MCLEAN, VA / ACCESS Newswire / November 17, 2025 / Gladstone Capital Corporation (Nasdaq:GLAD) (the "Company") today announced earnings for its fourth quarter and fiscal year ended September 30, 2025. Please read the Company's Annual Report on Form 10-K filed today with the U.S. Securities and Exchange Commission (the "SEC"), which is available on the SEC's website at www.sec.gov and the Investors section of the Company's website at www.GladstoneCapital.com. ...

Investment Portfolio Overview - As of September 30, 2025, the total investment portfolio had an aggregate fair value of $859.1 million, consisting of investments in 55 companies across 22 states and 16 different industries[31]. - The five largest investments at fair value totaled $196.5 million, representing 22.9% of the total investment portfolio[31]. - The investment portfolio comprised approximately 90.9% in debt investments and 9.1% in equity investments at cost[24]. - Secured first lien debt investments accounted for $646.1 million, or 73.7% of the total cost of debt investments as of September 30, 2025[32]. - The total cost of debt investments was $796.6 million, representing 90.9% of the total investments[32]. - Preferred equity investments were valued at $37.4 million, or 4.3% of total investments as of September 30, 2025[32]. - Common equity/equivalents were valued at $42.6 million, or 4.8% of total investments as of September 30, 2025[32]. - As of September 30, 2025, total investments at fair value reached $859,124 million, an increase from $796,260 million in 2024, representing a growth of 7.9%[34]. - The healthcare, education, and childcare sector accounted for 31.8% of total investments in 2025, up from 12.8% in 2024, indicating a significant strategic shift[34]. - The diversified/conglomerate manufacturing sector saw an increase in fair value from $160,264 million in 2024 to $202,466 million in 2025, representing a growth of 26.4%[34]. Investment Strategy and Focus - The investment strategy focuses on lower middle market companies with annual EBITDA between $3 million and $25 million[23]. - The company has invested in approximately 292 different companies since its initial public offering in 2001[28]. - Experienced management teams are a critical criterion for investment, with a focus on aligning management incentives with investor interests[39]. - The investment committee, comprising seasoned professionals with over 30 years of experience, plays a crucial role in the investment approval process[42]. - The company conducts extensive due diligence, including financial analysis and management assessments, to evaluate potential investments[37]. - The investment structure typically includes secured first lien debt and preferred equity, aimed at maximizing returns while managing risks[40]. Financial Management and Fees - The base management fee is set at an annual rate of 1.75%, based on the average total assets, with a potential reduction to 0.5% for syndicated loan participations[61]. - The income-based incentive fee is applicable if quarterly net investment income exceeds 1.75% of net assets, with a tiered structure for additional income[63]. - The capital gains-based incentive fee is 20% of net realized capital gains, with no fees recorded since inception through September 30, 2025, due to cumulative unrealized capital depreciation[65]. - The Adviser provides significant managerial assistance to portfolio companies, with fees credited against the base management fee[62]. - The company’s Board of Directors approved the renewal of the Advisory Agreement through August 31, 2026, considering the quality of services and investment performance[58]. Compliance and Regulatory Requirements - The company must distribute at least 90.0% of its taxable ordinary income and realized net short-term capital gains to qualify as a RIC[73]. - At least 90.0% of the company's gross income must come from specific sources to maintain its BDC status[77]. - The company must ensure that no more than 25% of its total assets are invested in the securities of one issuer[77]. - The company is required to maintain an asset coverage of at least 150% for its senior securities representing indebtedness[91]. - The company is subject to asset coverage ratio requirements under the 1940 Act, which could restrict distributions necessary to maintain RIC status[167]. Risks and Challenges - The company faces risks related to market conditions, including volatility in capital markets and potential impacts on valuations of investments[95]. - The company may experience fluctuations in results due to inflation affecting its portfolio companies[106]. - The company has significant potential conflicts of interest, which could impact investment returns[95]. - The company may face challenges in raising capital due to market volatility and credit conditions[103]. - The company is exposed to risks from investments in foreign portfolio companies, including political instability and currency fluctuations[141][142]. - The company operates in a highly competitive market for investment opportunities, facing pressure from larger entities with greater financial resources[116]. Debt and Leverage - As of September 30, 2025, the company incurred leverage through various debt instruments totaling $428.1 million at cost, with an effective annual cash interest rate of 5.6%[165]. - The company has a Credit Facility with maximum borrowings of $320.0 million, with no outstanding borrowings as of September 30, 2025[153]. - The Credit Facility requires the company to maintain a minimum net worth of $581.0 million as of September 30, 2025, and asset coverage of at least 150%[154]. - The company may issue equity to repay amounts outstanding under the Credit Facility, which could lead to substantial dilution for existing stockholders[157]. - The company has incurred leverage to generate capital for additional investments, which may be at risk if asset values decline[179]. Valuation and Performance Monitoring - The Valuation Team assesses fair value of investments quarterly, with oversight from the Board of Directors[54]. - The company’s net asset value (NAV) could be materially affected by fair value determinations of investments[57]. - The fair value of privately held securities may not be readily determinable, leading to fluctuations in reported values over time[121]. - The lack of liquidity in privately held investments may hinder the company's ability to quickly obtain cash equal to the recorded value of its investments[125]. - The company maintains ongoing monitoring of portfolio companies to ensure performance aligns with expectations and to identify best practices[50]. Distributions and Tax Implications - Distributions to U.S. stockholders attributable to Investment Company Taxable Income are generally taxable as ordinary income[79]. - The company intends to allocate capital gain distributions proportionately between common and preferred shares based on total distributions paid[80]. - The company intends to distribute at least 90.0% of its Investment Company Taxable Income to stockholders through monthly distributions[203]. - Distributions may include a return of capital, which could affect stockholders' tax liabilities and reduce the company's asset base[205][206]. - The company may not declare dividends or repurchase shares until asset coverage tests under the 1940 Act are satisfied[176].

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Core Insights - The Conservative Income Portfolio aims to target high-value stocks with significant margins of safety while utilizing well-priced options to reduce investment volatility [1] - The Enhanced Equity Income Solutions Portfolio is designed to generate yields between 7-9% while minimizing volatility [1] - Recent months have been challenging for income investors, particularly in the BDC asset class, which has seen significant declines [1] - The Covered Calls Portfolio focuses on lower volatility income investing with an emphasis on capital preservation [1] - The fixed income portfolio is centered on acquiring securities that offer high income potential and are heavily undervalued compared to peers [1] Company Overview - Trapping Value is a team of analysts with over 40 years of combined experience in generating options income while prioritizing capital preservation [2] - The Conservative Income Portfolio is managed in partnership with Preferred Stock Trader, featuring two income-generating portfolios and a bond ladder [2]

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Core Points - Gladstone Capital Corporation announced monthly cash distributions of $0.15 per share for common stock for October, November, and December 2025 [1] - The company plans to report earnings for its fourth fiscal quarter ended September 30, 2025 [1] Cash Distributions - Monthly cash distribution of $0.15 per share for common stock for each of the months: October, November, and December 2025 [1]

Core Insights - Artificial intelligence (AI) is identified as the greatest investment opportunity of the current era, with a strong emphasis on the urgent need for energy to support its growth [1][2][3] - A specific company is highlighted as a key player in the AI energy sector, owning critical energy infrastructure assets that are essential for meeting the increasing energy demands of AI technologies [3][7] Investment Landscape - Wall Street is investing hundreds of billions into AI, but there is a pressing concern regarding the energy supply needed to sustain this growth [2] - AI data centers, such as those powering large language models, consume energy equivalent to that of small cities, indicating a significant strain on global power grids [2] Company Profile - The company in focus is not a chipmaker or cloud platform but is positioned as a vital player in the energy sector, particularly in nuclear energy infrastructure [7] - It is capable of executing large-scale engineering, procurement, and construction (EPC) projects across various energy sectors, including oil, gas, and renewable fuels [7] Financial Position - The company is noted for being completely debt-free and holding a substantial cash reserve, which is nearly one-third of its market capitalization [8] - It is trading at less than 7 times earnings, making it an attractive investment opportunity compared to other energy and utility firms burdened with debt [10] Market Trends - The company is poised to benefit from the onshoring trend driven by tariffs, as well as the surge in U.S. LNG exports under the current administration's energy policies [5][14] - There is a growing recognition on Wall Street of this company's potential, as it quietly capitalizes on multiple favorable market trends without the inflated valuations seen in other sectors [8][10] Future Outlook - The demand for AI is expected to continue growing, leading to an increased need for energy infrastructure, positioning this company as a critical player in the future energy landscape [6][12] - The influx of talent into the AI sector is anticipated to drive rapid advancements, further solidifying the importance of energy infrastructure in supporting these developments [12][13]

Core Insights - The article discusses the best Business Development Company (BDC) dividend stocks to invest in, highlighting their role in supporting smaller and mid-sized businesses in the US [2][4]. Industry Overview - BDCs provide an alternative to traditional banking by raising funds through share issuance and investing in loans and equity stakes in private firms, aiming to support business growth while offering returns to investors [2]. - Fitch Ratings expresses a cautious outlook for BDCs in 2025, citing challenges such as a crowded lending environment, weaker earnings, and high interest rates impacting asset quality [3][4]. Company Highlights - **PennantPark Investment Corporation (NYSE:PNNT)**: - Focuses on mid-sized firms, achieving an average yield of 10.4% on debt investments as of June [9]. - Nearly all loans (99%) are at variable rates, benefiting from rising interest rates, with a current monthly dividend of $0.08 per share and a yield of 14.66% as of October 5 [10][11]. - **Gladstone Capital Corporation (NASDAQ:GLAD)**: - Provides debt and equity financing to lower middle-market businesses, focusing on secured loans and consistent cash flow [12]. - Offers a monthly dividend of $0.165 per share and a supplemental dividend of $0.10 per share, resulting in a yield of 9.27% as of October 5 [14]. - **BlackRock TCP Capital Corp. (NASDAQ:TCPC)**: - Targets mid-sized businesses with stable cash flows, primarily through senior secured loans [15]. - Maintains a stable dividend history with a current quarterly payout of $0.25 per share and a yield of 16.53% as of October 5 [16].

Group 1 - Gladstone Capital (NASDAQ: GLAD) has been identified as a promising business development company (BDC) with a buy rating assigned in December 2023 [1] - The original investment thesis highlighted the company's potential in shaping financial strategies and executing large-scale financings [1] - The analyst has a beneficial long position in the shares of GAIN and GLAD, indicating confidence in the company's performance [2] Group 2 - The analyst has over a decade of experience in financial management, contributing to the development of financial strategies for top-tier corporates [1] - Significant efforts have been made to institutionalize the REIT framework in Latvia, aimed at enhancing liquidity in pan-Baltic capital markets [1] - The analyst is involved in policy-level work, including the development of national SOE financing guidelines and frameworks for channeling private capital into affordable housing [1]

Gladstone Capital (NASDAQ: GLAD ) has been one of my first BDCs that I have covered here on the platform, assigning a buy rating. My original thesis was issued in December 2023, where I indicated aRoberts Berzins has over a decade of experience in the financial management helping top-tier corporates shape their financial strategies and execute large-scale financings. He has also made significant efforts to institutionalize REIT framework in Latvia to boost the liquidity of pan-Baltic capital markets. Other ...