Exhibit 99.1
Gladstone Investment Reports Financial Results for the First Quarter Ended June
30, 2006
MCLEAN, Va.--(BUSINESS WIRE)--Aug. 2, 2006--Gladstone Investment Corp.
(NASDAQ:GAIN):
-- Net Investment Income was $2.6 million or $0.16 per common share
-- Net Increase in Net Assets From Operations was $1.3 million or $0.08
per common share
Gladstone Investment Corp. (NASDAQ:GAIN) (the "Company") today announced
earnings for the first quarter ended June 30, 2006. All per share references are
per basic and diluted weighted average common share outstanding, unless
otherwise noted.
Net Investment Income for the first quarter ended June 30, 2006 was
$2,581,164 or $0.16 per share as compared $19,800 or $0.00 for the period June
22, 2005 (commencement of operations) to June 30, 2005.
Net Increase in Net Assets Resulting from Operations for the first quarter
ended June 30, 2006 was $1,277,048 or $0.08 per share as compared $19,800 or
$0.00 for the period June 22, 2005 (commencement of operations) to June 30,
2005.
Total assets were $228,699,044 at June 30, 2006 as compared to $230,323,807
or on March 31, 2006. Net asset value was $13.75 per actual common share
outstanding at June 30, 2006 as compared to $13.88 per actual common share at
March 31, 2006.
The weighted average yield on our portfolio of investments, excluding cash
and cash equivalents, was 8.77% for the first quarter ended June 30, 2006.
During the first quarter ended June 30, 2006 the Company recorded the
following activity:
-- Acquired interests in eight new syndicated loans for approximately $30
million;
-- Sold three syndicated loans for approximately $15.5 million;
-- Recorded net unrealized depreciation on its investments of
approximately $1.3 million; and
-- Recognized an aggregate of $3,273 of realized gains related to the
sale of four loan participations.
At June 30, 2006, the Company held 24 non-control/non-affiliate
investments, three control investments and cash investments, totaling an
aggregate cost basis of $210 million and fair value of nearly $209 million.
Condensed Schedule of Investments
June 30, 2006
Investment Type Cost Fair Value
- ----------------------------------------------------------------------
Total Non-Control/Non-Affiliate
Investments 114,228,222 113,251,478
Total Control Investments 56,246,318 56,028,640
Total cash equivalents 39,558,107 39,558,107
------------- -------------
Total investments and cash equivalents $210,032,647 $208,838,225
------------- -------------
"Since the inception of our fund on June 22, 2005, we have invested over
$170 million, bringing our total portfolio investments to 80% at quarter end. We
are reviewing many buyout opportunities and anticipate reporting additional
buyout activity for the second quarter," said Chip Stelljes, President and Chief
Investment Officer.
Subsequent to June 30, 2006, the Company:
-- Purchased additional loan participations of two portfolio companies of
approximately $0.5 million;
-- Purchased two new loan participations of approximately $5.0 million;
-- Sold one loan participation for $1.0 million; and
-- Declared monthly cash dividends of $0.07 per common share for each of
the months of July, August and September of 2006.
The Company will hold a conference call Thursday, August 3, 2006 at 9:30 am
EDT to discuss first quarter earnings. Please call (877) 407-0782 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 September 3,
2006. To hear the replay, please dial (877) 660-6853, access playback account
286 and use ID code 210002. 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 14, 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
For the three (Commencement of
months ended Operations) to
June 30, 2006 June 30, 2005
---------------- ----------------
INVESTMENT INCOME
Interest income
Non-Control/Non-Affiliate
investments $ 1,964,480 $ -
Control investments 1,190,302 -
Cash and cash equivalents 708,340 48,198
---------------- ----------------
Total interest income 3,863,122 48,198
Other income 316 -
---------------- ----------------
Total investment income 3,863,438 48,198
---------------- ----------------
EXPENSES
Administration fee 115,389 27,083
Base management fee 801,309 -
Directors fees 43,250 -
Insurance expense 72,611 -
Professional fees 79,748 -
Stockholder related costs 93,766 635
Interest expense - 378
Taxes and licenses 57,107 -
Other expenses 19,094 302
---------------- ----------------
Total expenses 1,282,274 28,398
---------------- ----------------
NET INVESTMENT INCOME 2,581,164 19,800
---------------- ----------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Realized gain on sale of Non-
Control/Non-Affiliate
investments 3,273 -
Net unrealized depreciation of
investment portfolio (1,307,389) -
---------------- ----------------
Net loss on investments (1,304,116) -
---------------- ----------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 1,277,048 $ 19,800
================ ================
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS PER COMMON SHARE:
Basic and Diluted $ 0.08 $ 0.00
================ ================
SHARES OF COMMON STOCK OUTSTANDING:
Basic and diluted weighted
average shares 16,560,100 14,400,100
GLADSTONE INVESTMENT CORPORATION
STATEMENT OF ASSETS AND LIABILITIES
(UNAUDITED)
June 30, March 31,
2006 2006
------------- -------------
ASSETS
Non-Control/Non-Affiliate investments
(Cost 6/30/06: $114,228,222; 3/31/06:
$97,423,004) $113,251,478 $ 97,585,972
Control investments (Cost 6/30/06:
$56,246,318; 3/31/06: $55,846,318) 56,028,640 55,796,318
------------- -------------
Total investments at fair value (Cost
6/30/06: $170,474,540; 3/31/06:
$153,269,322) 169,280,118 153,382,290
Cash and cash equivalents 58,283,609 75,672,605
Interest receivable 911,817 761,388
Prepaid directors fees 108,750 -
Prepaid insurance 27,262 99,874
Due from Adviser - 234,551
Other assets 87,488 173,099
------------- -------------
TOTAL ASSETS $228,699,044 $230,323,807
============= =============
LIABILITIES
Accounts payable $ 11,583 $ -
Administration fee payable to Gladstone
Administration 115,389 110,002
Base management fee payable to Gladstone
Management 801,309 -
Accrued expenses 124,876 367,031
Other liabilities 4,763 5,077
------------- -------------
Total Liabilities 1,057,920 482,110
------------- -------------
NET ASSETS $227,641,124 $229,841,697
============= =============
ANALYSIS OF NET ASSETS:
Common stock, $0.001 par value,
100,000,000 shares authorized and
16,560,100 issued and outstanding,
respectively $ 16,560 $ 16,560
Capital in excess of par value 230,229,279 230,229,279
Net unrealized (depreciation) appreciation
of investment portfolio (1,194,421) 112,968
Distributions in excess of net investment
income (1,410,294) (517,110)
------------- -------------
Total Net Assets $227,641,124 $229,841,697
============= =============
Net assets per share $ 13.75 $ 13.88
============= =============
GLADSTONE INVESTMENT CORPORATION
FINANCIAL HIGHLIGHTS
(UNAUDITED)
For the period
June 22, 2005
For the three (Commencement of
months ended Operations) to
June 30, 2006 June 30, 2005
---------------------------------
Per Share Data (1)
- ------------------
Balance at beginning of period $ 13.88 $ -
Net proceeds from initial public
offering (2) - 13.95
---------------------------------
Offering costs - (0.05)
Income from investment operations:
Net investment income (3) 0.16 -
Realized gain on sale of
investments (3) 0.00 -
Net unrealized appreciation of
investments (3) (0.08) -
---------------------------------
Total from investment operations 0.08 -
---------------------------------
Distributions (0.21) -
---------------------------------
Net asset value at end of period $ 13.75 $ 13.90
=================================
Per share market value at
beginning of period $ 14.90 $ 15.00
Per share market value at end of
period 15.00 15.05
Total Return (4) 2.13% 0.33%
Shares outstanding at end of
period 16,560,100 14,400,100
Ratios/Supplemental Data
------------------------
Net assets at end of period $ 227,641,124 $ 200,137,980
Average net assets (5) $ 227,718,666 $ 200,137,980
Ratio of expenses to average net
assets (annualized) 2.25% 0.06%
Ratio of net investment income to
average net assets (annualized) 4.53% 0.04%
(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 plan.
(5) Calculated using the average of the ending monthly net assets
for the respective periods.
CONTACT: Gladstone Investment Corp.
Kelly Sargent, 703-287-5835