- Net Investment Income for the quarter and fiscal year
ended March 31, 2010 was $2.7 million, or $0.12 per common share,
and $10.6 million, or $0.48 per common share,
respectively.
- Net Increase (Decrease) in Net Assets Resulting From
Operations for the quarter and fiscal year ended March 31, 2010 was
$20.6 million, or $0.93 per common share, and ($11.1) million, or
($0.50) per common share, respectively.
Gladstone Investment Corporation (Nasdaq:GAIN) (the "Company")
today announced earnings for the fourth quarter and fiscal year
ended March 31, 2010. All per share references are per basic and
diluted weighted average common share outstanding, unless otherwise
noted.
Net Investment Income for Quarter: Net
Investment Income for the quarters ended March 31, 2010 and 2009
was $2.7 million, or $0.12 per common share, and $3.0 million, or
$0.13 per common share, respectively, a decrease in Net Investment
Income of 8.7%, or 7.7% per common share.
Net Investment Income for Fiscal Year: Net
Investment Income for the fiscal years ended March 31, 2010 and
2009 was $10.6 million, or $0.48 per common share, and $13.4
million, or $0.62 per common share, respectively, a decrease in Net
Investment Income of 20.8%, or 22.6% per common share. The decrease
in Net Investment Income was primarily driven by a reduction of the
Company's investment portfolio as a result of the sale of the
majority of its senior syndicated loans (primarily to pay off its
prior line of credit) during the fiscal year ended March 31, 2010,
partially offset by decreased interest expense on lower outstanding
borrowings when compared to the prior year periods.
Net Increase (Decrease) in Net Assets Resulting from
Operations for Quarter: Net Increase (Decrease) in Net
Assets Resulting from Operations for the quarters ended March 31,
2010 and 2009 was $20.6 million, or $0.93 per common share, and
($4.0) million, or ($0.18) per common share, respectively. The
increase in the Net Increase in Net Assets Resulting from
Operations between the quarter ended March 31, 2010 and the prior
year's quarter was primarily due to the net gain on the Company's
investment portfolio. The Company recorded a net gain on
investments of $17.8 million for the quarter ended March 31, 2010,
compared to net loss of $6.9 million for the prior year period.
Net Decrease in Net Assets Resulting from Operations for
Fiscal Year: Net Decrease in Net Assets Resulting from
Operations for the fiscal years ended March 31, 2010 and 2009 was
$11.1 million, or $0.50 per common share, and $11.4 million, or
$0.53 per common share, respectively, a decrease in Net Decrease in
Net Assets Resulting from Operations of 3.3%, or 5.7% per common
share. Results of Operations for the fiscal years ended March 31,
2010 and 2009 were largely impacted by significant devaluations,
primarily in the Company's equity holdings of its Control
investments, and realized losses, primarily from the forced sale of
the majority of its senior syndicated loans to pay off its prior
line of credit in April 2009. The Company recorded net losses (both
realized and unrealized) on investments of $21.7 million and $24.8
million for the fiscal years ended March 31, 2010 and 2009,
respectively.
Estimated Fair Value: The aggregate
investment portfolio appreciated during the fiscal year ended March
31, 2010, primarily due to the reversal of unrealized depreciation
associated with the realized losses on the sale of the senior
syndicated loans. As of March 31, 2010, the entire portfolio
was fair valued at 91% of cost, up slightly from 90% as of March
31, 2009.
Net Asset Value: Net asset value was $8.74
per actual common share outstanding at March 31, 2010, as compared
to $9.73 per actual common share outstanding at March 31, 2009.
Asset Characteristics: Total assets were
$297.2 million at March 31, 2010, as compared to $326.8 million at
March 31, 2009. At March 31, 2010, the Company had investments in
16 portfolio companies with an aggregate cost basis of $227.6
million and an aggregate fair value of $206.9 million. As of
March 31, 2010, the Company's investment portfolio at fair value
was comprised of 80.0% debt securities and 20.0% equity
securities. For the Company's proprietary loans, the weighted
average asset risk rating at March 31, 2010 improved to 5.5 on a
ten point scale as compared to 5.1 at March 31, 2009.
Investment Yield: The annualized weighted
average yield on the Company's portfolio, excluding cash and cash
equivalents, was 11.1% and 11.0% for the quarter and fiscal year
ended March 31, 2010, respectively, as compared to 7.9% and 8.2%
for the quarter and fiscal year ended March 31, 2009,
respectively. The weighted average yield varies from period to
period based on the current stated interest rate on
interest-bearing investments and the amounts of loans for which
interest is not accruing. The increase in the weighted average
yield for the year ended March 31, 2010 resulted primarily from the
Company's sales of lower interest-bearing senior syndicated loans
subsequent to March 31, 2009.
Highlights for Quarter: During the quarter
ended March 31, 2010, the Company reported the following
significant events:
- Funded approximately $2.4 million of additional investments to
existing portfolio companies;
- Received principal repayments of approximately $0.7 million,
which included $0.2 million of unscheduled principal payments;
- Moved closer to exit one of the Company's large investments,
although it is still too early to make any firm predictions about
that outcome;
- Purchased $85.0 million of short-term U.S. Treasury securities
on March 30, 2010 which matured on April 1, 2010; and
- Paid monthly distributions of $0.04 per share for each of
January, February and March 2010.
Comments from President Dave Dullum: "We
are encouraged by the increasing demand for mezzanine financing for
buyouts in our markets and the outlook for our investment activity.
We will continue to be rigorous in our investigation of business
opportunities as we grow the portfolio and expand our capabilities
to seek to increase distributions to stockholders."
Subsequent to March 31, 2010: Subsequent
to March 31, 2010, the Company:
- Credit Facility 2-Year Renewal: Entered into a
third amended and restated credit agreement (the "Facility")
providing for a $50.0 million revolving line of credit arranged by
Branch Banking and Trust Company as administrative agent and Key
Equipment Finance Inc. The Facility may be expanded up to
$125.0 million through the addition of other lenders. The
Facility matures on April 13, 2012, and if it is not renewed or
extended by that date, all principal and interest will be due and
payable on or before April 13, 2013. Advances under the Credit
Facility will generally bear interest at the 30 day LIBOR rate
(subject to a minimum rate of 2.0%), plus 4.5% per annum.
- Investment Payoff: Received full
repayment from its senior syndicated loan to Interstate FiberNet,
Inc. of $6.8 million.
- Dividends Declared: Declared monthly cash
distributions of $0.04 per common share for each of April, May and
June 2010.
Summary Information: The following chart
is a summary of some of the information reported above (in
thousands of dollars, except per share data and percents):
|
March 31,
2010 |
March 31,
2009 |
For year ended: |
|
|
Net Investment Income |
|
10,598 |
|
13,388 |
Results of Operation |
(11,071) |
(11,449) |
Average Yield on Portfolio |
11.02% |
8.22% |
Total dollars invested |
|
4,788 |
|
53,002 |
Total dollars repaid |
90,240 |
49,785 |
|
|
|
For quarter ended: |
|
|
Net Investment Income |
2,709 |
2,967 |
Results of Operations |
20,629 |
(3,981) |
|
|
|
As of: |
|
|
Fair Value as a Percent of Cost |
90.90% |
89.97% |
Net Asset Value per share |
|
8.74 |
|
9.73 |
Number of Investments |
16 |
46 |
Total Assets |
|
297,161 |
|
326,843 |
Weighted Average Risk Rating (on a scale
of ten) |
5.5 |
5.1 |
Conference Call for Stockholders: The Company
will hold a conference call Tuesday, May 25, 2010 at 8:30 am
EDT. 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 24, 2010. To hear the replay, please
dial (877) 660-6853, access playback account 286 and use ID code
349214. 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 GladstoneInvestment.com
and investorcalendar.com. The event will be archived and available
for replay on the Company's website through August 23, 2010.
Warning: The financial statements below are
without footnotes, so readers should obtain and carefully review
the Company's Annual Report on Form 10-K for the year ended March
31, 2010, including the footnotes to the financial statements
contained therein. The Company has filed the Annual Report on Form
10-K today with the SEC, which can be retrieved from the SEC's
website at sec.gov or from the Company's website at
GladstoneInvestment.com. A paper copy can be obtained free of
charge by writing to the Company at 1521 Westbranch Drive, Suite
200, McLean, VA 22102.
The statements in this press release regarding the increasing
demand for mezzanine financing, the Company's projected investment
activities, the Company's ability to grow the portfolio 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 Company's
Annual Report on Form 10-K for the fiscal year ended March 31,
2010, as filed with the SEC on May 24, 2010. The risk factors set
forth in the Annual Report on 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 ASSETS AND LIABILITIES |
(DOLLAR AMOUNTS IN
THOUSANDS, EXCEPT PER SHARE DATA) |
|
|
March
31, |
|
2010 |
2009 |
|
|
|
ASSETS |
|
|
Cash and cash equivalents |
$87,717 |
$7,236 |
Investments at fair value |
|
|
Non-Control/Non-Affiliate investments
(Cost of $22,674 and $134,836, respectively) |
20,946 |
94,740 |
Control investments (Cost of
$152,166 and $150,081, respectively) |
148,248 |
166,163 |
Affiliate investments (Cost of
$52,727 and $64,028, respectively) |
37,664 |
53,027 |
Total investments (Cost of
$227,567 and $348,945, respectively) |
206,858 |
313,930 |
Interest receivable |
1,234 |
1,500 |
Due from Custodian |
935 |
2,706 |
Deferred financing fees |
83 |
1,167 |
Prepaid assets |
221 |
172 |
Other assets |
113 |
132 |
TOTAL ASSETS |
$297,161 |
$326,843 |
|
|
|
LIABILITIES |
|
|
Borrowings at fair value(1) |
|
|
Short-term loan (Cost of
$75,000 and $0, respectively) |
$75,000 |
$ — |
Line of credit (Cost of
$27,800 and $110,265, respectively) |
27,812 |
110,265 |
Total borrowings (Cost of
$102,800 and $110,265, respectively) |
102,812 |
110,265 |
Accounts payable and accrued expenses |
206 |
1,283 |
Fee due to Administrator |
149 |
179 |
Fees due to Adviser |
721 |
187 |
Other liabilities |
295 |
127 |
TOTAL LIABILITIES |
104,183 |
112,041 |
NET ASSETS |
$192,978 |
$214,802 |
|
|
|
ANALYSIS OF NET ASSETS: |
|
|
Common stock, $0.001 par value, 100,000,000
shares authorized, 22,080,133 shares issued and outstanding at
March 31, 2010 and 2009 |
$22 |
$22 |
Capital in excess of par value |
257,206 |
257,361 |
Net unrealized depreciation of investment
portfolio |
(20,710) |
(35,015) |
Net unrealized depreciation of
derivative |
(39) |
(53) |
Net unrealized appreciation of borrowings
under line of credit |
(12) |
— |
Accumulated net realized investment
loss |
(43,489) |
(7,513) |
TOTAL NET ASSETS |
$192,978 |
$214,802 |
|
|
|
NET ASSETS PER SHARE |
$8.74 |
$9.73 |
|
(1) Beginning the quarter ended
June 30, 2009, the Company elected to apply ASC 825, "Financial
Investments", which allows for the Company to fair value its
borrowings. The March 31, 2009 borrowing amounts are at cost. |
GLADSTONE INVESTMENT
CORPORATION |
CONSOLIDATED STATEMENTS
OF OPERATIONS |
(DOLLAR AMOUNTS IN
THOUSANDS, EXCEPT PER SHARE DATA) |
(UNAUDITED) |
|
|
|
Quarter Ended
March 31, |
|
2010 |
2009 |
INVESTMENT INCOME |
|
|
Interest income |
|
|
Non-Control/Non-Affiliate
investments |
$463 |
$1,595 |
Control investments |
3,144 |
2,926 |
Affiliate investments |
1,130 |
1,435 |
Cash and cash equivalents |
1 |
— |
Total interest income |
4,738 |
5,956 |
Other income |
14 |
— |
Total investment income |
4,752 |
5,956 |
|
|
|
EXPENSES |
|
|
Loan servicing fee |
855 |
1,233 |
Base management fee |
149 |
396 |
Administration fee |
149 |
179 |
Interest expense |
348 |
1,340 |
Amortization of deferred financing
fees |
431 |
— |
Professional fees |
124 |
148 |
Stockholder related costs |
19 |
72 |
Insurance expense |
72 |
57 |
Directors fees |
49 |
49 |
Other expenses |
82 |
25 |
Expenses before credit from Adviser |
2,278 |
3,499 |
Credit to fees from Adviser |
(235) |
(510) |
Total expenses net of credits to
fees |
2,043 |
2,989 |
|
|
|
NET INVESTMENT INCOME |
2,709 |
2,967 |
|
|
|
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS: |
|
|
Realized loss on sale of
Non-Control/Non-Affiliate investments |
— |
(807) |
Net unrealized appreciation
(depreciation) of Non-Control/Non-Affiliate investments |
1,770 |
(8,704) |
Net unrealized appreciation of Control
investments |
15,233 |
1,301 |
Net unrealized appreciation of Affiliate
investments |
801 |
1,262 |
Net unrealized depreciation of
derivative |
(5) |
— |
Net unrealized depreciation of credit
facility |
121 |
— |
Net gain (loss) on investments and
derivative |
17,920 |
(6,948) |
|
|
|
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS |
$20,629 |
$(3,981) |
|
|
|
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS PER COMMON SHARE: |
|
|
Basic and diluted |
$0.93 |
$(0.18) |
|
|
|
WEIGHTED AVERAGE SHARES OF COMMON STOCK
OUTSTANDING: |
|
|
Basic and diluted weighted average
shares |
22,080,133 |
22,080,133 |
GLADSTONE INVESTMENT
CORPORATION |
CONSOLIDATED STATEMENTS
OF OPERATIONS |
(DOLLAR AMOUNTS IN
THOUSANDS EXCEPT PER SHARE DATA) |
|
|
|
Year Ended March
31, |
|
2010 |
2009 |
INVESTMENT INCOME |
|
|
Interest income |
|
|
Non-Control/Non-Affiliate
investments |
$2,393 |
$8,494 |
Control investments |
11,745 |
11,306 |
Affiliate investments |
5,677 |
5,378 |
Cash and cash equivalents |
2 |
67 |
Total interest income |
19,817 |
25,245 |
Other income |
968 |
567 |
Total investment income |
20,785 |
25,812 |
|
|
|
EXPENSES |
|
|
Loan servicing fee |
3,747 |
5,002 |
Base management fee |
737 |
1,699 |
Incentive fee |
588 |
— |
Administration fee |
676 |
821 |
Interest expense |
1,988 |
5,349 |
Amortization of deferred financing
fees |
1,618 |
323 |
Professional fees |
626 |
532 |
Stockholder related costs |
295 |
485 |
Insurance expense |
262 |
222 |
Directors fees |
196 |
194 |
Other expenses |
280 |
271 |
Expenses before credits from Adviser |
11,013 |
14,898 |
Credits to fees from Adviser |
(826) |
(2,474) |
Total expenses net of credits to
fees |
10,187 |
12,424 |
|
|
|
NET INVESTMENT INCOME |
10,598 |
13,388 |
|
|
|
REALIZED AND UNREALIZED (LOSS) GAIN ON: |
|
|
Realized loss on sale of
Non-Control/Non-Affiliate investments |
(35,923) |
(5,023) |
Realized loss on termination of
derivative |
(53) |
— |
Net unrealized appreciation
(depreciation) of Non-Control/Non-Affiliate investments |
38,367 |
(16,418) |
Net unrealized (depreciation)
appreciation of Control investments |
(20,001) |
9,029 |
Net unrealized (depreciation)
appreciation of Affiliate investments |
(4,061) |
(12,425) |
Net unrealized appreciation
(depreciation) of derivative |
14 |
— |
Net unrealized appreciation of
borrowings |
(12) |
— |
Net loss on investments, derivative and
borrowings |
(21,669) |
(24,837) |
NET DECREASE IN NET ASSETS RESULTING FROM
OPERATIONS |
$(11,071) |
$(11,449) |
|
|
|
NET DECREASE IN NET ASSETS RESULTING FROM
OPERATIONS PER COMMON SHARE: |
|
|
Basic and diluted |
$(0.50) |
$(0.53) |
|
|
|
WEIGHTED AVERAGE SHARES OF COMMON STOCK
OUTSTANDING: |
|
|
Basic and diluted weighted average
shares |
22,080,133 |
21,545,936 |
GLADSTONE INVESTMENT
CORPORATION |
CONSOLIDATED FINANCIAL
HIGHLIGHTS |
(DOLLAR AMOUNTS IN
THOUSANDS, EXCEPT PER SHARE AND PER UNIT DATA) |
(UNAUDITED) |
|
|
|
Quarter Ended
March 31, |
|
2010 |
2009 |
Per Share Data (1) |
|
|
Net asset value at beginning of year |
$7.93 |
$10.15 |
|
|
|
Income from investment operations: |
|
|
Net investment income(2) |
0.12 |
0.13 |
Realized loss on sale of
investments(2) |
— |
(0.03) |
Net unrealized appreciation
(depreciation) of investments(2) |
0.81 |
(0.28) |
Total from investment operations |
0.93 |
(0.18) |
|
|
|
Distributions from: |
|
|
Net investment income |
(0.12) |
(0.13) |
Tax return on capital |
— |
(0.11) |
Total distributions(3) |
(0.12) |
(0.24) |
|
|
|
Net asset value at end of period |
$8.74 |
$9.73 |
|
|
|
Per share market value at beginning of
period |
$4.66 |
$4.89 |
Per share market value at end of period |
5.98 |
3.82 |
Total return(4) |
31.24% |
(17.39)% |
Shares outstanding at end of period |
22,080,133 |
22,080,133 |
|
|
|
Statement of Assets and Liabilities
Data: |
|
|
Net assets at end of period |
$192,978 |
$214,802 |
Average net assets(5) |
180,099 |
218,259 |
|
|
|
Senior Securities Data: |
|
|
Total borrowings |
$102,812 |
$110,265 |
Asset coverage ratio(6) |
281% |
293% |
Average coverage per unit(7) |
$2,814 |
$2,930 |
|
|
|
Ratios/Supplemental Data: |
|
|
Ratio of expenses to average net
assets(8)(9) |
5.06% |
6.41% |
Ratio of net expenses to average net
assets(8)(10) |
4.54% |
5.48% |
Ratio of net investment income to average net
assets(8) |
6.02% |
5.44% |
|
|
|
(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 distributions reinvested in
accordance with the terms of our distribution reinvestment
plan. |
(5) Calculated using the average of the
ending monthly net assets for the respective periods. |
(6) As a business development company,
the Company is generally required to maintain a ratio of at least
200% of total assets to total borrowings. |
(7) 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. 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 |
(DOLLAR AMOUNTS IN
THOUSANDS, EXCEPT PER SHARE AND PER UNIT DATA) |
(UNAUDITED) |
|
|
|
Year Ended March
31, |
|
2010 |
2009 |
Per Share Data (1) |
|
|
Net asset value at beginning of year |
$9.73 |
$12.47 |
|
|
|
Income from investment operations |
|
|
Net investment income(2) |
0.48 |
0.62 |
Realized loss on sale of
investments(2) |
(1.63) |
(0.23) |
Net unrealized depreciation of
investments(2) |
0.65 |
(0.92) |
Total from investment operations |
(0.50) |
(0.53) |
|
|
|
Distributions from: |
|
|
Net investment income |
(0.48) |
(0.62) |
Tax return on capital |
— |
(0.34) |
Total distributions(3) |
(0.48) |
(0.96) |
|
|
|
Shelf registration offering costs |
(0.01) |
(0.03) |
Effect on distribution of rights offering
after record date(4) |
— |
(1.22) |
Net asset value at end of year |
$8.74 |
$9.73 |
|
|
|
Per share market value at beginning of
year |
$3.67 |
$9.32 |
Per share market value at end of year |
5.98 |
3.82 |
Total return(5) |
79.80% |
(51.65)% |
Shares outstanding at end of year |
22,080,133 |
22,080,133 |
|
|
|
Statement of Assets and Liabilities
Data: |
|
|
Net assets at end of year |
$192,978 |
$214,802 |
Average net assets(6) |
191,112 |
230,738 |
|
|
|
Senior Securities Data: |
|
|
Total borrowings |
$102,812 |
$110,265 |
Asset coverage ratio(7) |
281% |
293% |
Average coverage per unit(8) |
$2,814 |
$2,930 |
|
|
|
Ratios/Supplemental Data: |
|
|
Ratio of expenses to average net
assets(9)(10) |
5.76% |
6.46% |
Ratio of net expenses to average net
assets(9)(11) |
5.33% |
5.38% |
Ratio of net investment income to average net
assets(9) |
5.55% |
5.80% |
|
(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) The effect of distributions from the
stock rights offering after the record date represents the effect
on net asset value of issuing additional shares after the record
date of a distribution. |
(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
balance of net assets at the end of each month of the reporting
period. |
(7) As a business development company,
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. |
(8) Asset coverage per unit is the asset
coverage ratio 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 credits from the
Adviser. |
(11) Ratio of net expenses to average
net assets is computed using total expenses net of credits to the
management fee. |
CONTACT: Gladstone Investment Corporation
Investor Relations
703-287-5893
Gladstone Investment (NASDAQ:GAIN)
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Gladstone Investment (NASDAQ:GAIN)
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From Oct 2023 to Oct 2024