MCLEAN, Va., Feb. 4, 2014 /PRNewswire/ -- Gladstone
Investment Corporation (NASDAQ: GAIN) (the "Company") today
announced earnings for its third quarter ended December 31, 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):
|
|
December
31,
2013
|
|
|
September
30,
2013
|
|
|
Change
|
|
|
%
Change
|
|
For the Quarter
Ended:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investment
income
|
|
$
|
8,696
|
|
|
$
|
11,359
|
|
|
$
|
(2,663)
|
|
|
(23.4)
|
%
|
Total
expenses
|
|
|
(4,294)
|
|
|
|
(5,131)
|
|
|
|
(837)
|
|
|
(16.3)
|
|
Net investment
income
|
|
|
4,402
|
|
|
|
6,228
|
|
|
|
(1,826)
|
|
|
(29.3)
|
|
Net investment income
per common share
|
|
|
0.17
|
|
|
|
0.24
|
|
|
|
(0.07)
|
|
|
(29.2)
|
|
Cash distribution per
common share
|
|
|
0.23
|
|
|
|
0.15
|
|
|
|
0.08
|
|
|
53.3
|
|
Total realized (loss)
gain
|
|
|
(13,144)
|
|
|
|
24,804
|
|
|
|
(37,948)
|
|
|
NM
|
|
Total unrealized
depreciation
|
|
|
(1,944)
|
|
|
|
(16,093)
|
|
|
|
14,149
|
|
|
87.9
|
|
Total unrealized
(depreciation) appreciation
excluding
reversal of previously-recorded
(depreciation)
appreciation upon realization
|
|
|
(15,462)
|
|
|
|
1,690
|
|
|
|
(17,152)
|
|
|
NM
|
|
Net (decrease)
increase in net assets resulting
from
operations
|
|
|
(10,686)
|
|
|
|
14,939
|
|
|
|
(25,625)
|
|
|
NM
|
|
Weighted average
yield on interest-bearing
investments
|
|
|
12.7
|
%
|
|
|
12.6
|
%
|
|
|
0.1
|
%
|
|
0.8
|
|
Total dollars
invested
|
|
$
|
44,172
|
|
|
$
|
20,429
|
|
|
$
|
23,743
|
|
|
116.2
|
|
Total dollars
repaid
|
|
|
24,434
|
|
|
|
19,860
|
|
|
|
4,574
|
|
|
23.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investments at
fair value
|
|
$
|
290,727
|
|
|
$
|
287,212
|
|
|
$
|
3,515
|
|
|
1.2
|
%
|
Fair value as a
percent of cost
|
|
|
80.7
|
%
|
|
|
81.1
|
%
|
|
|
(0.4)
|
%
|
|
(0.5)
|
|
Total net
assets
|
|
$
|
224,665
|
|
|
$
|
241,440
|
|
|
$
|
(16,775)
|
|
|
(6.9)
|
|
Net asset value per
common share
|
|
|
8.49
|
|
|
|
9.12
|
|
|
|
(0.63)
|
|
|
(6.9)
|
|
Asset coverage
ratio
|
|
|
336
|
%
|
|
|
328
|
%
|
|
|
8
|
%
|
|
2.4
|
|
Number of portfolio
companies
|
|
|
26
|
|
|
|
24
|
|
|
|
2
|
|
|
8.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NM=Not
Meaningful
|
|
|
|
|
|
|
|
|
|
Highlights for the Quarter: During the quarter
ended December 31, 2013, the
following significant events occurred:
- New Portfolio Activity: The Company disbursed, in
aggregate, $42.3 million in a
combination of debt and equity, to invest in three new portfolio
companies, Alloy Die Casting Co., Behrens Manufacturing, and
Meridian Rack & Pinion, Inc.
- Repayments of Loans: The Company received full repayment
of debt investments in Channel Technologies Group, LLC ("Channel")
and Cavert II Holding Corp. ("Cavert") in the amounts of
$16.2 million and $6.1 million, respectively. As a part of these
repayments, Channel and Cavert also paid prepayment and success
fees of $0.8 million and $0.2 million, respectively.
- Exits of Two Distressed Investments: In October 2013, one of the Company's portfolio
companies, Auto Safety House, LLC ("ASH"), was sold to its
existing management team. As a result of the sale, the Company
received minimal net cash proceeds, recognized a realized loss of
$11.4 million and retained a
$5.0 million accruing revolving
credit facility in ASH. In November
2013, another of the Company's portfolio companies,
Packerland Whey Products, Inc. ("Packerland"), was sold to other
existing owners. As a result of the sale, the Company received
$0.7 million in net cash proceeds and
recognized a realized loss of $1.8
million. These sales, while at a realized loss, were
accretive to the Company's net asset value in aggregate by
$5.7 million and reduced the
Company's non-accruals outstanding.
- Increased Recurring Distributions and Paid One-Time Bonus
Distribution: The Company paid its monthly cash distributions
for each of October, November and December
2013 to common stockholders of $0.06 per common share, representing a 20%
increase from the common distributions from the previous quarter.
The Company also paid a one-time bonus dividend of $0.05 per common share in November and paid the
preferred stockholders a monthly amount of $0.1484375 per preferred share of the Company's
7.125% Series A Cumulative Term Preferred Stock ("Term Preferred
Stock") for each of October, November and December 2013.
Third Quarter 2014 Results: Net Investment
Income for the quarters ended December
31 and September 30, 2013 was
$4.4 million, or $0.17 per share, and $6.2
million, or $0.24 per share,
respectively, a decrease of 29.3%. The decrease in Net
Investment Income for the quarter ended December 31, 2013, as compared to the prior
quarter, was primarily due to the $3.3
million in dividend and fee income related to the sale of
Venyu Solutions, Inc. ("Venyu") that was recognized in the previous
quarter. This was partially offset by fee income in the
aggregate amount of $1.0 million that
was received in connection with the full repayments of loans from
Cavert and Channel in the quarter ended December 31, 2013.
Net (Decrease) Increase in Net Assets Resulting from Operations
for the quarters ended December 31
and September 30, 2013 was
$(10.7) million, or $(0.40) per share, and $14.9 million, or $0.57 per share, respectively. The quarter
over quarter change is primarily due to the aforementioned realized
losses on the sales of the ASH and Packerland in the quarter ended
December 31, 2013 as well as the
$24.8 million realized gain on the
sale of Venyu in the previous quarter. Additionally,
unrealized (depreciation) appreciation, excluding reversal of
previously-recorded appreciation (depreciation) upon realization,
decreased to $(15.5) million in
unrealized depreciation in the quarter ended December 31, 2013 as compared to $1.7 million in unrealized appreciation in the
prior quarter. During the quarter ended December 31, 2013, the Company experienced
unrealized depreciation in certain of its portfolio companies,
primarily due to a decrease in certain comparable multiples used to
estimate fair value of the Company's investments and a decrease in
portfolio company performance.
Subsequent Events: After December 31, 2013, the following event
occurred:
- Distributions Declared: Declared the following
monthly cash distributions to stockholders:
Record
Date
|
|
Payment
Date
|
|
Distribution
per
Common Share
|
|
Distribution per
Term
Preferred Share
|
January 22,
2014
|
|
January 31,
2014
|
|
$
|
0.06
|
|
$
|
0.1484375
|
February 19,
2014
|
|
February 28,
2014
|
|
0.06
|
|
0.1484375
|
March 17,
2014
|
|
March 31,
2014
|
|
0.06
|
|
0.1484375
|
|
|
Total for the
Quarter
|
|
$
|
0.18
|
|
$
|
0.4453125
|
The January 2014 common
distribution represented the 103rd consecutive monthly common
distribution the Company has made since its initial public offering
in June 2005.
Conference Call for Stockholders: The Company will
hold its earnings release conference call Wednesday, February 5, 2014, 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 March 5,
2014. To hear the replay, please dial (877) 344-7529 and use
conference number 10029753. 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
April 4, 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 103 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
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
December 31, 2013, including the
notes to the consolidated financial statements contained
therein.
SOURCE Gladstone Investment Corporation