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 JUNE 30, 2008
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 (or for such shorter period that the registrant was required to file such reports), 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 a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12 b-2 of the Exchange Act.
Large accelerated filer o Accelerated filer x Non-accelerated filer o Smaller reporting company 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 August 4, 2008 was 21,087,574.
GLADSTONE CAPITAL CORPORATION
GLADSTONE CAPITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
|
|
|
June 30, |
|
September 30, |
|
||
|
|
|
2008 |
|
2007 |
|
||
|
ASSETS |
|
|
|
|
|
||
|
Non-Control/Non-Affiliate investments (Cost 6/30/08: $441,319; 9/30/07: $354,835) |
|
$ |
411,069 |
|
$ |
348,921 |
|
|
Control investments (Cost 6/30/08: $3,881; 9/30/07: $924) |
|
671 |
|
924 |
|
||
|
Total investments at fair value (Cost 6/30/08: $445,200; 9/30/07 $355,759) |
|
411,740 |
|
349,845 |
|
||
|
Cash and cash equivalents |
|
5,426 |
|
8,839 |
|
||
|
U.S. Treasury bill |
|
— |
|
2,484 |
|
||
|
Interest receivable – investments in debt securities |
|
3,301 |
|
2,426 |
|
||
|
Interest receivable – employees (Refer to Note 4) |
|
91 |
|
21 |
|
||
|
Due from custodian |
|
6,637 |
|
3,230 |
|
||
|
Deferred financing fees |
|
2,383 |
|
186 |
|
||
|
Prepaid assets |
|
202 |
|
337 |
|
||
|
Other assets |
|
462 |
|
361 |
|
||
|
TOTAL ASSETS |
|
$ |
430,242 |
|
$ |
367,729 |
|
|
|
|
|
|
|
|
||
|
LIABILITIES |
|
|
|
|
|
||
|
Accounts payable |
|
$ |
8 |
|
$ |
6 |
|
|
Interest payable |
|
522 |
|
588 |
|
||
|
Fee due to Administrator (Refer to Note 4) |
|
285 |
|
237 |
|
||
|
Fees due to Adviser (Refer to Note 4) |
|
468 |
|
708 |
|
||
|
Borrowings under lines of credit |
|
133,090 |
|
144,440 |
|
||
|
Accrued expenses and deferred liabilities |
|
905 |
|
791 |
|
||
|
Funds held in escrow |
|
290 |
|
— |
|
||
|
TOTAL LIABILITIES |
|
135,568 |
|
146,770 |
|
||
|
NET ASSETS |
|
$ |
294,674 |
|
$ |
220,959 |
|
|
|
|
|
|
|
|
||
|
ANALYSIS OF NET ASSETS |
|
|
|
|
|
||
|
Common stock, $0.001 par value, 50,000,000 shares authorized and 21,087,574 and 14,762,574 shares issued and outstanding at June 30, 2008 and September 30, 2007, respectively |
|
$ |
21 |
|
$ |
15 |
|
|
Capital in excess of par value |
|
341,281 |
|
235,907 |
|
||
|
Notes receivable – employees (Refer to Note 4) |
|
(9,179 |
) |
(9,230 |
) |
||
|
Net unrealized depreciation on investments |
|
(33,460 |
) |
(5,915 |
) |
||
|
Unrealized depreciation on derivative |
|
(304 |
) |
(292 |
) |
||
|
(Distributions in excess of) accumulated undistributed net investment income |
|
(3,685 |
) |
474 |
|
||
|
TOTAL NET ASSETS |
|
$ |
294,674 |
|
$ |
220,959 |
|
|
NET ASSETS PER SHARE |
|
$ |
13.97 |
|
$ |
14.97 |
|
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
2
GLADSTONE CAPITAL CORPORATION
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS
AS OF JUNE 30, 2008
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
|
Company |
|
Industry |
|
Investment (1) |
|
Cost |
|
Fair Value |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
NON-CONTROL/NON-AFFILIATE INVESTMENTS |
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||
|
Access Television Network, Inc. (2) |
|
Service-cable airtime (infomercials) |
|
Senior Term Debt (6) |
|
$ |
2,078 |
|
$ |
1,960 |
|
|
|
|
|
|
|
|
|
|
|
|
||
|
ACE Expediters, Inc |
|
Service - over-the-ground logistics |
|
Line of Credit, $850
available (6) |
|
200 |
|
197 |
|
||
|
|
|
|
|
Senior Term Debt (6) |
|
12,544 |
|
12,356 |
|
||
|
|
|
|
|
(9.5% Due 1/2012) |
|
|
|
|
|
||
|
|
|
|
|
Warrants (8) |
|
200 |
|
157 |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
ActivStyle Acquisition Co. (2) |
|
Service-medical products distribution |
|
Line of Credit, $1,500
available (6) |
|
1,100 |
|
1,078 |
|
||
|
|
|
|
|
Senior Term Debt (6) |
|
4,852 |
|
4,754 |
|
||
|
|
|
|
|
(8.5%, Due 9/2012) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (3) (6) |
|
4,435 |
|
4,302 |
|
||
|
|
|
|
|
(10.5%, Due 9/2012) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Allison Publications, LLC (2) |
|
Service-publisher of consumer oriented magazines |
|
Line of Credit, $4,000
available |
|
— |
|
— |
|
||
|
|
|
|
|
Senior Term Debt (6) |
|
11,070 |
|
10,615 |
|
||
|
|
|
|
|
(9.0%, Due 9/2012) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Anitox Acquisition Company (2) |
|
Manufacturing-preservatives for animal feed |
|
Line of Credit, $3,000
available (6) |
|
2,000 |
|
1,940 |
|
||
|
|
|
|
|
Senior Term Debt (6) |
|
2,550 |
|
2,473 |
|
||
|
|
|
|
|
(8.5%, Due 1/2012) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (3) (6) |
|
2,750 |
|
2,626 |
|
||
|
|
|
|
|
(10.5%, Due 1/2012) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Badanco Acquisition Corp. |
|
Service-luggage design and distribution |
|
Senior Subordinated
Term Debt (6) |
|
9,506 |
|
9,150 |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
BAS Broadcasting |
|
Service-radio station operator |
|
Senior Term Debt (5) |
|
7,300 |
|
7,300 |
|
||
|
|
|
|
|
Senior Term Debt (3) (5) |
|
1,000 |
|
1,000 |
|
||
|
|
|
|
|
(12.0%, Due 7/2009) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Bresnan |
|
Service-telecommunications |
|
Senior Term Debt (7) |
|
3,001 |
|
2,865 |
|
||
|
Communications, |
|
|
|
(5.0%, Due 9/2013) |
|
|
|
|
|
||
|
LLC |
|
|
|
Senior Subordinated Term Debt (7) |
|
1,509 |
|
1,365 |
|
||
|
|
|
|
|
(7.4%, Due 3/2014) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
CCS, LLC |
|
Service-cable tv franchise owner |
|
Senior Term Debt (6) |
|
3,427 |
|
3,358 |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
CHG Companies, Inc. (2) |
|
Service-healthcare staffing |
|
Letter of Credit (7) |
|
400 |
|
380 |
|
||
|
|
|
|
|
Senior Term Debt (7) |
|
1,580 |
|
1,501 |
|
||
|
|
|
|
|
(4.9%, Due 12/2012) |
|
|
|
|
|
||
|
|
|
|
|
Senior Subordinated Term Debt (7) |
|
500 |
|
445 |
|
||
|
|
|
|
|
(8.7%, Due 12/2012) |
|
|
|
|
|
||
3
|
Company |
|
Industry |
|
Investment (1) |
|
Cost |
|
Fair Value |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Chinese Yellow Pages Company |
|
Service-publisher of Chinese language directories |
|
Line of Credit, $950
available (6) |
|
$ |
700 |
|
$ |
667 |
|
|
|
|
|
|
Senior Term Debt (6) |
|
748 |
|
703 |
|
||
|
|
|
|
|
(9.0%, Due 9/2010) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Clinton Holdings, |
|
Distribution-aluminum sheets |
|
Senior Subordinated Term Debt (6) |
|
15,500 |
|
15,422 |
|
||
|
LLC (2) |
|
and stainless steel |
|
(12.0%, Due 1/2013) |
|
|
|
|
|
||
|
|
|
|
|
Common Stock Warrants (8) |
|
109 |
|
— |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
CMI Acquisition, LLC |
|
Service-recycling |
|
Senior Subordinated Term Debt (6) |
|
6,435 |
|
6,121 |
|
||
|
(2) |
|
|
|
(10.2%, Due 11/2012) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Community Media Corporation |
|
Service-publisher of free weekly newspapers |
|
Senior Term Debt (6) |
|
2,358 |
|
2,280 |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Country Road |
|
Service-telecommunications |
|
Senior Subordinated Term Debt (7) |
|
5,971 |
|
5,820 |
|
||
|
Communications LLC |
|
|
|
(10.2%, Due 7/2013) |
|
|
|
|
|
||
|
(2) |
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Defiance Acquisition |
|
Manufacturing-trucking parts |
|
Senior Term Debt (3) (6) |
|
6,245 |
|
5,496 |
|
||
|
Corporation |
|
|
|
(11.0%, Due 4/2010) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Doe & Ingalls |
|
Distributor-specialty chemicals |
|
Senior Term Debt (6) |
|
3,300 |
|
3,234 |
|
||
|
Management LLC (2) |
|
|
|
(6.0%, Due 11/2010) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (3) (6) |
|
4,421 |
|
4,311 |
|
||
|
|
|
|
|
(7.0%, Due 11/2010) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Emdeon Business Services, Inc. |
|
Service-healthcare technology solutions |
|
Senior Term Debt (7) |
|
2,365 |
|
2,239 |
|
||
|
|
|
|
|
Senior Subordinated Term Debt (7) |
|
2,011 |
|
1,860 |
|
||
|
|
|
|
|
(7.8%, Due 5/2014) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Express Courier International, Inc. |
|
Service-ground delivery and logistics |
|
Line of Credit, $1,200
available (6) |
|
900 |
|
884 |
|
||
|
|
|
|
|
Senior Term Debt (6) |
|
3,408 |
|
3,348 |
|
||
|
|
|
|
|
(9.3%, Due 6/2011) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (3) (6) |
|
4,644 |
|
4,539 |
|
||
|
|
|
|
|
(11.3%, Due 6/2011) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Finn Corporation |
|
Manufacturing-landscape |
|
Common Stock Warrants (8) |
|
37 |
|
3,197 |
|
||
|
|
|
equipment |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
GFRC Holdings LLC |
|
Manufacturing-glass-fiber |
|
Line of Credit, $3,000 available (6) |
|
— |
|
— |
|
||
|
|
|
reinforced concrete |
|
(6.7%, Due 12/2010) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (6) |
|
7,362 |
|
7,252 |
|
||
|
|
|
|
|
(9.8%, Due 12/2012) |
|
|
|
|
|
||
|
|
|
|
|
Senior Subordinated Term Debt (3) (6) |
|
6,716 |
|
6,565 |
|
||
|
|
|
|
|
(12.3%, Due 12/2012) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Global Materials Technologies, Inc. |
|
Manufacturing-steel wool products and metal fibers |
|
Senior Term Debt
(3) (6) |
|
4,830 |
|
4,492 |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
GTM Holdings, Inc. |
|
Manufacturing-socks |
|
Senior Term Debt (7) |
|
493 |
|
420 |
|
||
|
(2) |
|
|
|
(5.4%, Due 10/2013) |
|
|
|
|
|
||
|
|
|
|
|
Senior Subordinated Term Debt (7) |
|
500 |
|
400 |
|
||
|
|
|
|
|
(8.7%, Due 4/2014) |
|
|
|
|
|
||
4
|
Company |
|
Industry |
|
Investment (1) |
|
Cost |
|
Fair Value |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Greatwide Logistics Services, Inc. |
|
Service - logistics and |
|
Senior Term Debt (7) |
|
$ |
3,950 |
|
$ |
3,160 |
|
|
|
transportation |
|
(6.3%, Due 12/2013) |
|
|
|
|
|
|||
|
|
|
|
|
Senior Subordinated Term Debt (7) |
|
4,000 |
|
2,200 |
|
||
|
|
|
|
|
(9.3%, Due 6/2014) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
GS Maritime Intermediate Holdings LLC |
Service-cargo transport |
|
Senior Subordinated Term Debt (7) |
|
1,000 |
|
990 |
|
|||
|
|
|
(10.0%, Due 12/2013) |
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||
|
Harrington Holdings, Inc. (2) |
|
Service - healthcare products |
|
Senior Term Debt (7) |
|
2,469 |
|
2,271 |
|
||
|
|
distribution |
|
(4.7%, Due 1/2014) |
|
|
|
|
|
|||
|
|
|
|
|
Senior Subordinated Term Debt (7) |
|
5,000 |
|
4,250 |
|
||
|
|
|
|
|
(8.5%, Due 1/2014) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Heartland Communications Group, LLC (2) |
|
Service-radio station operator |
|
Line of Credit, $500 available (6) |
|
105 |
|
84 |
|
||
|
|
|
(10.0%, Due 12/2008) |
|
|
|
|
|
||||
|
|
|
|
Senior Term Debt (6) |
|
4,606 |
|
3,651 |
|
|||
|
|
|
|
|
(10.0%, Due 5/2011) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Interfilm Holdings, Inc. |
|
Service-slitter and distributor of |
|
Senior Term Debt (6) |
|
5,000 |
|
4,856 |
|
||
|
|
plastic films |
|
(10.5%, Due 10/2012) |
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
||
|
International Junior Golf Training Acquisition Company |
|
Service-golf training |
|
Line of Credit, $1,500 available (6) |
|
1,400 |
|
1,355 |
|
||
|
|
|
(9.0%, Due 5/2010) |
|
|
|
|
|
||||
|
|
|
Senior Term Debt (6) |
|
2,650 |
|
2,564 |
|
||||
|
|
|
|
|
(6.7%, Due 5/2012) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (3) (6) |
|
2,500 |
|
2,400 |
|
||
|
|
|
|
|
(10.5%, Due 5/2012) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
It’s Just Lunch International, LLC |
|
Service-dating service |
|
Line of Credit, $750 available (6) |
|
550 |
|
303 |
|
||
|
|
|
(6.5%, Due 6/2009) |
|
|
|
|
|
||||
|
|
|
|
|
Senior Term Debt (6) |
|
3,300 |
|
1,815 |
|
||
|
|
|
|
|
(6.7%, Due 6/2011) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (3) (6) (9) |
|
500 |
|
275 |
|
||
|
|
|
|
|
(10.5%, Due 6/2011) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
John Henry Holdings, Inc. (2) |
|
Manufacturing-packaging |
|
Senior Subordinated Term Debt (7) |
|
8,000 |
|
7,760 |
|
||
|
|
products |
|
(11.6%, Due 6/2011) |
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
||
|
Kinetek Acquisition Corp. |
|
Manufacturing-custom |
|
Senior Term Debt (7) |
|
1,482 |
|
1,359 |
|
||
|
|
|
engineered motors & controls |
|
(5.3%, Due 11/2013) |
|
|
|
|
|
||
|
|
|
|
|
Senior Subordinated Term Debt (7) |
|
1,508 |
|
1,275 |
|
||
|
|
|
|
|
(8.0%, Due 5/2014) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
KMBQ Corporation |
|
Service-AM/FM radio |
|
Line of Credit, $200 available (6) |
|
153 |
|
143 |
|
||
|
|
|
broadcaster |
|
(10.0%, Due 3/2010) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (6) |
|
1,794 |
|
1,663 |
|
||
|
|
|
|
|
(10.0%, Due 3/2010) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Legend Communications of Wyoming LLC |
|
Service-operator of radio stations |
|
Line of Credit, $500 available (5) |
|
200 |
|
200 |
|
||
|
|
|
(11.0%, Due 6/2011) |
|
|
|
|
|
||||
|
|
|
|
Senior Term Debt (5) |
|
9,250 |
|
9,250 |
|
|||
|
|
|
|
|
(11.0%, Due 6/2013) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Lindmark Outdoor |
|
Service-advertising |
|
Senior Subordinated Term Debt (6) |
|
10,000 |
|
9,350 |
|
||
|
Advertising LLC |
|
|
|
(11.0%, Due 10/2012) |
|
|
|
|
|
||
5
|
Company |
|
Industry |
|
Investment (1) |
|
Cost |
|
Fair Value |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
LocalTel, Inc. |
|
Service-yellow pages |
|
Line of Credit, $3,000 available |
|
$ |
1,170 |
|
$ |
234 |
|
|
|
|
publishing |
|
(6) (10) |
|
|
|
|
|
||
|
|
|
|
|
(non-accrual, Due 6/2009) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (6) (10) |
|
2,688 |
|
538 |
|
||
|
|
|
|
|
(non-accrual, Due 6/2011) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (3) (6) (10) |
|
2,750 |
|
550 |
|
||
|
|
|
|
|
(non-accrual, Due 6/2011) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Meteor Holding |
|
Manufacturing-bar code |
|
Senior Term Debt (7) |
|
2,330 |
|
2,330 |
|
||
|
Corporation (2) |
|
scanning and data capture |
|
(7.0%, Due 12/2013) |
|
|
|
|
|
||
|
|
|
|
|
Senior Subordinated Term Debt (7) |
|
1,500 |
|
1,500 |
|
||
|
|
|
|
|
(10.3%, Due 12/2013) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Multi-Ag Media LLC |
|
Service-dairy magazine |
|
Senior Term Debt (6) |
|
2,203 |
|
2,121 |
|
||
|
(2) |
|
publisher/ information database |
|
(9.0%, Due 12/2009) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Newhall |
|
Service-distributor of personal |
|
Line of Credit, $4,000 available (6) |
|
1,100 |
|
1,064 |
|
||
|
Holdings, Inc. (2) |
|
care products and supplements |
|
(6.0%, Due 5/2010) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (6) |
|
4,320 |
|
4,190 |
|
||
|
|
|
|
|
(8.3%, Due 5/2012) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (3) (6) |
|
4,500 |
|
4,343 |
|
||
|
|
|
|
|
(11.3%, Due 5/2012) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Northern |
|
Manufacturing-veneer and |
|
Senior Subordinated Term Debt (6) |
|
7,000 |
|
6,440 |
|
||
|
Contours, Inc. (2) |
|
laminate components |
|
(10.0%, Due 5/2010) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Pinnacle Treatment |
|
Service-Addiction treatment |
|
Line of Credit, $500 available (6) |
|
— |
|
— |
|
||
|
Centers, Inc. |
|
centers |
|
(6.7%, Due 12/2009) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (6) |
|
3,750 |
|
3,600 |
|
||
|
|
|
|
|
(8.5%, Due 12/2011) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (3) (6) |
|
7,500 |
|
7,163 |
|
||
|
|
|
|
|
(10.5%, Due 12/2011) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Precision Acquisition |
|
Manufacturing-consumable |
|
Equipment Note, $1,500 available (6) |
|
1,000 |
|
999 |
|
||
|
Group |
|
components for the aluminum |
|
(8.5%, Due 10/2011) |
|
|
|
|
|
||
|
Holdings, Inc. (2) |
|
industry |
|
Senior Term Debt (6) |
|
4,875 |
|
4,869 |
|
||
|
|
|
|
|
(8.5%, Due 10/2010) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (3) (6) |
|
4,179 |
|
4,174 |
|
||
|
|
|
|
|
(11.5%, Due 10/2010) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
PROFITSystems |
|
Service-design and develop |
|
Line of Credit, $1,250 available (6) |
|
— |
|
— |
|
||
|
Acquisition Co. (2) |
|
ERP software |
|
(6.7%, Due 7/2009) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (6) |
|
2,350 |
|
2,233 |
|
||
|
|
|
|
|
(8.5%, Due 7/2011) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (3) (6) |
|
2,900 |
|
2,733 |
|
||
|
|
|
|
|
(10.5%, Due 7/2011) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Puerto Rico Cable |
|
Service-telecommunications |
|
Senior Subordinated Term Debt (7) |
|
7,192 |
|
5,713 |
|
||
|
Acquisition |
|
|
|
(10.3%, Due 1/2012) |
|
|
|
|
|
||
|
Company, Inc. |
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
RCS Management |
|
Service-healthcare supplies |
|
Senior Term Debt (3) (6) |
|
2,938 |
|
2,805 |
|
||
|
Holding Co. |
|
|
|
(8.5%, Due 1/2011) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (4) (6) |
|
3,060 |
|
2,869 |
|
||
|
|
|
|
|
(10.5%, Due 1/2011) |
|
|
|
|
|
||
6
|
Company |
|
Industry |
|
Investment (1) |
|
Cost |
|
Fair Value |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
RedPrairie |
|
Service-design and develop |
|
Senior Term Debt (7) |
|
$ |
4,412 |
|
$ |
4,148 |
|
|
Holding, Inc. (2) |
|
supply chain software |
|
(5.7%, Due 7/2012) |
|
|
|
|
|
||
|
|
|
|
|
Senior Subordinated Term Debt (7) |
|
3,000 |
|
2,580 |
|
||
|
|
|
|
|
(9.3%, Due 1/2013) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Reliable |
|
Manufacturing-pharmaceutical |
|
Line of Credit, $5,000 available (6) |
|
1,200 |
|
1,176 |
|
||
|
Biopharmaceutical |
|
and biochemical intermediates |
|
(6.0%, Due 10/2010) |
|
|
|
|
|
||
|
Holdings, Inc. |
|
|
|
Mortgage Note (6) |
|
7,422 |
|
7,311 |
|
||
|
|
|
|
|
(9.5%, Due 10/2014) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (6) |
|
1,800 |
|
1,773 |
|
||
|
|
|
|
|
(9.0%, Due 10/2012) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (3) (6) |
|
11,963 |
|
11,694 |
|
||
|
|
|
|
|
(11.0%, Due 10/2012) |
|
|
|
|
|
||
|
|
|
|
|
Senior Subordinated Term Debt (6) |
|
6,000 |
|
5,663 |
|
||
|
|
|
|
|
(12.0%, Due 10/2013) |
|
|
|
|
|
||
|
|
|
|
|
Common Stock Warrants (8) |
|
209 |
|
— |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
RiskMetrics Group |
|
Service - develop risk and |
|
Senior Term Debt (7) |
|
1,937 |
|
1,874 |
|
||
|
Holdings, |
|
wealth management solutions |
|
(4.8%, Due 1/2014) |
|
|
|
|
|
||
|
LLC |
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Saunders & |
|
Manufacturing-equipment |
|
Line of Credit, $2,500 available (5) |
|
— |
|
— |
|
||
|
Associates |
|
provider for frequency control |
|
(7.0%, Due 5/2009) |
|
|
|
|
|
||
|
|
|
devices |
|
Senior Term Debt (5) |
|
11,000 |
|
10,973 |
|
||
|
|
|
|
|
(9.8%, Due 5/2013) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
SCI Cable, Inc. |
|
Service-cable, internet, voice |
|
Senior Term Debt (6) |
|
2,717 |
|
1,897 |
|
||
|
|
|
provider |
|
(11.0%, Due 10/2008) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Sunburst Media - |
|
Service-radio station operator |
|
Senior Term Debt (6) |
|
7,862 |
|
7,020 |
|
||
|
Louisiana, LLC |
|
|
|
(9.5%, Due 6/2011) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Sunshine Media |
|
Service-publisher regional B2B |
|
Line of Credit, $3,000 available (6) |
|
700 |
|
661 |
|
||
|
Holdings |
|
trade magazines |
|
(9.0%, Due 5/2010) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (6) |
|
17,000 |
|
16,108 |
|
||
|
|
|
|
|
(9.0%, Due 5/2012) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (3) (6) |
|
10,000 |
|
9,300 |
|
||
|
|
|
|
|
(11.5%, Due 5/2012) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Thibaut Acquisition |
|
Service-design and disbribute |
|
Line of Credit, $2,000 available (6) |
|
2,000 |
|
1,920 |
|
||
|
Co. |
|
wall covering |
|
(7.0%, Due 1/2011) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (6) |
|
2,188 |
|
2,100 |
|
||
|
|
|
|
|
(7.0%, Due 1/2011) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (3) (6) |
|
3,000 |
|
2,820 |
|
||
|
|
|
|
|
(10.5%, Due 1/2011) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Viapack, Inc. (2) |
|
Manufacturing-polyethylene |
|
Senior Real Estate Term Debt |
|
875 |
|
840 |
|
||
|
|
|
film |
|
(7.0%, Due 3/2011) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (3) (6) |
|
4,117 |
|
3,922 |
|
||
|
|
|
|
|
(11.3%, Due 3/2011) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Visual Edge |
|
Service-office equipment |
|
Senior Subordinated Term Debt (6) |
|
5,000 |
|
3,000 |
|
||
|
Technology, Inc. (2) |
|
distribution |
|
(11.5%, Due 8/2011) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Wesco Holdings, Inc. |
|
Service-aerospace parts and |
|
Senior Term Debt (7) |
|
2,452 |
|
2,346 |
|
||
|
(2) |
|
distribution |
|
(5.1%, Due 9/2013) |
|
|
|
|
|
||
|
|
|
|
|
Senior Subordinated Term Debt (7) |
|
2,268 |
|
2,199 |
|
||
|
|
|
|
|
(8.6%, Due 3/2014) |
|
|
|
|
|
||
7
|
Company |
|
Industry |
|
Investment (1) |
|
Cost |
|
Fair Value |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
West Coast Yellow |
|
Service-directory publisher |
|
Senior Term Debt (6) (10) |
|
$ |
1,555 |
|
$ |
616 |
|
|
Pages, Inc. |
|
|
|
(non-accrual, Due 8/2010) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Westlake |
|
Retail-hardware and variety |
|
Senior Subordinated Term Debt (6) |
|
15,000 |
|
14,325 |
|
||
|
Hardware, Inc. (2) |
|
|
|
(9.0%, Due 1/2011) |
|
|
|
|
|
||
|
|
|
|
|
Senior Subordinated Term Debt (6) |
|
10,000 |
|
9,400 |
|
||
|
|
|
|
|
(10.3%, Due 1/2011) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Winchester |
|
Manufacturing-high bandwidth |
|
Senior Term Debt (6) |
|
1,980 |
|
1,918 |
|
||
|
Electronics |
|
connectors and cables |
|
(6.2%, Due 5/2013) |
|
|
|
|
|
||
|
|
|
|
|
Senior Subordinated Term Debt (6) |
|
9,975 |
|
9,576 |
|
||
|
|
|
|
|
(12.0%, Due 4/2013) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
WP Evenflo Group |
|
Manufacturing-infant and |
|
Senior Term Debt (7) |
|
1,910 |
|
1,595 |
|
||
|
Holdings Inc. (2) |
|
juvenile products |
|
(5.1%, Due 2/2013) |
|
|
|
|
|
||
|
|
|
|
|
Senior Subordinated Term Debt (7) |
|
2,000 |
|
1,600 |
|
||
|
|
|
|
|
(8.6%, Due 2/2014) |
|
|
|
|
|
||
|
Total Non-Control/Non-Affiliate Investments |
|
|
|
$ |
441,319 |
|
$ |
411,069 |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
CONTROL INVESTMENTS |
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||
|
BERTL, Inc. |
|
Service-web-based evaluator |
|
Line of Credit, $700 available (11) |
|
$ |
726 |
|
$ |
— |
|
|
|
|
of digital imaging products |
|
(8.7%, Due 10/2009) |
|
|
|
|
|
||
|
|
|
|
|
Common Stock (8) |
|
424 |
|
— |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
U.S. HealthCare, Inc. |
|
Service-magazine publisher/ |
|
Line of credit, $200 available (10) |
|
30 |
|
30 |
|
||
|
|
|
operator |
|
(non-accrual, Due 3/2010) |
|
|
|
|
|
||
|
|
|
|
|
Line of credit, $450 available (10) |
|
231 |
|
231 |
|
||
|
|
|
|
|
(non-accrual, Due 3/2010) |
|
|
|
|
|
||
|
|
|
|
|
Common Stock (8) |
|
2,470 |
|
410 |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Total Control Investments |
|
|
|
$ |
3,881 |
|
$ |
671 |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Total Investments |
|
|
|
|
|
$ |
445,200 |
|
$ |
411,740 |
|
(1) Percentage represents interest rates in effect at June 30, 2008 and due date represents the contractual maturity date.
(2) Certain of the listed securities are issued by affiliate(s) of the indicated portfolio company.
(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 also junior to another Last Out Tranche.
(5) Investment valued at cost due to recent acquisition.
(6) Fair value was based on opinions of value submitted by Standard & Poor’s Securities Evaluations, Inc.
(7) Marketable securities, such as syndicated loans, are valued based on the indicative bid price, on or near June 30, 2008, offered by the respective originating syndication agent’s trading desk, or secondary desk.
(8) Security is non-income producing.
(9) It’s Just Lunch may borrow an additional $1,750 of the senior term debt facility, subject to certain conditions including Gladstone Capital’s approval. Borrowings of $500 were outstanding at June 30, 2008.
(10) LocalTel, West Coast Yellow Pages and U.S. Healthcare are currently past due on interest payments and are on non-accrual.
(11) BERTL line of credit was overdrawn by $26 as of June 30, 2008. The Company is currently restructuring the line of credit. BERTL interest is currently being capitalized as Paid in Kind (“PIK”) interest. Please refer to Note 2 “Summary of Significant Accounting Policies.”
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
8
GLADSTONE CAPITAL CORPORATION
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS
AS OF SEPTEMBER 30, 2007
(DOLLAR AMOUNTS IN THOUSANDS)
|
Company |
|
Industry |
|
Investment (1) |
|
Cost |
|
Fair Value |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
NON-CONTROL/NON-AFFILIATE INVESTMENTS |
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||
|
Access Television |
|
Service-cable airtime |
|
Line of Credit, $500 available |
|
$ |
— |
|
$ |
— |
|
|
Network, Inc. (2) |
|
(infomercials) |
|
(11.8% Due 3/2009) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (6) |
|
2,616 |
|
2,558 |
|
||
|
|
|
|
|
(11.8% Due 3/2009) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
ActivStyle Acquisition |
|
Service-medical products |
|
Line of Credit, $1,500 available (6) |
|
600 |
|
597 |
|
||
|
Co. (2) |
|
distribution |
|
(10.0%, Due 7/2009) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (6) |
|
5,245 |
|
5,219 |
|
||
|
|
|
|
|
(10.0%, Due 9/2012) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (3) (6) |
|
4,435 |
|
4,407 |
|
||
|
|
|
|
|
(12.6%, Due 9/2012) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Allison Publications, |
|
Service-publisher of consumer |
|
Senior Term Debt (6) |
|
7,884 |
|
7,780 |
|
||
|
LLC (2) |
|
oriented magazines |
|
(9.8%, Due 12/2011) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Anitox Acquisition |
|
Manufacturing-preservatives for |
|
Senior Real Estate Term Debt |
|
3,110 |
|
3,060 |
|
||
|
Company (2) |
|
animal feed |
|
(8.8%, Due 1/2012) |
|
|
|
|
|
||
|
|
|
|
|
Line of Credit, $3,000 available |
|
— |
|
— |
|
||
|
|
|
|
|
(10.0%, Due 1/2010) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (6) |
|
2,750 |
|
2,736 |
|
||
|
|
|
|
|
(10.0%, Due 1/2012) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (3) (6) |
|
2,750 |
|
2,736 |
|
||
|
|
|
|
|
(12.3%, Due 1/2012) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Badanco Acquisition |
|
Service-luggage design and |
|
Senior Subordinated Term Debt (6) |
|
9,653 |
|
9,628 |
|
||
|
Corp. |
|
distribution |
|
(12.4%, Due 7/2012) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Bresnan |
|
Service-telecommunications |
|
Senior Term Debt (7) |
|
3,002 |
|
2,910 |
|
||
|
Communications, |
|
|
|
(7.4%, Due 9/2013) |
|
|
|
|
|
||
|
LLC |
|
|
|
Senior Subordinated Term Debt (7) |
|
1,510 |
|
1,485 |
|
||
|
|
|
|
|
(9.9%, Due 3/2014) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
CCS, LLC |
|
Service-cable tv franchise owner |
|
Senior Term Debt (6) |
|
3,433 |
|
3,416 |
|
||
|
|
|
|
|
(11.8%, Due 10/2007) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
CHG Companies, Inc. |
|
Service-healthcare staffing |
|
Letter of Credit (6) (7) |
|
400 |
|
385 |
|
||
|
(2) |
|
|
|
(7.1%, Due 12/2012) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (6) (7) |
|
1,588 |
|
1,528 |
|
||
|
|
|
|
|
(7.9%, Due 12/2012) |
|
|
|
|
|
||
|
|
|
|
|
Senior Subordinated Term Debt (6) (7) |
|
500 |
|
480 |
|
||
|
|
|
|
|
(11.9%, Due 12/2012) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Chinese Yellow |
|
Service-publisher of Chinese |
|
Line of Credit, $950 available (6) |
|
230 |
|
229 |
|
||
|
Pages Company |
|
language directories |
|
(11.8%, Due 9/2010) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (6) |
|
1,071 |
|
1,051 |
|
||
|
|
|
|
|
(11.8%, Due 9/2010) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Clinton Holdings, |
|
Distribution-aluminum sheets |
|
Senior Subordinated Term Debt |
|
15,500 |
|
15,500 |
|
||
|
LLC (2) |
|
and stainless steel |
|
(13.0%, Due 1/2013) |
|
|
|
|
|
||
|
|
|
|
|
Common Stock Warrants (8) |
|
109 |
|
223 |
|
||
9
|
Company |
|
Industry |
|
Investment (1) |
|
Cost |
|
Fair Value |
|
||
|
CMI Acquisition, LLC |
|
Service-recycling |
|
Senior Subordinated Term Debt (6) |
|
$ |
6,500 |
|
$ |
6,451 |
|
|
(2) |
|
|
|
(12.4%, Due 11/2012) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Community Media |
|
Service-publisher of free weekly |
|
Senior Term Debt (6) |
|
2,511 |
|
2,482 |
|
||
|
Corporation |
|
newspapers |
|
(9.8%, Due 8/2012) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Country Road |
|
Service-telecommunications |
|
Senior Subordinated Term Debt (6) (7) |
|
5,967 |
|
5,880 |
|
||
|
Communications LLC |
|
|
|
(13.1%, Due 7/2013) |
|
|
|
|
|
||
|
(2) |
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Defiance Acquisition |
|
Manufacturing-trucking parts |
|
Senior Term Debt (3) (6) |
|
6,325 |
|
6,246 |
|
||
|
Corporation |
|
|
|
(13.8%, Due 4/2010) |
|||||||