Gladstone Capital Corp. Reports Operating Results (10-Q)
Gladstone Capital Corp. has a market cap of $292.5 million; its shares were traded at around $13.87 with a P/E ratio of 14.9 and P/S ratio of 6.9. The dividend yield of Gladstone Capital Corp. stocks is 6.1%.GLAD is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations: Purchases: During the six months ended March 31, 2010, we extended $180 of investments to a new portfolio company and $7,140 of investments to existing portfolio companies through revolver draws or the additions of new term notes, for total investments of $7,320.
Repayments: During the six months ended March 31, 2010, five borrowers made unscheduled full payoffs of $31,006, one borrower made an unscheduled partial payoff of $950 and we experienced contractual amortization, revolver repayments and some principal payments received ahead of schedule for an aggregate of $6,513, for total principal repayments of $38,469.
On March 15, 2010, through our wholly-owned subsidiary, Gladstone Business Loan, LLC (Business Loan), we entered into a fourth amended and restated credit agreement which provides for a $127,000 revolving line of credit arranged by Key Equipment Finance Inc. as administrative agent (the Credit Facility). Branch Banking and Trust Company (BB&T) and ING Capital LLC (ING) also joined the Credit Facility as committed lenders. Subject to certain terms and conditions, the Credit Facility may be expanded up to $202 million through the addition of other committed lenders to the facility. The Credit Facility matures in two years on March 15, 2012, and, if the facility is not renewed or extended by this date, all principal and interest will be due and payable on March 15, 2013. Advances under the Credit Facility will generally bear interest at the 30-day LIBOR (subject to a minimum rate of 2%), plus 4.5% per annum, with a commitment fee of 0.5% per annum on undrawn amounts.
Investment income for the three months ended March 31, 2010 was $9,814, as compared to $10,929 for the three months ended March 31, 2009. Interest income from our aggregate investment portfolio decreased for the three months ended March 31, 2010, as compared to the prior year period. The level of interest income from investments is directly related to the balance, at cost, of the interest-bearing investment portfolio outstanding during the period multiplied by the weighted average yield. The weighted average yield varies from period to period based on the current stated interest rate on interest-bearing investments and the amounts of loans for which interest is not accruing. Interest income from our investments decreased primarily due to the overall reduction in the cost basis of our investments, resulting from the exit of loans subsequent to March 31, 2009, partially offset by an increase in the weighted average yield on our portfolio. The annualized weighted average yield on our portfolio, excluding cash and cash equivalents, was 10.9% for the three months ended March 31, 2010 as compared to 9.7% for the prior year period. During the three months ended March 31, 2010, six investments were on non-accrual, for an aggregate of approximately $26,422 at cost, or 8.0% of the aggregate
Interest income from Non-Control/Non-Affiliate investments decreased for the three months ended March 31, 2010, as compared to the prior year period. The decrease was primarily attributable to an overall decrease in the aggregate Non-Control/Non-Affiliate investments held at March 31, 2010 compared to the prior year period. The decrease was also attributable to the conversion of two Non-Control/Non-Affiliate investments held during the prior year period (Clinton and Defiance) to Control investments. In addition, we reversed previously recorded interest income of approximately $90 during the three months ended March 31, 2010. The success fees earned during the three months ended March 31, 2010 and March 31, 2009 included in interest income were $848 and $21, respectively. Success fees earned during the three months ended March 31, 2010 resulted from payoffs from ActivStyle, Saunders and Visual Edge. Success fees earned during the three months ended March 31, 2009 resulted from a refinancing by Its Just Lunch.
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