MCLEAN, Va., Nov. 6, 2013
/PRNewswire/ -- Gladstone Investment Corporation (NASDAQ:
GAIN) (the "Company") today announced earnings for its second
quarter ended September 30,
2013. Please read the Company's 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.
(Logo:
http://photos.prnewswire.com/prnh/20101005/GLADSTONEINVESTMENT
)
Summary Information: (dollars in thousands,
except per share data):
|
September
30,
2013
|
|
June
30,
2013
|
|
Change
|
|
%
Change
|
For the Quarter
Ended:
|
|
|
|
|
|
|
|
Total investment
income
|
$
|
11,359
|
|
$
|
7,398
|
|
$
|
3,961
|
|
53.5%
|
Total
expenses
|
(5,131)
|
|
(3,365)
|
|
1,766
|
|
52.5
|
Net investment
income
|
6,228
|
|
4,033
|
|
2,195
|
|
54.4
|
Net investment income
per common share
|
0.24
|
|
0.15
|
|
0.09
|
|
60.0
|
Cash distribution per
common share
|
0.15
|
|
0.15
|
|
—
|
|
—
|
Total realized
gain
|
24,804
|
|
—
|
|
24,804
|
|
NM
|
Total unrealized
depreciation
|
(16,093)
|
|
(10,522)
|
|
(5,541)
|
|
(52.5)
|
Total unrealized
appreciation (depreciation) excluding reversal of
previously-recorded appreciation upon realization
|
1,690
|
|
(10,522)
|
|
12,212
|
|
NM
|
Net increase
(decrease) in net assets resulting from operations
|
14,939
|
|
(6,519)
|
|
21,444
|
|
NM
|
Weighted average
yield on interest-bearing investments
|
12.6%
|
|
12.5%
|
|
0.1%
|
|
0.8
|
Total dollars
invested
|
$
|
20,429
|
|
$
|
35,590
|
|
$
|
(15,161)
|
|
(42.6)
|
Total dollars
repaid
|
19,860
|
|
2,340
|
|
17,520
|
|
748.7
|
|
|
|
|
|
|
|
|
As
of:
|
|
|
|
|
|
|
|
Total investments at
fair value
|
$
|
287,212
|
|
$
|
308,327
|
|
$
|
(21,115)
|
|
(6.8)%
|
Fair value as a
percent of cost
|
81.1%
|
|
85.7%
|
|
(4.6)%
|
|
(5.4)
|
Total net
assets
|
$
|
241,440
|
|
$
|
230,472
|
|
$
|
10,968
|
|
4.6
|
Net asset value per
common share
|
9.12
|
|
8.70
|
|
0.42
|
|
4.8
|
Asset coverage
ratio
|
328%
|
|
283%
|
|
45%
|
|
15.9
|
Number of portfolio
companies
|
24
|
|
24
|
|
—
|
|
—
|
NM=Not Meaningful
Highlights for the Quarter: During the quarter
ended September 30, 2013, the
following significant events occurred:
- $25 Million Realized Gain from
Investment Exit: In August 2013,
the Company's portfolio company Venyu Solutions, Inc. ("Venyu") was
sold. As a result of the sale, the Company received net cash
proceeds of $32.2 million, resulting
in a realized gain of approximately $24.8
million and dividend income of $1.4
million. In addition, the Company received full
repayment of its debt investment of $19
million in principal repayment and $1.9 million in fee income. The Company's
original $6.0 million equity
investment generated a 5.5 times return, including dividends
received, equating to an 84.3% annual internal rate of return.
- New Portfolio Activity: The Company invested
$20.0 million in a new debt and
equity investment, Schylling, Inc.
- Recurring Distributions: The Company paid monthly
cash distributions for each of July, August and September 2013 to common stockholders of
$0.05 per common share and to
preferred stockholders of $0.1484375
per preferred share of the Company's 7.125% Series A Cumulative
Term Preferred Stock ("Term Preferred Stock").
Second Quarter 2014 Results: Net Investment
Income for the quarters ended September
30 and June 30, 2013 was
$6.2 million, or $0.24 per share, and $4.0
million, or $0.15 per share,
respectively, an increase of 54.4%. The increase in Net
Investment Income for the quarter ended September 30, 2013, as compared to the prior
quarter, was primarily due to the dividend and fee income related
to the sale of Venyu. This was partially offset by an
increase in the incentive fee expense by $1.4 million, when compared to the prior
quarter. Excluding the impact of the Venyu sale, Net
Investment Income increased approximately 5.2% quarter over
quarter.
Net Increase (Decrease) in Net Assets Resulting from Operations
for the quarters ended September 30
and June 30, 2013 was $14.9 million, or $0.57 per share, and $(6.5) million, or $(0.25) per share, respectively. The
quarter over quarter change is primarily due to the aforementioned
realized gain on the Venyu sale and related reversal of
previously-recorded unrealized appreciation upon realization,
resulting in a net $7.4 million
increase in the quarter ended September
30, 2013. Additionally, unrealized appreciation
(depreciation) excluding reversal of previously-recorded
appreciation upon realization increased $12.2 million as compared to the prior
quarter.
Subsequent Events: After September 30, 2013, the following events
occurred:
- Portfolio Activity: The Company invested
$16.3 million in Alloy Die Casting
Co. through a combination of debt and equity. The Company's
affiliated fund, Gladstone Capital Corporation participated as a
co-investor by providing $7.0 million
of debt and equity financing on the same terms. Additionally, the
Company received full repayment of its debt investments in Channel
Technologies Group, LLC ("Channel") in the aggregate amount of
$16.2 million. The prepayment
of the debt investments resulted in $0.8
million of success fee income. Simultaneously, the
Company invested $1.3 million in
additional preferred and common equity securities in Channel.
Lastly, the Company sold its portfolio company ASH Holdings Corp.
("ASH") to certain members of the existing management team at
ASH. As a result of the sale, the Company received minimal
net cash proceeds, recognized a realized loss of approximately
$11.4 million and has retained a
$5.0 million accruing revolving
credit facility in ASH.
- 20% Increase in Common Distributions Declared:
Declared the following monthly cash distributions to
stockholders:
Record
Date
|
|
Payment
Date
|
|
Distribution per
Common Share
|
|
Distribution per
Term Preferred Share
|
October 22,
2013
|
|
October 31,
2013
|
|
$
|
0.06
|
|
$
|
0.1484375
|
November 14,
2013
|
|
November 29,
2013
|
|
0.06
|
|
0.1484375
|
December 16,
2013
|
|
December 31,
2013
|
|
0.06
|
|
0.1484375
|
|
|
Total for the
Quarter
|
|
$
|
0.18
|
|
$
|
0.4453125
|
The monthly common distributions for the quarter ending
December 31, 2013 represent a 20%
increase from the common distributions declared by the Company's
Board of Directors for the quarter ended September 30, 2013. The October 2013 common distribution will represent
the 100th consecutive monthly common distribution the Company has
made since its initial public offering in June 2005.
- $0.05 One-time Bonus
Distribution on Common Stock Declared: Today the
Company's Board of Directors declared the following one-time bonus
cash distribution to common stockholders:
Record
Date
|
|
Payment
Date
|
|
Distribution
per
Common
Share
|
November 18,
2013
|
|
November 29,
2013
|
|
$
|
0.05
|
|
|
|
|
|
|
Conference Call for Stockholders: The Company will
hold its earnings release conference call Thursday, November 7, 2013, at 8:30 a.m. EST. Please call (800) 860-2442
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 6,
2013. To hear the replay, please dial (877) 344-7529 and use
conference number 10029738. 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 7, 2014.
About Gladstone Investment
Corporation: Gladstone Investment Corporation is a
publicly traded business development company that seeks to make
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 100 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.
The Company undertakes no obligation to update the information
contained herein to reflect subsequently occurring events or
circumstances, except as required by applicable securities laws and
regulations. For a description of certain risks to which the
Company is or may be subject, please refer to the factors discussed
under the captions "Cautionary Statement Concerning Forward Looking
Statements" and "Risk Factors" included in the Company's filings
with the SEC (accessible at www.sec.gov).
To obtain a paper copy of the Form 10-Q filed today with the
SEC, please contact the Company at 1521 Westbranch Drive, Suite
200, 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, 2013, including the
notes to the consolidated financial statements contained
therein.
SOURCE Gladstone Investment Corporation