Taylor Ritchie
CFO at Gladstone Investment
Thank you, Dave, and good morning, everyone. Looking at our operating performance for the first quarter of the fiscal year, we generated total investment income of $23,500,000 down from $27,500,000 in the prior quarter. This was primarily due to the prior quarter including 4,200,000.0 of success fee and dividend income, which did not reoccur as the timing of such income is variable. The decrease in total investment income was partially offset by an increase in interest income, including the collection of $1,500,000 of past due interest from a portfolio company that was previously on non accrual status. Net expenses for the quarter were $14,500,000 down from $20,300,000 The decrease was primarily due to the decrease in incentive fees, which include a $2,300,000 decrease in income based incentive fees as well as a $2,300,000 decrease in capital gains based incentive fees. Interest expense decreased in the current quarter due to the timing of the portfolio company exit in the prior quarter and the timing of our new investment activity in the current quarter. We also had an increase in credits to fees from the advisor due to the new investment activity previously mentioned. This resulted in net investment income for the quarter of $9,100,000 compared to $7,200,000 in the prior quarter. Overall, portfolio company valuations in aggregate was down $1,000,000 This unrealized depreciation was driven by decreased performance at some of our portfolio companies, partially offset by higher valuation multiples across the portfolio and increased performance at a number of our other portfolio companies. Adjusted net investment income, which is net investment income exclusive of any accrued or reversed capital gains based incentive fees was $8,900,000 or $0.24 per share compared to $9,400,000 or $0.26 per share in the prior quarter. The decrease was due to the net impact of realized gains and unrealized depreciation on investments in the prior quarter compared to the net unrealized depreciation recorded in the current quarter, which resulted in a reversal of previously accrued capital gains based incentive fees.