In This Article:
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Total Investment Income: $22.2 million, down from $23.6 million in the prior quarter.
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Net Expenses: $9.8 million, down from $18.3 million in the prior quarter.
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Net Investment Income: $12.4 million, up from $5.3 million in the prior quarter.
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Adjusted Net Investment Income: $8.6 million or $0.24 per share, consistent with the prior quarter.
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Total Assets: $914 million as of June 30, 2024.
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Non-Accrual Companies: Four companies, representing about 7.8% of the fair value of debt investments.
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Net Asset Value (NAV): $13.01 per share, down from $13.43 per share in the prior quarter.
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Available Credit Facility: Over $113 million available on a $200 million credit facility.
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Monthly Distribution: $0.08 per share, annual run rate of $0.96 per share.
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Asset Coverage Ratio: 216% as of June 30, 2024.
Release Date: August 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Gladstone Investment Corp (NASDAQ:GAIN) reported adjusted net investment income (NII) of $0.24 per share, consistent with the previous quarter.
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The company maintained a strong balance sheet with low leverage and good availability on its credit facility.
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GAIN invested $18.5 million in secured first lien debt for an add-on acquisition, enhancing its existing portfolio.
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The company continues to provide consistent monthly distributions of $0.08 per share, with a history of supplemental distributions.
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There is an increase in new acquisition opportunities, indicating a positive outlook for future growth.
Negative Points
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Total investment income decreased to $22.2 million from $23.6 million in the prior quarter, primarily due to decreased interest income.
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Four portfolio companies are on non-accrual status, representing about 7.8% of the fair value of debt investments.
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Net asset value (NAV) decreased to $13.01 per share from $13.43 per share in the previous quarter.
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Valuations in the aggregate were down by $18.9 million, driven by lower valuation multiples and decreased performance at some portfolio companies.
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The competitive environment for new acquisitions remains high, with upward pressure on valuations.
Q & A Highlights
Q: With all debt investments at floating rates and most debt liabilities at fixed rates, could NII per share decline below the distribution, and would the board be comfortable with NII running below the dividend? A: David Dullum, President, stated that they do not foresee a decline in the spread that would necessitate cutting the dividend. They supplement income with other sources and expect NII to remain above the dividend. Rachael Easton, CFO, added that while yields may compress as rates come down, borrowing costs on their variable debt will also decrease, and their debt portfolio has floors to protect against lower rates.