Gladstone Capital Corporation Reports Financial Results for its Fourth Quarter and Fiscal Year Ended September 30, 2016
November 21 2016 - 5:00PM
Gladstone Capital Corporation (NASDAQ:GLAD) (the “Company”) today
announced earnings for its fourth quarter and fiscal year ended
September 30, 2016. Please read the Company’s Annual Report
on Form 10-K filed today with the U.S. Securities and Exchange
Commission (the “SEC”), which can be retrieved from the SEC’s
website at www.sec.gov, or from the Company’s website at
www.GladstoneCapital.com.
Summary Information (dollars in
thousands, except per share data) (unaudited):
For the Quarter Ended: |
|
September
30,2016 |
|
June 30,2016 |
|
Change |
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
Total
investment income |
|
$ |
9,749 |
|
$ |
9,844 |
|
$ |
(95 |
) |
(1.0 |
)% |
Total
expenses, net of credits |
|
(4,847 |
) |
(4,937 |
) |
90 |
|
(1.8 |
) |
Net
investment income |
|
4,902 |
|
4,907 |
|
(5 |
) |
(0.1 |
) |
Net
investment income per common share |
|
0.21 |
|
0.21 |
|
— |
|
— |
|
Cash
distribution per common share |
|
0.21 |
|
0.21 |
|
— |
|
— |
|
Net
realized loss |
|
(2,621 |
) |
(84 |
) |
(2,537 |
) |
NM |
|
Net
unrealized appreciation |
|
18,414 |
|
693 |
|
17,721 |
|
NM |
|
Net
increase in net assets resulting from operations |
|
20,695 |
|
5,516 |
|
15,179 |
|
275.2 |
|
Weighted
average yield on interest-bearing investments |
|
11.0 |
% |
10.9 |
% |
0.1 |
% |
0.9 |
|
Total
invested |
|
$ |
20,163 |
|
$ |
33,994 |
|
$ |
(13,831 |
) |
(40.7 |
) |
Total
repayments and proceeds |
|
22,719 |
|
20,389 |
|
2,330 |
|
11.4 |
|
|
|
|
|
|
|
|
|
|
|
As of: |
|
September
30,2016 |
|
June 30,2016 |
|
Change |
|
% Change |
|
Total
investments, at fair value |
|
$ |
322,114 |
|
$ |
308,226 |
|
$ |
13,888 |
|
4.5 |
% |
Fair
value, as a percent of cost |
|
84.4 |
% |
79.8 |
% |
4.6 |
% |
5.8 |
|
Net asset
value per common share |
|
$ |
8.62 |
|
$ |
7.95 |
|
$ |
0.67 |
|
8.4 |
|
NM=Not Meaningful |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended: |
|
September 30, 2016 |
|
September 30,
2015 |
|
Change |
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
Total
investment income |
|
$ |
39,112 |
|
$ |
38,058 |
|
$ |
1,054 |
|
2.8 |
% |
Total
expenses, net of credits |
|
(19,625 |
) |
(20,358 |
) |
(733 |
) |
(3.6 |
) |
Net
investment income |
|
19,487 |
|
17,700 |
|
1,787 |
|
10.1 |
|
Net
investment income per common share |
|
0.84 |
|
0.84 |
|
— |
|
— |
|
Cash
distribution per common share |
|
0.84 |
|
0.84 |
|
— |
|
— |
|
Total net
realized gain (loss) |
|
7,152 |
|
(34,176 |
) |
41,328 |
|
NM |
|
Total net
unrealized (depreciation) appreciation |
|
(15,272 |
) |
24,960 |
|
(40,232 |
) |
NM |
|
Net
increase in net assets resulting from operations |
|
11,367 |
|
8,484 |
|
2,883 |
|
34.0 |
|
Weighted
average yield on interest-bearing investments |
|
11.1 |
% |
10.9 |
% |
0.2 |
% |
1.8 |
|
Total
invested |
|
$ |
89,546 |
|
$ |
134,097 |
|
$ |
(44,551 |
) |
(33.2 |
) |
Total
repayments and proceeds |
|
130,666 |
|
40,273 |
|
90,393 |
|
224.5 |
|
|
|
|
|
|
|
|
|
|
|
As of: |
|
September 30, 2016 |
|
September 30,
2015 |
|
Change |
|
% Change |
|
Total
investments, at fair value |
|
$ |
322,114 |
|
$ |
365,891 |
|
$ |
(43,777 |
) |
(12.0 |
) |
Fair
value as a percent of cost |
|
84.4 |
% |
89.2 |
% |
(4.8 |
) |
(5.4 |
) |
Net asset
value per common share |
|
$ |
8.62 |
|
$ |
9.06 |
|
$ |
(0.44 |
) |
(4.9 |
) |
NM=Not Meaningful |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Fiscal Quarter 2016 Highlights:
- Portfolio Activity: Invested $19.5 million in
three new portfolio companies and $0.7 million in existing
portfolio companies. Received $22.7 million in repayments and net
proceeds from portfolio companies.
- Portfolio Appreciation: Reported a net
realized and unrealized gain of $15.8 million, or $0.68 per share,
primarily due to unrealized appreciation on RBC Acquisition Corp.
(“RBC”), which was driven by proceeds received associated with the
sale of the investment in November 2016.
- Recurring Distributions: Paid monthly
distributions for each of July, August and September 2016 to common
stockholders ($0.07 per common share) and to preferred stockholders
($0.140625 per share of the Company’s 6.75% Series 2021 Term
Preferred Stock).
Fourth Fiscal Quarter 2016 Results:
Total investment income decreased by 1.0% compared to the prior
quarter as interest income increased by $0.9 million, or 10.4%, due
to an increase in the average balance of our interest-bearing
portfolio and other income declined to $0.6 million, or 6.5% of
investment income, compared to the prior quarter. Total expenses
decreased by 1.8% quarter over quarter, primarily as a result of a
$0.2 million decrease in professional and other general and
administrative expenses.
Net Investment Income for the quarter ending September 30, 2016
was $4.9 million, or $0.21 per share, which is consistent with the
prior quarter.
Net Increase in Net Assets Resulting from Operations for the
quarter ended September 30, 2016 and June 30, 2016 was $20.7
million, or $0.89 per share, compared to $5.5 million, or $0.24 per
share, respectively. The quarter over quarter increase is
primarily due to an increase in unrealized appreciation of $17.7
million largely attributed to the RBC sale.
Fiscal Year Ended 2016 Results:
Total investment income increased by 2.8% during the fiscal year
ended September 30, 2016 compared to the prior year as other income
increased by $0.7 million and interest income increased by $0.3
million due to an increase in the weighted average yield on our
interest-bearing investments from 10.9% to 11.1% year over
year. Total expenses decreased 3.6% year over year, primarily
due to a $0.9 million, or 24.3%, decrease in interest expense on
borrowings driven by a lower weighted average balance outstanding
on our credit facility during the year.
Net Investment Income for the years ended September 30, 2016 and
2015, was $19.5 million, or $0.84 per share, and $17.7 million, or
$0.84 per share, respectively.
Net Increase in Net Assets Resulting from Operations for the
years ended September 30, 2016 and 2015, was $11.4 million, or
$0.49 per share, compared to $8.5 million, or $0.40 per share,
respectively. The year over year change is driven by the
increase in net investment income and lower net realized and
unrealized loss compared to the prior year.
Subsequent Events:
Subsequent to September 30, 2016, the following significant events
occurred:
- Portfolio Activity:
- In October 2016, RP Crown Parent paid off at par for proceeds
of $2.0 million.
- In November 2016, we completed the sale of RBC for net proceeds
of approximately $37 million, which resulted in a realized loss of
approximately $2 million. In connection with the sale, we
received success fees associated with our debt investments of $1.1
million.
- In November 2016, we invested $5.2 million in Sea Link
International (“Sealink”) through secured second lien debt and an
equity co-investment. Sealink is a manufacturer and supplier of OEM
automotive lighting components and subassemblies.
- Common Stock Offering: Completed a public
offering of 2.2 million shares of our common stock, including the
overallotment. Gross proceeds totaled $17.3 million and net
proceeds, after underwriting discounts and offering costs, were
approximately $16.4 million.
- Distributions Declared: Declared the
following monthly cash distributions to stockholders on October 11,
2016:
|
|
|
|
|
|
|
Record Date |
|
Payment Date |
|
Distribution per Common Share |
|
Distribution per Series 2021 Term Preferred
Share |
October
21 |
|
October
31 |
|
$ |
0.07 |
|
$ |
0.140625 |
November
17 |
|
November
30 |
|
0.07 |
|
0.140625 |
December
20 |
|
December
30 |
|
0.07 |
|
0.140625 |
Total for the Quarter |
|
$ |
0.21 |
|
$ |
0.421875 |
|
|
|
|
|
|
|
Conference Call for Stockholders: The Company
will hold its earnings release conference call on Tuesday, November
22, 2016, at 8:30 a.m. EST. Please call (855) 465-0177 to
enter the conference. An operator will monitor the call and
set a queue for any questions. A replay of the conference call will
be available through December 22, 2016. To hear the replay,
please dial (855) 859-2056 and use conference number
46710429. The replay of the conference call will be available
beginning approximately one hour after the call concludes. The live
audio broadcast of the Company’s quarterly conference call will
also be available online at www.GladstoneCapital.com. The
event will be archived and available for replay on the Company’s
website through January 22, 2017.
About Gladstone Capital Corporation: Gladstone
Capital Corporation is a publicly traded business development
company that invests in debt and equity securities, consisting
primarily of secured first and second lien term loans to small and
medium sized businesses in the United States. Including
distributions through today, the Company has paid 165 consecutive
monthly or quarterly cash distributions on its common stock, which
over the past five years total approximately $90.1 million, or
$4.20 per share. Information on the business activities of
all the Gladstone funds can be found at
www.GladstoneCompanies.com.
To obtain a paper copy of the Company’s most recent Form 10-K,
please contact the Company at 1521 Westbranch Drive, Suite 100,
McLean, VA 22102, ATTN: Investor Relations. The
financial information above is not comprehensive and is without
notes, so readers should obtain and carefully review the Company’s
Form 10-K for the year ended September 30, 2016, including the
notes to the consolidated financial statements contained
therein.
Investor Relations Inquiries: Please visit www.gladstone.com or +1-703-287-5893.
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