Gladstone Investment Corporation Reports Financial Results for its Second Quarter Ended September 30, 2016
November 02 2016 - 4:15PM
Gladstone Investment Corporation (NASDAQ:GAIN) (the “Company”)
today announced earnings for its second quarter ended September 30,
2016. Please read the Company’s Quarterly Report on Form 10-Q
filed today with the U.S. Securities and Exchange Commission (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.
Summary Information:
(dollars in thousands, except per share data (unaudited):
|
|
September 30, 2016 |
|
June 30,2016 |
|
Change |
|
%Change |
|
For the quarter ended: |
|
|
|
|
|
|
|
|
|
|
|
Total
investment income |
|
$ |
11,744 |
|
$ |
14,393 |
|
$ |
(2,649 |
) |
(18.4 |
)% |
Total
expenses, net |
|
|
6,632 |
|
|
7,581 |
|
|
(949 |
) |
(12.5 |
) |
Net
investment income |
|
|
5,112 |
|
|
6,812 |
|
|
(1,700 |
) |
(25.0 |
) |
Net realized
(loss) gain |
|
|
(193 |
) |
|
18,560 |
|
|
(18,753 |
) |
NM |
|
Net
unrealized depreciation |
|
|
(5,021 |
) |
|
(838 |
) |
|
(4,183 |
) |
499.2 |
|
Net
(decrease) increase in net assets resulting from operations |
|
|
(102 |
) |
|
24,534 |
|
|
(24,636 |
) |
NM |
|
Net
investment income per common share |
|
|
0.17 |
|
|
0.23 |
|
|
(0.06 |
) |
(25.0 |
) |
Cash
distribution per common share |
|
|
0.19 |
|
|
0.19 |
|
— |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions coverage ratio(A) |
|
|
235.4 |
% |
|
233.9 |
% |
|
1.5 |
% |
0.6 |
|
Weighted
average yield on interest-bearing investments |
|
|
12.5 |
|
|
12.7 |
|
|
(0.2 |
) |
(1.6 |
) |
Total
dollars invested |
|
$ |
2,210 |
|
$ |
28,976 |
|
$ |
(26,766 |
) |
(92.4 |
) |
Total
dollars repaid and collected from sales |
|
|
2,198 |
|
|
42,942 |
|
|
(40,744 |
) |
(94.9 |
) |
|
|
|
|
|
|
|
|
|
|
|
As
of: |
|
|
|
|
|
|
|
|
|
|
|
Total
investments, at fair value |
|
$ |
485,972 |
|
$ |
490,981 |
|
$ |
(5,009 |
) |
(1.0 |
)% |
Fair value,
as a percent of cost |
|
|
93.0 |
% |
|
94.0 |
% |
|
(1.0 |
)% |
(1.1 |
) |
Net
assets |
|
$ |
292,102 |
|
$ |
297,880 |
|
$ |
(5,778 |
) |
(1.9 |
) |
Net asset
value per common share |
|
|
9.65 |
|
|
9.84 |
|
|
(0.19 |
) |
(1.9 |
) |
Number of
portfolio companies |
|
|
36 |
|
|
36 |
|
— |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
(A) Distributions coverage ratio is calculated by dividing the
sum of net investment income in excess of distributions at the end
of the period and distributions to common stockholders during the
period by current period distributions to common stockholders. |
NM = Not
Meaningful |
|
|
|
|
|
|
|
|
|
Highlights for the
Quarter: During the quarter ended September 30,
2016, the following significant events occurred:
- Portfolio Activity: Extended $2.2 million of
follow-on investments to existing portfolio companies.
- Preferred Stock Offering: Completed a public
offering of 2.3 million shares of 6.25% Series D Cumulative Term
Preferred Stock, due 2023 (“Series D Term Preferred Stock”), in
September 2016. Gross proceeds totaled approximately $57.5
million and net proceeds, after deducting underwriting discounts
and offering costs borne by us, were $55.4 million.
- Preferred Stock Redemption: Redeemed all 1.6
million outstanding shares of our 7.125% Series A Cumulative Term
Preferred Stock with a total liquidation value of $40.0 million in
September 2016, using a portion of the proceeds from the issuance
of our Series D Term Preferred Stock.
- Distributions and Dividends: Paid
monthly cash distributions to common and preferred stockholders for
each of July, August, and September 2016. The Company paid
$0.0625 per common share, per month; $0.1484375 per share, per
month, for the Company’s 7.125% Series A Cumulative Term Preferred
Stock (“Series A Term Preferred Stock”); $0.140625 per share, per
month, for the Company’s 6.75% Series B Cumulative Term Preferred
Stock (“Series B Term Preferred Stock”); and $0.135417 per share,
per month, for the Company’s 6.50% Series C Cumulative Term
Preferred Stock (“Series C Term Preferred Stock”).
Second Quarter Results:
Net investment income for the quarters ended September 30, 2016 and
June 30, 2016, was $5.1 million, or $0.17 per share, and $6.8
million, or $0.23 per share, respectively, a decrease of
25.0%. The decrease in net investment income period over
period was primarily due to lower other income, which was partially
offset by a decrease in total expenses net of credits, including
lower incentive fees.
Net asset value per common share as of September 30, 2016
decreased to $9.65 compared to $9.84 as of June 30, 2016. The
quarter over quarter decrease was primarily due to $5.0 million of
net unrealized depreciation, which was due to a decline in
performance of certain of our portfolio companies.
Subsequent Events: After
September 30, 2016, the following significant events occurred:
- Portfolio Activity: In October 2016, we
restructured our investment in D.P.M.S., Inc. As a result of the
restructure, we exchanged existing debt with a cost basis of $16.5
million and a fair value of $6.4 million as of September 30, 2016
for a new $8.8 million secured first lien term loan, relinquished
our preferred equity with a cost basis of $2.5 million and fair
value of $0, and relinquished a portion of our common equity with a
total cost basis of $3 and a fair value of $0, each as of September
30, 2016. The new term loan has a current interest rate of 10.0%
and matures in October 2021. The transaction resulted in a realized
loss of $10.2 million.
- Distributions and Dividends Declared: On
October 11, 2016, our Board of Directors declared the following
monthly cash distributions and dividends:
Record Date |
|
Payment Date |
|
Distribution per Common Share |
|
Dividend perSeries B TermPreferred
Share |
|
Dividend perSeries C Term
Preferred Share |
|
Dividend perSeries D Term
Preferred Share |
|
October 21, 2016 |
|
October 31, 2016 |
|
$ |
0.0625 |
|
$ |
0.140625 |
|
$ |
0.135417 |
|
$ |
0.15190972 |
(A) |
November 17, 2016 |
|
November 30, 2016 |
|
0.0625 |
|
0.140625 |
|
0.135417 |
|
0.13020833 |
|
December 20, 2016 |
|
December 30, 2016 |
|
0.0625 |
|
0.140625 |
|
0.135417 |
|
0.13020833 |
|
|
|
Total for the Quarter: |
|
$ |
0.1875 |
|
$ |
0.421875 |
|
$ |
0.406251 |
|
$ |
0.41232638 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A) Represents a combined dividend
for the prorated period from and including the issuance date,
September 26, 2016, to and including September 30, 2016 and a full
month of October 2016. |
|
Conference Call: The
Company will hold its earnings release conference call on Thursday,
November 3, 2016, at 8:30 a.m. EDT. Please call (855)
376-7516 to enter the conference. An operator will monitor
the call and set a queue for any questions. A replay of the
conference call will be available through December 3, 2016.
To hear the replay, please dial (855) 859-2056 and use the playback
conference number 46685375. 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 January 3, 2017.
About Gladstone Investment
Corporation: Gladstone Investment
Corporation is a publicly traded business development company that
seeks to make secured debt and equity investments in small and
medium-sized businesses in the United States in connection with
acquisitions, changes in control and recapitalizations. The
Company has paid 136 consecutive monthly cash distributions on its
common stock. Information on the business activities of all the
Gladstone funds can be found at www.gladstonecompanies.com.
To obtain a paper copy of our Quarterly Report on Form 10-Q
filed today with the SEC, please contact the Company at 1521
Westbranch Drive, Suite 100, McLean, VA 22102, ATTN: Investor
Relations. The financial information above is not
comprehensive and is without notes, so readers should obtain and
carefully review the Company’s Form 10-Q for the quarter ended
September 30, 2016, including the notes to the consolidated
financial statements contained therein.
Source: Gladstone Investment Corporation
Investor Relations Inquiries: Please visit www.gladstone.com or +1-703-287-5893.
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