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, 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 February 3, 2009 was 21,087,574.
GLADSTONE CAPITAL CORPORATION
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PART I. |
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FINANCIAL INFORMATION |
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Item 1. |
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Financial Statements (Unaudited) |
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2 |
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Condensed Consolidated Schedules of Investments as of December 31, 2008 and September 30, 2008 |
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3 |
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16 |
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17 |
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18 |
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Financial Highlights for the three months ended December 31, 2008 and 2007 |
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19 |
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20 |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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33 |
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33 |
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35 |
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38 |
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45 |
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46 |
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46 |
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46 |
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48 |
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48 |
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48 |
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48 |
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48 |
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48 |
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GLADSTONE CAPITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
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December 31, |
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September 30, |
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2008 |
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2008 |
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ASSETS |
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Non-Control/Non-Affiliate investments (Cost 12/31/08: $437,657; 9/30/08: $448,356) |
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$ |
384,012 |
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$ |
407,153 |
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Control investments (Cost 12/31/08: $13,112; 9/30/08: $12,514) |
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566 |
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780 |
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Total investments at fair value (Cost 12/31/08: $450,769; 9/30/08: $460,870) |
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384,578 |
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407,933 |
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Cash |
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5,756 |
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6,493 |
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Interest receivable – investments in debt securities |
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2,762 |
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3,588 |
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Interest receivable – employees (Refer to Note 4) |
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15 |
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91 |
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Due from custodian |
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7,303 |
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4,544 |
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Deferred financing fees |
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1,208 |
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1,905 |
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Prepaid assets |
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321 |
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306 |
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Other assets |
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1,044 |
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838 |
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TOTAL ASSETS |
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$ |
402,987 |
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$ |
425,698 |
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LIABILITIES |
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Accounts payable |
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$ |
8 |
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$ |
8 |
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Interest payable |
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544 |
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646 |
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Fee due to Administrator (Refer to Note 4) |
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227 |
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247 |
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Fees due to Adviser (Refer to Note 4) |
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725 |
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457 |
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Borrowings under line of credit |
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146,470 |
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151,030 |
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Accrued expenses and deferred liabilities |
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1,147 |
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1,328 |
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Funds held in escrow |
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76 |
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234 |
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TOTAL LIABILITIES |
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149,197 |
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153,950 |
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NET ASSETS |
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$ |
253,790 |
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$ |
271,748 |
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ANALYSIS OF NET ASSETS |
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Common stock, $0.001 par value, 50,000,000 shares authorized and 21,087,574 shares issued and outstanding at December 31, 2008 and September 30, 2008 |
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$ |
21 |
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$ |
21 |
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Capital in excess of par value |
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334,140 |
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334,143 |
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Notes receivable – employees (Refer to Note 4) |
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(9,170 |
) |
(9,175 |
) |
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Net unrealized depreciation on investments |
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(66,191 |
) |
(52,937 |
) |
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Unrealized depreciation on derivative |
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(304 |
) |
(304 |
) |
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Distributions in excess of net investment income |
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(4,706 |
) |
— |
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TOTAL NET ASSETS |
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$ |
253,790 |
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$ |
271,748 |
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NET ASSETS PER SHARE |
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$ |
12.04 |
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$ |
12.89 |
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THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
2
GLADSTONE CAPITAL CORPORATION
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS
AS OF DECEMBER 31, 2008
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
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Company (1) |
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Industry |
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Investment (2) |
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Cost |
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Fair Value |
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NON-CONTROL/NON-AFFILIATE INVESTMENTS |
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Access Television Network, |
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Service-cable airtime |
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Senior Term Debt (5) |
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$ |
1,618 |
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$ |
1,452 |
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Inc. |
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(infomercials) |
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(10.5%, Due 3/2009) |
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ACE Expediters, Inc |
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Service - over-the-ground |
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Line of Credit, $850 available |
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— |
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— |
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logistics |
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(4.3%, Due 1/2011) |
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Senior Term Debt (5) |
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11,387 |
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10,477 |
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(7.8%, Due 1/2012) |
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Common Stock Warrants (8) (14) |
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200 |
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183 |
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ActivStyle Acquisition Co. |
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Service-medical products |
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Line of Credit, $1,500 available (5) |
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1,100 |
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1,053 |
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distribution |
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(6.2%, Due 7/2009) |
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Senior Term Debt (5) |
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4,524 |
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4,247 |
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(8.5%, Due 9/2012) |
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Senior Term Debt (3) (5) |
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4,435 |
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4,047 |
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(10.5%, Due 9/2012) |
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AKQA Holdings |
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Service - market and |
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Senior Term Debt (6) |
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8,319 |
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8,271 |
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advertising |
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(6.0%, Due 3/2013) |
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Allison Publications, LLC |
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Service-publisher of consumer |
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Line of Credit, $1,000 available |
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— |
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— |
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oriented magazines |
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(10.0%, Due 9/2010) |
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Senior Term Debt (5) |
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10,174 |
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8,293 |
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(10.0%, Due 9/2012) |
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Anitox Acquisition Company |
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Manufacturing-preservatives |
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Line of Credit, $3,000 available (5) |
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2,000 |
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1,847 |
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for animal feed |
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(6.2%, Due 1/2010) |
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Senior Term Debt (5) |
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3,288 |
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3,037 |
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(8.5%, Due 1/2012) |
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Senior Term Debt (3) (5) |
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3,688 |
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3,338 |
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(10.5%, Due 1/2012) |
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Badanco Acquisition Corp. |
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Service-luggage design and |
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Senior Subordinated Term Debt (5) |
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9,409 |
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8,280 |
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distribution |
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(11.5%, Due 7/2012) |
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BAS Broadcasting |
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Service-radio station operator |
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Senior Term Debt (5) |
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7,300 |
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6,926 |
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(11.5%, Due 7/2013) |
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Senior Term Debt (3) (5) |
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950 |
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936 |
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(12.0%, Due 7/2009) |
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Bresnan Communications, |
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Service-telecommunications |
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Senior Term Debt (6) |
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3,001 |
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2,279 |
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LLC |
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(4.2%, Due 9/2013) |
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Senior Subordinated Term Debt (6) |
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1,508 |
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1,322 |
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(7.6%, Due 3/2014) |
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CCS, LLC |
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Service-cable TV franchise |
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Senior Term Debt (5) (13) |
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631 |
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252 |
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owner |
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(7.3%, Due 8/2008) |
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CHG Companies, Inc. |
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Service-healthcare staffing |
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Letter of Credit, $400 available (6) |
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400 |
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321 |
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(6.0%, Due 12/2012) |
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Senior Term Debt (6) |
|
1,523 |
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1,254 |
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||
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(3.0%, Due 12/2012) |
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Senior Subordinated Term Debt (6) |
|
500 |
|
385 |
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(6.5%, Due 12/2013) |
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3
GLADSTONE CAPITAL CORPORATION
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
AS OF DECEMBER 31, 2008
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
|
Company (1) |
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Industry |
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Investment (2) |
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Cost |
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Fair Value |
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Chinese Yellow Pages |
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Service-publisher of Chinese |
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Line of Credit, $700 available (5) |
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$ |
675 |
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598 |
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Company |
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language directories |
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(7.3%, Due 9/2010) |
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Senior Term Debt (5) |
|
656 |
|
575 |
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(7.3%, Due 9/2010) |
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Clinton Holdings, LLC |
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Distribution-aluminum sheets |
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Senior Subordinated Term Debt (5) |
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15,500 |
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14,357 |
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and stainless steel |
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(12.0%, Due 1/2013) |
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Common Stock Warrants (8) (14) |
|
109 |
|
— |
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CMI Acquisition, LLC |
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Service-recycling |
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Senior Subordinated Term Debt (5) |
|
6,414 |
|
5,805 |
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(7.4%, Due 11/2012) |
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Defiance Acquisition |
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Manufacturing-trucking parts |
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Senior Term Debt (3) (5) |
|
6,085 |
|
4,564 |
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Corporation |
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(11.0%, Due 4/2010) |
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Doe & Ingalls Management |
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Distributor-specialty chemicals |
|
Senior Term Debt (5) |
|
2,900 |
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2,726 |
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LLC |
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(6.8%, Due 11/2010) |
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|
Senior Term Debt (3) (5) |
|
4,399 |
|
4,113 |
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(7.8%, Due 11/2010) |
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Emdeon Business Services, |
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Service-healthcare technology |
|
Senior Term Debt (6) |
|
2,353 |
|
1,761 |
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Inc. |
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solutions |
|
(3.5%, Due 11/2013) |
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|
Senior Subordinated Term Debt (6) |
|
2,011 |
|
1,425 |
|
|
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(3.0%, Due 5/2014) |
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|
Finn Corporation |
|
Manufacturing-landscape |
|
Common Stock Warrants (8) (14) |
|
37 |
|
1,815 |
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equipment |
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GFRC Holdings LLC |
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Manufacturing-glass-fiber |
|
Line of Credit, $3,000 available |
|
— |
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— |
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reinforced concrete |
|
(6.2%, Due 12/2010) |
|
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|
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|
Senior Term Debt (5) |
|
7,168 |
|
6,792 |
|
|
|
|
|
|
|
(9.0%, Due 12/2012) |
|
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|
|
|
|
|
|
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|
Senior Subordinated Term Debt (3) (5) |
|
6,699 |
|
6,239 |
|
|
|
|
|
|
|
(11.5%, Due 12/2012) |
|
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|
Global Materials |
|
Manufacturing-steel wool |
|
Senior Term Debt (3) (5) |
|
4,560 |
|
4,047 |
|
|
|
Technologies, Inc. |
|
products and metal fibers |
|
(13.0%, Due 11/2009) |
|
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|
GTM Holdings, Inc. |
|
Manufacturing-socks |
|
Senior Term Debt (6) |
|
490 |
|
399 |
|
|
|
|
|
|
|
(8.5%, Due 10/2013) |
|
|
|
|
|
|
|
|
|
|
|
Senior Subordinated Term Debt (6) |
|
500 |
|
426 |
|
|
|
|
|
|
|
(11.8%, Due 4/2014) |
|
|
|
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|
|
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|
Greatwide Logistics |
|
Service - logistics and |
|
Senior Subordinated Term Debt (7) (9) |
|
2,000 |
|
40 |
|
|
|
Services, Inc. |
|
transportation |
|
(non-accrual, Due 6/2014) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Harrington Holdings, Inc. |
|
Service - healthcare products |
|
Senior Term Debt (6) |
|
2,456 |
|
1,810 |
|
|
|
|
|
distribution |
|
(2.7%, Due 1/2014) |
|
|
|
|
|
|
|
|
|
|
|
Senior Subordinated Term Debt (6) |
|
5,000 |
|
3,835 |
|
|
|
|
|
|
|
(6.5%, Due 1/2014) |
|
|
|
|
|
|
4
GLADSTONE CAPITAL CORPORATION
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
AS OF DECEMBER 31, 2008
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
|
Company (1) |
|
Industry |
|
Investment (2) |
|
Cost |
|
Fair Value |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Heartland Communications |
|
Service-radio station operator |
|
Line of Credit, $500 available (5) (10) |
|
$ |
105 |
|
$ |
68 |
|
|
Group, LLC |
|
|
|
(10.0%, Due 12/2008) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (5) |
|
4,468 |
|
2,882 |
|
||
|
|
|
|
|
(10.0%, Due 5/2011) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Interfilm Holdings, Inc. |
|
Service-slitter and distributor |
|
Senior Term Debt (5) |
|
4,988 |
|
4,588 |
|
||
|
|
|
of plastic films |
|
(10.5%, Due 10/2012) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
International Junior Golf |
|
Service-golf training |
|
Line of Credit, $1,500 available (5) |
|
1,400 |
|
1,318 |
|
||
|
Training Acquisition |
|
|
|
(9.0%, Due 5/2010) |
|
|
|
|
|
||
|
Company |
|
|
|
Senior Term Debt (5) |
|
2,451 |
|
2,225 |
|
||
|
|
|
|
|
(6.2%, Due 5/2012) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (3) (5) |
|
2,500 |
|
2,213 |
|
||
|
|
|
|
|
(10.5%, Due 5/2012) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
It’s Just Lunch |
|
Service-dating service |
|
Line of Credit, $750 available (5) |
|
550 |
|
220 |
|
||
|
International, LLC |
|
|
|
(5.9%, Due 6/2009) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (5) |
|
3,300 |
|
1,320 |
|
||
|
|
|
|
|
(6.2%, Due 6/2011) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (3) (5) (11) |
|
500 |
|
200 |
|
||
|
|
|
|
|
(10.5%, Due 6/2011) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
John Henry Holdings, Inc. |
|
Manufacturing-packaging |
|
Senior Subordinated Term Debt (6) |
|
8,000 |
|
7,497 |
|
||
|
|
|
products |
|
(8.2%, Due 6/2011) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Kinetek Acquisition Corp. |
|
Manufacturing-custom |
|
Senior Term Debt (6) |
|
1,440 |
|
1,037 |
|
||
|
|
|
engineered motors & controls |
|
(3.0%, Due 11/2013) |
|
|
|
|
|
||
|
|
|
|
|
Senior Subordinated Term Debt (6) |
|
1,507 |
|
1,258 |
|
||
|
|
|
|
|
(6.0%, Due 5/2014) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
KMBQ Corporation |
|
Service-AM/FM radio |
|
Line of Credit, $200 available (5) |
|
153 |
|
134 |
|
||
|
|
|
broadcaster |
|
(11.0%, Due 3/2010) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (5) |
|
1,790 |
|
1,558 |
|
||
|
|
|
|
|
(11.0%, Due 3/2010) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Legend Communications of |
|
Service-operator of radio |
|
Line of Credit, $500 available (5) |
|
497 |
|
476 |
|
||
|
Wyoming LLC |
|
stations |
|
(11.0%, Due 6/2011) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (5) |
|
9,250 |
|
8,857 |
|
||
|
|
|
|
|
(11.0%, Due 6/2013) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Lindmark Outdoor |
|
Service-advertising |
|
Senior Subordinated Term Debt (5) |
|
11,906 |
|
8,929 |
|
||
|
Advertising LLC |
|
|
|
(11.0%, Due 10/2012) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Multi-Ag Media LLC |
|
Service-dairy magazine |
|
Senior Term Debt (5) |
|
1,936 |
|
1,685 |
|
||
|
|
|
publisher/information |
|
(7.3%, Due 12/2009) |
|
|
|
|
|
||
|
|
|
database |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Newhall Holdings, Inc. |
|
Service-distributor of |
|
Line of Credit, $4,000 available (12) |
|
2,100 |
|
2,100 |
|
||
|
|
|
personal care products and |
|
(5.4%, Due 5/2010) |
|
|
|
|
|
||
|
|
|
supplements |
|
Senior Term Debt (5) |
|
4,050 |
|
3,442 |
|
||
|
|
|
|
|
(8.3%, Due 5/2012) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (3) (5) |
|
4,455 |
|
3,787 |
|
||
|
|
|
|
|
(11.3%, Due 5/2012) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Northern Contours, Inc. |
|
Manufacturing-veneer and |
|
Senior Subordinated Term Debt (5) |
|
6,825 |
|
5,878 |
|
||
|
|
|
laminate components |
|
(10.0%, Due 5/2010) |
|
|
|
|
|
||
5
GLADSTONE CAPITAL CORPORATION
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
AS OF DECEMBER 31, 2008
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
|
Company (1) |
|
Industry |
|
Investment (2) |
|
Cost |
|
Fair Value |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Pinnacle Treatment Centers, |
|
Service-Addiction treatment |
|
Line of Credit, $500 available |
|
$ |
— |
|
$ |
— |
|
|
Inc. |
|
centers |
|
(6.2%, Due 12/2009) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (5) |
|
3,350 |
|
3,099 |
|
||
|
|
|
|
|
(8.5%, Due 12/2011) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (3) (5) |
|
7,500 |
|
6,853 |
|
||
|
|
|
|
|
(10.5%, Due 12/2011) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Precision Acquisition |
|
Manufacturing-consumable |
|
Equipment Note, $1,500 available (5) |
|
1,000 |
|
980 |
|
||
|
Group Holdings, Inc. |
|
components for the |
|
(8.5%, Due 10/2011) |
|
|
|
|
|
||
|
|
|
aluminum industry |
|
Senior Term Debt (5) |
|
4,625 |
|
4,532 |
|
||
|
|
|
|
|
(8.5%, Due 10/2010) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (3) (5) |
|
4,137 |
|
4,054 |
|
||
|
|
|
|
|
(11.5%, Due 10/2010) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
PROFITSystems |
|
Service-design and develop |
|
Line of Credit, $1,250 available |
|
— |
|
— |
|
||
|
Acquisition Co. |
|
ERP software |
|
(6.2%, Due 7/2009) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (5) |
|
2,050 |
|
1,842 |
|
||
|
|
|
|
|
(8.5%, Due 7/2011) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (3) (5) |
|
2,900 |
|
2,559 |
|
||
|
|
|
|
|
(10.5%, Due 7/2011) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Puerto Rico Cable |
|
Service-telecommunications |
|
Senior Subordinated Term Debt (6) |
|
7,185 |
|
5,926 |
|
||
|
Acquisition Company, Inc. |
|
|
|
(8.0%, Due 1/2012) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
RCS Management Holding |
|
Service-healthcare supplies |
|
Senior Term Debt (3) (6) |
|
2,813 |
|
2,595 |
|
||
|
Co. |
|
|
|
(8.5%, Due 1/2011) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (4) (6) |
|
3,060 |
|
2,777 |
|
||
|
|
|
|
|
(10.5%, Due 1/2011) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
RedPrairie Holding, Inc. |
|
Service-design and develop |
|
Senior Term Debt (6) |
|
4,390 |
|
3,564 |
|
||
|
|
|
supply chain software |
|
(5.3%, Due 7/2012) |
|
|
|
|
|
||
|
|
|
|
|
Senior Subordinated Term Debt (6) |
|
3,000 |
|
2,306 |
|
||
|
|
|
|
|
(9.2%, Due 1/2013) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Reliable Biopharmaceutical |
|
Manufacturing-pharmaceutical |
|
Line of Credit, $5,000 available (5) |
|
800 |
|
760 |
|
||
|
Holdings, Inc. |
|
and biochemical intermediates |
|
(9.0%, Due 10/2010) |
|
|
|
|
|
||
|
|
|
|
|
Mortgage Note (5) |
|
7,389 |
|
7,093 |
|
||
|
|
|
|
|
(9.5%, Due 10/2014) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (5) |
|
1,733 |
|
1,646 |
|
||
|
|
|
|
|
(9.0%, Due 10/2012) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (3) (5) |
|
11,903 |
|
11,130 |
|
||
|
|
|
|
|
(11.0%, Due 10/2012) |
|
|
|
|
|
||
|
|
|
|
|
Senior Subordinated Term Debt (5) |
|
6,000 |
|
5,085 |
|
||
|
|
|
|
|
(12.0%, Due 10/2013) |
|
|
|
|
|
||
|
|
|
|
|
Common Stock Warrants (8) (14) |
|
209 |
|
— |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
RiskMetrics Group |
|
Service - develop risk and |
|
Senior Term Debt (6) |
|
1,937 |
|
1,448 |
|
||
|
Holdings, LLC |
|
wealth management solutions |
|
(3.5%, Due 1/2014) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Saunders & Associates |
|
Manufacturing-equipment |
|
Line of Credit, $2,500 available |
|
— |
|
— |
|
||
|
|
|
provider for frequency control |
|
(6.4%, Due 5/2009) |
|
|
|
|
|
||
|
|
|
devices |
|
Senior Term Debt (5) |
|
10,890 |
|
10,509 |
|
||
|
|
|
|
|
(9.8%, Due 5/2013) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
SCI Cable, Inc. |
|
Service-cable, internet, voice |
|
Senior Term Debt (5) (13) |
|
2,710 |
|
678 |
|
||
|
|
|
provider |
|
(9.3%, Due 10/2008) |
|
|
|
|
|
||
6
GLADSTONE CAPITAL CORPORATION
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
AS OF DECEMBER 31, 2008
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
|
Company (1) |
|
Industry |
|
Investment (2) |
|
Cost |
|
Fair Value |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Sunburst Media - Louisiana, |
|
Service-radio station operator |
|
Senior Term Debt (5) |
|
$ |
7,852 |
|
$ |
6,581 |
|
|
LLC |
|
|
|
(9.5%, Due 6/2011) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Sunshine Media Holdings |
|
Service-publisher regional |
|
Line of Credit, $3,000 available (5) |
|
700 |
|
630 |
|
||
|
|
|
B2B trade magazines |
|
(11.0%, Due 5/2010) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (5) |
|
17,000 |
|
15,640 |
|
||
|
|
|
|
|
(11.0%, Due 5/2012) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (3) (5) |
|
10,000 |
|
9,000 |
|
||
|
|
|
|
|
(13.5%, Due 5/2012) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Thibaut Acquisition Co. |
|
Service-design and disbribute |
|
Line of Credit, $1,000 available (5) |
|
1,000 |
|
900 |
|
||
|
|
|
wall covering |
|
(6.9%, Due 1/2011) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (5) |
|
1,838 |
|
1,654 |
|
||
|
|
|
|
|
(6.4%, Due 1/2011) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (3) (5) |
|
3,000 |
|
2,625 |
|
||
|
|
|
|
|
(10.5%, Due 1/2011) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Tulsa Welding School |
|
Service-private welding |
|
Line of credit, $2,000 available (5) |
|
137 |
|
— |
|
||
|
|
|
school |
|
(9.5%, 9/2011) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (5) |
|
3,900 |
|
3,822 |
|
||
|
|
|
|
|
(9.5%, 9/2013) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (5) |
|
8,000 |
|
7,790 |
|
||
|
|
|
|
|
(12.8%, 9/2013) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
United Maritime Group, LLC |
|
Service-cargo transport |
|
Senior Subordinated Term Debt (6) |
|
5,511 |
|
4,927 |
|
||
|
|
|
|
|
(9.0%, Due 12/2013) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Vanta Core |
|
Service-acquisition of |
|
Senior Subordinated Term Debt (5) |
|
13,865 |
|
13,518 |
|
||
|
|
|
aggregate quarries |
|
(12.0%, 8/2013) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Viapack, Inc. |
|
Manufacturing-polyethylene |
|
Senior Real Estate Term Debt (5) |
|
825 |
|
738 |
|
||
|
|
|
film |
|
(6.4%, Due 3/2011) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (3) (5) |
|
4,064 |
|
3,617 |
|
||
|
|
|
|
|
(11.3%, Due 3/2011) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Visual Edge Technology, |
|
Service-office equipment |
|
Senior Subordinated Term Debt (5) |
|
5,000 |
|
3,000 |
|
||
|
Inc. |
|
distribution |
|
(13.5%, Due 8/2011) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Wesco Holdings, Inc. |
|
Service-aerospace parts and |
|
Senior Term Debt (6) |
|
2,450 |
|
1,822 |
|
||
|
|
|
distribution |
|
(2.7%, Due 9/2013) |
|
|
|
|
|
||
|
|
|
|
|
Senior Subordinated Term Debt (6) |
|
2,267 |
|
1,621 |
|
||
|
|
|
|
|
(6.2%, Due 3/2014) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Westlake Hardware, Inc. |
|
Retail-hardware and variety |
|
Senior Subordinated Term Debt (5) |
|
15,000 |
|
13,519 |
|
||
|
|
|
|
|
(9.0%, Due 1/2011) |
|
|
|
|
|
||
|
|
|
|
|
Senior Subordinated Term Debt (5) |
|
10,000 |
|
8,788 |
|
||
|
|
|
|
|
(10.3%, Due 1/2011) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Winchester Electronics |
|
Manufacturing-high |
|
Senior Term Debt (5) |
|
1,694 |
|
1,542 |
|
||
|
|
|
bandwidth connectors and |
|
(6.7%, Due 5/2013) |
|
|
|
|
|
||
|
|
|
cables |
|
Senior Subordinated Term Debt (5) |
|
9,925 |
|
8,883 |
|
||
|
|
|
|
|
(14.0%, Due 6/2013) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
WP Evenflo Group Holdings |
|
Manufacturing-infant and |
|
Senior Term Debt (6) |
|
1,910 |
|
1,315 |
|
||
|
Inc. |
|
juvenile products |
|
(4.7%, Due 2/2013) |
|
|
|
|
|
||
|
|
|
|
|
Senior Subordinated Term Debt (6) |
|
2,000 |
|
1,445 |
|
||
|
|
|
|
|
(8.2%, Due 2/2014) |
|
|
|
|
|
||
|
Total Non-Control/Non-Affiliate Investments |
|
|
|
$ |
437,657 |
|
$ |
384,012 |
|
||
7
GLADSTONE CAPITAL CORPORATION
CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
AS OF DECEMBER 31, 2008
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
|
Company (1) |
|
Industry |
|
Investment (2) |
|
Cost |
|
Fair Value |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
CONTROL INVESTMENTS |
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||
|
BERTL, Inc. |
|
Service-web-based evaluator |
|
Line of Credit, $700 available (14) (15) |
|
$ |
759 |
|
$ |
— |
|
|
|
|
of digital imaging products |
|
(8.2%, Due 10/2009) |
|
|
|
|
|
||
|
|
|
|
|
Common Stock (8) (15) |
|
424 |
|
— |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
LYP Holdings Corp. |
|
Service-yellow pages |
|
Line of credit, $500 available (15) |
|
175 |
|
— |
|
||
|
|
|
publishing |
|
(10.0%, 5/2009) |
|
|
|
|
|
||
|
|
|
|
|
Line of Credit, $3,000 available (9) (15) |
|
1,170 |
|
— |
|
||
|
|
|
|
|
(non-accrual, Due 6/2009) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (9) (15) |
|
2,688 |
|
— |
|
||
|
|
|
|
|
(non-accrual, Due 6/2011) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (3) (9) (15) |
|
2,750 |
|
— |
|
||
|
|
|
|
|
(non-accrual, Due 6/2011) |
|
|
|
|
|
||
|
|
|
|
|
Common Stock Warrants (8) (15) |
|
1 |
|
— |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
U.S. Healthcare |
|
Service-magazine publisher/ |
|
Line of credit, $200 available (9) (15) |
|
169 |
|
169 |
|
||
|
Communications, Inc. |
|
operator |
|
(non-accrual, Due 3/2010) |
|
|
|
|
|
||
|
|
|
|
|
Line of credit, $450 available (9) (15) |
|
450 |
|
397 |
|
||
|
|
|
|
|
(non-accrual, Due 3/2010) |
|
|
|
|
|
||
|
|
|
|
|
Common Stock (8) (15) |
|
2,470 |
|
— |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Western Directories, Inc. |
|
Service-directory publisher |
|
Line of credit, $1,000 available (15) |
|
471 |
|
— |
|
||
|
|
|
|
|
(10%, Due 8/2009) |
|
|
|
|
|
||
|
|
|
|
|
Preferred Stock (8) (15) |
|
1,584 |
|
— |
|
||
|
|
|
|
|
Common Stock (8) (15) |
|
1 |
|
— |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Total Control Investments |
|
|
|
|
|
$ |
13,112 |
|
$ |
566 |
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Total Investments |
|
|
|
|
|
$ |
450,769 |
|
$ |
384,578 |
|
|
(1) |
Certain of the listed securities are issued by affiliate(s) of the indicated portfolio company. |
|
(2) |
Percentage represents interest rates in effect at December 31, 2008 and due date represents the contractual maturity date. |
|
(3) |
Last Out Tranche of senior debt, meaning if the portfolio 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 portfolio 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) |
Fair value was based on opinions of value submitted by Standard & Poor’s Securities Evaluations, Inc. |
|
(6) |
Security valued using internally-developed, risk-adjusted discounted cash flow methodologies as of December 31, 2008. |
|
(7) |
Security valued based on the indicative bid price on or near December 31, 2008, offered by the respective originating syndication agent’s trading desk, or secondary desk. |
|
(8) |
Security is non-income producing. |
|
(9) |
Greatwide, LYP Holdings and U.S. Healthcare are currently past due on interest payments and are on non-accrual. |
|
(10) |
Heartland’s line of credit was cancelled subsequent to December 31, 2008 and the balance was added to the term loan. |
|
(11) |
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 December 31, 2008. |
|
(12) |
Newhall’s line of credit was valued at cost due to payoff subsequent to December 31, 2008. In addition, the line of credit limit was reduced from $4,000 to $3,000. |
|
(13) |
CCS’s loan expired in August 2008 and SCI Cable’s loan expired in October 2008. The Company is actively working to recover amounts due under these loans, however, there is no assurance that there will be a full recovery of amounts past due. |
|
(14) |
BERTL’s line of credit was overdrawn by $59 as of December 31, 2008. The Company is currently restructuring the line of credit. BERTL’s interest is currently being capitalized as Paid in Kind (“PIK”) interest. |
|
(15) |
Fair value was based on the total enterprise value of the portfolio company, which was calculated using a liquidity waterfall approach. |
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, 2008
(DOLLAR AMOUNTS IN THOUSANDS)
|
Company |
|
Industry |
|
Investment (1) |
|
Cost |
|
Fair Value |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
NON-CONTROL/NON-AFFILIATE INVESTMENTS |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||
|
Access Television |
|
Service-cable airtime |
|
Senior Term Debt (6) |
|
$ |
1,923 |
|
$ |
1,774 |
|
|
Network, Inc. (2) |
|
(infomercials) |
|
(10.5%, Due 3/2009) |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
ACE Expediters, Inc |
|
Service - over-the- |
|
Line of Credit, $ 850 available |
|
— |
|
— |
|
||
|
|
|
ground logistics |
|
(6.0%, Due 1/2011) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (6) |
|
11,966 |
|
11,248 |
|
||
|
|
|
|
|
(9.8%, Due 1/2012) |
|
|
|
|
|
||
|
|
|
|
|
Common Stock Warrants (8) |
|
200 |
|
142 |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
ActivStyle Acquisition Co. (2) |
|
Service-medical products |
|
Line of Credit, $ 1,500 available (6) |
|
1,100 |
|
1,059 |
|
||
|
|
|
distribution |
|
(6.7%, Due 7/2009) |
|
|
|
|
|
||
|
|
|
|
|
Senior Term Debt (6) |
|
4,721 |
|
4,543 |
|
||
|
|
|||||||||||