Exhibit 99.1
Gladstone Investment Reports Results for the Second Quarter ended September 30,
2006
-- Net Investment Income was $2.9 million or $0.17 per common share
-- Net Increase in Net Assets From Operations was $2.8 million or $0.17
per common share
MCLEAN, Va.--(BUSINESS WIRE)--Nov. 1, 2006--Gladstone Investment Corp.
(NASDAQ:GAIN) (the "Company") today announced earnings for the second quarter
ended September 30, 2006. All per share references are per basic and diluted
weighted average common share outstanding, unless otherwise noted.
Net Investment Income for the second quarter ended September 30, 2006 was
$2,883,886 or $0.17 per share, as compared to $1,412,906 or $0.09 per share for
the second quarter ended September 30, 2005. Net Investment Income for the six
months ended September 30, 2006 was $5,465,050 or $0.33 per share, as compared
to $1,432,706 or $0.09 per share for the period June 22, 2005 (commencement of
operations) to September 30, 2005.
Net Increase in Net Assets Resulting from Operations for the second quarter
ended September 30, 2006 was $2,848,044, or $0.17 per share, as compared to
$1,476,732 or $0.09 per share for the same period a year ago. Net Increase in
Net Assets Resulting from Operations for the six months ended September 30, 2006
was $4,125,092, or $0.25 per share compared to $1,496,532 or $0.09 per share for
the period June 22, 2005 (commencement of operations) to September 30, 2005.
Total assets were $228,136,147 at September 30, 2006 as compared to
$230,323,807 at March 31, 2006. Net asset value was $13.71 per actual common
share outstanding at September 30, 2006 as compared to $13.88 per actual common
share at March 31, 2006.
The annualized weighted average yield on the Company's portfolio for the
three months ended September 30, 2006 was 8.72%. The annualized weighted average
yield on the Company's portfolio for the three months ended September 30, 2005
was 6.38%. The annualized weighted average yield on the Company's portfolio for
the six months ended September 30, 2006 was 8.44% compared to 6.38% for the
period June 22, 2005 (commencement of operations) to September 30, 2005.
During the second quarter ended September 30, 2006, the Company acquired
interests in seven new syndicated loans for approximately $13.5 million and
acquired interests in four existing syndicated loans of approximately $1.8
million.
At September 30, 2006, the Company held 28 non-control/non-affiliate
investments, three control investments and cash investments, totaling an
aggregate cost basis of $209 million and fair value of approximately $208
million.
Condensed Schedule of Investments
September 30, 2006
Investment Type Cost Fair Value
- ----------------------------------------------------------------------
Total Non-control/Non-Affiliate
Investments $122,529,078 $121,555,262
Total Control Investments 56,746,318 56,491,805
Total cash equivalents 30,007,690 30,007,690
---------------------------
Total investments and cash equivalents $209,283,086 $208,054,757
===========================
"Since the inception of our fund on June 22, 2005, we have invested over
$170 million, bringing our total portfolio investments to 78% of our initial
public offering proceeds at quarter end. We are reviewing many buyout and
mezzanine opportunities and anticipate reporting additional buyout and mezzanine
activity for the third quarter," said Chip Stelljes, President and Chief
Investment Officer.
Subsequent to September 30, 2006, the Company:
-- Purchased three new loan participations of approximately $4.0 million;
-- Sold one loan participation for $2.0 million and received principle
repayments of approximately $2.4 million on two loan participations;
-- Declared monthly cash dividends of $0.07 per common share for each of
the months of October, November and December of 2006; and
-- Entered into a $100 million revolving credit facility.
The Company will hold a conference call Thursday, November 2, 2006 at 8:30
am EST to discuss first 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 December 2, 2006.
To hear the replay, please dial (877) 660-6853, access playback account 286 and
use ID code 217126. 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 Investor Relations 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
and the Company's Form 10-Q as filed with the Securities and Exchange Commission
today. 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 three For the three
months ended months ended
September 30, 2006 September 30, 2005
------------------ ------------------
INVESTMENT INCOME
Interest income
Non-Control/Non-Affiliate
investments $ 2,387,375 $ 193,578
Control investments 1,256,303 -
Cash and cash equivalents 569,580 1,613,012
------------------ ------------------
Total interest income 4,213,258 1,806,590
Other income 670 -
------------------ ------------------
Total investment income 4,213,928 1,806,590
------------------ ------------------
EXPENSES
Administration fee 124,861 77,962
Base management fee 861,893 92,108
Directors fees 56,250 52,000
Insurance expense 67,626 42,478
Professional fees 88,040 66,302
Stockholder related costs 65,100 42,903
Taxes and licenses 41,337 -
Other expenses 24,935 19,931
------------------ ------------------
Total expenses 1,330,042 393,684
------------------ ------------------
NET INVESTMENT INCOME 2,883,886 1,412,906
------------------ ------------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Realized loss on sale of
Non-Control/Non-Affiliate
investments (1,934) -
Net unrealized
(depreciation) appreciation
of investment portfolio (33,908) 63,826
------------------ ------------------
Net loss on investments (35,842) 63,826
------------------ ------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 2,848,044 $ 1,476,732
================== ==================
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS PER
COMMON SHARE:
Basic and Diluted $ 0.17 $ 0.09
================== ==================
SHARES OF COMMON STOCK
OUTSTANDING:
Basic and diluted weighted
average shares 16,560,100 16,231,404
GLADSTONE INVESTMENT CORPORATION
STATEMENT OF OPERATIONS
(UNAUDITED)
For the period
June 22, 2005
For the six (Commencement of
months ended Operations) to
September 30, 2006 September 30, 2005
------------------ ------------------
INVESTMENT INCOME
Interest income
Non-Control/Non-Affiliate
investments $ 4,351,855 $ 193,578
Control investments 2,446,605 -
Cash and cash equivalents 1,277,920 1,661,210
------------------ ------------------
Total interest income 8,076,380 1,854,788
Other income 986 -
------------------ ------------------
Total investment income 8,077,366 1,854,788
------------------ ------------------
EXPENSES
Administration fee 240,250 105,045
Base management fee 1,663,202 92,108
Directors fees 99,500 52,000
Insurance expense 140,237 42,478
Professional fees 167,788 66,302
Stockholder related costs 158,866 43,538
Interest expense - 378
Taxes and licenses 98,444 -
Other expenses 44,029 20,233
------------------ ------------------
Total expenses 2,612,316 422,082
------------------ ------------------
NET INVESTMENT INCOME 5,465,050 1,432,706
------------------ ------------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net realized gain on sale of
Non-Control/Non-Affiliate
investments 1,339 -
Net unrealized
(depreciation) appreciation
of investment portfolio (1,341,297) 63,826
------------------ ------------------
Net gain on investments (1,339,958) 63,826
------------------ ------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 4,125,092 $ 1,496,532
================== ==================
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS PER
COMMON SHARE:
Basic and Diluted $ 0.25 $ 0.09
================== ==================
SHARES OF COMMON STOCK
OUTSTANDING:
Basic and diluted weighted
average shares 16,560,100 16,084,900
GLADSTONE INVESTMENT CORPORATION
STATEMENT OF ASSETS AND LIABILITIES
(UNAUDITED)
September 30, 2006 March 31, 2006
------------------ ------------------
ASSETS
Non-Control/Non-Affiliate
investments (Cost 9/30/06:
$122,529,078; 3/31/06:
$97,423,004) $ 121,555,262 $ 97,585,972
Control investments (Cost
9/30/06: $56,746,318; 3/31/06:
$55,846,318) 56,491,805 55,796,318
------------------ ------------------
Total investments at fair value
(Cost 9/30/06: $179,275,396;
3/31/06: $153,269,322) 178,047,067 153,382,290
Cash and cash equivalents 48,446,618 75,672,605
Interest receivable 1,294,355 761,388
Prepaid directors fees 72,500 -
Prepaid insurance 200,875 99,874
Due from Adviser - 234,551
Other assets 74,732 173,099
------------------ ------------------
TOTAL ASSETS $ 228,136,147 $ 230,323,807
================== ==================
LIABILITIES
Administration fee payable to
Gladstone Administration $ 124,861 $ 110,002
Base management fee payable to
Gladstone Management 861,893 -
Accrued expenses 154,285 367,031
Other liabilities 16,692 5,077
------------------ ------------------
Total Liabilities 1,157,731 482,110
------------------ ------------------
NET ASSETS $ 226,978,416 $ 229,841,697
================== ==================
ANALYSIS OF NET ASSETS:
Common stock, $0.001 par value,
100,000,000 shares authorized
and 16,560,100 shares issued
and outstanding $ 16,560 $ 16,560
Capital in excess of par value 230,196,151 230,229,279
Net unrealized (depreciation)
appreciation of investment
portfolio (1,228,329) 112,968
Distributions in excess of net
investment income (2,005,966) (517,110)
------------------ ------------------
Total Net Assets $ 226,978,416 $ 229,841,697
================== ==================
Net assets per share $ 13.71 $ 13.88
================== ==================
GLADSTONE INVESTMENT CORPORATION
FINANCIAL HIGHLIGHTS
(UNAUDITED)
For the three For the three
months ended months ended
September 30, 2006 September 30, 2005
-------------------------------------
Per Share Data (1)
- --------------------------------
Balance at beginning of period $ 13.75 $ 13.90
Income from investment
operations:
Net investment income (2) 0.17 0.09
Realized gain on sale of
investments (2) - -
Net unrealized appreciation
of investments (2) - -
-------------------------------------
Total from investment
operations 0.17 0.09
-------------------------------------
Distributions (0.21) (0.06)
-------------------------------------
Net asset value at end of
period $ 13.71 $ 13.93
=====================================
Per share market value at
beginning of period $ 14.82 $ 15.05
Per share market value at end
of period 14.60 14.68
Total return (3) -0.04% -2.07%
Shares outstanding at end of
period 16,560,100 16,560,100
Ratios/Supplemental Data
- --------------------------------
Net assets at end of period $ 226,978,416 $ 230,753,412
Average net assets (4) $ 226,140,557 $ 230,242,643
Ratio of expenses to average
net assets (annualized) 2.35% 0.68%
Ratio of net investment income
to average net assets
(annualized) 5.10% 2.45%
(1) Based on actual shares outstanding.
(2) Based on weighted average basic per share data.
(3) 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.
(4) Calculated using the average of the ending monthly net assets for
the respective periods.
GLADSTONE INVESTMENT CORPORATION
FINANCIAL HIGHLIGHTS
(UNAUDITED)
For the period
June 22, 2005
For the six (Commencement of
months ended Operations) to
September 30, 2006 September 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) 0.33 0.09
Realized gain on sale of
investments (3) - -
Net unrealized appreciation
of investments (3) (0.08) -
-------------------------------------
Total from investment
operations 0.25 0.09
-------------------------------------
Distributions (0.42) (0.06)
-------------------------------------
Net asset value at end of
period $ 13.71 $ 13.93
=====================================
Per share market value at
beginning of period $ 14.90 $ 15.00
Per share market value at end
of period 14.60 14.68
Total return (4) 0.87% -1.74%
Shares outstanding at end of
period 16,560,100 16,560,100
Ratios/Supplemental Data
- --------------------------------
Net assets at end of period $ 226,978,416 $ 230,753,412
Average net assets (5) $ 226,929,612 $ 222,716,478
Ratio of expenses to average
net assets (annualized) 2.30% -0.57%
Ratio of net investment income
to average net assets
(annualized) 4.82% 1.93%
(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.
Investor Relations
Robert Johnson, 703-287-5835