Gladstone Investment Reports Results for the Third Quarter Ended December 31, 2006
-- Net Investment Income for the Quarter Was $2.9 Million or $0.18 Per Common Share
-- Net Increase in Net Assets from Operations for the Quarter Was $2.7 Million or $0.16 Per Common Share
MCLEAN, Va.--(BUSINESS WIRE)--
Gladstone Investment Corp. (NASDAQ: GAIN) (the "Company") today announced earnings for the third quarter ended December 31, 2006. All per share references are per basic and diluted weighted average common share outstanding, unless otherwise noted.
Net Investment Income for the third quarter ended December 31, 2006 was $2,898,068 or $0.18 per share, as compared to $1,752,570 or $0.11 per share for the third quarter ended December 31, 2005. Net Investment Income for the nine months ended December 31, 2006 was $8,363,118 or $0.51 per share, as compared to $3,185,276 or $0.20 per share for the period June 22, 2005 (commencement of operations) to December 31, 2005.
Net Increase in Net Assets Resulting from Operations for the third quarter ended December 31, 2006 was $2,684,543, or $0.16 per share, as compared to $1,614,747 or $0.10 per share for the same period a year ago. Net Increase in Net Assets Resulting from Operations for the nine months ended December 31, 2006 was $6,809,635, or $0.41 per share compared to $3,111,279 or $0.19 per share for the period June 22, 2005 (commencement of operations) to December 31, 2005.
Total assets were $247,473,062 at December 31, 2006 as compared to $230,323,807 at March 31, 2006. Net asset value was $13.65 per actual common share outstanding at December 31, 2006 as compared to $13.88 per actual common share at March 31, 2006.
The annualized weighted average yield on the Company's portfolio for the three months ended December 31, 2006 was 9.41%. The annualized weighted average yield on the Company's portfolio for the three months ended December 31, 2005 was 6.42%. The annualized weighted average yield on the Company's portfolio for the nine months ended December 31, 2006 was 10.03% compared to 6.42% for the period June 22, 2005 (commencement of operations) to December 31, 2005.
During the third quarter ended December 31, 2006, the Company recorded the following activity:
-- Invested approximately $22.9 million in senior subordinated
debt, preferred and common equity of Acme Cryogenics, Inc.;
-- Invested approximately $19.6 million in senior and
subordinated debt, a revolving credit facility and preferred
and common equity of Noble Logistics Services, Inc.;
-- Acquired interests in 12 new syndicated loans for
approximately $18.0 million; and
-- Acquired interests in 4 existing syndicated loan
participations for approximately $8.0 million.
At December 31, 2006, the Company held 39 non-control/non-affiliate investments, 4 control investments and 1 affiliate investment, totaling an aggregate cost basis of approximately $242 million and a fair value of approximately $241 million.
Condensed Schedule of Investments
December 31, 2006
Investment Type Cost Fair Value
----------------------------------------------------------------------
Total Non-control/Non-Affiliate
Investments $141,804,619 $140,777,989
Total Control Investments 80,601,004 80,188,063
Total Affiliate Investments 19,550,000 19,550,000
------------- -------------
Total investments $241,955,623 $240,516,052
============= =============
"Since the inception of our fund on June 22, 2005, we have invested over $240 million, resulting in the full commitment of our IPO proceeds at quarter end. With the IPO proceeds invested we will continue to grow the assets by using leverage to build to the portfolio. We look forward to a productive 2007," said Chip Stelljes, President and Chief Investment Officer.
Subsequent to December 31, 2006, the Company:
-- Purchased 4 new and 2 existing loan participations of
approximately $6.7 million; and
-- Declared monthly cash dividends of $0.075 per common share for
each of the months of January, February and March of 2007.
The Company will hold a conference call Tuesday, February 6, 2007 at 8:30 am EST to discuss third quarter earnings. Please call (877) 407-8031 to enter the conference. An operator will monitor the call and set a queue for the questions.
A replay of the conference call will be available through March 6, 2007. To hear the replay, please dial (877) 660-6853, access playback account 286 and use ID code 229412. The online replay will be available approximately two hours after the call concludes.
The live audio broadcast of Gladstone Investment's quarterly conference call will be available online at www.GladstoneInvestment.com and www.investorcalendar.com. The online replay will follow shortly after the call.
Gladstone Investment Corporation is an investment company that seeks to make debt and equity investments in small and mid-sized private businesses in the U.S. in connection with acquisitions, changes in control and recapitalizations. For more information please visit our website at http://www.GladstoneInvestment.com.
This press release may include statements that may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements with regard to the future performance of the Company. Words such as "believes," "expects," "anticipates," "estimated," "approximately" "projects" and "future" or similar expressions are intended to identify forward-looking statements. These forward-looking statements inherently involve certain risks and uncertainties, although they are based on the Company's current plans that are believed to be reasonable as of the date of this press release. Factors that may cause the Company's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements include, among others, those factors listed under the caption "Risk factors" of the Company's Form 10-K dated March 31, 2006, as filed with the Securities and Exchange Commission on June 14, 2006, in the Company's Pre-effective Amendment No. 1 to Registration Statement on Form N-2 as filed with the Securities and Exchange Commission on December 22, 2006 and the Company's Form 10-Q as filed with the Securities and Exchange Commission today. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
GLADSTONE INVESTMENT CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
For the three For the three
months ended months ended
December 31, 2006 December 31, 2005
----------------- -----------------
INVESTMENT INCOME
Interest income
Non-Control/Non-Affiliate
investments $ 2,586,171 $ 790,879
Control investments 1,264,451 -
Affiliate investments 114,668 -
Cash and cash equivalents 332,586 1,530,809
----------------- -----------------
Total interest income 4,297,876 2,321,688
Other income 1,492 -
----------------- -----------------
Total investment income 4,299,368 2,321,688
----------------- -----------------
EXPENSES
Base management fee 551,235 265,522
Loan servicing fee 508,691 -
Administration fee 124,101 73,424
Directors fees 54,800 51,000
Professional fees 186,537 69,570
Insurance expense 60,696 69,552
Stockholder related costs 28,643 24,363
Interest expense 68,748 -
Amortization of deferred finance
costs 91,392 -
Taxes and licenses 41,550 -
Other expenses 60,132 15,687
----------------- -----------------
Expenses before credit from
Adviser 1,776,525 569,118
----------------- -----------------
Credit to base management fee for
fees collected by Adviser (Refer
to Note 3) (375,225) -
----------------- -----------------
Total expenses net of credit
to management fee 1,401,300 569,118
----------------- -----------------
NET INVESTMENT INCOME 2,898,068 1,752,570
----------------- -----------------
REALIZED AND UNREALIZED LOSS ON
INVESTMENTS
Realized (loss) gain on sale of
Non-Control/Non-Affiliate
investments (2,283) 38,056
Net unrealized depreciation of
investment portfolio (211,242) (175,879)
----------------- -----------------
Net loss on investments (213,525) (137,823)
----------------- -----------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS (Refer
to Note 6) $ 2,684,543 $ 1,614,747
================= =================
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS PER
COMMON SHARE:
Basic and Diluted $ 0.16 $ 0.10
================= =================
SHARES OF COMMON STOCK OUTSTANDING:
Basic and diluted weighted
average shares 16,560,100 16,560,100
GLADSTONE INVESTMENT CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
For the period
June 22, 2005
For the nine (Commencement of
months ended Operations) to
December 31, 2006 December 31, 2005
----------------- -----------------
INVESTMENT INCOME
Interest income
Non-Control/Non-Affiliate
investments $ 6,938,026 $ 984,457
Control investments 3,711,056 -
Affiliate investments 114,668 -
Cash and cash equivalents 1,610,506 3,192,019
----------------- -----------------
Total interest income 12,374,256 4,176,476
Other income 2,478 -
----------------- -----------------
Total investment income 12,376,734 4,176,476
----------------- -----------------
EXPENSES
Base management fee 2,214,437 357,630
Loan servicing fee 508,691 -
Administration fee 364,351 178,469
Directors fees 154,300 103,000
Professional fees 354,325 135,872
Insurance expense 200,933 112,030
Stockholder related costs 187,509 67,901
Interest expense 68,748 378
Amortization of deferred finance
costs 91,392 -
Taxes and licenses 139,994 -
Other expenses 104,161 35,920
----------------- -----------------
Expenses before credit from
Gladstone Management 4,388,841 991,200
----------------- -----------------
Credit to management fee for
fees collected by Adviser
(Refer to Note 3) (375,225) -
----------------- -----------------
Total expenses net of credit
to management fee 4,013,616 991,200
----------------- -----------------
NET INVESTMENT INCOME 8,363,118 3,185,276
----------------- -----------------
REALIZED AND UNREALIZED LOSS ON
INVESTMENTS
Realized (loss) gain on sale of
Non-Control/Non-Affiliate
investments (944) 38,056
Net unrealized depreciation of
investment portfolio (1,552,539) (112,053)
----------------- -----------------
Net loss on investments (1,553,483) (73,997)
----------------- -----------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS (Refer
to Note 6) $ 6,809,635 $ 3,111,279
================= =================
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS PER
COMMON SHARE:
Basic and Diluted $ 0.41 $ 0.19
================= =================
SHARES OF COMMON STOCK
OUTSTANDING:
Basic and diluted weighted
average shares 16,560,100 16,560,100
GLADSTONE INVESTMENT CORPORATION
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(UNAUDITED)
December 31, March 31,
2006 2006
------------- -------------
ASSETS
Non-Control/Non-Affiliate investments
(Cost 12/31/06: $141,804,619; 3/31/06:
$97,423,004) $140,777,989 $ 97,585,972
Control investments (Cost 12/31/06:
$80,601,004; 3/31/06: $55,846,318) 80,188,063 55,796,318
Affiliate investments (Cost 12/31/06:
$19,550,000) 19,550,000 -
------------- -------------
Total investments at fair value (Cost
12/31/06: $241,955,623; 3/31/06:
$153,269,322) 240,516,052 153,382,290
Cash and cash equivalents 1,890,942 75,672,605
Interest receivable 1,444,705 761,388
Due from custodian 2,798,620 -
Deferred finance costs 459,347 -
Prepaid directors fees 37,900 -
Prepaid insurance 145,382 99,874
Due from Adviser - 234,551
Other assets 180,114 173,099
------------- -------------
TOTAL ASSETS $247,473,062 $230,323,807
============= =============
LIABILITIES
Administration fee payable to
Administrator $ 124,101 $ 110,002
Fees due to Adviser 407,221 -
Borrowings under line of credit 20,000,000 -
Accrued expenses 812,864 367,031
Other liabilities 43,120 5,077
------------- -------------
Total Liabilities 21,387,306 482,110
------------- -------------
NET ASSETS $226,085,756 $229,841,697
============= =============
ANALYSIS OF NET ASSETS:
Common stock, $0.001 par value,
100,000,000 shares authorized and
16,560,100 shares issued and outstanding $ 16,560 $ 16,560
Capital in excess of par value 230,096,572 230,229,279
Net unrealized (depreciation) appreciation
of investment portfolio (1,439,571) 112,968
Distributions in excess of net investment
income (2,587,805) (517,110)
------------- -------------
TOTAL NET ASSETS $226,085,756 $229,841,697
============= =============
NET ASSETS PER SHARE $ 13.65 $ 13.88
============= =============
GLADSTONE INVESTMENT CORPORATION
FINANCIAL HIGHLIGHTS
(UNAUDITED)
For the three For the three
months ended months ended
December 31, 2006 December 31, 2005
----------------- -----------------
Per Share Data (1)
----------------------------------
Balance at beginning of period $ 13.71 $ 13.93
Income from investment
operations:
Net investment income (2) 0.18 0.11
Realized gain on sale of
investments (2) - -
Net unrealized depreciation of
investments (2) (0.02) (0.01)
----------------- -----------------
Total from investment operations 0.16 0.10
----------------- -----------------
Distributions (0.21) (0.12)
----------------- -----------------
Net asset value at end of period $ 13.65 $ 13.91
================= =================
Per share market value at
beginning of period $ 14.46 $ 15.05
Per share market value at end of
period 15.31 13.59
Total return (3) 7.38% (6.63%)
Shares outstanding at end of
period 16,560,100 16,560,100
Ratios/Supplemental Data
----------------------------------
Net assets at end of period $ 226,085,756 $ 230,376,300
Average net assets (4) $ 225,338,878 $ 229,896,936
Ratio of expenses to average net
assets (annualized) 3.15% 0.99%
Ratio of net expenses to average
net assets (annualized) 2.49% 0.99%
Ratio of net investment income to
average net assets (annualized) 5.14% 3.05%
(1) Based on actual shares outstanding.
(2) Based on weighted average basic per share data.
(3) Total return equals the change in the market value of the Company's common stock from the beginning of the period taking into account dividends reinvested in accordance with the terms of our dividend reinvestment plan.
(4) Calculated using the average of the ending monthly net assets for the respective periods.
GLADSTONE INVESTMENT CORPORATION
FINANCIAL HIGHLIGHTS
(UNAUDITED)
For the period
June 22, 2005
For the nine (Commencement of
months ended Operations) to
December 31, 2006 December 31, 2006
----------------- -----------------
Per Share Data (1)
----------------------------------
Balance at beginning of period $ 13.88 $ -
Net proceeds from initial public
offering (2) - 13.95
----------------- -----------------
Offering costs - (0.05)
Income from investment
operations:
Net investment income (3) 0.51 0.20
Realized gain on sale of
investments (3) - -
Net unrealized depreciation of
investments (3) (0.10) (0.01)
----------------- -----------------
Total from investment operations 0.41 0.19
----------------- -----------------
Distributions (0.63) (0.18)
----------------- -----------------
Net asset value at end of period $ 13.65 $ 13.91
================= =================
Per share market value at
beginning of period $ 14.90 $ 15.00
Per share market value at end of
period 15.31 13.59
Total return (4) 7.28% (8.25%)
Shares outstanding at end of
period 16,560,100 16,560,100
Ratios/Supplemental Data
----------------------------------
Net assets at end of period $226,085,756 $230,376,300
Average net assets (5) $226,399,367 $225,793,817
Ratio of expenses to average net
assets (annualized) 2.59% 0.75%
Ratio of net expenses to average
net assets (annualized) 2.36% 0.75%
Ratio of net investment income
to average net assets
(annualized) 4.93% 2.42%
(1) Based on actual shares outstanding.
(2) Net of initial underwriting discount of $1.05 per share.
(3) Based on weighted average basic per share data.
(4) Total return equals the change in the market value of the Company's common stock from the beginning of the period taking into account dividends reinvested in accordance with the terms of our dividend reinvestment plan.
(5) Calculated using the average of the ending monthly net assets for the respective periods.
Source: Gladstone Investment Corp.
Released February 5, 2007