Exhibit 99.1
Gladstone Investment Corporation Reports
Financial Results for the Three Months Ended December 31, 2005
MCLEAN, Va.--(BUSINESS WIRE)--Feb. 8, 2006--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.
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.
CONTACT: Gladstone Investment Corp.
Kelly Sargent, 703-287-5835