Gladstone Investment(US:GAIN)2024-11-07 21:20Financial Performance - Total investment income for the three months ended September 30, 2024, was $22,565 thousand, an increase of 11.9% compared to $20,277 thousand for the same period in 2023[8]. - Net investment income for the three months ended September 30, 2024, was $7,291 thousand, compared to a loss of $1,730 thousand in the same period last year[8]. - The net increase in net assets resulting from operations for the three months ended September 30, 2024, was $15,482 thousand, down from $47,356 thousand in the prior year[8]. - Basic and diluted net investment income per common share was $0.20 for the three months ended September 30, 2024, compared to a loss of $0.05 in the same period last year[8]. - Total investment return for the three months ended September 30, 2024, was 5.17%, compared to 0.42% for the same period in 2023[10]. - Net investment income increased to $0.20 per share from a loss of $(0.05) per share year-over-year[10]. - Net investment income for the six months ended September 30, 2024, was $19.7 million, representing a 193.7% increase compared to $6.7 million in 2023[203]. Asset and Liability Management - Total assets decreased from $938,083 thousand as of March 31, 2024, to $868,780 thousand as of September 30, 2024, representing a decline of approximately 7.4%[5]. - Total liabilities decreased from $445,372 thousand to $410,405 thousand, a reduction of about 7.8%[5]. - Net assets decreased from $492,711 thousand to $458,375 thousand, reflecting a decline of approximately 6.9%[5]. - The net asset value per share decreased from $13.43 to $12.49, a decline of approximately 7%[5]. - The company maintained a net worth of $789.2 million and asset coverage of 229.3% as of September 30, 2024, in compliance with the Credit Facility covenants[114]. Investment Portfolio - Total investments amounted to $840,147,000 with a fair value of $853,307,000, representing a 186.2% increase[22]. - The company has invested approximately $1.8 billion in 58 companies since its initial public offering in June 2005, excluding syndicated loans[169]. - The investment portfolio as of September 30, 2024, consisted of 77.4% in debt investments and 22.6% in equity investments[163]. - The company has a diversified investment strategy, with significant allocations in sectors such as Chemicals, Plastics, and Rubber, and Telecommunications[22]. - The company’s investments are primarily valued using Level 3 inputs within the fair value hierarchy, indicating a reliance on internal and third-party valuations[22]. Income and Expenses - Total expenses, net of credits to fees, for the three months ended September 30, 2024, were $15,274 thousand, down from $22,007 thousand in the same period last year[8]. - Total expenses decreased by $6.7 million, or 30.6%, to $15.3 million for the three months ended September 30, 2024, primarily due to a reduction in incentive fees[190]. - The total incentive fee for the three months ended September 30, 2024, was $2.2 million, a decrease from $11.5 million in the same period of the previous year[93]. - Interest expense increased by $0.3 million, or 4.8%, to $6.4 million, driven by higher borrowings and an increased effective interest rate of 11.0%[193]. Cash Flow and Distributions - Net cash provided by operating activities was $75,484 for the six months ended September 30, 2024, compared to a net cash used of $(96,585) in the same period of 2023[14]. - The company declared cash distributions of $43.3 million for the six months ended September 30, 2024, with $17.6 million paid during this period and $25.7 million paid in October 2024[141]. - The company reported that 51.0% of cash distributions to common stockholders for the year were from ordinary income, while 49.0% were from capital gains[139]. Debt and Financing - The company has issued 5.00% Notes due 2026 with an aggregate principal amount of $127.9 million, resulting in net proceeds of approximately $123.8 million after costs[121]. - The effective interest rate on borrowings was 11.0% for the three months ended September 30, 2024, compared to 10.9% for the same period in 2023[114]. - The Credit Facility allows for maximum borrowings of $200.0 million, with an outstanding balance of $8.9 million as of September 30, 2024[113]. - The fair value of collateral under the Credit Facility was $648.0 million as of September 30, 2024, down from $717.3 million as of March 31, 2024[119]. Valuation and Fair Value - The Valuation Team employs various techniques, including Total Enterprise Value and Yield Analysis, to determine the fair value of investments[49][51]. - The company engages third-party valuation firms to provide independent assessments of fair value for certain investments[45]. - The fair value of secured first lien debt was $469.5 million as of September 30, 2024, while the fair value of secured second lien debt was $111.3 million[67]. - The fair value of the investment portfolio as of September 30, 2024, was 101.6% of cost, compared to 147.3% as of June 30, 2024[201]. Market Performance - The closing market price of the company's common stock was $14.45 per share on September 30, 2024, representing a 15.7% premium to its net asset value of $12.49 per share[173]. - The company’s common units in Funko are convertible into class A common stock upon meeting certain requirements, with fair value based on the closing market price of Funko, Inc. shares[34].