GAIN - Earnings call transcript Q4 2024 | Gladstone Investment Corporation

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Operator

Greetings, and welcome to the Gladstone Investment Corporation Fourth Quarter and Year-End Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host David Gladstone, Chief Executive Officer. Thank you, sir.

You may begin.

David Gladstone

Okay. Latoya. you, Thank introduction, nice morning you to That's and all. very good Gladstone, This Investment. Chairman David Gladstone of is is This analysts quarter conference fourth the call XXXX, March for earnings XX, shareholders and of Investment. and Gladstone fiscal year-end

listed common and GAININ, the GAINZ are GAIN, preferred X GAINL have stock, on trading then the We symbol and other for and X we stocks NASDAQ registered notes.

warn to no, over now the ahead, our you and he'll LiCalsi, he's you to General -- some going Michael it me our turn warning. with I'll Mike. give So give just up Counsel, Go

Michael LiCalsi

forward-looking Thanks, certain David. our of regarding include the and factors, other risks reasonable. Many of the Good current may they're implied XXXX morning, statements different any plans, documents Act those involve may including future factors future everybody. results uncertainties on be with and performance, XX-K Act Today's we factors and Securities our Forms though Exchange XXXX, cause other forward-looking XX-Q, even call and our and these including to we these or materially based believe Securities results to the statements listed on from under statements, forward-looking filed which expressed our SEC. all risk be actual by

visit once notification past that's a or forward-looking of or gladstoneinvestment.com Please future sign on guarantee whether service could page information, take opportunity the as any results. can law. And is except You e-mail note our them again, for as information find the new of or market any our required a by of website, not is events SEC's And undertake statements, there. you also Investors to update no revise publicly or performance gladstoneinvestment.com, up please website, we future on result www.sec.gov. which that website, otherwise, the obligation to

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

it that, President. Dullum, turn I'll With back Dave to

Dave Dullum

much, very the thanks to that's on Mike, all good call. and morning

are and year. the we fiscal in follows report the very to year able for quarter had March solid fiscal fourth good we produced obviously, on very that results for XXXX, first GAIN ending First, previous pleased for the X quarters we're this which again

the end X/XX/XX, which for we adjusted which So value total and share the $XXX from up our million, at significantly to of year-end. year, did $X the prior of pretty NII increase generated $XXX million portfolio fiscal per fair is

net to buyout Now -- increasing portfolio significant capital this successful a financings exit growth it's our assets existing result for million. of $XX.X incremental gain and generated being reduced add-ons by new realized one while really where we companies, of a activity through

to to So up the get in is fiscal which for total million 'XX we the number, that from million year. net invested prior $XXX a year of $XXX

some at Now part event $XXX of invested portfolio buyouts investments invested million in as additional new $XX and an companies. add-on or existing a was amount, million X of this roughly is recapitalization

a there that just Now companies And little mentioned, a for and cap They They of for were were add-ons, there were recap interest I for X and actually for opportunities were on in made that up actually buyouts, recap bit company. new reasons. not that particular this portfolio not there. income to, X some gains, fact, grouping. were companies these events still bad clarification, take ownership in were us maintain actually significant

building and strong have we with therefore do a in teams know its continue strong pursue our obviously future a business value So opportunities companies equity we continue us of to belief management gains. and to the as they for investment knowledge in pretty future do increase add-on allow to we're the able where

expect going opportunities forward. So we continue you add-on should will these do to that

during year, per our share was monthly maintain on or shareholders, $X.XX distribution $X.XX basis. which to we an did annual the And per share

per in distributions. of share supplemental We also paid total a $X.XX

therefore, the fiscal for we to $X.XX aggregate annual shareholders distributions per had of So year. share

we've these Now success to clearly, obviously, these our income monthly exits the build we distributions. we're large which from which gains take, on that realized our years, generate strategy, coming in to to addition, buyout over the supplemental reward distributions we us the distributions, on actually been shareholders which able demonstrates from having capital the actually with allows that with supplemental

have we gains our constructively and for the portfolio able benefit increased, shareholders. been be to will XXXX, As has continue of matured, at the this clearly equity to these since we've values harvest

being As exit companies too to, rapidly, a model, some able for having really, of of it's time. the because shareholders not you benefit long are all these that to of to companies know, period them. to our we're of maintain And we unable

the while produce have So that that need timing that the level support continue our hopefully, maintaining currently we assets to the will dividend time, of over able grow to the to to are monthly exits and continue of we income the levels balance we them.

these capital million other fundamental equity-type the net fund, a reinforcing $XXX shareholders our XX I our in realized our So and as on this in providing of actually resulted while we exits our goal to growing XXXX period, but these and in this through income invested approximately X/XX/XX gains in mentioned well and total an to companies, monthly companies of XX about million and gains. $X.X private $XXX as billion, portfolio earlier, we've function approximately assets inception generated companies, actually aggregate additional of million the for again, distributions in has as $XX the exited buyout since

strong. got low leverage. is sheet balance We've Our

the Rachael. obviously the You'll the need And about arises, financing new will while this our to if companies, through portfolio we from the growing we hear interim continue add-ons providing in more support I continue mentioned assets so buyouts. the

that hearing strong. bankers investment flow volume other to and the were we The is say, okay, backlog we've quality are building, seeing of So building. that opportunities quickly finding deal actually back outlook, we the is I opportunities new the at we're the that deal new frankly, seeing I'd been folks clearly has with but the in backlogs looking from been is would before. say and levels

some including So buyout working is which initial right pretty of a have what I And closing something on varying right add-ons, in and the as process, our buyout to, those, we interest. now, now, what be and we fact, these out, letter we're deals, with call, put indications go phases due obviously into we're may, so. of mentioned. We of say, in we'll move new months next, actively on hopefully we call, are or in of stages And LOI then would say then intent, in each good X diligence. I we where

significant there So though, in is a competitive the and market, it liquidity, is environment. strong

years, are with So over conservative. we it the to as everyone stick call, done this We've we're that. pretty on well and going knows

So while going be new are in are to that prepared to careful of going we're values and aggressively what we acquisitions, willing be competing terms for pay. we to

that portfolio, carefully. And our position is frankly, we really do can that in a

our right the feel So company. of now about very and good where the momentum is I nature

as we forward, our up good. the very and and I portfolio, the that mentioned, looking quarter summing in state the is believe year fiscal So of

of strong year. pieces we over earnings In really the liquid and have performance. very our the and good sheet in have next of continued to active We a words, other prospect balance distributions activity, maintain level place buyout

and with actual So turn Rachael? I'll give CFO, more performance. to detail over Easton, the Rachael you that, it our she some can on

Rachael Easton

call. on and the David, everyone morning to good you, Thank

can and year. variable earned from operating as our we our increase in at investments lower investments recur million, prior current success year. to up year the well for interest made strong, This which performance, year fiscal income was offset Looking amounts investment in during generating the income in on and yield XXXX debt XX.X% the that income fee finished million the did the income, to by average partially was as year. by This increase timing $XX.X total in of not weighted in interest driven new $XX.X fiscal due on an be dividend

net prior year cover year, or still of distribution per $X.XX $X.XX monthly more of share. with annual per or our ended to $XX.X enough income than Additionally, we down share, investment fiscal $XX.X the million regular although per the adjusted in slightly from $X million share

as on This incentive from to or required impact $XX.X fourth quarter GAAP. net of quarter. or I just a up investment were $XX.X income a capital gains-based capital to net Adjusted million million, FY resulted the of increase in exclusive be $X.X in income quarter for million the million in fees primarily the of the indicator increase The fourth the and expenses can mentioned. Net in under accrued of the is $XX.X unrealized reported per is $X.X fluctuation we investment believe the was share, million the of prior in $X.XX quarter. We primarily adjusted representative do for variable, $X.XX quarter current the Focusing down 'XX, prior and quarter. million gains-based $X.X as prior large ongoing increase This million, due be investment that compared gains-based The net up million fees income losses of accrued fees for quarter operations. generated continue to $X.X was and any income, slightly in the prior to success accrued million from income, quarter. timing investment from quarter. to capital the income our incentive due realized share gains due to incentive investment $X.X total net that in an of is which recognized fee U.S. which net in to is per useful due primarily $XX.X

of March portfolio investment. from X of the on XX, During dissolution X was XXXX, quarter to upon the companies the reduced number X nonaccrual ended companies

key place back of release, We our we had of support the $XXX that liquidity when our capital We issuances, grow have we our are available get status as credit our facility. continue million success. and to rate With on flexibility fixed believe in companies to maintaining and $XXX will accrual remaining elements public with and note long-term portfolio on working million possible. yesterday's X X

low, remains March our were NAV. at with this all leverage with of above XXXX, of Additionally, plenty an our very successful over million common required proceeds of Overall, in XXX% shares accretive on common providing to our on XX, $XX the sale the ratio net we coverage stock being of cushion million asset ATM program XXX%, raising quarter, stock coverage. shares and X.X approximately

net increased Our of the per NAV share share of investment driven $X.XX quarter. this $XX.XX per by $X.XX compared depreciation income. was in of primarily net share prior The to investments $XX.XX per unrealized quarter to increase and

common to shareholders partially and remains per ended were strong. the book with $X.XX year share amounts distributable per by share per $X.XX shareholders of at monthly quarter. distributions per offset Consistent These during fiscal distribution $X.XX annual investments We quarters, our to $X.XX $X.XX on earnings rate losses per an share paid the in consistent prior share share. and run realized for $XX.X or of million with remains spillover of

we've the $X.XX see per During in fiscal year, an distributions. share supplemental aggregate

mentioned, yesterday's realized we yield funding using capital is Dave our we the distributions the gains XX.X% on a per future exits. In $X.XX recognize continue to which we during look in about year, price As $XX.XX. and supplemental paid of of as regular supplemental monthly of distributions the portion share closing aggregate, fiscal equity

my covers you, to Back David. call. part today's This of

David Gladstone

for return to associated investment Michael. very the yesterday, filed the year for the to That's success solid is the the information the call forward everyone and distributions team and you. nice, in March solid The than time. other And for SEC report well Thank next was gains Dave gains. We XX, ending show and which should year, and including team an in less fiscal we it's shareholders. a with activity The hopes to the as with and good supplemental income. attractive has to up seeking results great reported monthly XX-K potential from Okay. nice believe by date Gladstone capital point those a for as distributions with this bring realized net our Rachael, quarter you at exit year. continue team XXXX, in year position this This that investors is new believe a we go continue good Investment away, investment this as

shareholders analysts Now our line, on let's from and the some have that Latoya. questions are

Operator

[Operator Instructions] Schleien Mickey comes Thalmann. first question Our Ladenburg from with

Mickey Schleien

of And gain that the apart unrealized nice very what appreciation? a Mountain, for reported fund your you caused share Dave, from reversal would per any what that help can highlight drove $X.XX themes understand us the that?

Dave Dullum

in come Rachael let I'll have quick and Mickey, then Sure. fill in behind I'll and thoughts stab, that. a some

Rachael Easton

Sounds great.

see performance unrealized the portfolio almost entirely across an at was companies. it a decreased to was as depreciation offset at performance portfolio. of Looking from it's multiples This perspective, was really We the really companies. driving Mountain due a portfolio but but its that did the at many due companies, saw. of this in of depreciation a of many bit whole, final the reversal performance by there to our was the unrealized depreciation decreased the handful of the quarter realized we of with as performance There dissolution, we that unrealized

if Dave, holes any in want you And to fill there.

David Gladstone

X a number small reported that. with we're year And here for most actually million portfolio showed view all based are that headed slightly ended, right of are know on Fair our Yes. of that on you And those been as better those of personal that while have with million for feel here, the couple significantly. portfolio performing a in a to that notice that I individual and individual are our speak. amount and the by we breakdown the off in of companies are we I so exception my like in a the of relatively off where portfolio couple them. you, a handful K, appreciated that can the portfolio, is tell we'll good I and companies think of knowledge There the of direction

time, a multiples EBITDA of fairly overall some are with and little a just say by there handful Obviously, same At just I'd some being is done cases. individual net Rachael gains. good the said, large, good generating fundamentally in function as significant performing frankly, being a in these bit it companies issues no down performance. and a at there, major high And of very level, of

can address I I it. the best think that's really on

Mickey Schleien

Dave. for Thanks that,

And you in the is just said in always it's there's performing with know if word, -- told of don't portfolio, you've past, sort right given reluctant demand much the I performers acquisition in good strong equity So companies. the what private some but so for you're me assume be to hard know I offers have make something then for phone coming year, to the because fiscal you're is some sell to decision of must ringing But unrealized gains? replace these reasonable your good some that some you this it. of to for investments for with going harvest you pretty to it those the

Dave Dullum

you is this or And one, ourselves the we're think come, very if being what, Press time and say, you the a couple Well, need to successful. that very know hit the a to and folks teams, which points. the is good invested come year, which indeed "Guys, which to Counsel when always we us by said you management a always honestly, make I some right. it think liquidity no, I And We've that exit -- lot they of had we is say, like business, it, has true it's with. exits really of driven look past

again, hold and -- as our us we you to know, listened a replace something so say, that. whilst really to generally point, allow companies as go exit But And if position to, because in these have and really a we and model we it. we well good is gain, exactly realized maintain to good you and the to

that right? So as getting, these us you market portfolio. at we are said say we Having regular look approach, about to and us a the our you, really to reinvestment on people, almost it's like where investment "reinvest" take it have calls supplementals. think that, bankers the to coming model all and that realized we really if to basis pretty point take look either also we important a what really we're hard companies we the at for we So and out, decision the the at not gains of do generate as why and business as to

we that over would having in we good more so time distribution. exit versus the have one. be So be pretty is income level keep the it same there a and to monthly at generating the of can assets cautious best likely maintaining year how or would And do next say our which might the very I not for that

of position a that it's obviously, a that. we one really But I kind struggled in question, balance, it's it's and I that, with with. We're So and a how that's to good good add think Mickey. would

Mickey Schleien

That's really helpful, last Dave. me. one And for question

track You Gladstone and problem investments. record your of the universe affiliated companies have a in fixing

that or Mountain out, managements, work you like see just think companies recapitalized others situations merged we but don't replaced you've of businesses. I where you've Sometimes the can

with tell sure if both So which us doing have you'd on while. you a you're mistaken, and what been with that can those? nonaccrual And mind, rectify like to Hobbs, for not Edge I'm in I'm

Dave Dullum

meeting Yes. Hobbs September. benefited think first, you've at our that by being I last

really to team management think some on detail a going is right without the positive see management I you into function got performance we good They couple have of of a now, very teams things. track at which and a of actually, Hobbs. a

the things new as as not they as rapidly should of new And contracts. been. them contracts pricing affected One and with grew they somewhat that perhaps so of good frankly, those business were have the really

-- certain basically. contracts these percentage somewhere are or of So when completion fixed-price and

actually were over of money contracts. were some losing on time, they these -- So

lower folks on most, is year they've you again, positive is and so actually the So And if got team. the we've right having really in not good ago. team board. the and than that, the in reduced was, if it a margin believe, therefore, right a headed direction. been But said the number now We've and EBITDA, will, good able, top line we is those volume, all, the out, the say, wash to of now, revenue

any we less, And maybe year that with on hopefully working or a or So frankly, we'll so might accrual keep on that by just be back, with one. one.

Edge a to components it. has couple of

on there working those Some one with But effect are. with that don't detail might feel say made that's things of it. are where again, we positive than we're changes see to other that right aspect that We've there. recently going I not negative. more luck, that comment some And some any with on I can X with now, business. And any

Mickey Schleien

of to and year team Gladstone. the Dave, very congratulations your fiscal for and end good on you a

Dave Dullum

to you, Thank feeling the hope sir. we way, get hope soon. better, and I you're by you see I

Operator

a have Rowe do We Instructions] from [Operator just B. Bryce Riley. in with question came

Bryce Rowe

just a just like you it volume in was deals more thoughts made little the remarks, wanted makes comment that them like spot. to with a about you of was any your a attractive around the ask opportunities David, a comment maybe and than less prepared them what that of those you'd from good I you're where particular and But opportunities little quality of spotty, sounded seeing will, kind maybe to in if in came be? up maybe

Dave Dullum

Right.

So our at of look, happy back we to them. And look end there's were think, the or know coming year and flow thanks, that way, are I'm new being from to deals. are feel this where a we obviously, the to we fair have last near number -- are into time you I and we investment selective banking And that on to we holding seeing you're very say, new side I and going Bryce. as are, put companies you. spend starting by be like And now I miss able get backlog. deals the of would definitely the we're the on

value, able meeting people we getting And in to we frankly, to feel to believe have So even Xx, to, that's from we to on like companies anywhere that around Xx spend management generally EBITDA. time that are there while for other when are clearly a that the X.Xx are we're buy be not good maybe because out we to going been a Xx ones there some we're go Xx. processes our

part comment, And so my that's frankly. of

good pays don't really we the they look multiple. speak, surface, while honestly, kind so sure are, to companies on of I'm understand And that one, how those

smaller. a with EBITDA works, the not the us. word, arms if some X of quality. have of in as but the but they're feel businesses, little good get something how not it's pretty So know, surface, -- they kind our we're around year, or spotty general use model around. And the as X, marketplace more less could really you seeing. we it's our the of for speak, It's much what are a that and they're bit a positions fundamentally And we companies have even differentiator, we're bit to clear, The our their doing that's you is look a dealers so X on consistent, decent but new

decisions part to So really time how really, actually we and the if say, level, on have to the activity to X or the on make the are activity months we is level able books the try up, deals new But some be main get selective. over we spend to our conscientious next, so.

David Gladstone

Bryce, and just to his some that folks of trying mention is mother together are our saying everybody to that deals. put

there trying a there So sponsors don't a call we lot of they of fictitious numbers a company and these call in roll-up, it come believe out and take through. some that are independent to beginning what

so everybody thing the and sell very lot. that inflation. going years, of X on is And a standpoint, the of wants Inflation X best attractive lot that There's marketplace who you chance helps X not a see in to get we bought mentioned now or very, don't price like. We that it. capital another it has things then in X that and seeing pick up because at been you go just we're may to the where from compared gains out a

that. of some seen we've So

good time. So don't for is out of count because inflation inflation here a amount

questions? And any that's we Do have all. other

Operator

I'll it queue. in for questions back to closing further turn you comments. no are There

David Gladstone

guys for this to please call. end that you work Latoya. you of before come much conference the time. the enough up Okay. meeting. you you, with this next come And you on questions very didn't in, Thank attending Would Thank that's

Operator

This concludes teleconference. today's

a Thank disconnect and your great have at you your for participation, day. may time. lines this You

Gladstone Investment (GAIN) 9 May 242024 Q4 Earnings call transcript