GLAD - Earnings call transcript Q1 2022 | Gladstone Capital Corporation

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

Operator

Greetings, and welcome to Gladstone Capital First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Question-and-answer session will follow the formal presentation. [Operator Instructions].

As a reminder, this conference is being recorded. to conference like host. to now would turn over the your I Mr. Gladstone, Executive David Officer. Chief you. Thank to over And sir. you

David Gladstone

opportunity quarter this right. talk All Thank the Capital with and to that was you quarter to SEC. And to provide ending for you, a for December first regarding update for make is welcome shareholders Michael? and turn information yesterday analysts XX, the a statements. of is the -- Michael I'll was first, happy Almond. the filed calling it nice to in, General a always earnings the and Gladstone call thank But XXXX. the statement This over Licalsi, forward-looking all further it introduction certain Counsel, will we're

Michael Licalsi

Today's future good of they the the And statements under XXXX everybody. our Act Act Securities Exchange David. regarding forward-looking performance. morning, Securities those include of and including reports XXXX, Thanks,

forward-looking on statements certain these may uncertainties plans, results be many and actual to reasonable cause risks believe materially current our factors any results we with and and our So expressed future risk from be factors to XX-K, website, our including are or statements that can other this and based SEC, all documents Investors involve by we different XX-Q, Forms that implied page of you the these filed find the the forward-looking on www.gladstonecapital.com. which

also notification sign there. could You up email or service

required an a call And update of on revise result Qs, as law. future XX no the XX-Ks today's You website, forward-looking publicly - find overview we that is except or SEC's otherwise, information, these new statements, our any SCC.GOV. or can undertake results. as events, which also the by obligation of to of whether is And

Investors issued we for the detailed ask find more Again, yesterday, both and our XX-Q, them that you on of release page our can So information. press Form website. review you

President, Gladstone will Marcotte. call Bob over Bob. turn the to I Capital's Now

Bob Marcotte

the the of period you the some Nicole busy on dialing Last and call position. and so for highlights capital for the CFO, quarter thank Schaltenbrand, all, financial for morning, cover in was morning. and outlook a provide turning us, the state period for will before one liquidity and Good this comments to our the review Gladstone results and to portfolio our Capital I market

quarter's a of So which million record at the included beginning which quarter new investments, with in last proprietary for originations commitments. $XXX results, million, came approximately six represented the $XXX total

$XX did the sale, the the income over in rose fees last in by number of a the total anticipated previously offset received which the costs and call, $XXX,XXX of due Other million contributed generated of net XX.X% increase include with As the total to past period. and originations were we million not in million the with increase million Exits surged exits $XX at also covered debt to to million, a slightly $X.X prior period which $X.X of quarter, new for of repayments, we unchanged the so prior administrative investment came our quarter. X.X% and increase the Lignetics, period. the $X.X included discussed and just fee the Lignetics an the is prepayment declined income for other $XXX,XXX total million, exit interest issuance. were costs for and Borrowing $XX.X $XX.X the a under in as for million. the quarter of Interest which represented sale income net portfolio or exits X% period, interest-bearing average XX% investment gain realized of of for

down, million or unrealized net in income base and negatively performance compared management included decline fees quarter. of last fees from expenses $X.XX million the credited by investment to against management declined which related $X.X to realized income fees $X.X early net at in million of management results the a $X.XX management a new in increase the on Lignetics impacted million as net investment remitted XX% rose to several gain pandemic. improved the or With to came portfolio a the stages appreciation COVID deal in fees largely to the assets $XXX,XXX share, However, million closing the operations $X.X as at up of the and net $X $XX.X quarter, from sale, Net share. the as well credits company

of our to NAB report the a leverage, experience not quarter we rose respect XX.X%. perform share, to we're to portfolio, and $X.XX well modest pleased years per return December the for X.X% as Glad cumulative over our period, Despite defaults. $X.XX or to risen past has For With the for any did payment two share to continues XX. the portfolio the

to operating energy gain, the these several unrealized bulk communication supported for and depreciation the improved of businesses in addition performance In reduction investments the the the period. Lignetics in of and the appreciation

XXXX NAB of last This XXst to pandemic, appreciation XX.X% the were The investment favor $XX.X represents since XX% exits last the appreciation as continued or of as in quarter's XX% investments, December of the and to portfolio share were million over equity quarter of quarter the new which senior $X.XX loans asset in end NAB per net two the first-lien performance brings years. the mix loans. of prior second-lien originations the in to shift or equity increase

to average assets X.X%, weighted was XX.X% of rose on end value trailed which fair the investments. XX% the debt at on the assets yield first-lien investments average yield at The the So quarter. new exited the of weighted

was basis the average XX.X% from the than last by into than -- And new was overall higher XX yield at quarter-end. unchanged equity net prior overall the earning investments. for asset However, on our the reference, exited quarter's reinvesting yielding yield gain the points investments investments, the on approximately

like we repayments received did balance able portfolio end will are couple of with. to anticipate But of quarter. million Looking last to as over the I'd several maintain the our we the leave fiscal Anticipate grow there in you others the be investment a near-term. We've quarter. of $XX since comments of 'XX, or

As which make include with last made commitments, portion our we a or are platform activity our a investment small may to larger of investments four note, you recent funding PE investment strategy, forward. consistent companies -- the equity six of going included quarter of And future anticipate growth-oriented growth number investments to our and up co-investments.

floating the substantial on X.XX%, of margin. investments in We our debts to to between by XX% short-term given are exceeds the well-positioned absorb and rate the was assets increase floating rates. debt modest the and impending rates only subject floor as And average a floor our in any our spread of the floating-rate exceed -- average borrowing rate rate a assets floor average floating

CFO growth, While income the leverage, quarter or focused NII able to for support fee I'd to of are to one-time the of interest the sustaining the any it Nicole And distributions. to generate adjustments Schaltenbrand, like turn on combination Gladstone increasing we're to to in over increase financial exceed rates details provide margins, now current earning quarter. we some asset last Capital current Nicole. some for to sustained higher through shareholder dividend, performance fund's the

Nicole Schaltenbrand

everyone. Thanks, Bob. morning, Good

during share quarter. in declined $XXX quarter December which a to During of by for the the increased average our portfolio distribution. quarter-over-quarter fee X.X% increase $X.X an current XXst or Net was share, million with income XX.X% associated past on $XX.X and $XXX,XXX covered interest driven fees deal X% the investment quarter. compared was in the compared September by $X from increase million the the amount appreciation million to ended Bob whereas decline XXX% to the the as unrealized $X.XX shareholder the XX.X% prior increase received Other X.X quarter, we by was of per current in first-lien well portfolio unchanged by by the receipt The or such income by in or surge covered interest XXst, quarter the interest-bearing increase quarter was new total in $X.XX slightly in average December our drove the yield million million was by $X.X weighted million, The investment and the to portfolio to of weighted XX.X no or income And expenses of The for million to prior $XXX,XXX the to the driven income per $XX.X quarter. management balance quarter increased million, was driven credits. Total despite million as December increase proportion during million investment earlier. compared per to net which at $X.XX the XXth net share quarter. net for for as operations assets declined earnings, prior origination loans. $XX.X $XXXXXX total rose did quarter X.X net or ended resulting

sheet. balance Moving over the to

to and at of investments to of due of of advances three-quarter XXst, million, five credit $XXX other $XX.X eight rose the notes assets $XXX As December and $XX and our as $XXX million of Liabilities and end quarter, senior line in assets. value XXst due cash million million $XXX of primarily consisted were December under of consisting And of May rose in million million and total the XXXX. in notes million. three XXXX, senior of $XX fair

quarter by rose as end per XXth rose earnings at and in $X.XX share September December well X.X% prior net as of $X.XX per distribution. from unrealized $X.X portfolio December As from appreciation, net NAV XXst. the with XXst, of excess a million assets of as share realized to

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

David Gladstone

Thank Capital about right. Nicole six informing job new follow All Michael, of In closed investments proprietary summary, another representing a great all Company a and shareholders Bob did for you, company. analysts and solid and that new you of investments. our million $XXX Gladstone quarter

value private represent income associated a conclude The this XX% very blended and relationships $XX.X asset a During the activity the with $X.X company investments sale about brings and past as of seven year period. year. quarter. of investment these The a small equity It Lignetics, growing over the net XX% of of the and and about nice million income industry represented $X.X combination about for which net equity these by period, million number gains businesses. sponsors and exits appreciation sectors of realized lifted for of the of fee return million several diversity over new co-investment of investment distribution XX.X% net of good investment

people of quarter. they've an us all pay middle-market interest fantastic. and very attractive are you make to businesses It ask Operator, company summary, management. partners experienced commitment they absolutely by to for the their how gives has their invested This a accounts, that's in. in Many private paying support good investments please now, with In And come supported growth-oriented some business questions. to and continues cash tell funds acquisition stockholders. growth to that think opportunity mid-sized support of I good equity these to us looking invest and can a was, an on would distributions ongoing loan our to the

Operator

we the queue. it Instructions] equipment, a is One time, question-and-answer a handset this speaker Instructions] [Operator using confirmation we question while pick poll keys. line participants At conducting tone necessary to will for moment, up be your you. session. be questions. pressing A indicate your before [Operator may in Thank For please, will star

David Gladstone

some have We questions?

Operator

[Operator Instructions]

David Gladstone

disappointing. that's Well,

Somebody should ask a question.

Operator

from Please comes question Adrian first Adrian The Assets with Day Day go Management. ahead.

Adrian Day

please? equity investments, bit just that little more little David, bit or somebody about Listen, And a high might say you. you us you go? how about just Thank could more Yeah. could the maybe a give you

David Gladstone

Well, We've remember, done past in up some loan. time it some picked made it from year. as not Capital or like much equity, I my as every the something always a idea. you the Allied standpoint, But warrants,

So bit in direction a flexibility Bob, Bob overall speaking, to in that is the moving to want more you comment a holding portfolio. little its the Sure. that got on little that? now balance still of he's we're XX% sheet. Generally

swings receptive two that selective invest for X, are over the in and also the look Generally threshold. at the invest target. it appreciate, is companies. all cost certainly of in of in increases we that we're Now equity are that kind things recent times reasons. the But in. other reinvest sponsors private I of a XX% of the made with the XX% sometimes number as be at companies of we companies not, our mindful, sense some certainly to liquidations, Also don't speaking,

would I continue that's investments expect historically. think of I have the XX% to up time, a coming driving little bit, adjusted go the quarters. over but would more the appreciated to expect would we percentage a probably appreciation. those additional I have for overall, current number investments some current say At liquidation so that number So than also of I that significant

that's some but probably on number around know we're be I and So liquidations generally to we'd not are that like speaking, specific, based activity. where variance with

Adrian Day

you. Okay. Super. Thank

David Gladstone

next have quarter some get good very Well, questions? much. questions. I till to to we'll question, Other wait one you got good Thank so guess we

Operator

you. Thank

Thank end So the ladies turn question-and-answer to session, remarks. of and you. to would like call back we have and David Mr. reached gentlemen, for I the Gladstone closing

David Gladstone

much, this and Thank end quarter. see you everybody, of next call. right. very All That's we'll you again the

Operator

concludes today's conference. This

you disconnect your this may participation. time. Thank at your You lines for

Gladstone Capital (GLAD) 3 Feb 222022 Q1 Earnings call transcript