Exhibit 99.1
Gladstone Investment Corporation Reports Financial Results for the
Fiscal Year Ended March 31, 2006
MCLEAN, Va.--(BUSINESS WIRE)--June 13, 2006--Gladstone Investment Corp.
(NASDAQ:GAIN):
-- Net Investment Income was $5.88 million or $0.36 per common share
-- Net Increase in Net Assets From Operations was $6.05 million or $0.37
per common share
Gladstone Investment Corp. (NASDAQ:GAIN) (the "Company") today announced
earnings for the period June 22, 2005 (commencement of operations) to March 31,
2006. All per share references are per basic and diluted weighted average common
share outstanding, unless otherwise noted.
Net Investment Income for the period of June 22, 2005 (commencement of
operations) to March 31, 2006 was $5,883,898 or $0.36 per share. For the three
months ended March 31, 2006 Net Investment Income was $2,698,622 or $0.16.
Net Increase in Net Assets Resulting from Operations for the period ended
June 22, 2005 (commencement of operations) to March 31, 2006 was $6,054,297 or
$0.37 per share. The Net Increase in Net Assets Resulting from Operations for
the three months ended March 31, 2006 was $2,943,018 or $0.18 per share.
Total assets were $230,323,807 at March 31, 2006. Net asset value was
$229,841,697 or $13.88 per actual common share outstanding at March 31, 2006.
The weighted average yield on our portfolio of investments, excluding cash
and cash equivalents, was 7.02% for the period from June 22, 2005 (commencement
of operations).
During the period from June 22, 2005 (commencement of operations) to March
31, 2006 the Company recorded the following activity:
-- Invested $6.5 million in senior debt and common equity with Hailey
Transport Corporation;
-- Invested approximately $34.1 million in senior and subordinated debt,
preferred and common stock with Chase II Holdings Corporation;
-- Invested approximately $15.3 million in senior and subordinated debt,
and common equity with Quench Holdings Corporation;
-- Acquired interests in 19 syndicated loans for approximately $97.4
million;
-- Recorded net unrealized appreciation on its investments of
approximately $113,000; and
-- Recognized an aggregate of $57,431 of realized gains related to the
sale of five loan participations.
At March 31, 2006, the Company held nineteen non-control/non-affiliate
investments, three control investments and cash investments, totaling an
aggregate cost balance and fair value of nearly $223 million.
Condensed Schedule of Investments
March 31, 2006
Investment Type Cost Fair Value
- ----------------------------------------------------------------------
Total Non-Control/Non-Affiliate
Investments 97,423,004 97,585,972
Total Control Investments 55,846,318 55,796,318
Total cash equivalents 69,607,086 69,607,086
------------- -------------
Total investments and cash equivalents $222,876,408 $222,989,376
------------- -------------
"Since the inception of our fund on June 22, 2005, we have made tremendous
strides in building our solid portfolio. The fourth quarter proved to be
significant as we invested over $55 million, bringing the total invested funds
to 70%. Our intent is to increase our buyout investments significantly by this
time next year," said Chip Stelljes, President and Chief Investment Officer.
Subsequent to March 31, 2006, the Company:
-- Purchased additional loan participations in existing syndicated loans
of $3.6 million;
-- Purchased seven loan participations of $24.0 million;
-- Sold three loan participations for $15.5 million, realizing an
aggregate net loss of approximately $3,000 on the transactions; and
-- The Board of Directors declared its monthly cash dividends of $0.07
per common share for each of the months of April, May and June of
2006.
Results reported today for investment income and operating expenses for the
period June 22, 2005 (commencement of operations) to March 31, 2006 are not
expected to be indicative of future operating performance. In particular, the
Company expects investment income to increase in future periods, 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 Wednesday, June 14, 2006 at 9:30 am
ET to discuss year end earnings. Please call (877) 407-9205 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 July 14, 2006. To
hear the replay, please dial (877) 660-6853, access playback account 286 and use
ID code 204165. The online replay will be available approximately two hours
after the call concludes.
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.
For further information contact our Investor Relations Manager, Kelly
Sargent at 703-287-5835.
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 Form 10-K dated March
31, 2006, as filed with the Securities and Exchange Commission on June 13, 2006.
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
(Commencement of
Operations) to
March 31, 2006
----------------
INVESTMENT INCOME
Interest income
Non-Control/Non-Affiliate investments $2,450,906
Control investments 255,059
Cash and cash equivalents 4,434,706
----------------
Total interest income 7,140,671
Fee income - Control investments 230,000
Other income 185
----------------
Total investment income 7,370,856
----------------
EXPENSES
Administration fee 288,471
Base management fee 360,771
Directors fees 160,000
Insurance expense 184,642
Professional fees 163,369
Stockholder related costs 89,563
Organizational costs 7,002
Interest expense 378
Taxes and licenses 195,270
General and administrative expenses 37,492
----------------
Total expenses 1,486,958
----------------
NET INVESTMENT INCOME 5,883,898
----------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Realized gain on sale of Non-Control/Non-Affiliate
investments 57,431
Net unrealized appreciation of investment portfolio 112,968
----------------
Net gain on investments 170,399
----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $6,054,297
================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
PER COMMON SHARE:
Basic and Diluted $0.37
================
SHARES OF COMMON STOCK OUTSTANDING:
Basic and diluted weighted average shares 16,391,589
GLADSTONE INVESTMENT CORPORATION
STATEMENT OF OPERATIONS
(UNAUDITED)
Quarter Ended
March 31, 2006
--------------
INVESTMENT INCOME
Interest income
Non-Control/Non-Affiliate investments 1,466,449
Control investments 255,059
Cash and cash equivalents 1,242,687
--------------
Total interest income 2,964,195
Fee income - Control investments 230,000
Other income 185
--------------
Total investment income 3,194,380
--------------
EXPENSES
Administration fee 110,002
Base management fee 3,141
Directors fees 57,000
Insurance expense 72,612
Professional fees 27,497
Stockholder related costs 21,662
Organizational costs -
Interest expense -
Taxes and licenses 188,684
General and administrative expenses 15,160
--------------
Total expenses 495,758
--------------
NET INVESTMENT INCOME 2,698,622
--------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Realized gain on sale of Non-Control/Non-Affiliate
investments 19,375
Net unrealized appreciation of investment portfolio 225,021
--------------
Net gain on investments 244,396
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $2,943,018
==============
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
PER COMMON SHARE:
Basic and Diluted $0.18
==============
SHARES OF COMMON STOCK OUTSTANDING:
Basic and diluted weighted average shares 16,560,100
GLADSTONE INVESTMENT CORPORATION
STATEMENT OF ASSETS AND LIABILITIES
(UNAUDITED)
March 31, March 31,
2006 2005
------------- -------------
ASSETS
Non-Control/Non-Affiliate investments
(Cost 3/31/06: $97,423,004) $97,585,972 $-
Control investments (Cost 3/31/06:
$55,846,318) 55,796,318 -
------------- -------------
Total investments at fair value (Cost
3/31/06: $153,269,322) 153,382,290 -
Cash and cash equivalents 75,672,605 3,636
Interest receivable 761,388 -
Prepaid insurance 99,874 -
Deferred offering costs - 47,864
Due from Adviser 234,551 -
Other assets 173,099 -
------------- -------------
TOTAL ASSETS $230,323,807 $51,500
============= =============
LIABILITIES
Administration fee payable to Gladstone
Administration $110,002 $-
Loan payable to affiliate - 50,000
Accrued expenses 367,031 -
Other liabilities 5,077 -
------------- -------------
Total Liabilities 482,110 50,000
------------- -------------
NET ASSETS $229,841,697 $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 appreciation of investment
portfolio 112,968 -
Distributions in excess of net investment
income (517,110) -
------------- -------------
Total Net Assets $229,841,697 $1,500
============= =============
Net assets per share $13.88 $15.00
============= =============
GLADSTONE INVESTMENT CORPORATION
FINANCIAL HIGHLIGHTS
(UNAUDITED)
For the period
June 22, 2005
(Commencement of
Operations) to
March 31, 2006
----------------
Per Share Data (1)
- ------------------
Balance at beginning of period $-
Net proceeds from initial public offering (2) 13.95
----------------
Offering costs (0.05)
Income from investment operations:
Net investment income (3) 0.36
Realized gain on sale of investments (3) 0.00
Net unrealized appreciation of investments (3) 0.01
----------------
Total from investment operations 0.37
----------------
Distributions (0.39)
----------------
Net asset value at end of period $13.88
================
Per share market value at beginning of period $15.00
Per share market value at end of period 15.10
Total Return (4) 3.39%
Shares outstanding at end of period 16,560,100
Ratios/Supplemental Data
------------------------
Net assets at end of period $229,841,697
Average net assets (5) $226,875,738
Ratio of expenses to average net assets (6) 0.66%
Ratio of net investment income to average net
assets (6) 2.59%
(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 the
Company's common stock from the beginning of the period taking
into account dividends reinvested in accordance with the terms of
our dividend reinvestment program.
(5) Average net assets calculated from June 22, 2005 (commencement of
operations) to March 31, 2006.
(6) Amounts are not annualized.
GLADSTONE INVESTMENT CORPORATION
FINANCIAL HIGHLIGHTS
(UNAUDITED)
Quarter
Ended
March 31, 2006
----------------
Per Share Data (1)
- ------------------
Balance at beginning of period $13.91
Net proceeds from initial public offering -
----------------
Offering costs -
Income from investment operations:
Net investment income 0.17
Realized gain on sale of investments 0.00
Net unrealized appreciation of investments 0.01
----------------
Total from investment operations 0.18
----------------
Distributions (0.21)
----------------
Net asset value at end of period $13.88
================
Per share market value at beginning of period $13.59
Per share market value at end of period 15.10
Total Return (2) 12.68%
Shares outstanding at end of period 16,560,100
Ratios/Supplemental Data
------------------------
Net assets at end of period $229,841,697
Average net assets (3) $229,400,219
Ratio of expenses to average net assets (4) 0.86%
Ratio of net investment income to average net
assets (4) 3.11%
(1) Based on actual shares outstanding.
(2) Total return equals the change in the market value of the
Company's common stock from the beginning of the period taking
into account dividends reinvested in accordance with the terms of
our dividend reinvestment program.
(3) Average net assets calculated from January 1, 2006 to March 31,
2006.
(4) Amounts are annualized.
CONTACT: Gladstone Investment Corporation
Kelly Sargent, 703-287-5835