Gladstone Investment Corporation Reports Financial Results for the Third Quarter Ended December 31, 2007
-- Net Investment Income for the quarter ended December 31, 2007 was $3.7 million, or $0.23 per common share
-- Net Investment Income for the nine months ended December 31, 2007 was $9.6 million, or $0.58 per common share
MCLEAN, Va.--(BUSINESS WIRE)--
Gladstone Investment Corp. (NASDAQ:GAIN) (the "Company") today announced earnings for the third quarter ended December 31, 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 December 31, 2007 was $3,746,226, or $0.23 per share, as compared to $2,898,068, or $0.18 per share, for the quarter ended December 31, 2006. Net Investment Income for the nine months ended December 31, 2007 was $9,629,308, or $0.58 per share, as compared to $8,363,118, or $0.51 per share, for the nine months ended December 31, 2006.
Net Increase in Net Assets Resulting from Operations for the quarter ended December 31, 2007 was $5,108,919, or $0.31 per share, as compared to Net Increase in Net Assets Resulting from Operations of $2,684,543, or $0.16 per share, for the quarter ended December 31, 2006. Net Increase in Net Assets Resulting from Operations for the nine months ended December 31, 2007 was $9,012,310, or $0.54 per share, as compared to $6,809,635, or $0.41 per share, for the nine months ended December 31, 2006.
Total assets were $372,028,506 at December 31, 2007, as compared to $323,590,215 at March 31, 2007. Net asset value was $13.31 per actual common share outstanding at December 31, 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 9.05% for the three months ended December 31, 2007 compared to 9.41% for the three months ended December 31, 2006. The annualized weighted average yield on the Company's portfolio for the nine months ended December 31, 2007 was 9.05% compared to 10.03% for the nine months ended December 31, 2006.
During the third quarter ended December 31, 2007, the Company recorded the following activity:
-- Invested approximately $20.5 million in senior and
subordinated debt, a revolving credit facility and preferred
and common equity of Cavert II Holding Corp.;
-- Invested approximately $16.9 million in senior debt, a
revolving credit facility and preferred and common equity of
Danco Acquisition Corp.;
-- Received $9.8 million from the full repayment of two
syndicated loan participations; and
-- Received $9.9 million from the partial sale of two syndicated
loan participations.
At December 31, 2007, the Company held 51 Non-Control/Non-Affiliate investments, 6 Control investments and 2 Affiliate investments, totaling an aggregate cost basis of approximately $356 million and a fair value of approximately $352 million.
Condensed Schedule of Investments
December 31, 2007
Investment Type Cost Fair Value
----------------------------------------------------------------------
Total Non-Control/Non-Affiliate Investments $185,137,185 $ 174,066,264
Total Control Investments 136,536,484 143,192,123
Total Affiliate Investments 34,454,244 34,772,730
--------------------------
Total Investments $356,127,913 $ 352,031,117
==========================
"Since the inception of our fund in September 2005, we have invested over $500 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 December 31, 2007, the Company declared monthly cash dividends of $0.08 per common share for each of the months of January, February and March 2008.
The Company will hold a conference call on Friday, February 1, 2008 at 8:30 am ET to discuss fiscal 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 4, 2008. To hear the replay, please dial (877) 660-6853, access playback account 286 and use ID code 270241. 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 for replay on the Company's website.
Gladstone Investment Corporation is a publicly traded business development company that seeks to make debt and equity investments in small and mid-sized businesses in the United States in connection with acquisitions, changes in control and recapitalizations. Additional information can be found 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 prospectus filed with the Securities and Exchange Commission on December 19, 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 Three months
ended ended
December 31, December 31,
2007 2006
------------ ------------
INVESTMENT INCOME
Interest income
Non-Control/Non-Affiliate investments $ 3,891,918 $ 2,586,171
Control investments 2,865,843 1,264,451
Affiliate investments 700,494 114,668
Cash and cash equivalents 79,502 332,586
------------ ------------
Total interest income 7,537,757 4,297,876
Other income 6,244 1,492
------------ ------------
Total investment income 7,544,001 4,299,368
------------ ------------
EXPENSES
Base management fee 497,632 551,235
Loan servicing fee 1,287,013 508,691
Administration fee 211,159 124,101
Interest expense 2,381,227 68,748
Amortization of deferred finance costs 169,329 91,392
Professional fees 90,255 186,537
Stockholder related costs 25,083 28,643
Insurance expense 46,719 60,696
Directors fees 54,709 54,800
Taxes and licenses 41,886 41,550
General and administrative expenses 38,644 60,132
------------ ------------
Expenses before credit from Adviser 4,843,656 1,776,525
------------ ------------
Credits to base management fee (1,045,881) (375,225)
------------ ------------
Total expenses net of credit to base
management fee 3,797,775 1,401,300
------------ ------------
NET INVESTMENT INCOME 3,746,226 2,898,068
------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Realized loss on sale of Non-Control/Non-
Affiliate investments (146,034) (2,283)
Net unrealized depreciation of Non-
Control/Non-Affiliate investments (2,835,448) (52,814)
Net unrealized appreciation (depreciation)
of Control investments 4,487,562 (158,428)
Net unrealized depreciation of Affiliate
investments (148,387) -
Net unrealized appreciation derivative 5,000 -
------------ ------------
Net loss on investments 1,362,693 (213,525)
------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 5,108,919 $ 2,684,543
============ ============
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS PER COMMON SHARE:
Basic and Diluted $ 0.31 $ 0.16
============ ============
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)
Nine months Nine months
ended ended
December 31, December 31,
2007 2006
------------- ------------
INVESTMENT INCOME
Interest income
Non-Control/Non-Affiliate investments $ 11,220,467 $ 6,938,026
Control investments 8,043,247 3,711,056
Affiliate investments 1,501,944 114,668
Cash and cash equivalents 193,613 1,610,506
------------- ------------
Total interest income 20,959,271 12,374,256
Other income 40,828 2,478
------------- ------------
Total investment income 21,000,099 12,376,734
------------- ------------
EXPENSES
Base management fee 1,309,951 2,214,437
Loan servicing fee 3,741,082 508,691
Administration fee 646,740 364,351
Interest expense 5,818,564 68,748
Amortization of deferred finance costs 595,532 91,392
Professional fees 356,176 354,325
Stockholder related costs 220,312 187,509
Insurance expense 182,789 200,933
Directors fees 176,981 154,300
Taxes and licenses 125,018 139,994
General and administrative expenses 130,121 104,161
------------- ------------
Expenses before credit from Adviser 13,303,266 4,388,841
------------- ------------
Credits to base management fee (1,932,475) (375,225)
------------- ------------
Total expenses net of credit to base
management fee 11,370,791 4,013,616
------------- ------------
NET INVESTMENT INCOME 9,629,308 8,363,118
------------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Realized loss on sale of Non-Control/Non-
Affiliate investments (197,712) (944)
Net unrealized depreciation of Non-
Control/Non-Affiliate investments (10,671,793) (1,189,598)
Net unrealized appreciation
(depreciation) of Control investments 9,941,521 (362,941)
Net unrealized appreciation of Affiliate
investments 305,986 -
Net unrealized appreciation derivative 5,000 -
------------- ------------
Net loss on investments (616,998) (1,553,483)
------------- ------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 9,012,310 $ 6,809,635
============= ============
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS PER COMMON SHARE:
Basic and Diluted $ 0.54 $ 0.41
============= ============
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,
2007 2007
------------- -------------
ASSETS
Non-Control/Non-Affiliate investments
(Cost 12/31/07: $185,137,185; 3/31/07:
$138,567,741) $174,066,264 $138,168,612
Control investments (Cost 12/31/07:
$136,536,484; 3/31/07: $116,302,372) 143,192,123 113,016,491
Affiliate investments (Cost 12/31/07:
$34,454,244; 3/31/07: $19,750,000) 34,772,730 19,762,500
------------- -------------
Total investments at fair value (Cost
12/31/07: $356,127,913; 3/31/07:
$274,620,113) 352,031,117 270,947,603
Cash and cash equivalents 13,288,669 37,788,941
Interest receivable 1,965,776 1,306,090
Prepaid insurance 123,943 83,819
Deferred finance costs 462,210 627,960
Due from Custodian 3,412,644 12,694,985
Due from Adviser 253,684 20,383
Other assets 490,463 120,434
------------- -------------
TOTAL ASSETS $372,028,506 $323,590,215
============= =============
LIABILITIES
Due to Administrator $ 211,159 $ 162,244
Due to Adviser - -
Borrowings under line of credit 150,462,500 100,000,000
Accrued expenses 910,800 523,698
Other liabilities 71,205 85,764
------------- -------------
Total Liabilities 151,655,664 100,771,706
------------- -------------
NET ASSETS $220,372,842 $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 230,065,064 230,096,572
Net unrealized depreciation of investment
portfolio (4,096,797) (3,672,510)
Net unrealized appreciation of derivative 5,000 -
Distributions in excess of net investment
income (5,616,985) (3,622,113)
------------- -------------
Total Net Assets $220,372,842 $222,818,509
============= =============
Net assets per share $ 13.31 $ 13.46
============= =============
GLADSTONE INVESTMENT CORPORATION
FINANCIAL HIGHLIGHTS
(UNAUDITED)
Three months ended Three months ended
December 31, 2007 December 31, 2006
------------------ ------------------
Per Share Data (1)
--------------------------------
Balance at beginning of period $ 13.24 $ 13.71
Income from investment
operations:
Net investment income (2) 0.23 0.18
Realized loss on sale of
investments (2) (0.01) -
Net unrealized appreciation
(depreciation) of investments
(2) 0.09 (0.02)
Net unrealized appreciation of
derivative (2) - -
------------------ ------------------
Total from investment operations 0.31 0.16
------------------ ------------------
Distributions (0.24) (0.21)
------------------ ------------------
Net asset value at end of period $ 13.31 $ 13.65
================== ==================
Per share market value at
beginning of period $ 12.84 $ 14.46
Per share market value at end of
period 9.81 15.31
Total Return (3) -21.93% 7.38%
Shares outstanding at end of
period 16,560,100 16,560,100
Ratios/Supplemental Data
--------------------------------
Net assets at end of period $ 220,372,842 $ 226,085,756
Average net assets (4) $ 218,176,005 $ 225,338,878
Ratio of expenses to average net
assets (5) (6) 8.88% 3.15%
Ratio of net expenses to average
net assets (5) (7) 6.96% 2.49%
Ratio of net investment income
to average net assets (5) 6.87% 5.14%
(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. Total return does not take into
account dividends that may be characterized as a return of
capital.
(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.
GLADSTONE INVESTMENT CORPORATION
FINANCIAL HIGHLIGHTS
(UNAUDITED)
Nine months ended Nine months ended
December 31, 2007 December 31, 2006
----------------- -----------------
Per Share Data (1)
----------------------------------
Balance at beginning of period $ 13.46 $ 13.88
Income from investment operations:
Net investment income (2) 0.58 0.51
Realized loss on sale of
investments (2) (0.01) -
Net unrealized depreciation of
investments (2) (0.03) (0.11)
Net unrealized appreciation of
derivative (2) - -
----------------- -----------------
Total from investment operations 0.54 0.40
----------------- -----------------
Distributions (0.69) (0.63)
----------------- -----------------
Net asset value at end of period $ 13.31 $ 13.65
================= =================
Per share market value at
beginning of period $ 14.87 $ 14.90
Per share market value at end of
period 9.81 15.31
Total Return (3) -30.31% 7.28%
Shares outstanding at end of
period 16,560,100 16,560,100
Ratios/Supplemental Data
----------------------------------
Net assets at end of period $ 220,372,842 $ 226,085,756
Average net assets (4) $ 221,452,960 $ 226,399,367
Ratio of expenses to average net
assets (5) (6) 8.01% 2.59%
Ratio of net expenses to average
net assets (5) (7) 6.85% 2.36%
Ratio of net investment income to
average net assets (5) 5.80% 4.93%
(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. Total return does not take into
account dividends that may be characterized as a return of
capital.
(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 Corporation
Released January 31, 2008