Gladstone Investment(US:GAIN)2020-07-29 17:11Financial Data and Key Metrics Changes - The company reported adjusted net investment income (NII) of $0.11 per share for the quarter ended June 30, 2020, down from $0.19 per share for the quarter ended March 31, 2020, reflecting the impact of COVID-19 [12][30]. - Total portfolio income remained relatively stable quarter-to-quarter, indicating a solid foundation of the assets owned [13]. - The net asset value (NAV) per share decreased to $10.87 as of June 30, 2020, from $11.17 at March 31, 2020, a decline of $0.30 per share due to the impact of COVID-19 on portfolio company valuations [20]. Business Line Data and Key Metrics Changes - The company has not needed to provide significant additional financial support to its portfolio companies, indicating strong liquidity and management of cash flow [16]. - A new buyout investment of approximately $47 million was made in July, which included a combination of equity and debt, contributing to future interest income [18]. Market Data and Key Metrics Changes - The aggregate portfolio values depreciated about 8% from December 31, 2019, to March 31, 2020, primarily due to the pandemic, but only a 1% decline was observed from March 31 to June 30, 2020, suggesting stabilization [23]. - The company noted that the performance of portfolio companies varied based on their sector and geographic location, with some companies exceeding expectations despite the pandemic [15]. Company Strategy and Development Direction - The company is focused on closely monitoring portfolio companies and ensuring cash flow management during the pandemic [14]. - There is an ongoing effort to review potential new acquisitions, with a focus on quality due diligence and maintaining expected returns [26]. - The company aims to maintain its distribution levels while being cautious about the economic environment and potential impacts on portfolio companies [71]. Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of portfolio companies as the economy stabilizes and businesses adapt to the pandemic [48]. - The company is prepared for potential further devaluation of individual portfolio companies but remains focused on preserving value and supporting management teams [24]. - The outlook remains cautious, with management emphasizing the importance of liquidity and the ability to support portfolio companies through challenging times [66]. Other Important Information - The company raised approximately $2.3 million in net proceeds under a new series of equity and about $1.7 million under a common stock ATM, both above NAV [33]. - The board maintained a current monthly distribution run rate of $0.84 per year, representing a yield of about 8.4%, excluding supplemental distributions [34]. Q&A Session Summary Question: What are the terms received on Mason West? - The company focuses on total return on assets, with expected yields on debt portions around 12% and aggregate yields in the high 9% to 10% range [44]. Question: What is the status of Horizon facilities on non-accrual? - Horizon is travel-dependent and has been significantly affected by COVID-19, leading to its non-accrual status, but management remains optimistic about its recovery [48][49]. Question: What is the outlook for liquidity of borrowers? - On average, portfolio companies are in good shape, with management actively working on liquidity through cash flow management [66]. Question: Is there an expectation for another semi-annual supplemental dividend this year? - The company will evaluate the potential for a supplemental dividend based on liquidity and portfolio performance as the year progresses [70]. Question: How does the company plan to bridge the shortfall in net interest income? - The company is focusing on potential recoveries from non-accrual investments, new deals, and expense management to improve net interest income [95].