Gladstone Investment(US:GAIN)2025-11-04 21:09Investment Portfolio - As of September 30, 2025, the investment portfolio consisted of 71.1% in debt investments and 28.9% in equity investments, at cost[169] - From inception through September 30, 2025, the company has invested approximately $2.2 billion in 65 companies, excluding syndicated loans[174] - The fair value of the investment portfolio exceeded the cost basis by $93.7 million as of September 30, 2025, compared to $39.2 million as of June 30, 2025[200] - The ending investment portfolio at fair value increased to $1,130.9 million as of September 30, 2025, compared to $853.3 million in the prior year, representing a growth of approximately 32.5%[222] Financial Performance - The company generated $353.4 million in net realized gains and $45.4 million in other income from exiting 33 portfolio companies, totaling an increase of $398.8 million to net assets[176] - Total investment income for the three months ended September 30, 2025, increased by $2.7 million, or 12.0%, to $25.3 million compared to the prior year period[185] - Interest income rose by $1.7 million, or 8.0%, to $22.7 million for the three months ended September 30, 2025[186] - The net increase in net assets resulting from operations was $28.7 million, an increase of 85.4% compared to $15.5 million in the prior year[184] - Total investment income increased by $4.1 million, or 9.1%, for the six months ended September 30, 2025, compared to the prior year period[203] - The net increase in net assets resulting from operations was $36.5 million for the six months ended September 30, 2025, a significant increase of 307.3% compared to the prior year[201] Expenses and Fees - Total expenses, net of credits from the Adviser, increased by $5.7 million, or 37.5%, to $21.0 million for the three months ended September 30, 2025[192] - The incentive fee increased significantly by $2.975 million, or 133.3%, to $5.2 million for the three months ended September 30, 2025[192] - Total expenses, net of credits from the Adviser, increased by $10.4 million, or 41.6%, during the six months ended September 30, 2025, primarily due to higher incentive fees and interest expenses[209] - The company recorded a capital gains-based incentive fee of $4.7 million for the six months ended September 30, 2025, compared to a reversal of $2.2 million in the prior year[210] Investment Losses and Gains - The company recorded a net realized loss of $29.9 million on investments for the three months ended September 30, 2025, compared to a net realized gain of $42.3 million in the prior year[184] - For the three months ended September 30, 2025, the company recorded net realized losses on investments of $29.9 million, primarily due to the restructuring of J.R. Hobbs[197] - The net unrealized appreciation of investments for the same period was $54.5 million, driven by improved performance of certain portfolio companies and the reversal of previously recorded unrealized depreciation related to J.R. Hobbs[198] - Net realized losses on investments were $29.9 million for the six months ended September 30, 2025, compared to net realized gains of $42.3 million in the prior year, indicating a significant decline[215] - Net unrealized appreciation of investments was $53.4 million for the six months ended September 30, 2025, primarily due to improved performance of certain portfolio companies[216] Debt and Financing - The total commitment amount of the Credit Facility is $270.0 million, with a potential total commitment of $300.0 million[177] - As of September 30, 2025, the company had $97.7 million of borrowings outstanding on the Credit Facility[237] - The 5.00% Notes due 2026 have an aggregate principal amount of $127.9 million, with annual interest payments of $6.4 million[240] - The 4.875% Notes due 2028 have an aggregate principal amount of $134.6 million, with annual interest payments of $6.6 million[243] - The company completed a public offering of the 8.00% 2028 Notes with an aggregate principal amount of $74.8 million, resulting in net proceeds of approximately $72.3 million after deducting $2.5 million in underwriting discounts and offering costs[246][248] - The 7.875% 2030 Notes were offered with an aggregate principal amount of $126.5 million, yielding net proceeds of approximately $122.4 million after deducting $4.1 million in underwriting discounts and offering costs[249][251] Shareholder Distributions - Monthly cash distributions to common stockholders for the quarter totaled $0.24 per common share[182] - Monthly cash distributions of $0.08 per common share were paid for six months from April to September 2025, along with a supplemental distribution of $0.54 per common share in June 2025[225] Regulatory and Compliance - The company intends to maintain its qualification as a RIC under Subchapter M of the Code, requiring it to distribute at least 90% of its Investment Company Taxable Income[260] - The company anticipates issuing equity securities to obtain additional capital in the future, subject to regulatory constraints when trading below NAV[234] Risk Management - The average risk rating for loans in the company's portfolio was 7.4 as of September 30, 2025, compared to 7.0 on March 31, 2025[259] - The company uses a proprietary risk rating system to estimate the probability of default on debt securities, with a scale from 0 to >10, where >10 indicates the lowest probability of default[258] - The company targets approximately 90% of loans in its portfolio to be at variable rates, with all variable-rate loans linked to the current 30-day SOFR rate as of September 30, 2025[264]