Gladstone Investment Corporation Reports Financial Results for the First Quarter Ended June 30, 2007
-- Net Investment Income for the quarter was $2.9 million, or $0.17 per common share
-- Net Increase in Net Assets from Operations for the quarter was $8.3 million, or $0.50 per common share
MCLEAN, Va.--(BUSINESS WIRE)--
Gladstone Investment Corp. (NASDAQ:GAIN) (the "Company") today announced earnings for the first quarter ended June 30, 2007. All per share references are per basic and diluted weighted average common share outstanding, unless otherwise noted.
Net Investment Income for the quarter ended June 30, 2007 was $2,888,544, or $0.17 per share, compared to Net Investment Income for the quarter ended June 30, 2006 of $2,581,164, or $0.16 per share.
Net Increase in Net Assets Resulting from Operations for the quarter ended June 30, 2007 was $8,270,466, or $0.50 per share, compared to $1,277,048, or $0.08 per share for the quarter ended June 30, 2006.
Total assets were $363,079,575 at June 30, 2007 as compared to $323,590,215 at March 31, 2007. Net asset value was $13.73 per actual common share outstanding at June 30, 2007, as compared to $13.46 per actual common share outstanding at March 31, 2007.
The annualized weighted average yield on the Company's portfolio of investments, excluding cash and cash equivalents, was 9.10% for the quarter ended June 30, 2007 compared to 8.77% for the quarter ended June 30, 2006.
During the first quarter ended June 30, 2007, the Company recorded the following activity:
-- Invested approximately $11.4 million in senior debt and
warrants to purchase membership interest in B-Dry, LLC;
-- Acquired interests in thirteen new syndicated loans for
approximately $36.8 million;
-- Acquired interests in nine existing syndicated loan
participations for approximately $23.4 million; and
-- Sold or received full repayment for $21.4 million of nine
syndicated loan participations.
At June 30, 2007, the Company held 47 Non-control/Non-Affiliate investments, 5 Control investments and 1 Affiliate investment, totaling an aggregate cost basis of approximately $320 million and a fair value of approximately $322 million.
Condensed Schedule of Investments
June 30, 2007
Investment Type Cost Fair Value
----------------------------------------------------------------------
Total Non-control/Non-Affiliate Investments $186,296,045 $185,368,271
Total Control Investments 116,322,372 118,310,360
Total Affiliate Investments 17,250,000 17,947,445
-------------------------
Total Investments $319,868,417 $321,626,076
=========================
"Since the inception of our fund in June 2005, we have invested over $416 million, resulting in the full investment of our IPO proceeds as well as borrowings under our $200 million credit facility. We continue to add proprietary investments to our portfolio using leverage, thereby increasing returns to stockholders. We continue to see good opportunities for our company and expect to close more investments as the year progresses," said Chip Stelljes, President and Chief Investment Officer.
Subsequent to June 30, 2007, the Company:
-- Purchased additional loan participations of 2 new and 5
existing portfolio companies of approximately $11.3 million;
and
-- Declared monthly cash dividends of $0.075 per common share for
each of the months of July, August and September of 2007.
The Company will hold a conference call on Thursday, August 2, 2007 at 8:30 am EDT to discuss fiscal first 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 September 2, 2007. To hear the replay, please dial (877) 660-6853, access playback account 286 and use ID code 249132. 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 November 3, 2007.
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 Investor Relations at 703-287-5835.
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 "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 for the fiscal year ended March 31, 2007, as filed with the Securities and Exchange Commission on May 31, 2007. 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
June 30, 2007 June 30, 2006
------------------ ------------------
INVESTMENT INCOME
Interest income
Non-Control/Non-Affiliate
investments $ 3,248,555 $ 1,964,480
Control investments 2,564,992 1,190,302
Affiliate investments 426,563 -
Cash and cash equivalents 53,692 708,340
------------------ ------------------
Total interest income 6,293,802 3,863,122
Other income 6,127 316
------------------ ------------------
Total investment
income 6,299,929 3,863,438
------------------ ------------------
EXPENSES
Base management fee 359,689 801,309
Loan servicing fee 1,194,418 -
Administration fee 207,814 115,389
Interest expense 1,414,262 -
Amortization of deferred
finance costs 209,840 -
Professional fees 155,666 79,748
Stockholder related costs 37,889 93,766
Insurance expense 62,941 72,611
Directors fees 54,800 43,250
Taxes and licenses 41,807 57,107
General and administrative
expenses 56,134 19,094
------------------ ------------------
Expenses before credit
from Adviser 3,795,260 1,282,274
------------------ ------------------
Credits to base management fee (383,875) -
------------------ ------------------
Total expenses net of
credit to management
fee 3,411,385 1,282,274
------------------ ------------------
NET INVESTMENT INCOME 2,888,544 2,581,164
------------------ ------------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Realized (loss) gain on sale
of Non-Control/Non-Affiliate
investments (48,247) 3,273
Net unrealized depreciation of
Non-Control/Non-Affiliate
investments (528,645) (1,139,711)
Net unrealized appreciation
(depreciation) of Control
Investments 5,273,869 (167,678)
Net unrealized appreciation of
Affiliate Investments 684,945 -
------------------ ------------------
Net gain (loss) on
investments 5,381,922 (1,304,116)
------------------ ------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 8,270,466 $ 1,277,048
================== ==================
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS PER
COMMON SHARE:
Basic and Diluted $ 0.50 $ 0.08
================== ==================
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)
June 30, March 31,
2007 2007
------------- -------------
ASSETS
Non-Control/Non-Affiliate investments (Cost
6/30/07:$186,296,045;
3/31/07:$138,567,741) $185,368,271 $138,168,612
Control investments (Cost 6/30/07:
$116,322,372; 3/31/07: $116,302,372) 118,310,360 113,016,491
Affiliate investments (Cost 6/30/07:
$17,250,000; 3/31/07: $19,750,000) 17,947,445 19,762,500
------------- -------------
Total investments at fair value (Cost
6/30/07: $319,868,417; 3/31/07:
$274,620,113) 321,626,076 270,947,603
Cash and cash equivalents 34,596,442 37,788,941
Interest receivable 1,839,196 1,306,090
Prepaid insurance 24,553 83,819
Deferred finance costs 423,120 627,960
Due from Custodian 4,391,158 12,694,985
Due from Adviser - 20,383
Other assets 179,030 120,434
------------- -------------
TOTAL ASSETS $363,079,575 $323,590,215
============= =============
LIABILITIES
Due to Administrator $ 207,814 $ 162,244
Due to Adviser 286,561 -
Borrowings under line of credit 134,400,000 100,000,000
Accrued expenses 752,602 523,698
Other liabilities 98,406 85,764
------------- -------------
Total Liabilities 135,745,383 100,771,706
------------- -------------
NET ASSETS $227,334,192 $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 230,067,811 230,096,572
Net unrealized appreciation (depreciation)
of investment portfolio 1,757,659 (3,672,510)
Distributions in excess of net investment
income (4,507,838) (3,622,113)
------------- -------------
Total Net Assets $227,334,192 $222,818,509
============= =============
Net assets per share $ 13.73 $ 13.46
============= =============
GLADSTONE INVESTMENT CORPORATION
FINANCIAL HIGHLIGHTS
(UNAUDITED)
Three months ended Three months ended
June 30, 2007 June 30, 2006
------------------ ------------------
Per Share Data (1)
--------------------------------
Balance at beginning of
period $ 13.46 $ 13.88
Income from investment
operations:
Net investment income (2) 0.17 0.16
Realized (loss) gain on
sale of investments (2) - -
Net unrealized appreciation
(depreciation) of
investments (2) 0.33 (0.08)
------------------ ------------------
Total from investment
operations 0.50 0.08
------------------ ------------------
Distributions (0.23) (0.21)
------------------ ------------------
Net asset value at end of
period $ 13.73 $ 13.75
================== ==================
Per share market value at
beginning of period $ 14.87 $ 14.90
Per share market value at end
of period 14.21 15.00
Total Return (3) -2.93% 2.13%
Shares outstanding at end of
period 16,560,100 16,560,100
Ratios/Supplemental Data
-------------------------------
Net assets at end of period $ 227,334,192 $ 227,641,124
Average net assets (4) $ 222,928,553 $ 227,718,666
Ratio of expenses to average
net assets (5) (6) 6.81% 2.25%
Ratio of net expenses to
average net assets (5) (7) 6.12% 2.25%
Ratio of net investment
income to average net assets
(5) 5.18% 4.53%
(1) Based on actual shares outstanding at the end of the corresponding period.
(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.
(5) Amounts are annualized.
(6) Ratio of expenses to average net assets is computed using expenses before credit from the Adviser.
(7) Ratio of net expenses to average net assets is computed using total expenses net of credits to the management fee.
Source: Gladstone Investment Corp.
Released August 1, 2007