Gladstone Capital (US:GLAD)2021-05-05 18:06Financial Data and Key Metrics Changes - For the quarter ending March 31, 2021, total interest income declined slightly to $11.9 million, a decrease of $200,000 or 1.6% compared to the prior quarter, primarily due to a small decline in the weighted average yield [18][19] - Net investment income rose to $6.4 million or $0.195 per share, covering 100% of shareholder distributions, an increase of $100,000 compared to the prior quarter [20] - Net assets from operations increased to $21.3 million or $0.65 per share, compared to $12.3 million or $0.38 per share for the quarter ending December 31, 2020 [21] - NAV rose by 6.6% from $7.61 per share at December 31 to $8.11 per share as of March 31, 2021 [24] Business Line Data and Key Metrics Changes - Originations for the quarter totaled $72 million, including three new proprietary investments, while exits totaled $48 million, resulting in net originations of $24 million [7] - The portfolio's weighted average balance increased slightly by $10.7 million or 2.4% to $454.1 million compared to the previous quarter [18] - The asset mix shifted in favor of first lien loans, which rose to 58% of cost, while second lien exposure declined to 32% [15] Market Data and Key Metrics Changes - The company reported no payment defaults in its one non-accrual investment, which represents 1.5% of the portfolio at fair value, indicating a material uptick in business volumes [14] - The weighted average borrowing costs were reported at 4.6% as of March 31, with total liabilities rising to $233 million [22][24] Company Strategy and Development Direction - The company continues to target leverage in the vicinity of one-to-one debt to equity, with a focus on maintaining a low leverage position to capitalize on middle market investment opportunities [17][30] - The strategy includes investing in midsize private businesses supported by private equity funds, which helps facilitate acquisitions and business growth [31] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the portfolio's performance, noting that most investments have moved past COVID-related effects, with broad-based asset appreciation [12] - The company anticipates continued net investment portfolio growth driven by elevated levels of refinancing and recapitalization activity in the market [16] - Management highlighted the importance of maintaining a flexible capital position to navigate potential economic changes [30] Other Important Information - The board declared monthly distributions of $0.065 per common share for April, May, and June, resulting in an annual rate of $0.78 per share [25] - An incentive fee reduction was implemented, increasing the hurdle rate from 7% to 8%, which is expected to enhance net earnings available for shareholder distributions [26] Q&A Session Summary Question: Any questions from participants? - No questions were raised during the Q&A session, and the call concluded without further inquiries [33][34][35]