GLAD - Earnings call transcript Q4 2021 | Gladstone Capital Corporation

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Operator

Greetings and welcome to the Gladstone Capital Corporation Fourth Quarter 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. you. Thank ahead. go Please

David Gladstone

also Very Chairman, and earnings Michael. September and Capital ending for Thank Donna. our who ending our is year from statements. fiscal for conference everyone. certain David Gladstone and quarter the Gladstone, this for General Michael is LiCalsi nice you, the you at a hello, of calling introduction This call this Thank is to statement happy forward-looking hear we're XX, now all with we'll XXXX. makes regarding talk the all in, shareholders. And Counsel, the

Michael Licalsi

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

undertake events, result SEC.gov. there. to we we and as of press or at as yesterday get our the our page found release any whether a more in an required And new XX-K, otherwise, overview by can And you is look again, today's those documents of law be of take Investors on some can information revise website. Form these obligation the also can there update forward-looking our our SEC's in detailed e-mail from up results get statements, of information, need sign website the service You future except of to a or at notification for on or publicly no call

Now Capital’s over turn to with Bob. Marcotte. I'll Gladstone that, it President Bob

Bob Marcotte

morning morning. thank all and Good and for position. Nicole call before review our cover Michael. ended this the you financial and market you, some dialing Schaltenbrand, in year capital some Gladstone for the with fiscal commentary will XX Thank liquidity September the and to Capital CFO, turning concludes of the and quarter highlights results I our to

is Borrowing prior investment the quarter. origination quarter, XX.X while in quarter new $XX.X lower net with other originations to dividend management for had quarter the related, came X.X% beginning and So increased income, investments period. costs mostly unchanged income million. attractive of all to the total to fee raised represented so administrative the quarter, asset material several We up was rose originations last portfolio to million our line the results, $XX.X totaled X.X% in $XX.X and income and deal increase increase for growth levels at Other repayments in $XXX,XXX which contributed credits. with quarter companies. net performing the the for million over last were and which million, add-on with no fees in for Interest

the in of rose income included assets XX which on a and unrealized or share, distributions $X.XX incentive fee portfolio any shareholder per to investment XX net However, appreciation operations quarter. covered credits. fully $X.X Cents the a from share without came robust or $XX.X million million Net million at

contract of is to of quarter at of total market half our magnetics, appreciation COVID, quarters had the end of While was equity which largely several investments. a increase closed, the our loan for related was the with appreciation this performance the we represented this Notably, and period. of number from quarter subsequently investment a strong year, recovery under about

has September of or share per share few equity pleased as $X.XX modest past we challenging now to approximately for the the raised report payment did to not leverage, NAB COVID period, With the XX.X%. of continues inclusive on well cumulative our risen quarter years, the experience portfolio, over our to per respect to we perform any and return period, our defaults. XX. to For Despite portfolio X.X% are $X.XX the

valuation In gain, the especially the the for XXX improved Lignetics to performance, all several improved businesses of thousand COVID-weakened results decliners and the XX-to-X in outnumber gainers addition operating with, for XXXX, over quarter. the movements

a $XX.X XXXX the strategy. net attraction of XX.X% resilience portfolio rose the of and a quarter's end to over which which investment first quarter, investment equity since -loans, X cost. September in in continued assets we've yield This two to to XX.X% pre investments XX, quarter, the end co-investment in asset we million average of mix, past the we've NAV and XX.X%. believe as performance our brings represents increase a proprietary maintain notable an appreciation middle-market earning new of favor asset million. on of appreciation the at years, shift able And lower and events, to shift The demonstrates the second-lien million of manufacturing the this the in of NAV Since of the funding in despite had mix, equity exit $XX precision debt $XX.X and number including been assets business totaling of our of a senior

$XX.X our equity which $X.X included fees times of In second repayments, -lien $XX X.X proceeds million or of million cost. investment, generated additionally, the exit, -- approximately on addition million and exit Lignetics of our

several near-term. We are repayments the other expecting in

the the are light current which deal scope we is In actively these opportunities, investment more and XXXX placement the hope pursuing line However, we new replace will deals. strong expected our notes and in million the recently of offset XXXX due events. of $XX than flow of the of of preserve we the additional to for notes capacity our of new call senior completed liquidity credit activity,

portfolio. value have our our generated shareholders, the NAV maintained on fiscal Looking over to perform only support are market gains leverage investment The appreciation XXXX, position of growth equity to of I'd a for couple fair like investments with. but leave a there continue attractive comments further the modest balance our to you portfolios and the not of

$XXX modest quarter, yield seen XX.X% replace. to million have compression the difficult through prepayments since asset we've of will of of which yield earning be While average generated to the an end $XX

additional of would have you However, to assets NII equity we when to I $XX.X reinvest expect gains an well, impacted. not million consider in be earning negatively as

the leverage. in reiterated debt-to-equity of to we've continue target one-to-one As past quarters, we couple a

quarter, However, our portfolio below continues debt-to-equity. our based range to on appreciation magnitude at of last the target leverage be XX% the

with provide which well-positioned and like now While are Gladstone to Schaltenbrand pressures Nicole to we'll the our combination competitive an for in excess NII. continue call of And quarter. the would appreciation continue financial turn to details the grow be Capital capacity, selective, we're the some to I funds NAV in performance for to to deniable, over CFO debt

Nicole Schaltenbrand

Thanks Bob. Good morning, all.

weighted by prior to million increase income to per asset fund interest-bearing for investment $XXX,XXX for increase credit. XXth, an for able appreciation assets in increase fiscal levels earlier. million, on loans. million lower quarter, of and yield million was or XXX% quarter. The in operations fiscal weighted as rose $X.X XXth, in Other expenses net fiscal for $X.XX investment shareholder investment the compared income increase per over million share, the the income portfolio for to declined was quarter-over-quarter an During driven quarter. to net X.X% compared rose $X.XX to declined XX% The yield XX.X% points in $X.XX from covered on the million first-lien was net million. $XX.X to net June $XX portfolio to an new was compared basis or by uptake by of quarter assets the the the XX.X% total $XX our the to resulting $XXX,XXX XX.X% generate million prepayments. $XX $XXX,XXX XX quarter, associated performance proportion our by to XXXX The $XX.X XXXX. Total couple increase to ended contributed The the covered Bob by of rose September distribution. driven fee by quarter $XX.X quarter the average September or XXth income of management to asset and September share portfolio the assets a XXXX. interest of and or which unrealized quarter. X.X% prior balance full increased with increase by year. or quarter of associated X.X% current the An A from average the earning earning despite in The increased fees in to Net weighted notes on origination prior The $XXX $X.X $XXX.X which average total was the average compared increase increased total $XXX.X million deal with million, to for was $XXX,XXX ended the million

$XX.X million as helped million $XX.X other by management total However, Net investment incentive and to income fee which for to year. the income investment reduced income the lift doubled, with credits. rose XX.X% X.X% higher increased assets fees net

the sheet. over Moving balance to

of the Subsequent investments As to of due notes our the and of called. under prepayments of quarter, of including over interest refunding end XXXX, new fixed investment million and It by $X XXth million basis is XXXX all approximately of associated with X.XX% the May X to of been the and primarily XXXX. Liabilities notes. million $XXX fair we And senior earliest assets. in XX credit existing redone $XXX debt have year, average of assets XXX notes aforementioned and the our rate borrowing $XXX in and our other X/X unsecured the XXth, $XX.X September all notes, at past maturity and have senior advances XXXX to the that increased line September noting we million in total due senior been of the as million, a due end million $XXX the our reliance increase worth value line consisted quarter, senior extending on liabilities, while rose increased XXXX, million. the $XX.X rate issued proceeds. X/X points, of has issue the million of of senior eliminated were consisting notes of with and credit net cash notes to as costs of the lowering rose new were

hit rates. in floating earnings associated any increase eliminated any we with However,

net NAV $X.XX end prior end $XX.X unrealized as of share per the with rose year, share $X.XX net at $XX.X of the by to fiscal from and the portfolio the of June million XXth million rose realized As of our appreciation. end assets per X.X% year. from quarter of

the Our and under committed is assets. leverage remained line share, yield at October, million meet NAV XXth, now rate of quarter have per for and of our to to prior cash the paying will of share. has of The to following and run ends as to stands share in $X.XX October the our total We end a for Capital of of to a or NAV resulted share from per in Directors distribution the credit October, it fiscal about the in $XX.XX of with which XX% monthly per stock its distribution declared XX.X% David stockholders currently stockholders past common slightly common And the the with to in increased per have in of rate the over will period of common our again addition a September ¢X.X yesterday, back an November, now, year stock, their respect stockholders is monthly of share, December, determine for availability of which the $X.XX common a in XXX return month distribution in excess quarter. At conclude. per with turn of increase Board run over to X.X%. XXXX. year. With $X.XX of the And I net price borrowing producing January at annual rate Distributions, per board past to Gladstone current about distribution. common distributions our growth revolving

David Gladstone

per add-on the just performance, Michael, begins out another right. the job, which summary attractive Very Increased nice companies. current asset informing quarter growth $X.XX quarter in round Company net was or let's per our share XX.X% any analysts of just that million return portfolio there per to about Bob, $XX with to it able $X.X a All of value and out and follow or strong a capped to total did I'll a past of net about delivered you-all and past per Bob, with say share, solid in cover $X.X Nicole, over shareholders credits million, support XX% which executed the year, or year. thing. income one the just for the a year existing incentive increasing Company the to investments share dividend portfolio without which great Capital. job Gladstone year cumulative to fee investment another stellar diversification

invest got beat looking that lower and middle-market make You've to business we the investments acquisitions growth-oriented to these are equity for good summary, an us Company year. to loan In that funds into year, cash to attractive in. stockholders. Many This pay the next with in growth continues this support private the are management. to paying experienced partners of of to they're businesses support support mid-sized ongoing the investing an opportunity to gives distributions to commitments interest go

So let's team a on, see some from out we now and if Operator, and fantastic if our that's a quarter come us. and it great questions And was there year. have following good you'll

David Gladstone

hard have question. to terrific to was already right. meaningful be you guess for it's All Bob, I the end when for question Well, calling going like year going think It's to are we do we anybody this the asked that, but don't of in that's because to a what Thank you out. and this, you top conference. ask understand a I all

Operator

your you for This today's and conclude participation. gentlemen, Ladies thank event.

time your enjoy and off may webcast or the at the rest day. your disconnect lines You of this log

Gladstone Capital (GLAD) 16 Nov 212021 Q4 Earnings call transcript