GAIN - Earnings call transcript Q4 2020 | Gladstone Investment Corporation

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Operator

Greetings and welcome to Gladstone Investment Fourth Quarter and Year End Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to Mr. Officer. Executive Chief Gladstone, David Please proceed, sir.

David Gladstone

for Atalia. Alright. at hopefully you is you to fund. the ending of will ask good morning there. Thank the shareholders This questions analysts, year this end. you, out and is all Chairman this some Good David and for XXXX us fiscal And Gladstone,

stock two XXXX. GAIN X.XXX% X% for stock and common are on listed the GAINL for GAINM NASDAQ We then all matures there, have and under for other got the for the at out the in. calling preferred Thank trading symbol note again trading we registered you in

Julia to shareholders a in will minutes. are Michael happy analysts General be But us. great few We going are Secretary, first, and our provide LiCalsi. and updates follow with you Mike? and to to Ryan those Counsel to start our talk up that always we Dullum and Dave

Michael LiCalsi

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

XX-K results Now, all including risk any actual factors other or many may different we these cause our documents the forward-looking statements, SEC. factors XX-Q, to from implied Forms materially be and our filed future on by results with expressed listed

of the website is or find them SEC's our Investors all www.sec.gov. website is can on which page You the which www.gladstoneinvestment.com

is as events by note a And otherwise, guarantee any of to results. revise obligation except as new information performance information, also of not no future or undertake or any we of these please past market whether forward-looking statements, result update future or a that required law. Now, publicly

website visit the take please to notification service. and opportunity our for gladstoneinvestment.com e-mail once our again, Now, sign-up

XX, is there yesterday press Facebook our detailed call XXXX, we information. But more Twitter release review The us overview so today’s @GladstoneComps find issued March keyword also XX-K and is on can you simply through both for Gladstone ask You of on Form an Companies. and results our

Now, with of Dullum, that, Dave Investment. over President Gladstone presentation turn to Dave? will I the

Dave Dullum

and capital buyout of showing million. gains distributions. really in of likewise It fiscal incremental is one provides here dividends. an per which inception We fees of on new companies That effect especially to note generate to of interest periods quarterly to $X.XX at both other XXXX. facilitate on everybody. in two of for investments the an company, our gains portfolio increase monthly dimension existing was well. in share did given exit a made a that add-on really capital some one the XXXX supplemental We X/XX/XX per about were help million COVID last both first also a shareholders quarters income $X.X share to share per that Hey, also X/XX/XX, also we an realized I We to from $X.XX we company’s the our and respectively. accretive income monthly one and and case then much equity supplemental overall of We today million two generated importantly strategy in impact share COVID share and is that XX about We year investing to portfolio actually to say differentiator equity. a from reinforces did limit This again, this where to am come cost annual recapitalization also in which X/XX/XX, realized the of of Mike. and/or correlation maintained these that $X.XX changes at on quarters, billion. able obviously where $X.XX to NII good of with scars. generating to X/XX/XX other and a policies. high $X.XX per very had equity XX% from income on dividend and a though and we income share reflects I some we trend value, companies recently or XX recovery it paid June exited in another, are $XXX $XX.XX and acquisition. happy share Thanks to at values important assets gains of wanted per able on income the our as stability, from as Along per distributions since dividend basis at portfolio completed the and as increased at with with also $X.XX the somewhat in And we I per buyout exit experienced. lines, $XX.XX with buyout of we from equity NAV reduced $XXX companies to $XXX of as have the on some assets $XX distribution through aggregate and morning, have we really they adjusted about minimum in other portfolio this, securities, our an this are we other million a income in Certainly, to with end companies, adjusted investment through the have year net portfolio NII mentioned an the level over the report exit. invested portfolio trend

briefly are were new before other more financings early on declines companies her would primarily valuations a cycle, with hope the to status and to and able very quarter like we that seeing will is during and on seeing and execute therefore one, improving Two trend next experienced we excellent balance least we elaborate touch given fiscal back fiscal and areas where sheet two continue the COVID on were low this at So, this we increases our year come favorable of and valuation I the on are that strong portfolio in clearly quarter-over-quarter. year liquidity availability accrual non-accrual to in And Julia the two begin the we levered with equity companies. section. exits actually that other X/XX/XX,

able want necessary. pandemic, to companies with Regarding support any issues we briefly are did position potential really and continue we have companies face see earnings company’s to the our temporary much as not decline provide to do of provide some starting did I monitor management support liquidity to with are portfolio any I in to we to financial and support in although actively to to review our experienced provide fortunately, engaged strong disruption liquidity that that as and real improvement we And mentioned, are proactively teams needs. a have

buyout forward, potential looking continue to the acquisitions to and being while continue continue challenges we though provide we expectations to portfolio companies actively elevated. So managerial price present with review just does support financial to market our purchase

and another distribution sheet, to in annually we structure our the of per of position Overall, discussions paid we high I monthly $X.XX are discipline our year. next is providing that we attractive diligence, a XXXX. to with supplemental take as believe and appropriate. we have although want distributions deals. to due I opportunities just continue of to of share And few that and to I of monthly usual maintain our balance earnings declared and elaborate of we So, level valuations do encouraged over portfolio state good a share closed per geared prospect of some be increasing a distributions our be June the have am the where view as portfolio, by the of acquisition in might run-rate respect, expect the in with to our distribution of strength $X.XX and currently in advantage a consistent engaging to

and over she I details. So some go will can more it with Julia? turn with that, Julia to

Julia Ryan

Thanks, Dave. morning. Good

million, on of operating year, performance latter NII at share had for trends of the $XX.X of $XX past adjusted over report per XXXX gains investments. the net certainly year investment Looking the its positive we happy of during realized and part income quarter $X.XX but total fiscal million in to resulting are challenges, and the

the last D with preferred XXXX extension our of Series term of are during redemption We our the also notes, our quarter success the the and the excited financing stock about of issuance credit fiscal facility.

million As the in per for $X.X the as of to we compared or share most million $X adjusted generated $X.XX NII recent quarter, per share $X.XX prior or quarter.

income to offset the We a adjusted which interest by the income. investment continue NII was our indicator other slightly and quarter an prior believe Investment declined transactions operations. as quarter-over-quarter decrease representative in income due to the partially in was is in of increase useful that

and due incentive not due. was is portfolio our realized capital believe we the this quarter, was year and expect believe Net support by by our and the key yet of gains the $X.X accrual grow going fee, We of As based million expenses reiterate, unrealized status the are to in improvement during million quarter the us. to prior Again, to we liquidity current will loans driven the quarter. new of Dave return success. that losses and in and to a net primarily compared which two gains fee impact flexibility our increase $X.X elements into to further maintaining fiscal for increased contractually which mentioned, can

facility in have With $XXX X/XX/XX. about new availability the million of place of capital our successful financing transactions have this under credit quarter, we long-term and as

to $XX.X increased unrealized NAV primarily of common related quarter-over-quarter, to $XX.XX million. Our net depreciation per share

solid. undistributed or declared With XXXX, income announced income in $X.XX million net to mind, shareholders and In previously April to of addition, as in distributable in remains with distribution Board $X.XX shareholders basis, be per Directors supplemental combined common paid June book net of our XXXX. totaled a common investment realized share. $XX.X to another gains that about On very

$X.XX $X.XX price. total a run been Assuming estimating the per annual of today’s which would yield share And closing and which yesterday’s Back my of distribution you, of has yet using part per common in of X% not per distributions or declared, covers David. would this distribution, result about current total to call. our monthly share, per in the year determined rate share $X.XX supplemental

David Gladstone

All great, nice Julia, very work.

the shareholders about seen, You and one I the along have informed ever with who Michael how have I’ve which you our information plenty people that are. we is and of ones following think and, largest Dave that are strong filed of stock yesterday, XX-K

year March has is gains. capital realized team Gladstone results generating investors investment year, in of that XXXX. XX, is for gains. reported the exit seeking transactions activity investments and to Investment believe position that believe Our income from monthly team distributions continuous with succeed buyout great for We the and including potential the to for one we’re financings, solid continue fiscal our ending of I distributions personally fiscal attractive supplemental significant

year in government’s reaction the during been has record it which COVID-XX extremely the good. and think I the to

$XXX from to $XXX while this million steady paying $XX.XX, all net up million, increased Assets to assets from dividend. $XX.XX a

love enjoyed who with dividends being COVID-XX have this of through for those right going recession paid. me, So our like dividend

So great some the quite investment. by team that’s running job

come analysts or the Now let’s stop have some any other there. have and we’ll from operator on, our out questions and shareholder

Operator

Instructions] Joseph Thank Jefferies. Our proceed. you. comes first from with Kyle question [Operator Please

Kyle Joseph

Hi, levels? guys very you markets Quick just having much contrast on. get in the to in good me for of is to morning. question, spreads kind sense pre-COVID and want focus for Thanks pricing where on, a terms of

Dave Dullum

right? looking it Good really morning. you at, the of – value we you for to I’m good know, what question Xx companies, what buy not we’re of spreads, won’t terms pushing around looking honest, answer was is if market as be saying will, companies to Kyle. much the not because companies, trailing companies of EBITDA. we more Dave. I’d we’re say change, great that Hey, And I pre-COVID So It’s think because in buy. to good multiples companies, enterprise

elevated We’re do of very, some part, that obviously well, multiples. as companies fact, number same did a sort did of in the trickier seeing, that environment, went frankly, relatively not well. is very some frankly, even COVID, that through Others And speaking.

But that’s I’d value and helps. really it? from really adjustments perspective that, how are to say, looking way on what’s our therefore, tricky and a into challenge a in called requires That business, to seeing part. said EBITDA, high the generally, got return enterprise buy some all ultimately the of the having rigor get the look multiples, you’ve so still financed COVID you So fairly have an thing through really on we are which

Kyle Joseph

see to Thanks. And back non-accruals, helpful. turn Very then great on. on two investments

back from would curious, kind at on Just them resulted or this specific things companies accrual? you that – is going of economic broader say being you’ve it resulted improvement in these done

Dave Dullum

answer certainly you generally, change or and been, with I I’d thing, as we were whether management also calendar their that’s know, frankly. here, couple say, they out good a more. business of then that on this should combination, companies, a year, work say all non-accruals the much we Yes. but happens couple the company. one, would could of one it that of a improved hopefully, managing or end in things, exception I’d there, our management Julia portfolio were have our companies. in said be say sort as Generally, a things are pretty job maybe here that with improving, a of by And we doing of if all And there it’s

Kyle Joseph

my Okay, helpful. answering Thanks for questions.

David Gladstone

Okay.

question. Second

Operator

in turn back are queue like the There to Gladstone call closing further Mr. comments. Instructions] this to no questions over [Operator would at I time. for

David Gladstone

to any you more I But see this at you that in. calling that’s point questions questions. the in around. like answer next And floating of there We’d for end this you time, call. Thank wish quarter. we’ll Alright. out are had

Operator

Thank and ladies you, gentlemen.

your disconnect great a time, may this and at You day. lines have

Gladstone Investment (GAIN) 12 May 212020 Q4 Earnings call transcript