GLADSTONE INVESTMENT CORPORATION\DE Q4 FY2025 earnings call

• Positive results for Q4 and FY 2025 with adjusted NII of $0.97 per share covering the dividend.
• Portfolio fair value increased to $979M, with realized capital gains of $19.8M from a portfolio company exit.
• Invested $221M in the year, up from $184M prior year, adding talent to the investing team and managing 25 operating companies.
• Maintained monthly distribution of $0.08 per share, with supplemental distributions from realized capital gains.
• Since inception, invested in 62 buyout portfolio companies, exited 33, with current portfolio valued at $979M and net realized gains of $353M.

For the fiscal year ended March 31, 2025, Gladstone Investment generated adjusted NII of $0.97 per share, which covered the $0.96 per share annual dividend. Total investment income was $93.7 million, up from $87.3 million in the prior year. The portfolio fair value was $979 million as of 03/31/25, up from $921 million prior year end. They invested $221 million in the year, up from $184 million prior year, with investments in new portfolio companies, add-on investments, and a dividend recap. Throughout the year, they maintained a monthly distribution of $0.08 per share, with supplemental distributions totaling $1.66 per share for the year and an additional $0.54 per share declared post-year end.

• Cautiously optimistic about buyout activity, with close to closing two new acquisitions.
• Have a backlog of companies in initial review, moving towards letter of intent and due diligence stages.
• Considering tariff impact on valuations of potential buyout opportunities.

• Tariffs impacting portfolio companies, with some exposure to tariff risk in the portfolio.
• Uncertain economic landscape affecting valuations and buyout activity.
• Four portfolio companies on non-accruals status, though two are showing improvement in profitability.

Q: Mickey Schleien asked about quantitative exposure to tariff risk in the portfolio.

A: David Dullum responded that most portfolio companies are impacted in some regard, with a few directly producing in China already working on supply chain adjustments.

Q: Mickey Schleien asked about the outlook for non-accrual portfolio companies like Hobbs.

A: David Dullum stated Hobbs is profitable and improving, with hope to bring it back on accrual by year end, and other non-accrual companies are moving in the right direction.

Q: Erik Zwick asked about the components of cautiously optimistic buyout activity.

A: David Dullum said optimism comes from close to closing acquisitions and a backlog of companies in review; caution is due to tariff impact on valuations and economic uncertainty.

Q: Erik Zwick asked about the rationale for Educators Resource dividend recap and other recap opportunities.

A: David Dullum explained Educators Resource recap was due to a good management team and reinvestment decision, with no immediate other recap opportunities seen but ongoing evaluation.