Gladstone Capital Corp (GLAD, Financial) released its 8-K filing on November 13, 2023, detailing its financial results for the fourth quarter and fiscal year ended September 30, 2023. The company reported a significant increase in total investment income and net asset value per common share, reflecting a strong fiscal performance.
Fiscal Year and Fourth Quarter Performance Highlights
For the fiscal year ended September 30, 2023, GLAD's total investment income saw a substantial rise of 36.9% to $86.4 million, compared to $63.15 million in the previous year. This increase was primarily driven by a $29.0 million surge in interest income, attributed to a higher weighted average principal balance and yield on interest-bearing investments. The net investment income for the year stood at $41.0 million, or $1.10 per share, marking a 27.1% increase from the prior year.
The fourth quarter results also showed positive trends, with total investment income climbing by 4.1% to $23.76 million. However, total expenses also rose by 14.6%, leading to a 5.9% decrease in net investment income to $10.987 million, or $0.28 per share. Despite this, the company's net increase in net assets from operations went up by 10.2% to $13.1 million.
Balance Sheet and Shareholder Distributions
GLAD's balance sheet reflected a healthy financial position with total investments at fair value amounting to $704.815 million as of September 30, 2023, an 8.5% increase year-over-year. The net asset value per common share improved to $9.39, a 3.4% rise from the previous year. The company also reported an 18.6% increase in cash distributions per common share to $0.9425 for the fiscal year.
Management's Commentary
While net originations moderated last quarter negatively impacting fee income, the underlying portfolio continued to perform well generating an 8% increase in net interest income and ROE of 13.7% for the period. These results capped a strong fiscal 2023 for GLAD where we achieved 9% asset growth and 27% NII growth which supported the 22% increase in the common distribution rate and NAV growth of 3.4%. We ended fiscal 2023 with a conservative leverage profile and ample borrowing capacity to capitalize on the growing private credit opportunity across the lower middle market and grow our earning assets, net interest income and shareholder distributions in the coming quarters,"said Bob Marcotte, President of Gladstone Capital.
Looking Ahead
The company has announced its distribution schedule for the subsequent quarter, maintaining a consistent payout to shareholders. GLAD's strategic positioning and conservative leverage profile suggest a continued focus on sustainable growth and shareholder value.
Investors are encouraged to review the full details of GLAD's financial performance in the company's Form 10-K, which includes comprehensive notes to the consolidated financial statements. For further inquiries, investors may visit www.gladstonecompanies.com or contact investor relations.
Gladstone Capital Corporation, a business development company, continues to focus on debt and equity securities investments, primarily in secured first and second lien term loans to lower middle market businesses in the United States, as it navigates the evolving financial landscape.
Explore the complete 8-K earnings release (here) from Gladstone Capital Corp for further details.
