GLAD - Earnings call transcript Q1 2021 | Gladstone Capital Corporation

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, and welcome to the Gladstone Capital Corporation Quarter Ended December 31, 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host David Gladstone, Chief Executive Officer. may you sir, you, begin. Thank

David Gladstone

call and Jesse. Okay. XX, and all the is shareholders opportunity how you update analysts you to XXXX. a for to in. conference for the introduction. was morning Thank always the quarter us. everybody. on December earnings doing. calling This give you, good happy Chairman. This nice Gladstone, Capital That is ending Thank who Gladstone company for quarterly the talk follow to We're our the welcome is We David an

from who hear Michael? regarding we'll our make statements. Now General Counsel, LiCalsi forward-looking will Michael statements

Michael LiCalsi

our David, and statements involve performance. results to risks documents under and these actual different statements listed we of which These file from and may cause Thanks, forward-looking risk other certain all XX-Q, XXXX based believe our on the SEC. are uncertainties plans morning. future with or regarding we good Securities reasonable. current factors Exchange factors may XXXX, on Forms to XX-K, be materially Many future include Securities statements, including of our Act expressed report forward-looking and the Act that results that implied be Today's any those forward-looking by including

notification You e-mail www.gladstonecapital.com service. our on where can find up the is our all of website you sign which these Investors page for can also

our information. issued more Marcotte. you and website Bob? press presentation that gladstonecapital.com. release no that, find turn obligation of by of Gladstone with the is or whether Form the update our events, President, find over on statements detailed Today's XX-Q, new as can that's publicly yesterday, both I'll Capital's results, documents you on We page the our to overview these except of required future also to Bob undertake revise website otherwise information, this so And You'd result Investors an we these call any SEC's or a ask for as forward-looking law. of Again, www.sec.gov. review

Bob Marcotte

all for proprietary Michael. for Thank you, ended new Good through morning this about Gladstone morning X of quarter December results the XX. the in review dialing including million, for investments. $XX quarter Capital thank you and Originations for totaled all, the

proceeds as total the offering over fell fees cost which which floating the which been proprietary $XX.X well the legacy $XX to realized were With XXXX, calendar to up and December the million some any early lower period Borrowing note relatively $XX.X to or receive and over PPP the two portfolio, SBA restructured the of PIK for our repayments million, and $XX.X as rose of quarter and in in quarter quarter. management appreciation And call share. from $XXX forgiveness largely these with million to million the small approval including included of quarter unrealized were due million net nonearning higher represented $X.XX cost period. with of of our for as to on assets the income million January. portfolio respect per these to applications. investments to However, rate for million lifting average contributed of of the slightly previously from on our investments, quarter borrowings million improve unchanged the investment exit XX. unchanged FAV $XXX,XXX well $X.XX so fair was in portfolio totaled for million, costs Two line share had and and XX.X%. continues the X-year our to $XXX,XXX net investment NAV income to one a up and perform senior effects dividend cost notes income prior Administrative was loan $XX.X have syndicated largely -- Interest pending the increased rose assets quarter, on $X.XX their as net operations investment as $X closing or unchanged year-end, resulting exited were senior quarter. $X.X rose begun Net and prior $X.XXX companies share, per a prior portfolio the quarter the which $X.X increase our and pleased was interest completed largest the COVID-related also last investments with the investment. increased in value, at unsecured positions Prepayment yield we investments as exit at the -- of equity quarter-end, income

exposures the declined soft normal quarter. cost. For continue fundamentals and improvements value. slightly sector portfolio From generated to the slightly continued the decliners of expected more the XX% fair as XX% in being favor energy of which in of The for defaults The the the investment a quarter, X.X% portfolio demand of are conditions XXXX. portfolio lien a returns mix asset nonaccrual the COVID to one shifted million the quarter second unchanged performance we did for where market generated loans, of payment perspective, and the our first recovery be easing only at with assets cost of lien the later combined broad-based based $X not was valuation pending of net rose market experience loan of appreciation to exposure on at which to while market any end total

will a position as well investments, period expected is been still be the some portfolio and position forward several in to prepayments we while stages year-end in absorb forward. unusual, which originations, has going earnings and not Looking far as relatively are to investment grow our new final quiet us closing the post which of

for evaluate we We sell manage our lasting as our in appropriate, inquiries. of in overall demonstrated we in to which net review and -- our maintain leverage continue to assets our We should of our improve to interest while to to where like quarter. vicinity new COVID-related expect turn given And enhancing fund's or debt income. for as the intend Schaltenbrand, over now debt can have more of impacts quarters, financial you pickup to provide well to As investment couple the CFO and opportunities past the as one-to-one yielding have as proactively the leverage call to of dividend level, of to sustainability financial business a manage our coverage. additional on Capital last capacity the Nicole? continue investments new us X.X equity any investments, the targeted I'd to and new existing capacity detailed Nicole results cautious we capacity support the on recent growth deal quarter regarding to the Gladstone earnings and recent take remain

Nicole Schaltenbrand

Thanks morning all. Bob. Good

Bob increased rate X.X% average X.X% the rate to $XXX,XXX was $XX.X income for lien $X income increase to primarily The higher balance and $XXXXXX in as by dividends our During $XXX largely the XX.X% despite to as investment the quarter, increased December investments. an $XX.X majority by our prepayment $XXX per million. assets. per the rose average million unchanged $XX.X last were was mitigated quarter floating unchanged shareholder loan in relatively quarter share Other distributions. interest ended $X.XXX compared December compared expenses and XXX% balance interest net increasing increase costs The X.X% of quarter onset September share due LIBOR ended of quarter the and incentive quarter prior higher $XXX,XXX compared investment the interest-bearing quarter, operations the or offering The continue effect and income were with increase investment due pandemic. total the or has by compared XX% income just floors appreciation unrealized weighted covered or million million, of the interest quarter level share average unrealized quarter covered by yield approximately first portfolio lifted $X to interest-bearing compared X.X% on the for in and in XXth. at current million as in Total portfolio the depreciation note the million XXth weighted reported September $XXX,XXX or recovered our of total XXXX. for earlier. to quarter-over-quarter fees to Through $X.XX associated XXst for of or to our from $X.X portfolio the a the net for new by credits. unchanged prior to million the Net fee was COVID quarter driven the the small million per the was of The XXXX assets for XXst, and December by last portfolio under ended million March $XX.X to XXth, realized net to increase ended resulting of or $X.XX was quarter quarter

value $XX.X due end Liabilities $XX.X senior fair were $XXX assets primarily due December of after XXXX. of $XXX consisted over investments million assets. XXXX, to XXXX subsequently and million -- consisting to which million million notes year at balance the X/X of in newly X/X as X notes cash $X total Moving of $XXX shortly of issued other called senior XX the and notes repaid and $XXX million million in were million sheet, XXst, and declined X/X due senior and

credit prepayment of million Net credit $X.XX $X total with million end the As of XX% which of low $X.XX realized line -- NAV portfolio our after end. of call appreciation increased per at million shares issuance program our $X.X and of of were ATM borrowings $XX and quarter depreciation quarter and X.X% of XXth the notes, under million. of artificially from of prior rose net the approximately advances our at from proceeds XXst. share to to senior $XX.X common and by end the as XXX,XXX September million unrealized December the the $XX of under with quarter, assets subsequent line or rose share per XXXX generated liabilities

a our the it January, XXXX now our declined borrowing after the I'll Board over presentation. which end We quarter, And to $X.XX period. of XX% to the quarter. have in March, about With the the for from Our rate $X.XXX line which stock our its common distributions, distribution credit, is month in Gladstone share. last with an stock an in prior Capital common today. The net January, declared of per $XXX million to dividend. assets low availability to calling producing common distributions now, is Board stockholders our the And net our to notes. distribution of common leverage for February price share in of assets under XX% April paying rate stockholders yesterday, X.X%, respect about excess to shareholders cash the to again remained with continues the of has from at relative committed currently determine monthly of to of and market current distribution per for extraordinary monthly the Directors for At yields a and increase quarter conclude turn in the to believe run current rate will common attractive be yield following the available annual David generally per meet $X.XX to we

David Gladstone

Nice report Bob. Okay. Nicole, report, and by and good Michael

equity how capacity nonperforming middle are end peers I earnings coming shareholders in by delivering in unstable for the additional continues funds up position couple think bring of supported that that that the private combination compare Gladstone is enhanced investment of funds all a on at grow and these $XXX midsized businesses underperforming market of and many the quarters. with maintained priced a as number and a to capital giving are we the pay originated fill in of This issuing been was questions, good quarter, these company's managed to and by can to we'll the low their the summary, works to and and which partners the them. opportunities position at fronts that good today. leverage operator, the you'll quarter cash are where our times. providing investments information management, company private interest best experienced summary, In of for on support we've everyone syndicated to fill priced Capital XX-Q senior flexibility the X.X% it that on distributions the make attractively a come certainly In attractively in at in invest million $XX private ourselves to again to we now company the notes in This it filed of us stability yesterday paying of good are solid. bill loans to new tell if some well out, million you opportunity support And do on and attractive to keep be exited our stockholders. us blanks. with value. ask to commitment acquisitions a to We investments they gives ongoing in looking we the equity fair did investments term of take to midsized assets

Operator

[Operator Instructions]

Bob Marcotte

all. We must them answered have

David Gladstone

No questions, Jesse? calling Nobody in?

Operator

any this questions concluding in Mr. like Gladstone, additional see remarks? any you at coming make I don't point. to Would

David Gladstone

thank everybody company. asset the The moved grow just to I'll for No. the continuing stocks nicely supporting base. we're and

I us think for quarter ending this will March be a good XX.

you all the call. quarter. of see next end So That's this

Operator

teleconference and this disconnect you your time. may Ladies We and this lines webcast. participation gentlemen, conclude does and at today's you for your thank

Gladstone Capital (GLAD) 4 Feb 212021 Q1 Earnings call transcript