (4) $155,867,538 $151,897,549
Ratio of expenses to average net assets
- annualized (5) 6.16% 5.10%
Ratio of net expenses to average net
assets - annualized (6) 4.84% 4.39%
Ratio of net investment income to
average net assets - annualized 12.42% 11.38%
(1) Basic per share data.
(2) Based on weighted average basic per share data.
(3) Total return equals the increase of the ending market value
over the beginning market value plus monthly dividends divided by the
monthly beginning market value, assuming monthly dividend
reinvestment.
(4) Average net assets are computed by taking the average balance
of net assets at the end of each month of the reporting period.
(5) Ratio of expenses to average net assets is computed using
expenses before credit from Gladstone Management and including income
tax expense.
(6) Ratio of net expenses to average net assets is computed using
total expenses net of credits from Gladstone Management and including
income tax expense.
(7) Represents the anti-dilutive impact of (i) the other
components in the changes in net assets and (ii) the different share
amounts used in calculating per share data as a result of calculating
certain per share data based upon the weighted average basic shares
outstanding during the period and certain per share data based on the
shares outstanding as of a period end or transaction date.
CONTACT: Gladstone Capital Corp.
Robert Johnson, 703-287-5835