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Jun 30, 2022
Gladstone Capital Q3 2022 Earnings Report
Gladstone Capital reported a decrease in net investment income and net asset value per share due to valuation adjustments, but portfolio companies performed well with no non-accrual investments.
Key Takeaways
Gladstone Capital Corporation reported a decrease in net investment income to $6.9 million, or $0.2025 per share, for the quarter ended June 30, 2022, compared to $8.7 million, or $0.25 per share, for the prior quarter. The net decrease in net assets resulting from operations was $5.6 million, or $0.16 per share. Total investments at fair value increased to $586.5 million. The company's Board of Directors declared monthly distributions to common stockholders of $0.0675 per share for July, August, and September 2022, totaling $0.2025 for the quarter.
Total investment income decreased to $13.8 million from $17.3 million in the previous quarter.
Net investment income decreased by 20.1% to $6.9 million, or $0.2025 per share.
Net asset value decreased to $9.12 per share as of June 30, 2022.
Invested $48.7 million in three new portfolio companies and $18.6 million in existing portfolio companies.
Forward Guidance
Gladstone Capital expects the trend of strong net originations to continue in the current quarter. The company anticipates that portfolio growth, underlying performance, and the recent uptick in LIBOR will lift core net interest income and enhance earnings and potential common distributions in the coming quarters.
Positive Outlook
- Strong quarter of net originations
- Total investments lifted to a new high-water mark
- Trend of net originations expected to continue
- Portfolio growth expected to lift core net interest income
- Uptick in LIBOR expected to enhance earnings
Challenges Ahead
- Investment income fell for the period
- Reduced exit fees impacted investment income
- Valuation adjustments associated with elevated market yields
- Reduced equity valuation multiples
Historical Earnings Impact
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Avg. Return Before/After Earnings
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