MCLEAN, Va., Aug. 1, 2011 /PRNewswire/ -- Gladstone Investment
Corporation (Nasdaq: GAIN) (the "Company") today announced earnings
for the quarter ended June 30, 2011.
All per share references are per basic and diluted weighted
average common share outstanding, unless noted otherwise.
(Logo:
http://photos.prnewswire.com/prnh/20101005/GLADSTONEINVESTMENT
)
Net Investment Income for the Quarter: Net
Investment Income for the quarters ended June 30, 2011 and 2010 was $3.5 million, or $0.16 per share, and $4.2
million, or $0.19 per share,
respectively, a decrease in Net Investment Income of 16.8%.
The decrease in Net Investment Income was primarily due to a
significant amount of other income, including success fees and
dividend income, recorded in the prior-year period as part of the
A. Stucki Holding Corp. ("A. Stucki") exit in June 2010.
Net Increase in Net Assets Resulting from Operations for the
Quarter: Net Increase in Net Assets Resulting from
Operations for the quarters ended June 30,
2011 and 2010 was $4.2
million, or $0.19 per share,
and $5.4 million, or $0.24 per share, respectively, a decrease of 22%.
A net gain on investments of $0.7
million was recorded for the quarter ended June 30, 2011, primarily due to appreciation
experienced in certain control investments, as compared to a
$1.2 million net gain in the
prior-year period, due primarily to appreciation experienced in
certain equity investments.
Investment Portfolio Fair Value: As of June 30, 2011, the entire portfolio was fair
valued at 77.1% of cost, as compared to 77.7% as of March 31, 2011. The aggregate investment
portfolio depreciated during the quarter ended June 30, 2011, due primarily to the
recapitalization of Cavert II Holding Corp. ("Cavert"), which
resulted in a realized gain and the reversal of unrealized
appreciation that was reflected in the portfolio's fair value at
March 31, 2011. Excluding
reversals, net unrealized appreciation for the quarter was
$1.1 million.
Net Asset Value: Net asset value was $9.06 per share outstanding at June 30, 2011, as compared to $9.00 per share outstanding at March 31, 2011.
Asset Characteristics: Total assets were
$242.1 million at June 30, 2011, as compared to $241.1 million at March
31, 2011. At June 30, 2011,
the Company had investments in 17 portfolio companies with an
aggregate cost basis of $214.3
million and an aggregate fair value of $165.3 million. As of June 30, 2011, the Company's investment portfolio
at fair value was comprised of 80.9% in debt securities and 19.1%
in equity securities. Additionally, the Company held
$68.9 million in cash and cash
equivalents at June 30, 2011,
including $40.0 million from a
short-term loan that was repaid subsequent to quarter end.
Investment Yield: The weighted average yield on the
Company's interest-bearing portfolio, excluding cash and cash
equivalents, was 12.0% for the quarter ended June 30, 2011, as compared to 10.3% for the
prior-year quarter. The increase in the weighted average
yield for the quarter ended June 30,
2011, resulted primarily from the exits of lower
interest-bearing debt investments and the addition of
higher-yielding debt investments subsequent to June 30, 2010.
Highlights for the Quarter: During the quarter
ended June 30, 2011, the following
significant events occurred:
- Investment Recapitalization: In April 2011, the Company recapitalized its
investment in Cavert, from which the Company received gross cash
proceeds of $5.6 million from the
sale of its common equity, resulting in a realized gain of
$5.5 million, $2.3 million in a partial redemption of its
preferred stock and $0.7 million in
preferred dividends. At the same time, the Company invested
$5.7 million in new subordinated debt
in Cavert.
- New Investment: In April
2011, the Company invested $16.4
million in a new control investment, Mitchell Rubber
Products, Inc. ("Mitchell"), consisting of subordinated debt and
preferred and common equity. Mitchell, headquartered in
Mira Loma, California, develops,
mixes and molds rubber compounds for specialized applications in
the non-tire rubber market.
- Distributions: The Company paid monthly cash
distributions to stockholders of $0.045 per common share for each of April, May
and June 2011, an increase of 12.5%
over January, February and March
2011.
Comments from our President, Dave
Dullum: "We achieved realized gains through a
recapitalization of our investment in Cavert, the third such
successful realized event over the past year in our proprietary
portfolio. These exits have collectively resulted in
$29.2 million in realized gains and
$9.7 million in investment income.
We are continuing to strive to put these proceeds to work, as
demonstrated with our $16.4 million
investment in Mitchell in April. All of this activity and
effort enabled us to increase the monthly dividend by 25% over the
past two quarters. We hope to continue this healthy investment
activity and to carry that momentum throughout the fiscal
year."
Subsequent Events: After June 30, 2011, the following occurred:
- Investment Payoff: In July
2011, the Company received full repayment of its senior
syndicated loan to Survey Sampling, LLC, resulting in gross
proceeds of $2.3 million.
- Distributions Declared: The Company's board of
directors increased the monthly distribution from $0.045 to $0.05 per
share, or 11.1%, and declared the following monthly distributions
to stockholders:
|
|
|
Declaration
Date
|
Record
Date
|
Payment
Date
|
Cash
Distribution
|
|
|
July 12,
2011
|
July 22,
2011
|
July 29,
2011
|
$
0.050
|
|
|
July 12,
2011
|
August 19,
2011
|
August 31,
2011
|
0.050
|
|
|
July 12,
2011
|
September
22, 2011
|
September
30, 2011
|
0.050
|
|
|
Total for
the Quarter:
|
$
0.150
|
|
|
|
|
|
|
|
Summary Information: The following chart is a
summary of some of the information reported above (dollars in
thousands, except per share data)(unaudited):
|
|
June 30,
2011
|
|
June 30,
2010
|
|
|
For the
Three Months Ended:
|
|
|
|
|
|
|
|
|
Net investment income
|
|
$
|
3,500
|
|
|
$
|
4,207
|
|
|
|
Net increase in net assets
resulting from operations
|
|
4,187
|
|
|
5,368
|
|
|
|
Average yield on
interest-bearing investments
|
|
12.0
|
%
|
|
10.3
|
%
|
|
|
Total dollars
invested
|
|
$
|
22,459
|
|
|
$
|
1,354
|
|
|
|
Total dollars repaid
|
|
5,397
|
|
|
44,083
|
|
|
|
|
|
|
|
|
|
|
|
As
of:
|
|
|
|
|
|
|
Fair value as a percent of
cost
|
|
77.1
|
%
|
|
80.2
|
%
|
|
|
Net asset value per
share
|
|
$
|
9.06
|
|
|
$
|
8.86
|
|
|
|
Number of portfolio
companies
|
|
17
|
|
|
15
|
|
|
|
Total assets at fair
value
|
|
$
|
242,132
|
|
|
$
|
290,910
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conference Call for Stockholders: The Company will hold a
conference call Tuesday, August 2,
2011, at 8:30 a.m. EDT.
Please call (800) 860-2442 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 1, 2011. To hear the
replay, please dial (877) 344-7529 and use conference number
10001384. The replay 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.GladstoneInvestment.com.
The event will be archived and available for replay on the
Company's website through October 3,
2011.
Warning: The financial statements below are without
footnotes, so readers should obtain and carefully review the
Company's Form 10-Q for the quarter ended June 30, 2011, including the footnotes to the
financial statements contained therein. The Company has filed the
Form 10-Q today with the SEC, which can be retrieved from the SEC's
website at www.sec.gov or from the Company's website at
www.GladstoneInvestment.com. To obtain a paper copy from us, please
contact us at 1521 Westbranch Drive, Suite 200, McLean, VA 22102.
About us: 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.
Information on the business activities of all the Gladstone funds can be found at
www.gladstonecompanies.com.
For Investor Relations inquiries related to any of the monthly
dividend paying Gladstone funds,
please visit www.gladstone.com.
The statements in this press release regarding the Company's
ability to make additional investments, the Company's other
projected investment activities and other such statements are
"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 to differ from these
forward-looking statements include, among others, the duration and
effects of current economic instability, the Company's ability to
access debt and equity capital and those factors listed under the
caption "Risk Factors" of the post-effective amendment of the
Company's registration statement on Form N-2(file No. 333-160720),
filed with the SEC on June 17, 2011
(the "Form N-2") and the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30,
2010, filed with the SEC on August 1,
2011 (the "Form 10-Q"). The risk factors set forth in the
Form N-2 and Form 10-Q 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 ASSETS AND LIABILITIES
(DOLLAR
AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
|
|
|
|
June
30,
|
|
March 31,
|
|
|
|
|
2011
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Investments at fair
value
|
|
|
|
|
|
|
|
Control
investments (Cost of $139,913 and
$136,306, respectively)
|
|
$
|
99,717
|
|
$
|
104,062
|
|
|
|
Affiliate
investments (Cost of $59,186 and $45,145,
respectively)
|
|
50,676
|
|
34,556
|
|
|
|
Non-Control/Non-Affiliate investments (Cost of
$15,155 and $15,741,
respectively)
|
|
14,902
|
|
14,667
|
|
|
|
Total investments (Cost of $214,254 and
$197,192, respectively)
|
|
165,295
|
|
153,285
|
|
|
|
Cash and cash
equivalents
|
|
68,858
|
|
80,580
|
|
|
|
Restricted cash
|
|
4,430
|
|
4,499
|
|
|
|
Interest receivable
|
|
782
|
|
737
|
|
|
|
Due from custodian
|
|
1,626
|
|
859
|
|
|
|
Deferred financing
fees
|
|
340
|
|
373
|
|
|
|
Prepaid assets
|
|
268
|
|
224
|
|
|
|
Other assets
|
|
533
|
|
552
|
|
|
|
TOTAL ASSETS
|
|
$
|
242,132
|
|
$
|
241,109
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
Borrowings at fair
value
|
|
|
|
|
|
|
|
Short-term loan (Cost
of $40,000)
|
|
$
|
40,000
|
|
$
|
40,000
|
|
|
|
Credit Facility (Cost
of $0)
|
|
—
|
|
—
|
|
|
|
Total borrowings (Cost
of $40,000)
|
|
40,000
|
|
40,000
|
|
|
|
Accounts payable and accrued
expenses
|
|
384
|
|
201
|
|
|
|
Fees due to Adviser
|
|
308
|
|
499
|
|
|
|
Fee due to
Administrator
|
|
151
|
|
171
|
|
|
|
Other liabilities
|
|
1,254
|
|
1,409
|
|
|
|
TOTAL LIABILITIES
|
|
42,097
|
|
42,280
|
|
|
|
NET ASSETS
|
|
$
|
200,035
|
|
$
|
198,829
|
|
|
|
|
|
|
|
|
|
|
ANALYSIS OF NET
ASSETS
|
|
|
|
|
|
|
|
Common stock, $0.001 par value
per share, 100,000,000 shares authorized, 22,080,133 shares issued
and outstanding at June 30, 2011 and March 31, 2011
|
|
$
|
22
|
|
$
|
22
|
|
|
|
Capital in excess of par
value
|
|
257,190
|
|
257,192
|
|
|
|
Net unrealized depreciation of
investment portfolio
|
|
(48,959)
|
|
(43,907)
|
|
|
|
Net unrealized depreciation of
other
|
|
(37)
|
|
(76)
|
|
|
|
Undistributed net investment
income
|
|
684
|
|
165
|
|
|
|
Accumulated net realized
investment loss
|
|
(8,865)
|
|
(14,567)
|
|
|
|
TOTAL NET ASSETS
|
|
$
|
200,035
|
|
$
|
198,829
|
|
|
|
|
|
|
|
|
|
|
NET ASSETS PER
SHARE
|
|
$
|
9.06
|
|
$
|
9.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GLADSTONE
INVESTMENT CORPORATION
CONSOLIDATED
STATEMENTS OF OPERATIONS
(DOLLAR
AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
|
|
|
|
Three Months
Ended June 30,
|
|
|
|
|
2011
|
|
2010
|
|
|
|
INVESTMENT INCOME
|
|
|
|
|
|
|
|
Interest income
|
|
|
|
|
|
|
|
Control
investments
|
|
$
|
2,634
|
|
$
|
3,019
|
|
|
|
Affiliate
investments
|
|
1,368
|
|
1,082
|
|
|
|
Non-Control/Non-Affiliate
investments
|
|
405
|
|
405
|
|
|
|
Cash and cash
equivalents
|
|
4
|
|
1
|
|
|
|
Total interest
income
|
|
4,411
|
|
4,507
|
|
|
|
Other income
|
|
|
|
|
|
|
|
Control
investments
|
|
835
|
|
2,741
|
|
|
|
Non-Control/Non-Affiliate
investments
|
|
16
|
|
—
|
|
|
|
Total other
income
|
|
851
|
|
2,741
|
|
|
|
Total investment
income
|
|
5,262
|
|
7,248
|
|
|
|
|
|
|
|
|
|
|
EXPENSES
|
|
|
|
|
|
|
|
Loan servicing
fee
|
|
677
|
|
824
|
|
|
|
Base management
fee
|
|
331
|
|
200
|
|
|
|
Incentive fee
|
|
19
|
|
1,052
|
|
|
|
Administration
fee
|
|
151
|
|
178
|
|
|
|
Interest
expense
|
|
132
|
|
274
|
|
|
|
Amortization of deferred
financing fees
|
|
108
|
|
164
|
|
|
|
Professional
fees
|
|
209
|
|
124
|
|
|
|
Stockholder related
costs
|
|
126
|
|
104
|
|
|
|
Other expenses
|
|
224
|
|
240
|
|
|
|
Expenses before credits
from Adviser
|
|
1,977
|
|
3,160
|
|
|
|
Credits to fees from
Adviser
|
|
(215)
|
|
(119)
|
|
|
|
Total expenses net of
credits to fees
|
|
1,762
|
|
3,041
|
|
|
|
|
|
|
|
|
|
|
NET INVESTMENT INCOME
|
|
3,500
|
|
4,207
|
|
|
|
|
|
|
|
|
|
|
REALIZED AND UNREALIZED GAIN
(LOSS)
|
|
|
|
|
|
|
|
Net realized gain on sale
of investments
|
|
5,739
|
|
16,976
|
|
|
|
Net realized loss on
other
|
|
(39)
|
|
—
|
|
|
|
Net unrealized
depreciation of investment portfolio
|
|
(5,052)
|
|
(15,798)
|
|
|
|
Net unrealized
appreciation (depreciation) of other
|
|
39
|
|
(17)
|
|
|
|
Net gain on investments
and other
|
|
687
|
|
1,161
|
|
|
|
|
|
|
|
|
|
|
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS
|
|
$
|
4,187
|
|
$
|
5,368
|
|
|
|
|
|
|
|
|
|
|
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS PER COMMON SHARE
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
|
0.19
|
|
$
|
0.24
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE SHARES OF
COMMON STOCK OUTSTANDING
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
22,080,133
|
|
22,080,133
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GLADSTONE
INVESTMENT CORPORATION
CONSOLIDATED
FINANCIAL HIGHLIGHTS
(DOLLAR
AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AND PER UNIT
DATA)
(UNAUDITED)
|
|
|
Three months
ended June 30,
|
|
|
|
2011
|
|
2010
|
|
|
|
Per Share
Data(A)
|
|
|
|
|
|
|
Net asset value at beginning of
period
|
$
|
9.00
|
|
$
|
8.74
|
|
|
|
|
|
|
|
|
|
Income from investment
operations:
|
|
|
|
|
|
|
Net investment
income(B)
|
0.16
|
|
0.19
|
|
|
|
Realized gain on sale of
investments(B)
|
0.26
|
|
0.77
|
|
|
|
Net unrealized
depreciation of investments(B)
|
(0.23)
|
|
(0.72)
|
|
|
|
Total from investment
operations
|
0.19
|
|
0.24
|
|
|
|
|
|
|
|
|
|
Distributions
from:
|
|
|
|
|
|
|
Net investment
income
|
(0.13)
|
|
(0.12)
|
|
|
|
Total
distributions(C)
|
(0.13)
|
|
(0.12)
|
|
|
|
|
|
|
|
|
|
Net asset value at end of
period
|
$
|
9.06
|
|
$
|
8.86
|
|
|
|
|
|
|
|
|
|
Per share market value at
beginning of period
|
$
|
7.79
|
|
$
|
6.01
|
|
|
|
Per share market value at end of
period
|
7.14
|
|
5.83
|
|
|
|
Total return(D)
|
(6.67)
|
%
|
(0.99)
|
%
|
|
|
Shares outstanding at end of
period
|
22,080,133
|
|
22,080,133
|
|
|
|
|
|
|
|
|
|
Statement of Assets and
Liabilities Data:
|
|
|
|
|
|
|
Net assets at end of
period
|
$
|
200,035
|
|
$
|
195,706
|
|
|
|
Average net assets(E)
|
198,324
|
|
193,094
|
|
|
|
|
|
|
|
|
|
Senior Securities
Data:
|
|
|
|
|
|
|
Total borrowings
|
$
|
40,000
|
|
$
|
91,500
|
|
|
|
Asset coverage
ratio(F)
|
537
|
%
|
301
|
%
|
|
|
Average coverage per
unit(G)
|
$
|
5,371
|
|
$
|
3,006
|
|
|
|
|
|
|
|
|
|
Ratios/Supplemental
Data:
|
|
|
|
|
|
|
Ratio of expenses to average net
assets(H)(I)
|
3.99
|
%
|
6.55
|
%
|
|
|
Ratio of net expenses to average
net assets(H)(J)
|
3.55
|
|
6.30
|
|
|
|
Ratio of net investment income
to average net assets(H)
|
7.06
|
|
8.71
|
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(A) Based on actual
shares outstanding at the end of the corresponding
period.
(B) Based on weighted average
basic per share data.
(C) Distributions are determined
based on taxable income calculated in accordance with income tax
regulations, which may differ from amounts determined under
GAAP.
(D) 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 the Company's dividend reinvestment
plan.
(E) Calculated using the average
of the balance of net assets at the end of each month of the
reporting period.
(F) As a BDC, the Company is
generally required to maintain an asset coverage ratio of at least
200% of total consolidated assets, less all liabilities and
indebtedness not represented by senior securities, to total
borrowings and guaranty commitments. Asset coverage ratio is the
ratio of the carrying value of the Company's total consolidated
assets, less all liabilities and indebtedness not represented by
senior securities, to the aggregate amount of senior securities
representing indebtedness.
(G) Asset coverage per unit is
the asset coverage ratio expressed in terms of dollar amounts per
one thousand dollars of indebtedness.
(H) Amounts are
annualized.
(I) Ratio of expenses to average
net assets is computed using expenses before credits from the
Adviser.
(J) Ratio of net expenses to
average net assets is computed using total expenses net of credits
to the management fee.
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SOURCE Gladstone Investment Corporation