from Gladstone Investment Corporation (NASDAQ:GAIN)
Gladstone Investment Corporation Reports Financial Results for its Fourth Quarter and Fiscal Year Ended March 31, 2024
MCLEAN, VA / ACCESSWIRE / May 8, 2024 / Gladstone Investment Corporation (Nasdaq:GAIN) (the "Company") today announced earnings for its fourth quarter and fiscal year ended March 31, 2024. Please read the Company's Annual Report on Form 10-K, filed today with the U.S. Securities and Exchange Commission (the "SEC"), which is available on the SEC's website at www.sec.gov or the investors section of the Company's website at www.gladstoneinvestment.com.
Summary Information: (dollars in thousands, except per share data (unaudited)):
| March 31, 2024 | December 31, 2023 | $ Change | % Change | |||||||||||||
For the quarter ended: | ||||||||||||||||
Total investment income | $ | 23,648 | $ | 23,081 | $ | 567 | 2.5 | % | ||||||||
Total expenses, net(A) | 18,325 | 13,337 | 4,988 | 37.4 | % | |||||||||||
Net investment income(A) | 5,323 | 9,744 | (4,421 | ) | (45.4) | % | ||||||||||
Net realized (loss) gain | (14,650 | ) | 43,461 | (58,111 | ) | NM | ||||||||||
Net unrealized appreciation (depreciation) | 31,911 | (46,626 | ) | 78,537 | NM | |||||||||||
Net increase in net assets resulting from operations(A) | $ | 22,584 | $ | 6,579 | $ | 16,005 | 243.3 | % | ||||||||
Net investment income per weighted-average common share(A) | $ | 0.15 | $ | 0.28 | $ | (0.13 | ) | (46.4) | % | |||||||
Adjusted net investment income per weighted-average common share(B) | $ | 0.24 | $ | 0.26 | $ | (0.02 | ) | (7.7) | % | |||||||
Net increase in net assets resulting from operations per weighted-average common share(A) | $ | 0.63 | $ | 0.19 | $ | 0.44 | 231.6 | % | ||||||||
Cash distribution per common share from net investment income | $ | 0.24 | $ | 0.43 | $ | (0.19 | ) | (44.2) | % | |||||||
Cash distribution per common share from cumulative net realized gains(C) | $ | - | $ | 0.81 | $ | (0.81 | ) | (100.0) | % | |||||||
Weighted-average yield on interest-bearing investments | 14.3 | % | 14.4 | % | (0.1) | % | (0.7) | % | ||||||||
Total dollars invested | $ | 936 | $ | 68,200 | $ | (67,264 | ) | (98.6) | % | |||||||
Total dollars repaid and/or collected from sales | $ | 500 | $ | 77,953 | $ | (77,453 | ) | (99.4) | % | |||||||
Weighted-average shares of common stock outstanding - basic and diluted | 36,114,984 | 34,351,597 | 1,763,387 | 5.1 | % | |||||||||||
Total shares of common stock outstanding | 36,688,667 | 35,351,954 | 1,336,713 | 3.8 | % | |||||||||||
As of: | ||||||||||||||||
Total investments, at fair value | $ | 920,504 | $ | 902,808 | $ | 17,696 | 2.0 | % | ||||||||
Fair value, as a percent of cost | 107.8 | % | 103.9 | % | 3.9 | % | 3.7 | % | ||||||||
Net assets | $ | 492,711 | $ | 459,941 | $ | 32,770 | 7.1 | % | ||||||||
Net asset value per common share | $ | 13.43 | $ | 13.01 | $ | 0.42 | 3.2 | % | ||||||||
Number of portfolio companies | 24 | 25 | (1 | ) | (4.0) | % | ||||||||||
| March 31, 2024 | March 31, 2023 | $ Change | % Change | |||||||||||||
For the year ended: | ||||||||||||||||
Total investment income | $ | 87,306 | $ | 81,543 | $ | 5,763 | 7.1 | % | ||||||||
Total expenses, net(A) | 65,529 | 44,543 | 20,986 | 47.1 | % | |||||||||||
Net investment income(A) | 21,777 | 37,000 | (15,223 | ) | (41.1) | % | ||||||||||
Net realized gain | 30,256 | 10,753 | 19,503 | 181.4 | % | |||||||||||
Net unrealized appreciation (depreciation) | 33,272 | (12,206 | ) | 45,478 | NM | |||||||||||
Net increase in net assets resulting from operations(A) | $ | 85,305 | $ | 35,547 | $ | 49,758 | 140.0 | % | ||||||||
Net investment income per weighted-average common share(A) | $ | 0.63 | $ | 1.11 | $ | (0.48 | ) | (43.2) | % | |||||||
Adjusted net investment income per weighted-average common share(B) | $ | 1.00 | $ | 1.10 | $ | (0.10 | ) | (9.1) | % | |||||||
Net increase in net assets resulting from operations per weighted-average common share(A) | $ | 2.47 | $ | 1.07 | $ | 1.40 | 130.8 | % | ||||||||
Cash distribution per common share from net investment income | $ | 1.08 | $ | 0.92 | $ | 0.16 | 17.4 | % | ||||||||
Cash distribution per common share from cumulative net realized gains(C) | $ | 1.12 | $ | 0.49 | $ | 0.63 | 128.6 | % | ||||||||
Weighted-average yield on interest-bearing investments | 14.4 | % | 13.0 | % | 1.4 | % | 10.8 | % | ||||||||
Total dollars invested | $ | 183,924 | $ | 133,756 | $ | 50,168 | 37.5 | % | ||||||||
Total dollars repaid and/or collected from sales | $ | 80,228 | $ | 87,833 | $ | (7,605 | ) | (8.7) | % | |||||||
Weighted-average shares of common stock outstanding - basic and diluted | 34,466,724 | 33,311,785 | 1,154,939 | 3.5 | % | |||||||||||
Total shares of common stock outstanding | 36,688,667 | 33,591,505 | 3,097,162 | 9.2 | % | |||||||||||
As of: | ||||||||||||||||
Total investments, at fair value | $ | 920,504 | $ | 753,543 | $ | 166,961 | 22.2 | % | ||||||||
Fair value, as a percent of cost | 107.8 | % | 104.6 | % | 3.2 | % | 3.0 | % | ||||||||
Net assets | $ | 492,711 | $ | 439,742 | $ | 52,969 | 12.0 | % | ||||||||
Net asset value per common share | $ | 13.43 | $ | 13.09 | $ | 0.34 | 2.6 | % | ||||||||
Number of portfolio companies | 24 | 25 | (1 | ) | (4.0) | % | ||||||||||
NM = Not Meaningful
(A) Inclusive of $3.5 million, or $0.09 per weighted-average common share, of capital gains-based incentive fees accrued during the three months ended March 31, 2024 and ($0.6 million), or ($0.02) per weighted-average common share, of capital gains-based incentive fees reversed during the three months ended December 31, 2023, respectively; and $12.7 million, or $0.37 per weighted-average common share, of capital gains-based incentive fees accrued during the year ended March 31, 2024 and ($0.3 million), or $(0.01) per weighted-average common share, of capital-gains based incentive fees reversed during the year ended March 31, 2023, respectively. These fees were accrued/(reversed) in accordance with United States generally accepted accounting principles ("GAAP"), where such amounts were not contractually due under the terms of the investment advisory agreement for the respective periods. Also see discussion under Non-GAAP Financial Measure - Adjusted Net Investment Income below.
(B) See Non-GAAP Financial Measure - Adjusted Net Investment Income, below, for a description of this non-GAAP measure and a reconciliation from Net investment income to Adjusted net investment income, including on a weighted-average per share basis. The Company uses this non-GAAP financial measure internally in analyzing financial results and believes it is useful to investors as an additional tool to evaluate ongoing results and trends for the Company.
(C) Estimates of tax characterization made on a quarterly basis may not be representative of the actual tax characterization of distributions for the full year. Estimates made on a quarterly basis are updated as of each interim reporting date.
Highlights for the Quarter: During the quarter ended March 31, 2024, the following significant events occurred:
- Portfolio Activity:
- Recognized a $14.7 million realized loss on our preferred and common equity investments and related first and second lien debt investments in The Mountain Corporation ("The Mountain") upon its liquidation and dissolution.
- Distributions and Dividends:
- Paid $0.08 per common share to common stockholders in each of January, February, and March 2024.
- At-the-market ("ATM") program activity:
- Sold 1,336,713 shares of our common stock under our common stock ATM program at a weighted-average gross price of $14.41 per share and raised approximately $18.9 million in net proceeds. These sales were above our then-current estimated NAV per share.
- Financing activity:
- Amended our credit facility, increasing the size from $135.0 million to $200.0 million.
Fourth Quarter Results: Net investment income for the quarter ended March 31, 2024 was $5.3 million, or $0.15 per weighted-average common share, compared to net investment income for the quarter ended December 31, 2023 of $9.7 million, or $0.28 per weighted-average common share. This change was a result of an increase in total expenses, net of credits, partially offset by an increase in total investment income, quarter over quarter.
Total investment income for the quarters ended March 31, 2024 and December 31, 2023 was $23.6 million and $23.1 million, respectively. The quarter over quarter increase was primarily due to a $0.8 million increase in dividend and success fee income, the timing of which can be variable. This increase was partially offset by a $0.3 million decrease in interest income, primarily due to a decrease in weighted-average principal balance of our interest-bearing investment portfolio outstanding.
Total expenses, net of credits, for the quarters ended March 31, 2024 and December 31, 2023 was $18.3 million and $13.3 million, respectively. The quarter over quarter increase was primarily due to a $4.1 million increase in the capital gains-based incentive fees in the current quarter, as a result of the net impact of realized and unrealized gains and losses, as well as a $1.3 million decrease in credits to fees from Adviser, partially offset by a $0.3 milliondecrease in other expenses.
Net asset value per common share as of March 31, 2024 was $13.43 compared to $13.01 as of December 31, 2023. The quarter over quarter increase was primarily due to $31.9 million, or $0.88 per common share, of net unrealized appreciation of investments, and $5.3 million, or $0.15 per common share, of net investment income, partially offset by $14.7 million, or $0.41 per common share, of realized losses on investments and $8.7 million, or $0.24 per common share, of distributions paid to common stockholders.
Highlights for the Year: During the year ended March 31, 2024, the following significant events occurred:
- Portfolio Activity:
- Invested $61.3 million in two new portfolio companies, through a combination of secured first lien debt and preferred equity;
- Recapitalized our investment in one portfolio company, investing an additional $2.5 million in the form of secured first lien debt. In connection with this investment, we received gross proceeds of $2.2 million, including $1.9 million of dividend income and $0.3 million of realized gains;
- In addition to amounts