Gladstone Investment Corporation Reports Financial Results for the Fiscal Year and Quarter Ended March 31, 2008
-- Net Investment Income for the year ended March 31, 2008 was $13.1 million, or $0.79 per common share and for the quarter ended March 31, 2008 was $3.4 million, or $0.21 per common share
-- Net Decrease in Net Assets Resulting From Operations for the year was $0.9 million, or $0.06 per common share and for the quarter ended March 31, 2008 was $10.0 million, or $0.60 per common share
MCLEAN, Va.--(BUSINESS WIRE)--
Gladstone Investment Corp. (NASDAQ:GAIN) (the "Company") today announced earnings for the fourth quarter and fiscal year ended March 31, 2008. All per share references are per basic and diluted weighted average common share outstanding, unless otherwise noted.
Net Investment Income for the year ended March 31, 2008 was $13,051,550, or $0.79 per share compared to Net Investment Income for the year ended March 31, 2007 of $11,147,732, or $0.67 per share. For the three months ended March 31, 2008 Net Investment Income was $3,422,242, or $0.21 per share compared to $2,784,614, or $0.17 per share for the same period a year ago.
Net Decrease in Net Assets Resulting from Operations for the year ended March 31, 2008 was $941,161, or $0.06 per share compared to the Net Increase in Net Assets Resulting from Operations of $7,268,404, or $0.44 per share for the year ended March 31, 2007. The Net Decrease in Net Assets Resulting from Operations for the three months ended March 31, 2008 was $9,953,471, or $0.60 per share compared to the Net Increase in Net Assets Resulting from Operations of $458,769, or $0.03 per share for the three months ended March 31, 2007. The primary reason for the decrease in net assets for both the quarter and fiscal year end is directly related to the unrealized depreciation adjustments the Company recorded in the fourth quarter as a result of the devaluation in our overall investment portfolio.
Total assets were $352,293,092 at March 31, 2008 as compared to $323,590,215 at March 31, 2007. Net asset value was $12.47 per actual common share outstanding at March 31, 2008 as compared to $13.46 per actual common share outstanding at March 31, 2007.
The weighted average yield on our portfolio of investments, excluding cash and cash equivalents, was 8.91% for the year ended March 31, 2008 compared to 8.72% for the year ended March 31, 2007. The annualized weighted average yield on the Company's portfolio for the three months ended March 31, 2008 was 8.42% compared to 8.72% for the three months ended March 31, 2007.
During the fourth quarter ended March 31, 2008, the Company recorded the following activity:
-- Invested approximately $10.6 million in senior debt, common
stock and common stock warrants in Mathey Investments, Inc.;
and
-- Sold ten syndicated loan participations for approximately
$16.5 million, realizing an aggregate net loss of
approximately $2.2 million on the transactions.
At March 31, 2008, the Company held 43 non-control/non-affiliate investments, six control investments and three affiliate investments, totaling an aggregate cost basis of approximately $351 million and a fair value of approximately $336 million.
Condensed Schedule of Investments
March 31, 2008
Investment Type Cost Fair Value
----------------------------------------------------------------------
Total Non-Control/Non-Affiliate Investments $166,416,086 $142,739,216
Total Control Investments 138,353,930 145,406,928
Total Affiliate Investments 46,034,721 47,457,910
-------------------------
Total Investments $350,804,737 $335,604,054
=========================
"Our investing activity continues to include proprietary investments and co- investments in support of equity sponsors. We are also expanding our efforts in the control investment category," said Chip Stelljes, Co-Vice Chairman and Chief Investment Officer.
Subsequent to March 31, 2008, the Company:
-- Successfully sold all 5,520,033 million shares associated with
the transferable rights offering for net proceeds of
approximately $41 million;
-- Invested approximately $5.7 million in one new investment;
-- Sold nine of its syndicated loan participations totaling
approximately $13.2 million, realizing an aggregate net loss
of approximately $1.7 million on the transactions;
-- Declared monthly cash dividends of $0.08 per common share for
each of the months of April, May and June of 2008.
The Company will hold a conference call on Thursday, May 22, 2008 at 8:30 am EDT to discuss fourth quarter and fiscal year financial results. 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 June 22, 2008. To hear the replay, please dial (877) 660-6853, access playback account 286 and use ID code 284214. The 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 and will be available through June 22, 2008.
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.
For further information contact Kerry Finnegan at 703-287-5893.
This press release may include statements that may constitute "forward-looking statements," including statements with regard to the future performance of the Company. Words such as "should," "believes," "feel," "expects," "projects," "strive," "goals," 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 Annual Report on Form 10-K for the year ended March 31, 2008, as filed with the SEC on May 21, 2008. The risk factors set forth in the Form 10-K under the caption "Risk Factors" are specifically incorporated by reference into this press release. 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)
Three months ended Three months ended
March 31, 2008 March 31, 2007
------------------ ------------------
INVESTMENT INCOME
Interest income
Non-Control/Non-Affiliate
investments $ 3,354,365 $ 2,634,567
Control investments 2,725,237 1,775,004
Affiliate investments 783,892 420,961
Cash and cash equivalents 23,119 51,141
------------------ ------------------
Total interest income 6,886,613 4,881,673
Other income 6,768 3,229
------------------ ------------------
Total investment income 6,893,381 4,884,902
------------------ ------------------
EXPENSES
Base management fee 492,651 198,679
Loan servicing fee 1,272,421 1,060,163
Administration fee 208,346 162,244
Interest expense 1,914,821 538,913
Amortization of deferred
finance costs 138,663 142,387
Professional fees 60,172 231,703
Stockholder related costs 47,301 85,974
Insurance expense 48,422 61,406
Directors fees 54,708 53,800
Taxes and licenses 43,815 28,879
General and administrative
expenses 66,215 38,498
------------------ ------------------
Expenses before credit
from Adviser 4,347,535 2,602,646
------------------ ------------------
Credits to base management fee (876,396) (502,358)
------------------ ------------------
Total expenses net of
credit to base management
fee 3,471,139 2,100,288
------------------ ------------------
NET INVESTMENT INCOME 3,422,242 2,784,614
------------------ ------------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Realized loss on sale of Non-
Control/Non-Affiliate
investments (2,213,942) (92,906)
Net unrealized (depreciation)
appreciation of Non-
Control/Non-Affiliate
investments (12,605,949) 627,501
Net unrealized appreciation
(depreciation) of Control
investments 397,358 (2,872,940)
Net unrealized appreciation of
Affiliate investments 1,104,703 12,500
Net unrealized depreciation on
derivative (57,883) -
------------------ ------------------
Net loss on investments (13,375,713) (2,325,845)
------------------ ------------------
NET (DECREASE) INCREASE IN NET
ASSETS RESULTING FROM
OPERATIONS $ (9,953,471) $ 458,769
================== ==================
NET (DECREASE) INCREASE IN NET
ASSETS RESULTING FROM
OPERATIONS PER COMMON SHARE:
Basic and Diluted $ (0.60) $ 0.03
================== ==================
SHARES OF COMMON STOCK
OUTSTANDING:
Basic and diluted weighted
average shares 16,560,100 16,560,100
GLADSTONE INVESTMENT CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
For the period
June 22, 2005
(Commencement of
Year Ended Year Ended Operations) to
March 31, 2008 March 31, 2007 March 31, 2006
-------------- -------------- ----------------
INVESTMENT INCOME
Interest income
Non-Control/Non-
Affiliate
investments $ 14,574,832 $ 9,572,593 $ 2,450,906
Control investments 10,768,484 5,486,060 255,059
Affiliate
investments 2,285,836 535,629 -
Cash and cash
equivalents 216,732 1,661,647 4,434,706
-------------- -------------- ----------------
Total interest
income 27,845,884 17,255,929 7,140,671
Other income 47,596 5,707 230,185
-------------- -------------- ----------------
Total investment
income 27,893,480 17,261,636 7,370,856
-------------- -------------- ----------------
EXPENSES
Base management fee 1,802,602 2,413,116 915,360
Loan servicing fee 5,013,503 1,568,854 -
Administration fee 855,086 526,595 288,471
Interest expense 7,733,385 607,661 378
Amortization of
deferred finance
costs 734,195 233,779 -
Professional fees 416,348 586,028 163,369
Stockholder related
costs 267,613 273,483 89,563
Insurance expense 231,211 262,339 184,642
Directors fees 231,689 208,100 160,000
Taxes and licenses 168,833 168,873 195,270
General and
administrative
expenses 196,336 142,659 44,494
-------------- -------------- ----------------
Expenses before
credit from
Adviser 17,650,801 6,991,487 2,041,547
-------------- -------------- ----------------
Credits to base
management fee (2,808,871) (877,583) (554,589)
-------------- -------------- ----------------
Total expenses
net of credit to
base management
fee 14,841,930 6,113,904 1,486,958
-------------- -------------- ----------------
NET INVESTMENT INCOME 13,051,550 11,147,732 5,883,898
-------------- -------------- ----------------
REALIZED AND UNREALIZED
(LOSS) GAIN ON
INVESTMENTS
Realized (loss) gain
on sale of Non-
Control/Non-
Affiliate
investments (2,411,654) (93,850) 57,431
Net unrealized
(depreciation)
appreciation of Non-
Control/Non-
Affiliate
investments (23,277,742) (562,097) 162,968
Net unrealized
appreciation
(depreciation) of
Control investments 10,338,879 (3,235,881) (50,000)
Net unrealized
appreciation of
Affiliate
investments 1,410,689 12,500 -
Net unrealized
depreciation on
derivative (52,883) - -
-------------- -------------- ----------------
Net (loss) gain
on investments (13,992,711) (3,879,328) 170,399
-------------- -------------- ----------------
NET (DECREASE) INCREASE
IN NET ASSETS
RESULTING FROM
OPERATIONS $ (941,161) $ 7,268,404 $ 6,054,297
============== ============== ================
NET (DECREASE) INCREASE
IN NET ASSETS
RESULTING FROM
OPERATIONS PER COMMON
SHARE:
Basic and Diluted $ (0.06) $ 0.44 $ 0.37
============== ============== ================
SHARES OF COMMON STOCK
OUTSTANDING:
Basic and diluted
weighted average
shares 16,560,100 16,560,100 16,391,589
GLADSTONE INVESTMENT CORPORATION
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
March 31, March 31,
2008 2007
------------- -------------
ASSETS
Non-Control/Non-Affiliate investments
(Cost 3/31/08: $166,416,086; 3/31/07:
$138,567,741) $142,739,216 $138,168,612
Control investments (Cost 3/31/08:
$138,353,930; 3/31/07: $116,302,372) 145,406,928 113,016,491
Affiliate investments (Cost 3/31/08:
$46,034,721; 3/31/07: $19,750,000) 47,457,910 19,762,500
------------- -------------
Total investments at fair value (Cost
3/31/08: $350,804,737; 3/31/07:
$274,620,113) 335,604,054 270,947,603
Cash and cash equivalents 9,360,154 37,788,941
Interest receivable 1,661,724 1,306,090
Prepaid insurance 90,521 83,819
Deferred finance costs 323,547 627,960
Due from Custodian 4,399,016 12,694,985
Due from Adviser 89,401 20,383
Other assets 764,675 120,434
------------- -------------
TOTAL ASSETS $352,293,092 $323,590,215
============= =============
LIABILITIES
Due to Administrator $ 208,346 $ 162,244
Borrowings under line of credit 144,834,500 100,000,000
Accrued expenses 716,107 523,698
Other liabilities 89,190 85,764
------------- -------------
Total Liabilities 145,848,143 100,771,706
------------- -------------
NET ASSETS $206,444,949 $222,818,509
============= =============
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 224,172,532 226,553,515
Net unrealized depreciation of investment
portfolio (15,200,683) (3,672,510)
Net unrealized depreciation of derivative (52,883) -
Accumulated net investment income 18,200 18,067
Accumulated net realized loss (2,508,777) (97,123)
------------- -------------
TOTAL NET ASSETS $206,444,949 $222,818,509
============= =============
Net assets per share $ 12.47 $ 13.46
============= =============
GLADSTONE INVESTMENT CORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS
(UNAUDITED)
Three months ended Three months ended
March 31, 2008 March 31, 2007
------------------ ------------------
Per Share Data (1)
--------------------------------
Balance at beginning of period $ 13.31 $ 13.65
Income from investment
operations:
Net investment income (2) 0.21 0.17
Realized loss on sale of
investments (2) (0.13) (0.01)
Net unrealized depreciation
of investments (2) (0.68) (0.13)
------------------ ------------------
Total from investment
operations (0.60) 0.03
------------------ ------------------
Distributions (3) (0.24) (0.22)
------------------ ------------------
Net asset value at end of
period $ 12.47 $ 13.46
================== ==================
Per share market value at
beginning of period $ 9.81 $ 15.31
Per share market value at end
of period 9.41 14.87
Total Return (4) (1.77%) (1.41%)
Shares outstanding at end of
period 16,560,100 16,560,100
Statement of Assets and
Liabilities Data:
--------------------------------
Net assets at end of period $206,444,949 $222,818,509
Average net assets (5) $214,143,553 $223,372,272
Senior Securities Data:
--------------------------------
Borrowings under line of
credit $144,834,500 $100,000,000
Average coverage ratio (6) 243% 324%
Average coverage per unit (7) $ 3,513 $ 3,228
Ratios/Supplemental Data
--------------------------------
Ratio of expenses to average
net assets (8) (9) 8.12% 4.66%
Ratio of net expenses to
average net assets (8) (10) 6.48% 3.76%
Ratio of net investment income
to average net assets (8) 6.39% 4.99%
(1) Based on actual shares outstanding at the end of the
corresponding period.
(2) Based on weighted average basic per share data.
(3) Distributions are determined based on taxable income calculated
in accordance with income tax regulations which may differ from
amounts determined under accounting principles generally
accepted in the United States of America.
(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.
(6) As a business development company, we are generally required to
maintain a ratio of 200% of total assets to total borrowings.
(7) Asset coverage per unit is the ratio of the carrying value of our
total consolidated assets, less all liabilities and indebtedness
not represented by senior securities, to the aggregate amount of
senior securities representing indebtedness. Asset coverage per
unit is expressed in terms of dollar amounts per $1,000 of
indebtedness.
(8) Amounts are annualized.
(9) Ratio of expenses to average net assets is computed using
expenses before credit from the Adviser.
(10) Ratio of net expenses to average net assets is computed using
total expenses net of credits to the management fee.
GLADSTONE INVESTMENT CORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS
For the period
June 22, 2005
(Commencement
For the year For the year of
ended ended Operations) to
March 31, 2008 March 31, 2007 March 31, 2006
-------------- -------------- --------------
Per Share Data (1)
-------------------------
Balance at beginning of
period $ 13.46 $ 13.88 $ -
Net proceeds from
initial public
offering (2) - - 13.95
Offering costs - - (0.05)
Income from investment
operations:
Net investment income
(3) 0.79 0.67 0.36
Realized loss on sale
of investments (3) (0.15) (0.01) -
Net unrealized
(depreciation)
appreciation of
investments (3) (0.70) (0.22) 0.01
-------------- -------------- --------------
Total from investment
operations (0.06) 0.44 0.37
-------------- -------------- --------------
Total distributions (4) (0.93) (0.85) (0.39)
Shelf registration
offering costs - (0.01) -
-------------- -------------- --------------
Net asset value at end
of period $ 12.47 $ 13.46 $ 13.88
============== ============== ==============
Per share market value
at beginning of period $ 14.87 $ 15.10 $ 15.00
Per share market value
at end of period 9.41 14.87 15.10
Total Return (5) (31.54%) 4.36% 3.39%
Shares outstanding at
end of period 16,560,100 16,560,100 16,560,100
Statement of Assets and
Liabilities Data:
-------------------------
Net assets at end of
period $206,444,949 $222,818,509 $229,841,697
Average net assets (6) $219,625,608 $225,642,593 $226,875,738
Senior Securities Data:
-------------------------
Borrowings under line
of credit $144,834,500 $100,000,000 $ -
Average coverage ratio
(7) 243% 324% N/A
Average coverage per
unit (8) $ 3,513 $ 3,228 N/A
Ratios/Supplemental
Data
-------------------------
Ratio of expenses to
average net assets (9)
(10) 8.04% 3.10% 1.08%
Ratio of net expenses
to average net assets
(9) (11) 6.76% 2.71% 0.79%
Ratio of net investment
income to average net
assets (9) 5.94% 4.94% 3.11%
(1) Based on actual shares outstanding at the end of the
corresponding period.
(2) Net of initial underwriting discount of $1.05 per share.
(3) Based on weighted average basic per share data.
(4) Distributions are determined based on taxable income calculated
in accordance with income tax regulations which may differ from
amounts determined under accounting principles generally
accepted in the United States of America.
(5) 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.
(6) Calculated using the average of the ending monthly net assets for
the respective periods.
(7) As a business development company, we are generally required to
maintain a ratio of 200% of total assets to total borrowings.
(8) Asset coverage per unit is the ratio of the carrying value of our
total consolidated assets, less all liabilities and indebtedness
not represented by senior securities, to the aggregate amount of
senior securities representing indebtedness. Asset coverage per
unit is expressed in terms of dollar amounts per $1,000 of
indebtedness.
(9) Amounts are annualized.
(10) Ratio of expenses to average net assets is computed using
expenses before credit from the Adviser.
(11) Ratio of net expenses to average net assets is computed using
total expenses net of credits to the management fee.
Source: Gladstone Investment Corporation
Released May 21, 2008