GAIN - Earnings call transcript Q3 2019 | Gladstone Investment Corporation

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Gladstone Investment Corporation Third Quarter's Earning Ending December 31st, 2019 Earnings Call and Webcast. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions]

to Gladstone. conference like speaker to now David today would hand over the your I ahead. go Please

David Gladstone

All right. XXst, GAINL. GAINM Sarah. is and for and Thank the you, of a the conference quarterly analysts under on quarter call common earnings preferred stocks ending NASDAQ Investment. stocks and December Gladstone XXXX traded shareholders This for This is GAIN the symbols two

a to you and this all you for provide of Thank future. analysts an shareholders you to our call; happened We're business happy calling current the give update provide always from and view environment. understand view the goals of a and in. Two what help

General start and ahead. LiCalsi. Secretary, of Michael go with We'll out our Counsel Michael course

Michael LiCalsi

include Thanks Securities David and factors future certain current believe forward-looking to they're XXXX Act uncertainties be Act the Exchange performance. which involve based other we on and those and of Securities These good under morning regarding may risks XXXX reasonable. and call statements including of statements our plans though forward-looking everyone. even our Today's

and on file different be Forms may the of found including And materially which to www.gladstoneinvestment.com all website be website forward-looking expressed is any factors can by future actual or with SEC's results risk the listed results SEC factors is cause or XX-K statements we our XX-Q, implied many other which from documents these our www.sec.gov. all on our which

past except any required performance or any is publicly future to revise We whether also otherwise update obligation new future guarantee statements of information Please market note by result as undertake information, results. no as no forward-looking events, or or law. that a of

our website visit opportunity the up gladstoneinvestment.com, take you that service. notification sign to once our e-mail again, ask We for

through The Form release on can results issued Twitter. there XX-Q keyword overview XX, yesterday @GladstoneComps. for ask that our find call also us information. press XXXX, and more And review Companies. you of we Today's is on our an December detailed so Facebook The Gladstone simply is You handle both

Investment's I'll President, that with Gladstone Dave? over Dullum. to David And turn the presentation

David Dullum

Hi and our XX/XX/XX call. morning net quarter income distribution results pleased common solid $X.XX quarterly shareholders last that most our of ending quarter very our than good this report of regular greater to on operating per adjusted share Mike. again consistent much and investment recent We're and Thanks for $X.XX with common and all to was per was share. the participants the

performance when is the quarters the the And outlook of adjusted share. portfolio considering income-generating investment particular for income have of valuations potential already based past strong, balance in three the on net X/XX/XX generated $X.XX ending per year our the we fiscal current and fiscal where

also. support made in to have we buyout During since distributions those income actually activity, equity four XX return to over with quarter in our Along portfolio portion also and times exited generating equity making that the total to companies exited with our on the investments -- quarter, incremental of thesis grow And assets add-on during shareholders. this existing we continued with of and that generated companies investments, investments shareholders period. monthly for cash-on-cash acquisitions and two investments an in overall exits these inception we portfolio we've and XXXX, again the and exit

it yield future asset determined needs, as and And at stock our with net capital the and price plan dividend performance to raise of wise we to at strong be we Our resulting that also XX/XX/XX. long-term some value common share the per that our $XX.XX common would remained strong look the equity. for

proceeds we value of ATM net million new accretive shareholders. which our have net January, stock So, common selling program asset to raised is all began existing in to-date we $X our about under and above

for shareholder our positive so program this overall continue of capital. cost will We value as it and is long determine we

the the annual an share rate during $X.XX of quarter, maintained per for So, common at we quarter. distributions monthly our XX/XX/XX

January, in successes our run during reflecting X% distributions increase of additional $X.XX $X.XX. per capital rate declared calendar of monthly a gain in an made Subsequently, And share December. supplemental to the year, Board or annual per $X.XX we for common our share distribution common realization another

on just investment So, news that in a very to The activity outlook. much on The briefly and pickup continues are the buyout we're good a new competitive. we is be seeing very environment though involved fiscal mentioned and as of we I potential opportunities investment that analyzing new number profile. add-ons other our made new mentioned, opportunities. year-to-date the fit reviewing in evaluating And as a basis and several in two acquisitions, daily

to continuing grows gains. manage as capital the to supplemental and additional exits we're anticipate portfolio we semi-annual and able realize and the distributions So pay matures

Of XXXX. any fiscal the and one declared and Board will we we ability additional make to that that be of amounts timing, our deemed well in as further to evaluate of supplemental as their would capital gains, these course, which similar Directors the distributions distributions

basis, over you So to turn to actual give Julia? performance this detail the Julia for to quarter. past CFO, on Ryan that our financial it I'm of going more

Julia Ryan

Thanks Dave.

company me $X start Investment We of due which was financial of million prior the to quarter amounts was upon past a to other NII due which income, can one exit by declined compared variable. performance. $X.X $X.X quarter increase in driven in prior a by primarily million, an million offset of interest with the portfolio Let income collection million $X.X of December decrease and in with quarter. NII of be in fund income, the the summary ended which of the which slightly

proceeds the million which in capital This this to increase net partially compared fee and in to interest adviser. Net gains-based incentive expenses investment the of taxes a was quarter. decrease by with incentive excise quarter, $X.X as pre-incentive notably expense, net exits paydown prior in unrealized an in driven from higher the by credit and offset from due our given as fees $X.X facility expenses slightly decrease income-based credits and gains most other decreased fee, given was to a well the the a increase million primarily fee income realized increase

adjusted exclude common share to incentive gains-based NII in capital fee current average accrual, When investment the quarter. the weighted adjusting income was $X.XX for net

We investment metric as of and associated with fee, fee. continue a does to realized capital any income net indicator is gains-based investment representative exclusive incentive useful operations not transactions believe that this unrealized of include or those this

of XX, million, exits. the ended XXXX $XX recognized gain two a realized on those of December During was quarter a net we which result primarily investments

the and exceeded portfolio disbursements On portfolio. companies of in and end existing the existing million of and side December as decreased compared at about because million prepayments to total to due roughly exits $X to the assets and $XXX sheet XX, million to $XXX a liquidity balance decline September,

asset and result XX, $XX.XX facility about Liquidity remained $XXX strong of compared million assets available totaled coverage common under our Net million, XXX%. of with almost to as or December $XX.XX $XXX credit an share per impact share unrealized exits primarily during a of gains XX distributions of unrealized the which of September or realized reversal depreciation quarter. depreciation, and per includes upon the at recorded made the exceeding appreciation previously

December million XX This fee, totaled realized undistributed on for gains due only of net declared gains-based amount $X.XX million, investment -- common and $X.X of combined year about $XX deemed income which of reduced roughly is with share. we is net As basis, $XX book contractually almost the currently. net the book of of which per or net and distribution the million by XXXX is accrual million also fiscal the million incentive $XX $XX capital a

in incentive first for the gains-based in even future accrual of of our fee quarter equal, if share calendar capital be to and share the mind else announced for to Board periods All distribution per $X.XX previously monthly per the distributions $X.XX be the paid in Directors entire With increased would as available that to common to advisers. shareholders common January were XXXX.

distribution distributions, yet $XX.XX. $X.XX $X.XX share year rate totaled monthly X.X% share yesterday's per price run or this roughly which of based distributions yield been annual and per $X.XX which is Assuming per declared closing supplemental share, have per on of in determined common of a estimating not

you part my back and today's of covers This call to David.

David Gladstone

yesterday results and and activity the significant bring date. up XX-Q add-on All has filed think transactions our Okay. net you including good to information exit Dave, The Julia, everyone with shareholders, I Thank gains. Michael. should realized excellent reported investment presentation team to

one XX months' last see of brokerage two BDCs. large follow that and number houses to a return GAIN regard the list and has was did the was significant. with total They XX.X%. of on quite I that their list That's

make the now it due Fantastic Some good can't be of to And it. today. to hard from in come times. fabulous make time never you if that's it'd that we're returns

own I ever future team a have we and this been the continue the best of year running And my and to well. in so, XXXX that company this position that's tremendous. hope looks is think reported ending now position that XX, we've throughout view longer. we're in and fiscal our is The just as a good team in year goes it successes they've I another for these March today great

And believe Gladstone seeking gains return. you potential show other and income. for to supplemental attractive distributions continue monthly continuous, team is a investment The capital Investment we to investors an distributions from and strong hopes

in you point, And how today we'll seen from come can and would Sarah, our questions them and they our XX-Q was analysts at questions? shareholders about and ask you that this yesterday. and filed on heard what stop have tell some

Operator

of Mickey Certainly. first Ladenburg. [Operator the Our from Instructions] line question comes Schleien with

now is line Your open.

Mickey Schleien

it's the Dave I pipeline I have your But your that and the today available since appreciate equity question instead, just accretive nicely common everyone. stock Yes, meaningfully healthy And price do is debt good still use issuing not is capital than that you I one quite looks cheaper that at low? why equity allocation. current about and leverage capital NAV. obviously realize to noted morning

David Dullum

X availability the is again our we've think to decision equity driven capital thought really by frankly a around of Mickey, knows in many like next times as somewhat ATM about and I the taking raising look months. view The I some through talked longer capital fungible. think who what being as world of was much So to needs as less sort XX the going immediate and

do to of work. We to objective thought this was and to relatively as to because base our able somewhat need common point put way you effective a to and go slew The is not out accretive. it raise we shareholders equity in wonderful especially position We're actually diluting be equity capital and without point shore a a our being to up it. base it at

The how careful cost pay we'll we common at the out will for do to to look we're as on decline at out equity, start price course whatever reasons, yield based I the the of mentioned very levels they and the of in dividend that stock that paying if you be continue relative that. on if current

you if way of low-cost somewhat and in, company about good opportunistic terms will, corporate the equity. fairly the of a some to in relative So ability this of thinking finance again lay

So really that's answer more long about it's but a that. sort Mickey, of

news point with good have The that that both move availability of your frankly of availability new as excess we access of to we'll to as result have we some able lots gains investments forward we've and that is credit the also and through be a generated. line our cash that have, really we indeed we

So that's basically the answer.

Mickey Schleien

Okay. particular potentially Dave. has China? on borrowers them platform just the manufacturing to that or some I that given mind. could I how one some a your And came question be from of follow-up thoughts to may importing impact supplies started understand, its your but have materials industries. And of expertise early my you days in know, coronavirus Gladstone formulate as

David Dullum

based on, know that just impact working So, some the had And board. we have it's these obviously, from a the import do with which of not internally themselves been been few we've And companies China. ours, working lot But have they companies companies. more to so say as indeed on we of do issues coronavirus. necessarily not that, will the and importantly, but have I a all across tariff product

cetera. So – say them they like moved a they've some worked. coronavirus, Vietnam couple to this, have I would production et even And the places prior of to

slowdown our of do But I effect. that coming But think not we on or right there's point, companies import And product anticipate indeed significant some this any I'm see of from our so hearing possible manufacturing in. at China could it CEOs it's that a that a in manufacture to now have yeah, impact.

Mickey Schleien

me I you it Dave. understand. Thank That's for morning. time, your for this

David Dullum

Mickey. Thanks,

David Gladstone

question. Next

Operator

Thank you. [Operator Instructions]

David Gladstone

on come other any have questions, We please board.

Operator

Individual have [ph], a the of Investor. question do We Ferron from Mark line

Your line open. is now

Unidentified Analyst

guys. Hey,

return being quarter. fantastic Julia was $X.XX And it a share. dividend about to hear nice talk about Another total the at

the As China it's SOG effect future? and watching like Are companies far any you. Thank of sounded for other as in cetera, pretty et the out like things minimal. you're there you

David Dullum

Lots seeing that we're about manufacturing been issues has All general, inputs course, the talking predicting. and a keeping very started seeing most CEOs run moves economy lot being companies than I'm of from Everyone's of haven't around recession we more getting employees. our other conservative. Nothing into our hiring really all and of with a towards good the and of reasonably careful again are very in a our automation, and main we good We've getting economy yet. companies. qualified

So, on. generally, I one thing, usual important but of think to for at we have moves – to higher what all is the the automation are all businesses we focus we're basics look kind

Unidentified Analyst

Dave. you, Thank

Your doing Thank great job are you very are – and always. guys girls much. as

David Gladstone

question. Another

Operator

David from have the of line Individual question We do [ph], a Kobza Investor.

line now Your open. is

Unidentified Analyst

ago my shares. few performance for Kobza, rely on in income along I initiated cost your is name you. to Thank income. and Investment I Gladstone investment My five an average about your basis and gratitude have my called just for position own team. David companies express and my to I thanks years monthly for a with of $XX.XX, and this XX,XXX – I other Hello.

And few bless keep I a much, thank Gladstone and other say and BDCs including Investment grateful. again other some is that can best always. the And and I and out that far of I'm Thank that Corporation investment most so away grateful owned. Lord the you most so you. own you I'm I've may the And companies companies and

David Gladstone

have are another appreciate you our holders compliment. Well, question? dividends. we thank people monthly that Do And for like nice and who we

Operator

no questions further time. at have this We

David Gladstone

All the all calling quarter. and in. we'll time That's right. see call. the together you this thank Well, for appreciate of you next We end

Operator

today's this participating. Ladies and gentlemen, concludes Thank conference for call. you

disconnect. now may You

Gladstone Investment (GAIN) 5 Feb 202019 Q3 Earnings call transcript