Gladstone Capital Corporation
Jul 30, 2014

Gladstone Capital Corporation Reports Financial Results for the Quarter Ended June 30, 2014

MCLEAN, Va., July 30, 2014 (GLOBE NEWSWIRE) -- Gladstone Capital Corporation (Nasdaq:GLAD) (the "Company") today announced earnings for its third quarter ended June 30, 2014. Please read the Company's Quarterly Report on Form 10-Q filed today with the U.S. Securities and Exchange Commission (the "SEC"), which can be retrieved from the SEC's website at www.sec.gov, or from the Company's website at www.GladstoneCapital.com.

Summary Information (dollars in thousands, except per share data) (unaudited):
         
For the Quarter Ended:June 30,
2014
March 31,
2014
 Change% Change
         
Total investment income $ 10,180  $ 9,331  $ 849 9.1%
Total expenses(5,117) (4,846) 271 5.6
Net investment income5,063 4,485 578 12.9
Net investment income per common share0.24 0.21 0.03 14.3
Cash distribution per common share0.21 0.21
Total realized loss(1,243) (2,539) (1,296) (51.0)
Total unrealized depreciation(23,995) (4,048) 19,947 NM
Net decrease in net assets resulting from operations(20,175) (2,102) 18,073 NM
Weighted average yield on interest-bearing investments11.5% 11.6% (0.1)% (0.9)
Total dollars invested $ 3,360  $ 34,921 $ (31,561) (90.4)
Total dollars repaid8,919 13,748 (4,829) (35.1)
         
         
As of:June 30,
2014
March 31,
2014
Change% Change
Total investments at fair value  $ 265,083  $ 293,320 $ (28,237) (9.6)
Fair value as a percent of cost75.7% 82.4% (7.2)% (8.7)
Net asset value per common share $ 8.62  $ 9.79 $ (1.17) (12.0)
Asset coverage ratio289.6% 308.2% (18.6)% (6.0)
Number of portfolio companies49 51 (2) (3.9)
NM=Not Meaningful        

Highlights for the Quarter: During the third quarter ended June 30, 2014, the following significant events occurred:

Third Quarter 2014 Results: Net Investment Income for the quarters ended June 30 and March 31, 2014, were $5.1 million, or $0.24 per share, and $4.5 million, or $0.21 per share, respectively. Net investment income increased by 12.9% in the three months ended June 30, 2014, as compared to the prior quarter, primarily due to the increase in other income, which consisted of success fees of $0.7 million and dividend income and other fees of $1.3 million received during the current quarter. The increase in other income was partially offset by an increase in dividend expense of $0.3 million for the three months ended June 30, 2014, as compared to the prior period, which was due to the higher monthly distribution amount on our Series 2021 Term Preferred Stock, as compared to our Series 2016 Term Preferred Stock (as a result of the greater number of outstanding shares, partially offset by a lower rate).

Net Decrease in Net Assets Resulting from Operations for the quarters ended June 30 and March 31, 2014 were ($20.2) million, or ($0.96) per share, and ($2.1) million, or ($0.10) per share, respectively. The quarter over quarter decrease is primarily due to a decrease in financial and operating performance of select investments and, to a lesser extent, a decrease in certain comparable multiples used for valuing several portfolio companies during the quarter ended June 30, 2014. 

Subsequent Events: Subsequent to June 30, 2014, the following significant event occurred:


Record Date

Payment Date
Distribution per
Common Share
Distribution per
Series 2021 Term
Preferred Share
July 25 August 5 $ 0.07  $ 0.140625
August 20 August 290.070.140625
August 20 September 300.070.140625
Total for the Quarter $ 0.21  $ 0.421875

Conference Call for Stockholders: The Company will hold its earnings release conference call on Thursday, July 31, 2014, at 8:30 a.m. EDT. Please call (855) 465-0177 to enter the conference. An operator will monitor the call and set a queue for any questions. A replay of the conference call will be available through August 31, 2014. To hear the replay, please dial (855) 859-2056 and use conference number 59694882. The replay of the conference call will be available beginning approximately one hour after the call concludes. The live audio broadcast of the Company's quarterly conference call will also be available online at www.GladstoneCapital.com. The event will be archived and available for replay on the Company's website through September 30, 2014.

About Gladstone Capital Corporation:Gladstone Capital Corporation is a publicly traded business development company that invests in debt and equity securities, consisting primarily of senior term loans, second term lien loans, and senior subordinated term loans in small and medium sized businesses in the United States. Including dividends through today, the Company has paid 129 consecutive monthly cash distributions on its common stock. Before the Company started paying monthly distributions, the Company paid eight consecutive quarterly cash distributions on its common stock. Information on the business activities of all the Gladstone funds can be found at www.gladstonecompanies.com.        

The Company undertakes no obligation to update the information contained herein to reflect subsequently occurring events or circumstances, except as required by applicable securities laws and regulations. For a description of certain risks that the Company is or may be subject to, please refer to the factors discussed under the captions "Cautionary Statement Concerning Forward Looking Statements" and "Risk Factors" included in the Company's filings with the SEC (www.sec.gov).

To obtain a paper copy of the Company's most recent Form 10-Q, please contact the Company at 1521 Westbranch Drive, Suite 100, McLean, VA 22102, ATTN: Investor Relations. The financial information above is not comprehensive and is without notes, so readers should obtain and carefully review the Company's Form 10-Q for the quarter ended June 30, 2014, including the notes to the consolidated financial statements contained therein.

CONTACT: Investor Relations Inquiries:

         Please visit www.gladstone.com

         or +1-703-287-5893