Gladstone Investment Corp. (NASDAQ:GAIN): -- Net Investment Income
was $1.75 million or $0.11 per common share -- Net Increase in Net
Assets From Operations was $1.61 million or $0.10 per common share
Gladstone Investment Corp. (NASDAQ:GAIN) (the "Company") today
announced earnings for the three months ended December 31, 2005 and
for the period June 22, 2005 (commencement of operations) to
December 31, 2005. 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,
2005 was $1,752,570 or $0.11 per share and was $3,185,276 or $0.20
per share for the period of June 22, 2005 (commencement of
operations) to December 31, 2005. Net Increase in Net Assets
Resulting from Operations for the three months ended December 31,
2005 was $1,614,747 or $0.10 per share. The Net Increase in Net
Assets Resulting from Operations for the period June 22, 2005
(commencement of operations) to December 31, 2005 was $3,111,279 or
$0.19 per share. The Company also recorded net unrealized
depreciation on its investments of $175,879 for the three months
ended December 31, 2005 and $112,053 for the period June 22, 2005
(commencement of operations) to December 31, 2005. Total assets
were $230,956,388 at December 31, 2005, as compared to $51,500 at
March 31, 2005. Net asset value was $230,376,300 or $13.91 per
actual common share outstanding at December 31, 2005 as compared to
$15.00 per actual common share outstanding at March 31, 2005. The
weighted average yield on our portfolio of investments, excluding
cash and cash equivalents, was 6.42% for both the three months
ended December 31, 2005 and for the period from June 22, 2005
(commencement of operations) to December 31, 2005. During the three
months ended December 31, 2005 the Company recorded the following
activity: -- Recorded new loans of approximately $23.4 million with
7 portfolio investments; -- Received principal repayments of $3.0
million; and -- Recognized gains of $38 thousand on the sale of
three loan participations. At December 31, 2005, the Company had
investments in debt securities in twelve private companies having
an aggregate cost balance of approximately $60.8 million and a fair
value of approximately $60.7 million. "During the quarter we were
able to invest in $23.4 million of new portfolio investments.
Subsequent to quarter end, we closed on our first equity investment
and are working actively on several additional investments that we
anticipate will build a solid portfolio for the long-term," said
Chip Stelljes, President and Chief Investment Officer. Subsequent
to December 31, 2005, the Company: -- Contributed a $2.5 million
investment in our wholly-owned subsidiary that utilized the funds
to acquire a 95% equity interest in a school bus dealership. The
equity interest was valued at $4.2 million, by which our
wholly-owned subsidiary financed the remaining $1.7 million; and
made a loan for $4 million to the same dealership for a total
investment of $6.5 million; -- Purchased an additional $4.8 million
of loan participations with two portfolio companies; -- Purchased
loan participations of $18.9 million in six companies; -- Sold one
loan participation for $1.0 million; and -- The Board of Directors
declared its monthly cash dividends of $0.07 per common share for
each of the months of January, February and March of 2006. Results
reported today for investment income and operating expenses are not
expected to be indicative of future operating performance. In
particular, the Company expects investment income to increase in
future periods, as compared to the three months ended December 31,
2005 and the period June 22, 2005 (commencement of operations) to
December 31, 2005, as a result of the investment of the net
proceeds from the initial public offering and as investments are
made in portfolio company securities that the Company expects will
yield a greater return than the cash and cash equivalents in which
the vast majority of the net proceeds of the Company's initial
public offering are currently invested. The Company will hold a
conference call Thursday, February 9, 2006 at 9:30 am EDT to
discuss 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 9, 2006. To hear the replay, please dial
(877) 660-6853, access playback account 286 and use ID code 190142.
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. 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. This press
release may include statements that may constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended, 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 prospectus dated June 22, 2005, as filed with the
Securities and Exchange Commission on June 23, 2005. 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. -0- *T GLADSTONE INVESTMENT CORPORATION
STATEMENT OF OPERATIONS (UNAUDITED) For the period June 22, 2005
For the three (Commencement of months ended Operations) to December
31, December 31, 2005 2005 ---------------- ----------------
INVESTMENT INCOME Interest income - investments $ 790,879 $ 984,457
Interest income - cash and cash equivalents 1,530,809 3,192,019
---------------- ---------------- Total investment income 2,321,688
4,176,476 ---------------- ---------------- EXPENSES Administration
fee to Gladstone Administration 73,424 178,469 Base management fee
to Gladstone Management 265,522 357,630 Directors fees 51,000
103,000 Insurance 69,552 112,030 Organizational costs - 7,002
Professional fees 69,570 135,872 Stockholder related costs 24,363
67,901 Interest - 378 General and administrative 15,687 28,918
---------------- ---------------- Total expenses 569,118 991,200
---------------- ---------------- NET INVESTMENT INCOME 1,752,570
3,185,276 ---------------- ---------------- REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS Realized gain on sale of investment
38,056 38,056 Net unrealized depreciation of investment portfolio
(175,879) (112,053) ---------------- ---------------- Net loss on
investments (137,823) (73,997) ---------------- ----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 1,614,747 $
3,111,279 ================ ================ NET INCREASE IN NET
ASSETS RESULTING FROM OPERATIONS PER COMMON SHARE: Basic and
Diluted $ 0.10 $ 0.19 ================ ================ SHARES OF
COMMON STOCK OUTSTANDING: Basic and diluted weighted average shares
16,560,100 16,312,600 GLADSTONE INVESTMENT CORPORATION STATEMENT OF
ASSETS AND LIABILITIES (UNAUDITED) December 31, March 31, 2005 2005
------------- ----------- ASSETS Cash $ 16,218,450 $ 3,636
Investments at fair value (Cost 12/31/2005: $60,823,059) 60,711,006
- Cash equivalents 153,128,873 - Interest receivable 317,233 -
Prepaid insurance 172,485 - Prepaid directors fees 42,000 -
Deferred offering costs - 47,864 Other assets 366,341 -
------------- ----------- TOTAL ASSETS $230,956,388 $ 51,500
============= =========== LIABILITIES Accounts payable $ 2,207 $ -
Administration fee payable to Gladstone Administration 73,424 -
Base management fee payable to Gladstone Management 192,787 - Loan
payable to affiliate - 50,000 Accrued expenses 311,670 -
------------- ----------- Total Liabilities 580,088 50,000
------------- ----------- NET ASSETS $230,376,300 $ 1,500
============= =========== ANALYSIS OF NET ASSETS: Common stock,
$0.001 par value, 100,000,000 shares authorized and 16,560,100 and
100 shares issued and outstanding, respectively $ 16,560 $ -
Capital in excess of par value 230,229,279 1,500 Net unrealized
depreciation of investment portfolio (112,053) - Undistributed net
investment income 242,514 - ------------- ----------- Total Net
Assets $230,376,300 $ 1,500 ============= =========== Net assets
per share $ 13.91 $ 15.00 ============= =========== GLADSTONE
INVESTMENT CORPORATION FINANCIAL HIGHLIGHTS (UNAUDITED) For the
period June 22, 2005 For the three (Commencement of months ended
Operations) to December 31, December 31, 2005 2005 ----------------
---------------- Per Share Data (1)
------------------------------------ Balance at beginning of period
$ 13.93 $ - Net proceeds from initial public offering (2) - 13.95
---------------- ---------------- Offering costs - (0.05) Income
from investment operations: Net investment income (3) 0.11 0.20
Realized gain on sale of investments (3) 0.00 0.00 Net unrealized
depreciation of investments (3) (0.01) (0.01) ----------------
---------------- Total from investment operations 0.10 0.19
---------------- ---------------- Distributions (0.12) (0.18)
---------------- ---------------- Net asset value at end of period
$ 13.91 $ 13.91 ================ ================ Per share market
value at beginning of period $ 15.05 $ 15.00 Per share market value
at end of period 13.59 13.59 Total Return (4) (5) -6.63% -8.25%
Shares outstanding at end of period 16,560,100 16,560,100
Ratios/Supplemental Data ------------------------------------ Net
assets at end of period $ 230,376,300 $ 230,376,300 Average net
assets (6) $ 229,896,936 $ 225,793,817 Ratio of expenses to average
net assets-annualized 0.99% 0.75% Ratio of net investment income to
average net assets-annualized 3.05% 2.42%
------------------------------------ (1) Based on actual shares
outstanding. (2) Net of initial underwriting discount of $1.05 per
share. (3) Based on weighted average basic per share data. (4)
Total return equals the change in the market value of our common
stock from the beginning of the period taking into account
dividends reinvested in accordance with the terms of our dividend
reinvestment plan. (5) Amounts are not annualized. (6) Average net
assets calculated from October 1, 2005 and June 22, 2005
(commencement of operations), respectively to December 31, 2005. *T
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