Gladstone Investment(US:GAIN)2021-05-12 15:04Financial Data and Key Metrics Changes - The company reported an adjusted net investment income (NII) of $0.69 per share for the fiscal year ending March 31, 2021, with a recovery trend in the last two quarters showing adjusted NII per share at $0.20 and $0.24 respectively [8] - Net asset value (NAV) per share increased from $11.17 to $11.52, and total assets rose from $576 million to $644 million [9][26] - Monthly distribution was maintained at $0.07 per share, totaling $0.84 annually, with a supplemental dividend of $0.09 per share paid in June 2020 [9] Business Line Data and Key Metrics Changes - The company exited one portfolio company and completed a dividend recapitalization of another, generating other income from exit fees and dividends, along with realized capital gains on equity [10] - Since inception in 2005, the company has invested in 53 buyout portfolio companies, totaling approximately $1.4 billion, with 23 exits generating about $238 million in net realized gains [11] Market Data and Key Metrics Changes - The company noted that the buyout market continues to present challenges with elevated purchase price expectations, requiring rigorous due diligence [15] - The company is engaging in discussions for potential acquisitions, indicating a focus on attractive valuations [15] Company Strategy and Development Direction - The company aims to provide managerial financial support to portfolio companies while actively reviewing potential new acquisitions [15] - The structure of the portfolio is designed to provide consistent monthly distributions, with expectations to maintain the current run rate of $0.84 per share annually [16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the state of the portfolio and the strength of the balance sheet, anticipating good earnings and distributions over the next year [16] - The management highlighted that portfolio companies that experienced earnings declines are starting to see improvements, with a strong liquidity position to support temporary needs [14] Other Important Information - The company successfully issued 2026 notes, redeemed Series D term preferred stock, and extended its credit facility, enhancing its financial flexibility [18] - As of March 31, 2021, the company had approximately $158 million available under its credit facility [21] Q&A Session Summary Question: Market spreads and pricing compared to pre-COVID levels - Management indicated that there has not been much change in enterprise value multiples, with good companies still pushing around 7x trailing EBITDA, and some elevated multiples observed [30] Question: Non-accrual investments returning to accrual status - Management noted that the improvement in non-accruals is due to a combination of broader economic recovery and effective management changes within the portfolio companies [32]