UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________

Form 8-K
_____________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event Reported): August 1, 2018  

Gladstone Investment Corporation
(Exact Name of Registrant as Specified in Charter)

Delaware814-0070483-0423116
(State or Other Jurisdiction of Incorporation)(Commission File Number)(I.R.S. Employer Identification Number)

 

1521 Westbranch Drive, Suite 100, McLean, Virginia 22102
(Address of Principal Executive Offices) (Zip Code)

(703) 287-5800
(Registrant's telephone number, including area code)


(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 [ ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 [ ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 [ ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 [ ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company [   ]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [   ]

 
 

Item 2.02. Results of Operations and Financial Condition.

On August 1, 2018, Gladstone Investment Corporation issued a press release announcing its financial results for its first fiscal quarter ended June 30, 2018. The text of the press release is included as an exhibit to this Current Report on Form 8-K. The information in this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.

Item 9.01. Financial Statements and Exhibits.

(d)           Exhibits.

Exhibit No. Description
   
99.1 Press Release issued by Gladstone Investment Corporation, dated August 1, 2018


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 Gladstone Investment Corporation
   
  
Date: August 1, 2018By: /s/ Julia Ryan        
  Julia Ryan
  Chief Financial Officer and Treasurer
  


EXHIBIT INDEX

 

Exhibit No. Description
   
99.1 Press Release issued by Gladstone Investment Corporation, dated August 1, 2018

EdgarFiling

EXHIBIT 99.1

Gladstone Investment Corporation Reports Financial Results for its First Quarter Ended June 30, 2018

MCLEAN, Va, Aug. 01, 2018 (GLOBE NEWSWIRE) -- Gladstone Investment Corporation (NASDAQ: GAIN) (the “Company”) today announced earnings for its first quarter ended June 30, 2018. Please read the Company’s Quarterly Report on Form 10-Q filed today with the U.S. Securities and Exchange Commission (the “SEC”), which can be retrieved from the SEC’s website at www.sec.gov or from the Company’s website at www.gladstoneinvestment.com

Summary Information:  (dollars in thousands, except per share data (unaudited)):

  June 30,
2018
 March 31,
2018
 Change %
Change
 
For the quarter ended:         
Total investment income $15,504 $15,419 $85 0.6%
Total expenses, net(A) 15,446 12,175 3,271 26.9 
Net investment income(A) 58 3,244 (3,186)(98.2)
Net realized gain 14,108 189 13,919 7,364.6 
Net unrealized appreciation 18,161 18,413 (252)(1.4)
Net increase in net assets resulting from operations(A) 32,327 21,846 10,481 48.0 
Net investment income per weighted-average common share(A)  0.10 (0.10)(100.0)
Adjusted net investment income per weighted-average common share(B) 0.20 0.21 (0.01)(4.8)
Net increase in net assets resulting from operations per weighted-average common share(A) 0.99 0.67 0.32 47.8 
Cash distribution per common share from net investment income 0.21 0.19 0.02 10.5 
Cash distribution per common share from realized gains(C) 0.05  0.05 NM 
          
          
Weighted-average yield on interest-bearing investments 13.0 12.6 0.4 3.2 
Total dollars invested $30,052 $27,351 $2,701 9.9 
Total dollars repaid and
collected from sales
 32,062 13,242 18,820 142.1 
          
As of:         
Total investments, at fair value $629,318 $599,147 $30,171 5.0%
Fair value, as a percent of cost 105.4%102.4%3.0%2.9 
Net assets $379,808 $354,200 $25,608 7.2 
Net asset value per common share 11.57 10.85 0.72 6.6 
Number of portfolio companies 33 33   
          

(A) Inclusive of $6.5 million, or $0.20 per weighted-average common share, and $3.6 million, or $0.11 per weighted-average common share, of capital gains-based incentive fees accrued during the three months ended June 30, 2018 and the three months ended March 31, 2018, respectively. These fees were accrued in accordance with United States generally accepted accounting principles (“U.S. GAAP”), where such amounts are 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 that this non-GAAP financial measure 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.

NM = Not Meaningful

Highlights for the Quarter:  During the quarter ended June 30, 2018, the following significant events occurred:

First Quarter Results: Net investment income for the quarters ended June 30, 2018 and March 31, 2018 was $58, or $0.00 per weighted-average common share, and $3.2 million, or $0.10 per weighted-average common share, respectively. This period over period decrease was primarily a result of the accrual of capital gains-based incentive fees of $6.5 million, or $0.20 per weighted-average common share in the current period, as compared to $3.6 million, or $0.11 per weighted-average common share, during the prior period. Such fees are accrued under U.S. GAAP, but payment is not contractually due under the terms of our investment advisory agreement. See discussion under Non-GAAP Financial Measure – Adjusted Net Investment Income below.

Net asset value per common share as of June 30, 2018 increased to $11.57 compared to $10.85 as of March 31, 2018. The quarter over quarter increase was primarily due to $14.1 million, or $0.43 per common share, of realized gains, primarily due to the sale of one portfolio company, and $18.2 million, or $0.56 per common share, of net unrealized appreciation, principally resulting from improved performance and an increase in comparable multiples used to estimate the fair value of certain portfolio companies, partially offset by a decline in performance of certain other portfolio companies. The increase was also partially offset by the aforementioned accrual of $6.5 million, or $0.20 per common share, of capital gains-based incentive fees accrued under U.S. GAAP, the payment of which is not contractually due under the terms of the investment advisory agreement.

Subsequent Events:  After June 30, 2018, the following significant events occurred:

Record Date Payment Date Distribution per
Common Share
 Dividend per
Share of
Series B Term
Preferred
Stock
 Dividend per
Share of Series
C Term
Preferred
Stock
 Dividend per
Share of
Series D Term
Preferred
Stock
 
July 20, 2018 July 31, 2018 $0.067 $0.140625 $0.135417 $0.13020833 
August 21, 2018 August 31, 2018 0.067 0.140625 0.135417 0.13020833 
September 19, 2018 September 28, 2018 0.067 0.140625 0.135417 0.13020833 
Total for the Quarter: $0.201 $0.421875 $0.406251 $0.39062499 
              

Non-GAAP Financial Measure — Adjusted Net Investment Income: On a supplemental basis, the Company discloses Adjusted net investment income, including on a per share basis, which is a financial measure that is calculated and presented on a basis of methodology other than in accordance with U.S. GAAP (“non-GAAP”). Adjusted net investment income represents net investment income, excluding the capital gains-based incentive fee. The Company uses this non-GAAP financial measure internally in analyzing financial results and believes that this non-GAAP financial measure is useful to investors as an additional tool to evaluate ongoing results and trends for the Company. The Company’s investment advisory agreement provides that a capital gains-based incentive fee is determined and paid annually with respect to realized capital gains (but not unrealized appreciation) to the extent such realized capital gains exceed realized capital losses and unrealized depreciation of investments for such year. However, under U.S. GAAP, a capital gains-based incentive fee is accrued if realized capital gains and unrealized appreciation of investments exceed realized capital losses and unrealized depreciation of investments. Refer to Note 4 — Related Party Transactions in our Quarterly Report on Form 10-Q for further discussion. The Company believes that Adjusted net investment income is a useful indicator of operations exclusive of any capital gains-based incentive fee, as net investment income does not include realized or unrealized investment activity associated with the capital gains-based incentive fee.

The following table provides a reconciliation from net investment income (the most comparable GAAP measure) to Adjusted net investment income for the periods presented:

  For the quarter ended 
  June 30, 2018 March 31, 2018 
  Amount Per Share Amount Amount Per Share
Amount
 
Net investment income $58 $ $3,244 $0.10 
Capital gains-based incentive fee  6,508  0.20  3,647  0.11 
Adjusted net investment income $6,566 $0.20 $6,891 $0.21 
              

Adjusted net investment income may not be comparable to similar measures presented by other companies, as it is a non-GAAP financial measure that is not based on a comprehensive set of accounting rules or principles and therefore may be defined differently by other companies. In addition, Adjusted net investment income should be considered in addition to, but not as a substitute for or superior to financial measures determined in accordance with U.S. GAAP.

Conference Call:  The Company will hold its earnings release conference call on Thursday, August 2, 2018, at 8:30 a.m. EDT. Please call (855) 376-7516 to enter the conference. An operator will monitor the call and set a queue for any questions. A replay of the conference call will be available through August 9, 2018. To hear the replay, please dial (855) 859-2056 and use the playback conference number 9879045. The replay will be available beginning approximately one hour after the call concludes. The live audio broadcast of the Company’s quarterly conference call will also be available online at www.gladstoneinvestment.com. The event will be archived and available for replay on the Company’s website through October 2, 2018.

About Gladstone Investment Corporation:  Gladstone Investment Corporation is a publicly traded business development company that seeks to make secured debt and equity investments in lower middle market businesses in the United States in connection with acquisitions, changes in control, and recapitalizations. The Company has paid 157 consecutive monthly cash distributions on its common stock. Information on the business activities of all the Gladstone funds can be found at www.gladstonecompanies.com.

To obtain a paper copy of our Quarterly Report on Form 10-Q, filed today with the SEC, please contact the Company at 1521 Westbranch Drive, Suite 100, McLean, VA 22102, ATTN: Investor Relations. The financial information above is not comprehensive and is without notes, so readers should obtain and carefully review the Company’s Form 10-Q for the three months ended June 30, 2018, including the notes to the consolidated financial statements contained therein.

Source: Gladstone Investment Corporation

Investor Relations Inquiries: Please visit www.gladstone.com or +1-703-287-5893.