UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED DECEMBER 31, 2006
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 814-00237
GLADSTONE CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
|
MARYLAND |
|
54-2040781 |
|
(State or other jurisdiction of incorporation or organization) |
|
(I.R.S. Employer Identification No.) |
|
|
|
|
1521 WESTBRANCH DRIVE, SUITE 200
MCLEAN, VIRGINIA 22102
(Address of principal executive office)
(703) 287-5800
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes x No o.
Indicate by check mark whether the registrant is large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12 b-2 of the Exchange Act. (Check One):
Large accelerated filer o Accelerated filer x Non-accelerated filer o.
Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o No x .
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. The number of shares of the issuer’s Common Stock, $0.001 par value, outstanding as of February 5, 2007 was 12,249,683.
GLADSTONE CAPITAL CORPORATION
TABLE OF CONTENTS
GLADSTONE CAPITAL
CORPORATION
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(Unaudited)
|
|
|
December 31, |
|
September 30, |
|
||
|
|
|
2006 |
|
2006 |
|
||
|
|
|
|
|
|
|
||
|
ASSETS |
|
|
|
|
|
||
|
Investments at fair value (Cost 12/31/2006: $244,537,584; 9/30/2006: $216,202,986) |
|
$ |
244,972,971 |
|
$ |
217,642,750 |
|
|
Cash and cash equivalents |
|
5,996,680 |
|
731,744 |
|
||
|
Interest receivable — investments in debt securities |
|
1,923,478 |
|
1,394,942 |
|
||
|
Interest receivable — employees |
|
39,130 |
|
37,396 |
|
||
|
Due from custodian |
|
3,884,561 |
|
3,587,152 |
|
||
|
Deferred financing fees |
|
113,666 |
|
145,691 |
|
||
|
Prepaid assets |
|
280,431 |
|
226,747 |
|
||
|
Due from employees |
|
— |
|
1,803,283 |
|
||
|
Other assets |
|
209,270 |
|
213,510 |
|
||
|
TOTAL ASSETS |
|
$ |
257,420,187 |
|
$ |
225,783,215 |
|
|
|
|
|
|
|
|
||
|
LIABILITIES |
|
|
|
|
|
||
|
Accounts payable |
|
$ |
10,931 |
|
$ |
4,072 |
|
|
Interest payable |
|
358,605 |
|
247,530 |
|
||
|
Administration fee due to Administrator |
|
126,085 |
|
— |
|
||
|
Fees due to Adviser (Refer to Notes 3 and 4) |
|
849,106 |
|
240,363 |
|
||
|
Borrowings under line of credit |
|
85,186,000 |
|
49,993,000 |
|
||
|
Withholding taxes payable |
|
— |
|
1,803,283 |
|
||
|
Accrued expenses and deferred liabilities |
|
603,098 |
|
721,287 |
|
||
|
Funds held in escrow |
|
203,240 |
|
203,193 |
|
||
|
TOTAL LIABILITIES |
|
87,337,065 |
|
53,212,728 |
|
||
|
NET ASSETS |
|
$ |
170,083,122 |
|
$ |
172,570,487 |
|
|
|
|
|
|
|
|
||
|
ANALYSIS OF NET ASSETS |
|
|
|
|
|
||
|
Common stock, $0.001 par value, 50,000,000 shares authorized and 12,249,683 and 12,305,008 shares issued and outstanding, respectively |
|
$ |
12,250 |
|
$ |
12,305 |
|
|
Capital in excess of par value |
|
179,782,427 |
|
181,270,565 |
|
||
|
Notes receivable — employees |
|
(10,248,156 |
) |
(10,248,308 |
) |
||
|
Net unrealized appreciation on investments |
|
435,385 |
|
1,439,764 |
|
||
|
Unrealized depreciation on derivative |
|
(263,528 |
) |
(253,716 |
) |
||
|
Realized loss on sale of investments |
|
(859,381 |
) |
(861,695 |
) |
||
|
Realized gain on settlement of derivative |
|
27,568 |
|
15,014 |
|
||
|
Accumulated undistributed net investment income |
|
1,196,557 |
|
1,196,558 |
|
||
|
TOTAL NET ASSETS |
|
$ |
170,083,122 |
|
$ |
172,570,487 |
|
|
NET ASSETS PER SHARE |
|
$ |
13.88 |
|
$ |
14.02 |
|
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.
2
GLADSTONE CAPITAL
CORPORATION
CONSOLIDATED SCHEDULE OF INVESTMENTS
AS OF DECEMBER 31, 2006
(UNAUDITED)
|
Company (1) |
|
Industry |
|
Investment (2) |
|
Cost |
|
Fair Value |
|
|
|
|
|
|
|
|
|
|
|
ACS Media LLC |
|
Service-directory advertising |
|
Senior Term Debt (6) |
|
$2,386,446 |
|
$2,385,950 |
|
|
|
|
|
|
|
|
|
|
|
ActivStyle Acquisition Co. |
|
Service-medical products distribution |
|
Line of Credit (8) |
|
— |
|
— |
|
|
|
|
Senior Term Debt (5) |
|
3,120,000 |
|
3,120,000 |
|
|
|
|
|
(9.6%, Due 7/2011) |
|
|
|
|
|
|
|
|
|
Senior Term Debt (3) (5) |
|
2,500,000 |
|
2,500,000 |
|
|
|
|
|
|
|
|
|
|
|
|
Advanced Homecare |
|
Service-home health nursing services |
|
Senior Subordinated Term Debt (6) |
|
6,100,000 |
|
6,100,000 |
|
|
|
|
|
|
|
|
|
|
|
Allied Extruders, LLC |
|
Manufacturing-polyethylene film |
|
Senior Real Estate Term Debt |
|
1,000,000 |
|
1,000,000 |
|
|
|
|
Senior Term Debt (3) (5) |
|
8,000,000 |
|
7,990,000 |
|
|
|
|
|
(11.4%, Due 3/2011) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Badanco Acquisition Corp. |
|
Manufacturing-luggage |
|
Senior Term Debt (5) |
|
4,777,519 |
|
4,783,491 |
|
|
|
|
Senior Term Debt (3) (5) (18) |
|
8,552,688 |
|
9,073,118 |
|
|
|
|
|
(13.8%, Due 2/2010) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benetech, Inc. |
|
Service & Manufacuring-dust management systems for the |
|
Senior Term Debt (5) |
|
1,950,000 |
|
1,981,688 |
|
|
coal and electric utility |
|
Senior Term Debt (3) (5) |
|
3,006,250 |
|
3,070,133 |
|
|
|
industries |
|
(13.3%, Due 5/2009) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bresnan Communications, LLC |
|
Service-telecommunications |
|
Senior Term Debt (6) |
|
1,002,036 |
|
1,000,000 |
|
|
|
|
(7.1%, Due 9/2013) |
|
|
|
|
|
|
|
|
|
Senior Subordinated Term Debt (6) |
|
1,511,167 |
|
1,533,750 |
|
|
|
|
|
(9.9%, Due 3/2014) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Bedding, Inc. |
|
Manufacturing-mattresses |
|
Senior Subordinated Term Debt (5) |
|
2,436,016 |
|
2,174,128 |
|
|
|
|
(14.4%, Due 3/2009) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Country Road |
|
Service-telecommunications |
|
Senior Subordinated Term Debt (5) (6) |
|
5,963,007 |
|
6,000,000 |
|
Communications LLC |
|
|
|
(13.3%, Due 7/2013) |
|
|
|
|
|
Country Road Management, Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dealer Computer Services, Inc. |
|
Manufacturing & Service- |
|
Senior Term Debt (6) |
|
949,620 |
|
955,555 |
|
(d/b/a Reynolds & Reynolds) |
|
Systems for automotive retailers |
|
(7.9%, Due 10/2012) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Defiance Stamping |
|
Manufacturing-trucking parts |
|
Senior Term Debt (3) (5) |
|
6,325,000 |
|
6,325,000 |
|
Company |
|
|
|
(13.4%, Due 4/2010) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Doe & Ingalls Management LLC |
|
Distributor-specialty chemicals |
|
Senior Term Debt (5) |
|
4,700,000 |
|
4,723,500 |
|
Doe & Ingalls of North |
|
|
|
(9.9%, Due 11/2010) |
|
|
|
|
|
Carolina Operating LLC |
|
|
|
Senior Term Debt (3) (5) |
|
4,500,000 |
|
4,516,875 |
|
Doe & Ingalls of Florida |
|
|
|
(13.4%, Due 11/2010) |
|
|
|
|
|
Operating LLC |
|
|
|
|
|
|
|
|
|
Doe & Ingalls of Virginia |
|
|
|
|
|
|
|
|
|
Operating LLC |
|
|
|
|
|
|
|
|
3
GLADSTONE CAPITAL
CORPORATION
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
AS OF DECEMBER 31, 2006
(UNAUDITED)
|
Company (1) |
|
Industry |
|
Investment (2) |
|
Cost |
|
Fair Value |
|
|
|
|
|
|
|
|
|
|
|
Dresser Holdings, Inc. |
|
Manufacturing-oilfield & energy |
|
Senior Term Debt (6) |
|
1,831,236 |
|
1,847,259 |
|
|
products |
|
(8.1%, Due 10/2013) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Emdeon Business Services, Inc. |
|
Service-healthcare technology |
|
Senior Term Debt (6) |
|
1,500,000 |
|
1,505,625 |
|
|
solutions |
|
(7.9%, Due 11/2013) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employment Solutions |
|
Service-specialty staffing |
|
Senior Term Debt (5)(6) |
|
3,000,513 |
|
3,000,000 |
|
Management, Inc. |
|
|
|
(8.4%, Due 10/2012) |
|
|
|
|
|
Employbridge |
|
|
|
Senior Subordinated Term Debt (5)(6) |
|
3,000,516 |
|
3,000,000 |
|
|
|
|
(12.4%, Due 10/2013) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Express Courier International, |
|
Service-ground delivery and |
|
Line of Credit (8) |
|
— |
|
— |
|
Inc. |
|
logistics |
|
(9.6%, Due 6/2009) |
|
|
|
|
|
|
|
|
Senior Term Debt (5) |
|
4,582,500 |
|
4,588,228 |
|
|
|
|
|
(9.6%, Due 6/2011) |
|
|
|
|
|
|
|
|
|
Senior Term Debt (3) (5) |
|
3,950,000 |
|
3,954,938 |
|
|
|
|
|
(11.9%, Due 6/2011) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finn Corporation |
|
Manufacturing-landscape |
|
Common Stock Warrants |
|
37,000 |
|
768,616 |
|
|
equipment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FR X Ohmstede Holdings, LLC |
|
Service & Manufacuring-heat |
|
Senior Term Debt (6) |
|
2,843,478 |
|
2,875,467 |
|
FR X Ohmstede Acquisitions Co. |
|
exchangers |
|
(8.4%, Due 8/2013) |
|
|
|
|
|
|
|
|
Senior Subordinated Term Debt (6) |
|
3,011,976 |
|
3,045,000 |
|
|
|
|
|
(12.4%, Due 8/2014) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Generac Acquisition Corp. |
|
Manufacturing-standby power |
|
Senior Term Debt (6) |
|
2,380,000 |
|
2,388,925 |
|
|
products |
|
(7.8%, Due 11/2013) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Materials |
|
Manufacturing-steel wool |
|
Senior Term Debt (3) (5) |
|
5,250,000 |
|
5,177,813 |
|
Technologies, Inc. |
|
products and metal fibers |
|
(14.4%, Due 11/2009) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GTM Holdings, Inc. |
|
Manufacturing-socks |
|
Senior Term Debt (6) |
|
500,000 |
|
503,750 |
|
Gold Toe Investment Corp. |
|
|
|
(8.1%, Due 10/2013) |
|
|
|
|
|
|
|
|
Senior Subordinated Term Debt (6) |
|
500,000 |
|
507,500 |
|
|
|
|
|
(11.4%, Due 4/2014) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hudson Products Holdings, Inc. |
|
Manufacturing-heat transfer |
|
Senior Term Debt (6) |
|
1,190,000 |
|
1,192,975 |
|
|
solutions |
|
(8.1%, Due 12/2013) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IPC Information Systems, LLC |
|
Manufacturing-specialized |
|
Senior Term Debt (6) |
|
238,000 |
|
239,190 |
|
|
telephony systems |
|
(7.9%, Due 9/2013) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
It’s Just Lunch International, LLC |
|
Service-dating service |
|
Line of Credit (5)(9) |
|
500,000 |
|
499,375 |
|
|
|
|
(9.4%, Due 6/2009) |
|
|
|
|
|
|
|
|
|
Senior Term Debt (5) |
|
3,400,000 |
|
3,395,750 |
|
|
|
|
|
(9.6%, Due 6/2011) |
|
|
|
|
|
|
|
|
|
Senior Term Debt (3)(10) |
|
400,000 |
|
400,000 |
|
|
|
|
|
(11.9%, Due 6/2011) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John Henry Holdings, Inc. |
|
Manufacturing-packaging |
|
Senior Subordinated Term Debt (6) |
|
8,000,000 |
|
8,000,000 |
|
Multi Packaging Solutions, Inc. |
|
products |
|
(12.4%, Due 6/2011) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kinetek Acquisition Corp. |
|
Manufacturing-custom |
|
Senior Term Debt (6) |
|
1,506,174 |
|
1,505,625 |
|
|
engineered motors & controls |
|
(7.8%, Due 11/2013) |
|
|
|
|
|
|
|
|
|
Senior Subordinated Term Debt (6) |
|
1,509,887 |
|
1,509,375 |
|
|
|
|
|
(10.8%, Due 5/2014) |
|
|
|
|
4
GLADSTONE CAPITAL
CORPORATION
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
AS OF DECEMBER 31, 2006
(UNAUDITED)
|
Company (1) |
|
Industry |
|
Investment (2) |
|
Cost |
|
Fair Value |
|
|
|
|
|
|
|
|
|
|
|
LocalTel, Inc. |
|
Service-yellow pages |
|
Line of Credit (5) (11) |
|
— |
|
— |
|
|
publishing |
|
(9.8%, Due 6/2009) |
|
|
|
|
|
|
|
|
|
Senior Term Debt (5) |
|
2,687,500 |
|
2,479,219 |
|
|
|
|
|
(9.9%, Due 6/2011) |
|
|
|
|
|
|
|
|
|
Senior Term Debt (3) (5) |
|
2,750,000 |
|
2,420,000 |
|
|
|
|
|
(12.4%, Due 6/2011) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MediMedia USA Inc. |
|
Service-healthcare and |
|
Senior Term Debt (6) |
|
1,075,087 |
|
1,072,329 |
|
|
pharmaceutical marketing |
|
(7.8%, Due 10/2013) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Network Solutions LLC |
|
Service-internet domain registry |
|
Senior Term Debt (5)(6) |
|
4,453,198 |
|
4,488,413 |
|
|
and host |
|
(10.4%, Due 1/2012) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Northern Contours |
|
Manufacturing-veneer and |
|
Senior Subordinated Term Debt (5) |
|
7,000,000 |
|
7,017,500 |
|
Northern Contours |
|
laminate components |
|
(12.4%, Due 5/2010) |
|
|
|
|
|
of Kentucky, Inc. |
|
|
|
|
|
|
|
|
|
Norcon Holding LLC |
|
|
|
|
|
|
|
|
|
Norcon Lewis LLC |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pinnacle Treatment Centers, Inc. |
|
Service-Addiction treatment |
|
Line of Credit (7)(12) |
|
— |
|
— |
|
|
centers |
|
(9.6%, Due 12/2009) |
|
|
|
|
|
|
|
|
|
Senior Term Debt (7) |
|
2,500,000 |
|
2,500,000 |
|
|
|
|
|
(9.6%, Due 12/2011) |
|
|
|
|
|
|
|
|
|
Senior Term Debt (3)(7) |
|
4,500,000 |
|
4,500,000 |
|
|
|
|
|
(12.4%, Due 12/2011) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Precision Acquisition Group |
|
Manufacturing-consumable |
|
Equipment Note (5)(13) |
|
— |
|
— |
|
Holdings, Inc. |
|
components for the aluminum |
|
(9.9%, Due 10/2011) |
|
|
|
|
|
Precision Asset Acquisition |
|
industry |
|
Senior Term Debt (5) |
|
5,000,000 |
|
5,006,250 |
|
Company, LLC |
|
|
|
(9.9%, Due 10/2010) |
|
|
|
|
|
|
|
|
Senior Term Debt (3)(5) |
|
4,200,000 |
|
4,205,250 |
|
|
|
|
|
(11.9%, Due 10/2010) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROFITSystems Acquisition Co. |
|
Service-design and develop |
|
Line of Credit (14) |
|
— |
|
— |
|
PROFITSystems, Inc. |
|
ERP software |
|
(9.6%, Due 7/2009) |
|
|
|
|
|
|
|
|
Senior Term Debt (5) |
|
3,025,000 |
|
3,028,781 |
|
|
|
|
|
(9.6%, Due 7/2011) |
|
|
|
|
|
|
|
|
|
Senior Term Debt (3)(5) |
|
2,900,000 |
|
2,903,625 |
|
|
|
|
|
(11.9%, Due 7/201) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Puerto Rico Cable |
|
Service-telecommunications |
|
Senior Subordinated Term Debt (5)(6) |
|
7,809,590 |
|
7,775,183 |
|
Acquisition Company, Inc. |
|
|
|
(11.6%, Due 1/2012) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QCE, LLC (d/b/a Quiznos Corp.) |
|
Service-restaurant franchisor |
|
Senior Term Debt (6) |
|
3,002,529 |
|
2,981,269 |
|
|
|
|
(7.6%, Due 5/2013) |
|
|
|
|
|
|
|
|
|
Senior Term Debt (3)(6) |
|
3,043,949 |
|
3,048,750 |
|
|
|
|
|
(11.1%, Due 11/2013) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Radio Systems Corporation |
|
Service-design electronic pet |
|
Senior Term Debt (6) |
|
952,000 |
|
955,570 |
|
|
containment products |
|
(8.1%, Due 9/2013) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rally Parts, Inc. |
|
Manufacturing-aftermarket |
|
Senior Term Debt (6) |
|
238,000 |
|
238,595 |
|
Motorsport Aftermarket Group, Inc. |
|
motorcycle parts and accessories |
|
(7.9%, Due 11/2013) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RCS Management Holding Co. |
|
Service-healthcare supplies |
|
Senior Term Debt (3) (5) |
|
3,000,000 |
|
2,996,250 |
|
|
|
|
(9.9%, Due 1/2011) |
|
|
|
|
|
|
|
|
|
Senior Term Debt (4) (5) |
|
3,000,000 |
|
2,996,250 |
|
|
|
|
|
(12.4%, Due 1/2011) |
|
|
|
|
5
GLADSTONE CAPITAL
CORPORATION
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
AS OF DECEMBER 31, 2006
(UNAUDITED)
|
Company (1) |
|
Industry |
|
Investment (2) |
|
Cost |
|
Fair Value |
|
|
|
|
|
|
|
|
|
|
|
RedPrairie Holding, Inc. |
|
Service-design and develop |
|
Senior Term Debt (6) |
|
3,980,000 |
|
3,980,000 |
|
RedPrairie Corporation |
|
supply chain software |
|
(8.4%, Due 7/2012) |
|
|
|
|
|
Blue Cube Software, Inc. |
|
|
|
Senior Subordinated Term Debt (6) |
|
2,000,000 |
|
2,010,000 |
|
|
|
|
(11.9%, Due 1/2013) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCPH Holdings, Inc. |
|
Manufacturing-underwater |
|
Credit Facility (15) |
|
— |
|
— |
|
Sea Con Phoenix, Inc. |
|
and harsh environment |
|
(9.8%, Due 2/2007) |
|
|
|
|
|
Phoenix Optix, Inc. |
|
components |
|
Senior Term Debt (5) |
|
2,450,000 |
|
2,456,125 |
|
|
|
|
(10.3%, Due 2/2010) |
|
|
|
|
|
|
|
|
|
Senior Term Debt (3) (5) |
|
2,850,000 |
|
2,860,688 |
|
|
|
|
|
(13.3%, Due 2/2010) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCS Acquisition Corp. |
|
Service-chemically treated |
|
Senior Term Debt (3) (5) (16) |
|
5,625,000 |
|
5,639,063 |
|
|
equipment distribution |
|
(9.4%, Due 12/2011) |
|
|
|
|
|
|
|
|
|
Senior Term Debt (3) (5) (16) |
|
6,550,000 |
|
6,566,375 |
|
|
|
|
|
(11.4%, Due 12/2011) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stolle Machinery Company, LLC |
|
Manufacturing-can making |
|
Senior Term Debt (6) |
|
238,000 |
|
239,190 |
|
LJ Can Holdings, Inc. |
|
equipment and parts |
|
(7.9%, Due 9/2012) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thibaut Acquisition Co. |
|
Design and Disbtribution-wall |
|
Credit Facility (17) |
|
— |
|
— |
|
|
coverings |
|
(9.9%, Due 1/2011) |
|
|
|
|
|
|
|
|
|
Senior Term Debt (5) |
|
3,237,500 |
|
3,241,547 |
|
|
|
|
|
(9.9%, Due 1/2011) |
|
|
|
|
|
|
|
|
|
Senior Term Debt (3) (5) |
|
3,000,000 |
|
3,003,750 |
|
|
|
|
|
(12.4%, Due 1/2011) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Visual Edge Technology, Inc. |
|
Service-office equipment |
|
Senior Subordinated Term Debt (5) |
|
5,000,000 |
|
4,650,000 |
|
Graphic Enterprises, Inc. |
|
distribution |
|
(13.3%, Due 8/2011) |
|
|
|
|
|
Copeco, Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wesco Holdings, Inc. |
|
Service-aerospace parts and |
|
Senior Term Debt (6) |
|
2,526,100 |
|
2,518,750 |
|
Wesco Aircraft Hardware Corp. |
|
distribution |
|
(7.6%, Due 9/2013) |
|
|
|
|
|
|
|
|
Senior Subordinated Term Debt (6) |
|
2,273,102 |
|
2,306,250 |
|
|
|
|
|
(11.1%, Due 3/2014) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
West Corporation |
|
Service-business process |
|
Senior Term Debt (6) |
|
4,760,000 |
|
4,771,900 |
|
|
outsourcing |
|
(8.1%, Due 10/2013) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Westlake Hardware, Inc. |
|
Retail-hardware and variety |
|
Senior Subordinated Term Debt (5) |
|
15,000,000 |
|
14,962,500 |
|
WHI Holding Corp. |
|
|
|
(12.6%, Due 1/2011) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Winchester Electronics |
|
Manufacturing-high bandwidth |
|
Senior Term Debt (3) (5) |
|
6,000,000 |
|
6,015,000 |
|
|
connectors and cables |
|
(12.4%, Due 6/2012) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total: |
|
|
|
|
|
$244,537,584 |
|
$244,972,971 |
(1) We do not “Control,” and are not an “Affiliate” of, any of our portfolio companies, each as defined in the Investment Company Act of 1940, as amended (the “1940 Act”). In general, under the 1940 Act, we would “Control” a portfolio company if we owned 25% or more of its voting securities and would be an “Affiliate” of a portfolio company if we owned 5% or more of its voting securities.
(2) Percentage represents interest rates in effect at December 31, 2006 and due date represents the contractual maturity date.
(3) Last Out Tranche of senior debt, meaning if the company is liquidated then the holder of the Last Out Tranche is paid after the senior debt.
(4) Last Out Tranche of senior debt, meaning if the company is liquidated then the holder of the Last Out Tranche is paid after the senior debt, however the debt is junior to another Last Out Tranche.
(5) Fair value was based on opinions of value submitted by Standard & Poor’s Securities Evaluations, Inc.
(6) Marketable securities, such as syndicated loans, are valued based on the indicative bid price, as of December 29, 2006, from the respective originating syndication agent’s trading desk.
(7) Investment valued at cost due to recent acquisition.
(8) Availability under the credit facility totals $1,500,000. There were no borrowings outstanding at December 31, 2006.
(9) Availability under the credit facility totals $750,000. Borrowings of $500,000 were outstanding at December 31, 2006.
6
(10) The company may borrow an additional $1,850,000 of the senior term debt facility, subject to certain conditions including Gladstone Capital’s approval.
(11) Availability under the credit facility totals $2,000,000. There were no borrowings outstanding at December 31, 2006.
(12) Availability under the credit facility totals $500,000. There were no borrowings outstanding at December 31, 2006.
(13) The company may borrow up to $1,000,000 for purposes of acquiring equipment. There were no borrowings outstanding at December 31, 2006.
(14) Availability under the credit facility totals $1,250,000. There were no borrowings outstanding at December 31, 2006.
(15) Availability under the credit facility totals $500,000. There were no borrowings outstanding at December 31, 2006.
(16) The company may borrow up to an additional $875,000 to finance capital expenditures.
(17) Availability under the credit facility totals $1,000,000. There were no borrowings outstanding at December 31, 2006.
(18) Includes a success fee with a $360,068 fair value and no cost basis.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.
7
GLADSTONE CAPITAL
CORPORATION
CONSOLIDATED SCHEDULE OF INVESTMENTS
AS OF SEPTEMBER 30, 2006
|
Company (1) |
|
Industry |
|
Investment (2) |
|
Cost |
|
Fair Value |
|
ActivStyle Acquisition Co. |
|
Service-medical products |
|
Line of Credit (16) |
|
$ — |
|
$ — |
|
ActivStyle, Inc. |
|
distribution |
|
(9.6%, Due 7/2009) |
|
|
|
|
|
|
|
|
Senior Term Debt (5) |
|
3,200,000 |
|
3,200,000 |
|
|
|
|
|
(9.6%, Due 7/2011) |
|
|
|
|
|
|
|
|
|
Senior Term Debt (3) (5) |
|
2,500,000 |
|
2,500,000 |
|
|
|
|
|
(11.8%, Due 7/2011) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advanced Homecare Management, Inc. |
|
Service-home health nursing services |
|
Senior Subordinated Term Debt(5)(6) |
|
5,000,000 |
|
5,000,000 |
|
|
|
|
(11.33%, Due 12/2013) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allied Extruders, LLC |
|
Manufacturing-polyethylene |
|
Senior Real Estate Term Debt |
|
1,000,000 |
|
1,000,000 |
|
P&O Packaging Acquisition LLC |
|
film |
|
(9.8%, Due 3/2011) |
|
|
|
|
|
|
|
|
Senior Term Debt (3) (5) |
|
8,000,000 |
|
8,030,000 |
|
|
|
|
|
(11.3%, Due 3/2011) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Badanco Acquisition Corp. |
|
Manufacturing-luggage |
|
Senior Term Debt (5) |
|
5,145,019 |
|
5,157,881 |
|
|
|
|
(10.8%, Due 2/2010) |
|
|
|
|
|
|
|
|
|
Senior Term Debt (3) (5) |
|
8,585,125 |
|
8,628,051 |
|
|
|
|
|
(13.8%, Due 2/2010) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benetech, Inc. |
|
Service & Manufacturing-dust |
|
Senior Term Debt (5) |
|
2,112,500 |
|
2,144,187 |
|
|
management systems for the |
|
(10.3%, Due 5/2009) |
|
|
|
|
|
|
|
coal and electric utility |
|
Senior Term Debt (3) (5) |
|
3,046,875 |
|
3,107,813 |
|
|
|
industries |
|
(13.3%, Due 5/2009) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bresnan Communications, LLC |
|
Service-telecommunications |
|
Senior Term Debt (6) |
|
1,002,115 |
|
997,500 |
|
|
|
|
(7.2%, Due 9/2013) |
|
|
|
|
|
|
|
|
|
Senior Subordinated Term Debt |
|
1,511,554 |
|
1,533,750 |
|
|
|
|
|
(9.9%, Due 3/2014) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Bedding, Inc. |
|
Manufacturing-mattresses |
|
Senior Subordinated Term Debt (5) |
|
2,438,359 |
|
2,306,991 |
|
|
|
|
(14.4%, Due 3/2009) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Country Road |
|
Service-telecommunications |
|
Senior Subordinated Term Debt (5) (6) |
|
5,961,594 |
|
6,015,000 |
|
Communications LLC |
|
|
|
(13.3%, Due 7/2013) |
|
|
|
|
|
Country Road Management, Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Defiance Stamping |
|
Manufacturing-trucking parts |
|
Senior Term Debt (3) (5) |
|
6,325,000 |
|
6,332,906 |
|
Company |
|
|
|
(13.3%, Due 4/2010) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Doe & Ingalls Management LLC |
|
Distributor-specialty chemicals |
|
Senior Term Debt (5) |
|
4,700,000 |
|
4,723,500 |
|
|
|
|
(9.8%, Due 11/2010) |
|
|
|
|
|
|
Doe & Ingalls of North |
|
|
|
Senior Term Debt (3) (5) |
|
4,500,000 |
|
4,516,875 |
|
Carolina Operating LLC |
|
|
|
(13.3%, Due 11/2010) |
|
|
|
|
|
Doe & Ingalls of Florida |
|
|
|
|
|
|
|
|
|
Operating LLC |
|
|
|
|
|
|
|
|
|
Doe & Ingalls of Virginia |
|
|
|
|
|
|
|
|
|
Operating LLC |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Express Courier International, |
|
Service-ground delivery and |
|
Line of Credit (7) |
|
— |
|
— |
|
Inc. |
|
logistics |
|
(9.6%, Due 6/2009) |
|
|
|
|
|
|
|
|
Senior Term Debt (5) |
|
4,700,000 |
|
4,700,000 |
|
|
|
|
|
(9.6%, Due 6/2011) |
|
|
|
|
|
|
|
|
|
Senior Term Debt (3) (5) |
|
3,950,000 |
|
3,950,000 |
|
|
|
|
|
(11.8%, Due 6/2011) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finn Corporation |
|
Manufacturing-landscape |
|
Common Stock Warrants |
|
37,000 |
|
709,431 |
|
|
equipment |
|
|
|
|
|
|
8
GLADSTONE CAPITAL
CORPORATION
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
SEPTEMBER 30, 2006
|
Company (1) |
|
Industry |
|
Investment (2) |
|
Cost |
|
Fair Value |
|
FR X Ohmstede Holdings, LLC |
|
Service & Manufacturing-heat |
|
Senior Term Debt (6) |
|
3,000,000 |
|
3,026,250 |
|
FR X Ohmstede Acquisitions Co. |
|
exchangers |
|
(8.5%, Due 8/2013) |
|
|
|
|
|
|
|
|
Senior Subordinated Term Debt (6) |
|
3,012,369 |
|
3,030,000 |
|
|
|
|
|
(12.5%, Due 8/2014) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Materials |
|
Manufacturing-steel wool |
|
Senior Term Debt (3) (5) |
|
5,300,000 |
|
5,233,750 |
|
Technologies, Inc. |
|
products and metal fibers |
|
(14.3%, Due 11/2009) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
It’s Just Lunch International, |
|
Service-dating service |
|
Line of Credit (12) (5) |
|
200,000 |
|
199,500 |
|
LLC |
|
|
|
(9.2%, Due 6/2009) |
|
|
|
|
|
|
|
|
Senior Term Debt (13) (5) |
|
3,300,000 |
|
3,291,750 |
|
|
|
|
|
(9.6%, Due 6/2011) |
|
|
|
|
|
|
|
|
|
Senior Term Debt (3) (14) |
|
— |
|
— |
|
|
|
|
|
(11.8%, Due 6/2011) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John Henry Holdings, Inc. |
|
Manufacturing-packaging |
|
Senior Subordinated Term Debt (6) |
|
8,000,000 |
|
8,000,000 |
|
Multi Packaging Solutions, Inc. |
|
products |
|
(12.5%, Due 6/2011) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LocalTel, Inc. |
|
Service-yellow pages |
|
Line of Credit (5) (15) |
|
350,000 |
|
343,000 |
|
|
publishing |
|
(9.8%, Due 6/2009) |
|
|
|
|
|
|
|
|
|
Senior Term Debt (5) |
|
2,687,500 |
|
2,633,750 |
|
|
|
|
|
(9.8%, Due 6/2011) |
|
|
|
|
|
|
|
|
|
Senior Term Debt (3) (5) |
|
2,750,000 |
|
2,695,000 |
|
|
|
|
|
(12.3%, Due 6/2011) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mistras Holdings Corp. |
|
Service & Manufacturing- |
|
Senior Term Debt (3) (5) |
|
9,499,999 |
|
9,737,499 |
|
|
nondestructive testing |
|
(11.5%, Due 8/2008) |
|
|
|
|
|
|
|
instruments, systems |
|
Senior Term Debt (4) (5) (18) |
|
5,250,001 |
|
5,620,124 |
|
|
|
and services |
|
(12.5%, Due 8/2008) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Network Solutions LLC |
|
Service-internet domain registry |
|
Senior Term Debt (6) |
|
4,464,358 |
|
4,499,747 |
|
|
and host |
|
(10.4%, Due 1/2012) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Northern Contours |
|
Manufacturing-veneer and |
|
Senior Subordinated Term Debt (5) |
|
7,000,000 |
|
7,017,500 |
|
Northern Contours |
|
laminate components |
|
(12.3%, Due 5/2010) |
|
|
|
|
|
of Kentucky, Inc. |
|
|
|
|
|
|
|
|
|
Norcon Holding LLC |
|
|
|
|
|
|
|
|
|
Norcon Lewis LLC |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROFITSystems Acquisition Co. |
|
Service-design and develop |
|
Line of Credit (17) |
|
— |
|
— |
|
PROFITSystems, Inc. |
|
ERP software |
|
(9.6%, Due 7/2009) |
|
|
|
|
|
|
|
|
Senior Term Debt (5) |
|
3,100,000 |
|
3,100,000 |
|
|
|
|
|
(9.6%, Due 7/2011) |
|
|
|
|
|
|
|
|
|
Senior Term Debt (5) |
|
2,900,000 |
|
2,900,000 |
|
|
|
|
|
(11.8%, Due 7/201) (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Puerto Rico Cable |
|
Service-telecommunications |
|
Senior Subordinated Term Debt (5)(6) |
|
7,813,274 |
|
7,775,183 |
|
Acquisition Company, Inc. |
|
|
|
(11.6%, Due 1/2012) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QCE, LLC (d/b/a Quiznos Corp.) |
|
Service-restaurant franchisor |
|
Senior Term Debt (6) |
|
3,010,713 |
|
2,977,538 |
|
|
|
|
(7.6%, Due 5/2013) |
|
|
|
|
|
|
|
|
|
Senior Term Debt (3) (6) |
|
3,045,560 |
|
3,033,750 |
|
|
|
|
|
(11.1%, Due 11/2013) |
|
|
|
|
9
GLADSTONE CAPITAL
CORPORATION
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
SEPTEMBER 30, 2006
|
Company (1) |
|
Industry |
|
Investment (2) |
|
Cost |
|
Vair Value |
|
RCS Management Holding Co. |
|
Service-healthcare supplies |
|
Senior Term Debt (3) (5) |
|
3,000,000 |
|
3,003,750 |
|
|
|
|
(9.8%, Due 1/2011) |
|
|
|
|
|
|
|
|
|
Senior Term Debt (4) (5) |
|
3,000,000 |
|
3,003,750 |
|
|
|
|
|
(12.3%, Due 1/2011) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RedPrairie Holding, Inc. |
|
Service-design and develop |
|
Senior Term Debt (6) |
|
3,990,000 |
|
3,990,000 |
|
RedPrairie Corporation |
|
supply chain software |
|
(8.4%, Due 7/2012) |
|
|
|
|
|
Blue Cube Software, Inc. |
|
|
|
Senior Subordinated Term Debt (6) |
|
2,000,000 |
|
2,005,000 |
|
|
|
|
(11.9%, Due 1/2013) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCPH Holdings, Inc. |
|
Manufacturing-underwater |
|
Credit Facility (8) |
|
— |
|
— |
|
Sea Con Phoenix, Inc. |
|
and harsh environment |
|
(9.8%, Due 2/2007) |
|
|
|
|
|
Phoenix Optix, Inc. |
|
components |
|
Senior Term Debt (5) |
|
2,625,000 |
|
2,631,563 |
|
|
|
|
(10.3%, Due 2/2010) |
|
|
|
|
|
|
|
|
|
Senior Term Debt (3) (5) |
|
2,887,500 |
|
2,898,328 |
|
|
|
|
|
(13.3%, Due 2/2010) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCS Acquisition Corp. |
|
Service-chemically treated |
|
Senior Term Debt (3) (5) (9) |
|
6,250,000 |
|
6,257,812 |
|
|
equipment distribution |
|
(9.3%, Due 12/2011) |
|
|
|
|
|
|
|
|
|
Senior Term Debt (3) (5) (10) |
|
6,568,750 |
|
6,576,961 |
|
|
|
|
|
(11.3%, Due 12/2011) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thibaut Acquisition Co. |
|
Design and Disbtribution-wall |
|
Credit Facility (11) |
|
— |
|
— |
|
|
coverings |
|
(9.8%, Due 1/2011) |
|
|
|
|
|
|
|
|
|
Senior Term Debt (5) |
|
3,325,000 |
|
3,325,000 |
|
|
|
|
|
(9.8%, Due 1/2011) |
|
|
|
|
|
|
|
|
|
Senior Term Debt (3) (5) |
|
3,000,000 |
|
3,000,000 |
|
|
|
|
|
(12.3%, Due 1/2011) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Visual Edge Technology,
Inc. |
|
Service-office equipment distribution |
|
Senior Subordinated Term Debt (5) |
|
5,000,000 |
|
4,987,500 |
|
Copeco, Inc. |
|
|
|
(13.3%, Due 8/2011) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Westlake Hardware, Inc. |
|
Retail-hardware and variety |
|
Senior Subordinated Term Debt (5) |
|
15,000,000 |
|
14,981,250 |
|
|
|
|
(12.6%, Due 1/2011) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Winchester Electronics |
|
Manufacturing-high bandwidth |
|
Senior Term Debt (3) (5) |
|
6,000,000 |
|
6,007,500 |
|
|
connectors and cables |
|
(12.3%, Due 6/2012) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Xspedius Communications LLC |
|
Service-telecommunications |
|
Senior Subordinated Term Debt (5) |
|
5,157,821 |
|
5,306,110 |
|
|
|
|
(15.8%, Due 3/2010) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total: |
|
|
|
|
|
$216,202,986 |
|
$217,642,750 |
(1) We do not “Control,” and are not an “Affiliate” of, any of our portfolio companies, each as defined in the Investment Company Act of 1940, as amended (the “1940 Act”). In general, under the 1940 Act, we would “Control” a portfolio company if we owned 25% or more of its voting securities and would be an “Affiliate” of a portfolio company if we owned 5% or more of its voting securities.
(2) Percentage represents interest rates in effect at September 30, 2006 and due date represents the contractual maturity date.
(3) Last Out Tranche of senior debt, meaning if the company is liquidated then the holder of the Last Out Tranche is paid after the senior debt.
(4) Last Out Tranche of senior debt, meaning if the company is liquidated then the holder of the Last Out Tranche is paid after the senior debt, however the debt is junior to another Last Out Tranche.
(5) Fair value was based on opinions of value submitted by Standard & Poor’s Securities Evaluations, Inc.
(6) Marketable securities, such as syndicated loans, are valued based on the indicative bid price, as of September 30, 2006 from the respective originating syndication agent’s trading desk.
10
(7) Availability under the credit facility totals $1,500,000. There were no borrowings outstanding at September 30, 2006.
(8) Availability under the credit facility totals $500,000. There were no borrowings outstanding at September 30, 2006.
(9) Availability under the debt facility totals $7,500,000. The outstanding balance of the debt facility was $6,250,000 at September 30, 2006.
(10) Availability under the debt facility totals $7,500,000. The outstanding balance of the debt facility was $6,568,750 at September 30, 2006.
(11) Availability under the credit facility totals $1,000,000. There were no borrowings outstanding at September 30, 2006.
(12) Availability under the credit facility totals $750,000. Borrowings of $200,000 were outstanding at September 30, 2006.
(13) The company may borrow an additional $500,000 under the senior term debt facility, subject to certain conditions including Gladstone Capital’s approval.
(14) The company may borrow an additional $2,250,000 under the senior term debt facility, subject to certain conditions including Gladstone Capital’s approval.
(15) Availability under the credit facility totals $3,000,000. Borrowings of $350,000 were outstanding at September 30, 2006.
(16) Availability under the credit facility totals $1,500,000. There were no borrowings outstanding at September 30, 2006
(17) Availability under the credit facility totals $1,250,000. There were no borrowings outstanding at September 30, 2006
(18) Includes a success fee with a fair value of $742,000 and no cost basis.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.
11
GLADSTONE CAPITAL
CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
|
|
|
Three Months Ended December 31, |
|
||||
|
|
|
2006 |
|
2005 |
|
||
|
INVESTMENT INCOME |
|
|
|
|
|
||
|
Interest income — investments |
|
$ |
7,898,600 |
|
$ |
5,847,107 |
|
|
Interest income — cash and cash equivalents |
|
37,269 |
|
8,912 |
|
||
|
Interest income — notes receivable from employees |
|
138,191 |
|
107,093 |
|
||
|
Prepayment fees and other income |
|
159,658 |
|
67,207 |
|
||
|
Total investment income |
|
8,233,718 |
|
6,030,319 |
|
||
|
|
|
|
|
|
|
||
|
EXPENSES |
|
|
|
|
|
||
|
Loan servicing (Refer to Notes 3 and 4) |
|
719,152 |
|
715,415 |
|
||
|
Base management fee (Refer to Note 3) |
|
398,432 |
|
268,701 |
|
||
|
Incentive fee (Refer to Note 3) |
|
1,148,483 |
|
— |
|
||
|
Administration fee (Refer to Note 3) |
|
126,085 |
|
— |
|
||
|
Professional fees |
|
110,920 |
|
122,466 |
|
||
|
Amortization of deferred financing fees |
|
58,300 |
|
26,250 |
|
||
|
Interest expense |
|
1,120,257 |
|
652,078 |
|
||
|
Stockholder related costs |
|
63,728 |
|
128,935 |
|
||
|
Directors fees |
|
54,250 |
|
24,000 |
|
||
|
Insurance expense |
|
62,694 |
|
50,777 |
|
||
|
Stock option compensation |
|
— |
|
43,257 |
|
||
|
Other expenses |
|
88,485 |
|
55,789 |
|
||
|
Expenses before credit from Adviser |
|
3,950,786 |
|
2,087,668 |
|
||
|
Credits to base management and incentive fees (Refer to Note 3) |
|
(879,994 |
) |
(550,000 |
) |
||
|
Total expenses net of credits to base management and incentive fees |
|
3,070,792 |
|
1,537,668 |
|
||
|
|
|
|
|
|
|
||
|
NET INVESTMENT INCOME BEFORE INCOME TAXES |
|
5,162,926 |
|
4,492,651 |
|
||
|
Income tax expense |
|
— |
|
50,237 |
|
||
|
NET INVESTMENT INCOME |
|
5,162,926 |
|
4,442,414 |
|
||
|
|
|
|
|
|
|
||
|
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: |
|
|
|
|
|
||
|
Net realized gain (loss) on sale of investments |
|
2,314 |
|
(1,180,595 |
) |
||
|
Realized gain on settlement of derivative |
|
12,554 |
|
— |
|
||
|
Unrealized depreciation on derivative |
|
(9,812 |
) |
(892 |
) |
||
|
Net unrealized (depreciation) appreciation on investments |
|
(1,004,379 |
) |
4,972,422 |
|
||
|
Net (loss) gain on investments |
|
(999,323 |
) |
3,790,935 |
|
||
|
|
|
|
|
|
|
||
|
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS |
|
$ |
4,163,603 |
|
$ |
8,233,349 |
|
|
|
|
|
|
|
|
||
|
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS PER COMMON SHARE: |
|
|
|
|
|
||
|
Basic |
|
$ |
0.34 |
|
$ |
0.73 |
|
|
Diluted |
|
$ |
0.34 |
|
$ |
0.71 |
|
|
|
|
|
|
|
|
||
|
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING: |
|
|
|
|
|
||
|
Basic |
|
12,294,340 |
|
11,306,510 |
|
||
|
Diluted |
|
12,294,340 |
|
11,573,620 |
|
||
|
|
|
|
|
|
|
||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.
12
GLADSTONE CAPITAL
CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
(UNAUDITED)
|
|
|
Three Months Ended December 31, |
|
||||
|
|
|
2006 |
|
2005 |
|
||
|
Operations: |
|
|
|
|
|
||
|
Net investment income |
|
$ |
5,162,926 |
|
$ |
4,442,414 |
|
|
Net realized gain (loss) on sale of investments |
|
2,314 |
|
(1,180,595 |
) |
||
|
Realized gain on settlement of derivative |
|
12,554 |
|
— |
|
||
|
Unrealized depreciation on derivative |
|
(9,812 |
) |
(892 |
) |
||
|
Net unrealized (depreciation) appreciation on investments |
|
(1,004,379 |
) |
4,972,422 |
|
||
|
Net increase in net assets from operations |
|
4,163,603 |
|
8,233,349 |
|
||
|
|
|
|
|
|
|
||
|
Capital transactions: |
|
|
|
|
|
||
|
Distributions to stockholders |
|
(5,162,927 |
) |
(4,579,272 |
) |
||
|
Stock option compensation |
|
— |
|
43,257 |
|
||
|
Issuance of common stock under stock option plan |
|
— |
|
85,900 |
|
||
|
Repayment of principal on employee notes |
|
152 |
|
23,094 |
|
||
|
Stock surrendered in settlement of withholding tax |
|
(1,488,193 |
) |
— |
|
||
|
Decrease in net assets from capital share transactions |
|
(6,650,968 |
) |
(4,427,021 |
) |
||
|
|
|
|
|
|
|
||
|
Total (decrease) increase in net assets |
|
(2,487,365 |
) |
3,806,328 |
|
||
|
Net assets at beginning of year |
|
172,570,487 |
|
151,610,683 |
|
||
|
Net assets at end of period |
|
$ |
170,083,122 |
|
$ |
155,417,011 |
|
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.
13
GLADSTONE CAPITAL
CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
|
|
Three Months Ended December 31, |
|
||||
|
|
|
2006 |
|
2005 |
|
||
|
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
Net increase in net assets resulting from operations |
|
$ |
4,163,603 |
|
$ |
8,233,349 |
|
|
Adjustments to reconcile net increase in net assets resulting from operations to net cash (used in) provided by operating activities: |
|
|
|
|
|
||
|
Purchase of investments |
|
(52,311,008 |
) |
(26,688,457 |
) |
||
|
Principal repayments on investments |
|
23,967,229 |
|
38,702,066 |
|
||
|
Net amortization of premiums and discounts |
|
9,181 |
|
32,641 |
|
||
|
Amortization of deferred financing fees |
|
58,300 |
|
26,250 |
|
||
|
Stock compensation expense |
|
— |
|
43,257 |
|
||
|
Realized loss on investments |
|
— |
|
1,180,595 |
|
||
|
Unrealized depreciation on derivative |
|
9,812 |
|
892 |
|
||
|
Change in net unrealized depreciation (appreciation) on investments |
|
1,004,379 |
|
(4,972,422 |
) |
||
|
(Increase) decrease in interest receivable |
|
(530,270 |
) |
457,764 |
|
||
|
(Increase) decrease in funds due from custodian |
|
(297,409 |
) |
210,954 |
|
||
|
Increase in prepaid assets |
|
(53,686 |
) |
(19,277 |
) |
||
|
Increase in due from affiliate |
|
— |
|
(300,638 |
) |
||
|
Increase in other assets |
|
(5,572 |
) |
(20,919 |
) |
||
|
Increase (decrease) in accounts payable |
|
6,859 |
|
(11,109 |
) |
||
|
Increase in interest payable |
|
111,075 |
|
5,683 |
|
||
|
(Decrease) increase in accrued expenses and deferred liabilities |
|
(118,189 |
) |
2,297 |
|
||
|
Increase (decrease) in fees due to affiliate |
|
608,743 |
|
(181,213 |
) |
||
|
Increase in administration fee due to Gladstone Administration |
|
126,085 |
|
— |
|
||
|
Increase in funds held in escrow |
|
47 |
|
1,404 |
|
||
|
Increase in investment balance due to payment in kind interest |
|
— |
|
(33,022 |
) |
||
|
Net cash (used in) provided by operating activities |
|
(23,250,821 |
) |
16,670,095 |
|
||
|
|
|
|
|
|
|
||
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
Receipt of principal on notes receivable - employees |
|
152 |
|
23,094 |
|
||
|
Net cash provided by investing activities |
|
152 |
|
23,094 |
|
||
|
|
|
|
|
|
|
||
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
||
|
|
|
|
|||||