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Mar 31, 2020
Gladstone Capital Q2 2020 Earnings Report
Reported earnings for the second fiscal quarter ended March 31, 2020.
Key Takeaways
Gladstone Capital Corporation reported a net investment income of $6.5 million, or $0.21 per share, for the quarter ended March 31, 2020. The Net Decrease in Net Assets Resulting from Operations was $27.8 million, or $0.89 per share, driven by net portfolio depreciation and net realized loss on investments.
Interest income decreased by $0.5 million, or 4.0%, due to lower average Libor rates.
Other income decreased by $0.2 million, or 30.3%, primarily due to a decrease in dividend income received.
Total expenses decreased by 13.9% quarter over quarter, largely as a result of the $0.8 million increase in the incentive fee credit granted by the Adviser.
Net Investment Income for the quarter ended March 31, 2020 was $6.5 million, or $0.21 per share.
Gladstone Capital
Gladstone Capital
Forward Guidance
Gladstone Capital was in a relatively strong capital position entering last quarter. The company believes it has sufficient levels of liquidity to support its existing portfolio companies and selectively deploy capital in new investment opportunities.
Positive Outlook
- Strong capital position entering last quarter.
- Diverse portfolio.
- Focus on industries that are generally expected to be more insulated from economic cycles.
- Limited exposure to the consumer or retail services sectors.
- Overall leverage continues to compare favorably.
Challenges Ahead
- Majority of the unrealized depreciation recognized last quarter is a result of the broad-based market valuations and COVID-19 related uncertainties.
- COVID-19 related uncertainties.
- Market pricing adjustment combined with additional valuation discounts applied to any portfolio company impacted to some extent by COVID-19.
- Decline in investor demand for broadly syndicated loans.
- Economic uncertainties at the end of last quarter significantly increased the benchmark yields on which our internal (and external) investment valuations are based.