Gladstone Investment Corp (GAIN) 2024 Q2 法說會逐字稿

Greetings, and welcome to the Gladstone Investment Corporation Second Quarter Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. David Gladstone, Chief Executive Officer. Please proceed, sir.

您好，歡迎參加格萊斯頓投資公司第二季財報電話會議。 （操作員指示）謹此提醒，本次會議正在錄製中。現在我很高興向大家介紹你們的東道主，執行長大衛·格萊斯頓先生。請繼續，先生。

Thank you, Latonya, and good morning to everybody. This is David Gladstone, Chairman of Gladstone Investment, and this is the second quarter end in our fiscal year that ends March of 2024. The quarter that we're talking about, though, is the 1 that ends in September 30, 2023. So we're bringing everybody up to date. And Gladstone Investment is listed on NASDAQ and has the trading symbol of GAIN, for the common stock. And then we have 3 preferred stocks that are out there, and those are registered notes. Thank you all for calling in.

謝謝你，拉托尼亞，祝大家早安。我是 Gladstone Investment 董事長 David Gladstone，這是我們截至 2024 年 3 月的財年的第二季末。不過，我們談論的季度是截至 2023 年 9 月 30 日的第一季。我們正在為每個人提供最新資訊。 Gladstone Investment 在納斯達克上市，普通股交易代號為 GAIN。然後我們有 3 隻優先股，這些都是記名票據。感謝大家的來電。

We're always happy to provide updates to our shareholders and analysts that are following us and provide a view of the current business environment, a little bit about the future, hopefully. Two goals is to help you understand what has happened and give you a current view of the future. And now I'll start out with our General Counsel, Michael LiCalsi.

我們總是很樂意向關注我們的股東和分析師提供最新信息，並提供對當前商業環境的看法，希望對未來有一些了解。有兩個目標是幫助您了解發生的事情並讓您對未來有一個當前的看法。現在我將從我們的總法律顧問 Michael LiCalsi 開始。

Thanks, David. Good morning, everybody. Today's call may include forward-looking statements under the Securities Act of 1933 and the Securities Exchange Act of 1934, including those regarding our future performance. These forward-looking statements involve certain risks and uncertainties and other factors, even though they're based on our current plans, which we believe to be reasonable. And many factors may cause our actual results to be materially different from any future results expressed or implied by these forward-looking statements including all the risk factors in our Forms 10-Q, 10-K and other documents that we filed with the SEC, you can find them on the Investors page of our website, www.gladstoneinvestment.com and the SEC's website, which is www.sec.gov.

謝謝，大衛。大家早安。今天的電話會議可能包括根據 1933 年證券法和 1934 年證券交易法做出的前瞻性陳述，包括有關我們未來業績的陳述。這些前瞻性陳述涉及某些風險和不確定性以及其他因素，儘管它們是基於我們認為合理的當前計劃。許多因素可能導致我們的實際結果與這些前瞻性陳述明示或暗示的任何未來結果存在重大差異，包括我們向 SEC 提交的 10-Q、10-K 表格和其他文件中的所有風險因素，您可以在我們網站www.gladstoneinvestment.com 的投資者頁面和SEC 網站www.sec.gov 上找到它們。

And we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Please also note that past performance or market information is never a guarantee of any future results. We ask everybody to visit our website, once again, gladstoneinvestment.com, sign up for email notification service. You can also find us on Twitter, @GladstoneComps, and our Facebook keyword there is, the Gladstone Companies.

我們沒有義務公開更新或修改任何前瞻性陳述，無論是由於新資訊、未來事件或其他原因，除非法律要求。另請注意，過去的表現或市場資訊絕不是任何未來結果的保證。我們請大家再次造訪我們的網站gladstoneinvestment.com，註冊電子郵件通知服務。您也可以在 Twitter、@GladstoneComps 上找到我們，我們的 Facebook 關鍵字是 Gladstone Companies。

Today's call is an overview of our results through September 30, '23 so we ask that you review our press release and Form 10-Q, both issued yesterday for more detailed information. And with that, I'll turn it over to Dave Dullum, President of Gladstone Investment.

今天的電話會議概述了我們截至 2023 年 9 月 30 日的結果，因此我們請您查看我們昨天發布的新聞稿和 10-Q 表格，以了解更多詳細資訊。接下來，我將把它交給 Gladstone Investment 總裁 Dave Dullum。

Thanks, Mike. So good morning, everyone. We are happy to report that GAIN again produced very good results for the second quarter of fiscal year '24. This ends March 31, '24, and this is following on the previous really solid first quarter of this fiscal year. We ended this second quarter with adjusted NII of $0.24 per share, total assets of $928 million, which is up from about $847 million at the prior quarter end. So deal activity is obviously important to us.

謝謝，麥克。大家早安。我們很高興地報告，嘉盛集團在 24 財年第二季再次取得了非常好的業績。該活動將於 2024 年 3 月 31 日結束，這是繼本財年第一季表現強勁之後的結果。在第二季末，調整後的 NII 為每股 0.24 美元，總資產為 9.28 億美元，高於上一季末的約 8.47 億美元。因此，交易活動顯然對我們很重要。

And for this quarter, we invested approximately $65 million, and that was between 1 new buyout investment, and we made an add-on acquisition to 1 of our existing portfolio companies. As we've said before and will continue forward, we will continue to seek these add-on opportunities, as they do allow us to increase, obviously, our investment in companies where we know the management team, we know the business, and we have a strong belief in that company's future, and therefore, we can and do generally build incremental equity value.

本季度，我們投資了約 6,500 萬美元，其中包括 1 項新的收購投資，以及我們對 1 家現有投資組合公司的追加收購。正如我們之前所說並將繼續前進，我們將繼續尋求這些附加機會，因為它們確實使我們能夠增加對我們了解管理團隊、我們了解業務以及我們了解的公司的投資。對該公司的未來抱有堅定的信念，因此，我們能夠而且確實普遍建立增量股權價值。

It's a good way of continuing the growth of our assets and the underlying fundamentals of the business. So actually in this regard and subsequent to the quarter end, we invested an additional $65 million to fund another add-on acquisition to another 1 of our existing portfolio companies. So following in the same vein, and we find that this sort of activity these days is actually a good area for us to look at, as we continue to build overall incremental value in the portfolio. We also, though, did have a successful exit of 1 portfolio company, and this generated a meaningful realized capital gain of around $43.5 million.

這是持續成長我們的資產和業務基本面的好方法。因此，實際上在這方面，在季度末之後，我們額外投資了 6,500 萬美元，為我們現有投資組合公司的另一家附加收購提供資金。因此，按照同樣的思路，我們發現這些天的此類活動實際上是我們值得關注的一個很好的領域，因為我們繼續在投資組合中建立整體增量價值。不過，我們也成功退出了 1 家投資組合公司，這產生了約 4,350 萬美元的有意義的已實現資本利得。

So again, we continue to make new acquisitions, add-on to our existing portfolio companies and likewise, exit companies when it makes sense and that, of course, generates some capital gains. We also maintained our monthly distribution to shareholders at the $0.08 per share, which is $0.96 per share on an annual basis and then paid a supplemental distribution of $0.12 per share in September of this year, 2023. Subsequent then to the quarter end, we declared aggregate supplemental distributions of $1 per share to be paid incrementally in November and December.

因此，我們繼續進行新的收購，增加現有投資組合公司的規模，同樣，在有意義的時候退出公司，當然，這會產生一些資本收益。我們還維持對股東的每月分配為每股 0.08 美元，即每年每股 0.96 美元，然後在今年 2023 年 9 月支付了每股 0.12 美元的補充分配。隨後到季度末，我們宣布每股1 美元的補充分配總額將在11 月和12 月逐步支付。

So in aggregate, it will be $1 being paid between those 2 months. Now this fairly large supplemental distribution highlights the strength of our buyout strategy and our ability to reward our shareholders with a meaningful supplemental distributions from these realized capital gains, which are generated on the equity portion of the exits. So in addition, of course, to the income which we generate on a monthly basis to be able to fund the monthly, at least currently, $0.08 per share.

因此，總的來說，這 2 個月之間將支付 1 美元。現在，這個相當大的補充分配凸顯了我們收購策略的優勢，以及我們從這些已實現的資本收益中獲得有意義的補充分配來獎勵股東的能力，這些資本收益是在退出的股權部分中產生的。當然，除了我們每月產生的收入之外，我們還能夠為每月（至少目前是）每股 0.08 美元的資金提供資金。

The balance sheet, of course, is important, and that continues to be strong. We have low leverage, pretty positive liquidity position with additional availability on our credit facility. So we obviously continue to provide support to our portfolio of companies for these add-on acquisitions, I mentioned, and also any interim financing if the need arises, of course, why we continue to actively grow our assets through new buyouts.

當然，資產負債表很重要，而且仍然強勁。我們的槓桿率較低，流動性狀況相當積極，我們的信貸安排具有額外的可用性。因此，我提到，我們顯然會繼續為我們的公司投資組合提供支持，以進行這些附加收購，並在需要時提供任何臨時融資，當然，這也是我們繼續透過新收購積極成長資產的原因。

In that regard and looking forward, currently, deal flow seems to be picking up sellers who have been holding back in the past, say, 6 months, I believe, are starting to test the market. And we do hear from a lot of the merger and acquisition and the sell-side investment bankers that we deal with that the backlog of new opportunities seems to be building. There is -- obviously, continues to be significant liquidity with buyout funds that we compete with, which reinforces a strong competitive environment, so we must remain value-sensitive, while aggressively competing for new acquisitions.

在這方面和展望未來，目前，交易流似乎正在回升那些過去一直猶豫不決的賣家，比如說，我相信，六個月來，他們正在開始測試市場。我們確實從與我們打交道的許多併購和賣方投資銀行家那裡聽到，新機會的積壓似乎正在增加。顯然，與我們競爭的收購基金仍然擁有大量流動性，這強化了強大的競爭環境，因此我們必須保持價值敏感，同時積極競爭新的收購。

One thing we should note in this environment, of course, with interest rates being relatively high with somewhat lack of liquidity in the debt side from the commercial banks, which generally provide the leverage to the traditional private equity fund, who we compete with, we have the benefit of providing both the debt and the equity when we make an acquisition. So we believe that looking ahead that we have somewhat of a competitive edge because we are the supplier of the debt and the equity when we do compete for a specific new potential add on -- a new potential investment.

當然，在這種環境下我們應該注意的一件事是，利率相對較高，商業銀行的債務方面缺乏流動性，而商業銀行通常為我們的競爭對手傳統私募股權基金提供槓桿，我們當我們進行收購時，我們可以享受提供債務和股權的好處。因此，我們相信，展望未來，我們具有一定的競爭優勢，因為當我們競爭特定的新潛在附加項目（新的潛在投資）時，我們是債務和股權的提供者。

So in summing up the quarter and looking forward, we believe the state of our portfolio is very good. We have a strong liquid balance sheet. We have an active level of buyout activity and continued prospects of very good earnings and distributions over the next year. So with that, I'll turn it over to our CFO, Rachael Easton, for some more details.

因此，在總結本季並展望未來時，我們相信我們的投資組合狀況非常好。我們擁有強大的流動資產負債表。我們的收購活動非常活躍，明年的獲利和分配也將繼續保持良好的前景。因此，我會將其轉交給我們的財務長 Rachael Easton，以了解更多詳細資訊。

Thank you, Dave, and good morning. Looking at our operating performance. In the second quarter of fiscal year 2024, we generated total investment income of $20.3 million, consistent with the prior quarter. While total investment income in the aggregate did not change quarter-to-quarter, there were fluctuations components, including increased interest income driven by new debt investments made in the quarter and increased SOFR as well as lower dividend and success fee income, which is variable in timing and did not reoccur in the current quarter.

謝謝你，戴夫，早安。看看我們的經營業績。 2024 財年第二季度，我們的總投資收入為 2,030 萬美元，與上一季持平。雖然總投資收入按季度沒有變化，但存在波動成分，包括本季度新債務投資帶來的利息收入增加和 SOFR 增加，以及股息和成功費收入下降（這是可變的）時間上並沒有在本季度再次發生。

Net expenses as of September 30, 2023, $22 million, up from $11.9 million in the prior quarter. This was primarily due to a $9.7 million increase in accrued capital gains-based incentive fees due to the net impact of realized and unrealized gains and losses as required under U.S. GAAP as well as an increased margin. This resulted in a net investment loss of $1.7 million for the quarter, primarily due to the large accrued capital gains-based incentive fees recognized during this period.

截至 2023 年 9 月 30 日，淨費用為 2,200 萬美元，高於上一季的 1,190 萬美元。這主要是由於美國公認會計原則要求的已實現和未實現損益的淨影響以及利潤率的增加，導致基於應計資本收益的激勵費用增加了 970 萬美元。這導致本季淨投資損失 170 萬美元，主要是由於在此期間確認的大量應計資本收益激勵費用。

Adjusted net investment income, which is net investment income or loss exclusive of any accrued capital gains-based incentive fees for the quarter was $8.1 million or $0.24 per share, down just a penny from $8.5 million or $0.25 per share in the prior quarter. We continue to believe that adjusted net investment income is a useful and representative indicator of our ongoing operations. Consistent with the prior quarter, at September 30, we continue to have 3 portfolio companies that are on nonaccrual status. And we will continue working with those companies to get back on accrual status. We believe that maintaining liquidity and flexibility to support and grow our portfolio are key elements of our success.

本季調整後的淨投資收益（即不包括任何應計資本利得激勵費的淨投資收益或損失）為810 萬美元，即每股0.24 美元，比上一季的850 萬美元，即每股0.25美元只下降1 美分。我們仍然相信，調整後的淨投資收益是我們持續經營的有用且具代表性的指標。與上一季一致，截至 9 月 30 日，我們仍有 3 家投資組合公司處於非應計狀態。我們將繼續與這些公司合作，恢復應計狀態。我們相信，保持流動性和靈活性以支持和發展我們的投資組合是我們成功的關鍵要素。

With our 3 public note issuances, we have long-term fixed rate capital in place. And as of yesterday's release, we had approximately $66 million available on our newly amended and extended $135 million credit facility. Additionally, during the quarter, we raised approximately $4 million in net proceeds under our common stock ATM program, all sales of which were above NAV. We anticipate continuing to be active in the ATM program. Overall, our leverage remains relatively low with an asset coverage ratio at September 30, 2023, of 211%, providing plenty of cushion to the required 150% coverage.

透過發行 3 次公開票據，我們擁有長期固定利率資本。截至昨天發布的消息，我們新修訂並延長的 1.35 億美元信貸額度中約有 6,600 萬美元可供使用。此外，本季度，我們透過普通股 ATM 計畫籌集了約 400 萬美元的淨收益，所有銷售額均高於資產淨值。我們預計將繼續積極參與 ATM 計劃。總體而言，我們的槓桿率仍然相對較低，截至 2023 年 9 月 30 日的資產覆蓋率為 211%，為所需的 150% 覆蓋率提供了充足的緩衝。

Valuation in the aggregate were up $48.7 million, driven by unrealized gains at a portfolio company that was marked up to reflect the fair value of the expected exit, which took place in October as well as higher valuation multiples across the portfolio and increased performance at many of our portfolio companies. Our NAV increased to $14.03 per share compared to $12.99 per share at the end of the prior quarter. The increase was primarily driven by $1.44 per share of net unrealized appreciation of investments, partially offset by $0.36 per share of distributions paid to common shareholders during the quarter, of which $0.12 per share related to a supplemental distribution and $0.05 per share of net investment loss.

總估值上漲了 4,870 萬美元，原因是一家投資組合公司的未實現收益被標記為反映 10 月份發生的預期退出的公允價值，以及整個投資組合的更高估值倍數以及許多公司業績的提高。我們的投資組合公司。我們的資產淨值增至每股 14.03 美元，而上一季末每股資產淨值為 12.99 美元。這一增長主要是由每股1.44 美元的未實現投資淨增值推動的，部分被本季度支付給普通股股東的每股0.36 美元的分配所抵消，其中每股0.12 美元與補充分配相關，每股0.05 美元的淨投資損失。

Consistent with prior quarters, distributable book earnings to shareholders remains strong. We started the fiscal year with $32 million or $0.95 per share in spillover and our monthly distribution remains consistent at $0.08 per share for an annual run rate of $0.96 per share. During this past quarter, in September 2023, we paid a $0.12 per share supplemental distribution. And as you heard in October, we declared an additional aggregate $1 per share supplemental distribution to be paid in November and December 2023.

與前幾季一致，股東可分配帳面收益依然強勁。本財年伊始，我們的溢出額為 3,200 萬美元，即每股 0.95 美元，我們的每月分配保持在每股 0.08 美元，年運行率為每股 0.96 美元。在過去的這個季度，即 2023 年 9 月，我們支付了每股 0.12 美元的補充分配。正如您在 10 月聽到的那樣，我們宣布將於 2023 年 11 月和 12 月額外支付每股 1 美元的補充分配。

We look to continue funding future supplemental distributions, as we recognize realized capital gains on the equity portion of our exits. Using the monthly distribution run rate of $0.96 per share per year and $1.24 per share in supplemental distributions (inaudible) fiscal year 2024. Our aggregate estimated fiscal year distributions would total at least $2.20 per common share or a yield of about 16% using yesterday's closing price of $13.74. This covers my part of today's call. Back to you, David.

我們希望繼續為未來的補充分配提供資金，因為我們承認退出股權部分已實現的資本利得。使用每年每股0.96 美元的月度分配運行率和2024 財年補充分配（聽不清楚）每股1.24 美元的分配率。我們估計的財政年度分配總額將至少為每股普通股2.20 美元，或使用昨天收盤價計算的收益率約為16%價格為 13.74 美元。這就是我今天電話會議的部分內容。回到你身上，大衛。

Okay. Thank you. Very nice, Rachael. Well, actually wonderful news for everybody, a very nice report by Dave and Michael, information for shareholders. I think this completes everything in terms of the past, this call and the 10-Q filed by the SEC yesterday -- to the SEC yesterday should bring everyone up to date. So for the quarter ending September 30, 2023, the company paid a regular distribution of $0.08 per share per month or $0.24 per share for the quarter.

好的。謝謝。非常好，瑞秋。嗯，實際上對每個人來說都是好消息，戴夫和邁克爾的報告非常好，為股東提供了資訊。我認為這已經完成了過去的一切，這次電話會議和 SEC 昨天向 SEC 提交的 10-Q 應該讓每個人都了解最新情況。因此，在截至 2023 年 9 月 30 日的季度中，該公司每月支付每股 0.08 美元的定期分配，或本季每股 0.24 美元。

Now skipping ahead and looking at the quarter ending December 31, 2023, the company also has declared but not yet paid 2 more supplemental extra distributions. The November 17 distribution is $0.12 per share and December 15 distribution is $0.88 a share. So aggregate supplementals for the quarter ending December 31 will be $1 per share. And then if you include the distribution declared a regular is $0.24. That's $1.24 for the quarter.

現在跳到2023年12月31日結束的季度，該公司還宣布但尚未支付另外兩次補充額外分配。 11 月 17 日的分配為每股 0.12 美元，12 月 15 日的分配為每股 0.88 美元。因此，截至 12 月 31 日的季度的補充總額將為每股 1 美元。然後，如果您包括宣布的常規分配，則為 0.24 美元。即本季 1.24 美元。

So please be aware that the record date for the November supplemental distribution is November 7. So you have to buy before then. And the same thing is true for the December supplemental distribution, is December 5. So you need to own the stock before those dates in order to get the supplemental distributions. So get busy and get out and buy some shares so that you get those supplemental distributions.

所以請注意，11月補充發行的記錄日期是11月7日。所以你必須在此之前購買。 12 月補充分配也是如此，即 12 月 5 日。因此，您需要在這些日期之前擁有股票才能獲得補充分配。因此，忙碌起來，出去買一些股票，這樣你就可以獲得這些補充分配。

The team has reported solid results for the quarter ending September 30, 2023 including buyout investments, exit activity and associated net realized gains. We believe the team is in a great position to continue these successes through the remainder of the fiscal year ending March 31, 2024. And I'll say this again, I keep saying it, and for those of you who have listened to me, you've gotten some real good extra dividends.

該團隊報告了截至 2023 年 9 月 30 日的季度的穩健業績，包括收購投資、退出活動和相關的已實現淨收益。我們相信，該團隊處於有利位置，可以在截至 2024 年 3 月 31 日的財年剩餘時間內繼續取得這些成功。我要再說一遍，我一直這麼說，對於那些聽過我講話的人來說，你已經得到了一些真正好的額外股息。

We believe Gladstone Investment is an attractive investment for investors seeking continuous monthly distributions and the supplemental distributions from potential capital gains and the other income that we generate. The team hopes to continue to show you strong one -- but I'm going to stop at this point and let's get some questions from our analysts. Some of you teed up really early this morning so we're ready for you. So Latonya, would you come in and tell them how they can ask a question.

我們相信，格萊斯頓投資對於尋求連續每月分配以及從潛在資本收益和我們產生的其他收入中獲得補充分配的投資者來說是一項有吸引力的投資。團隊希望繼續向您展示強大的功能，但我將在此停下來，讓我們的分析師提出一些問題。你們中的一些人今天早上很早就準備好了，所以我們已經為你們做好了準備。那麼拉托尼亞，你能進來告訴他們如何提問嗎？

We will now conduct a question-and-answer session. (Operator Instructions) our first question comes from Mickey Schleien with Ladenburg.

我們現在將進行問答環節。 （操作員說明）我們的第一個問題來自 Ladenburg 的 Mickey Schleien。

I want to start by congratulating you on the sale of Counsel Press, which is a very impressive outcome and I'm sure shareholders are going to be very pleased with the dividends that are related to that. Dave, I wanted to ask you about a couple of investments. First, E3 operates in the oil and gas sector, which is obviously cyclical. So I want to know what is it about this company and the deal structure that gives you comfort ahead of a potential slowdown in the economy and making an investment in a cyclical sector?

首先，我想祝賀您出售 Counsel Press，這是一個非常令人印象深刻的結果，我相信股東會對與之相關的股息感到非常滿意。戴夫，我想問你一些投資的問題。首先，E3經營的是石油天然氣產業，週期性明顯。所以我想知道這家公司的什麼以及交易結構讓您在經濟潛在放緩之前感到安心並投資於週期性行業？

Mickey, good. Thanks for the question. Yes, you're right, E3 is a little bit out of the norm for us in that regard. What they do, though, they mainly provide a -- I call it, a product that goes mainly to the guys that do the fracking. So if you understand where you go from the well to the pipeline coming out from a fracking situation, you have times when these valves that they have will basically -- the pressure gets too high and they sought to blow, right?

米奇，好。謝謝你的提問。是的，你說得對，E3 在這方面對我們來說有點不正常。不過，他們所做的主要是提供一種——我稱之為，一種主要面向水力壓裂人員的產品。因此，如果您了解從水井到水力壓裂情況下的管道的位置，您有時會發現這些閥門基本上會 - 壓力變得太高並且它們會試圖吹爆，對吧？

And the way they mechanically do it, have done it for many, many, many years, is literally have somebody take and go internal ranch and relieve a valve and it can be very dangerous. What these guys have developed over the last number of years is a system that sits on a skid about the size of a decent-sized table, if you will, that actually control electronically. So it understands pressure building and has a relief. And they've got some technology in the valve system itself that allows for, I'd call it, some proprietariness to the system.

他們機械地做這件事的方式，已經做了很多很多很多年了，實際上就是讓人去內部牧場並釋放閥門，這可能非常危險。這些人在過去的幾年裡開發了一種系統，它位於一個滑道上，大小相當於一張相當大的桌子，如果你願意的話，它實際上是電子控制的。所以它理解壓力的積聚並有一種緩解。他們在閥門系統本身擁有一些技術，我稱之為系統的一些專有性。

So they are really in a position where as long as you're doing some of the fracking and unless that business completely went to 0, they're going to have -- still have a very substantial opportunity.

因此，他們確實處於這樣的位置：只要你進行一些水力壓裂，除非該業務完全為零，否則他們將仍然擁有非常可觀的機會。

They rent their product. The payback literally is like less than 4 months on what they rent, and they are building them as fast as they can make them. So that's kind of a high level. And you're right, it can be cyclical, but given the profitability, given the level of cash that they have, we believe even if we had somewhat of a slowdown, we would be in really good shape going forward.

他們租用他們的產品。從字面上看，他們租用的東西不到 4 個月就能收回投資，而且他們正在以最快的速度建造它們。所以這是一個很高的水平。你是對的，這可能是週期性的，但考慮到盈利能力，考慮到他們擁有的現金水平，我們相信，即使我們有一定程度的放緩，我們未來的狀況也會非常好。

It's a pretty unique situation, frankly, and by the way, run by very experienced folks, and we went out and brought in some very experienced management to the deal guy came in from Halliburton, who is the actually CEO. We brought him in. So I think we've got a really great management team that knows the industry.

坦白說，這是一個非常獨特的情況，順便說一句，由非常有經驗的人管理，我們出去為來自哈里伯頓的交易人員引進了一些非常有經驗的管理人員，他實際上是首席執行官。我們把他引進了。所以我認為我們擁有一支非常優秀的管理團隊，他們了解這個行業。

That sounds really interesting, Dave. My other question is about SFEG, which is, as you know, an electrical manufacturer and that can also be cyclical. But in this company, you're in the second lien. So could you tell us the nature of the add-on acquisition, what's giving you comfort to be in a second lien in a cyclical business and also who owns the first lien that's ahead of you.

聽起來真的很有趣，戴夫。我的另一個問題是關於 SFEG，正如你所知，它是一家電氣製造商，也可能是週期性的。但在這家公司，你擁有第二留置權。那麼，您能否告訴我們附加收購的性質，是什麼讓您在周期性業務中擁有第二留置權感到安心，以及誰擁有您之前的第一留置權。

Okay. SFEG, I want to be sure we're on the same page, it's not an electrical business really. It really is a combination of a couple of other companies that provide product like welding devices, cutting and so on, going to pipelines and what have you, which is broader than certainly oil and gas as well.

好的。 SFEG，我想確保我們意見一致，這實際上不是電力產業。它實際上是其他幾家公司的組合，這些公司提供焊接設備、切割等產品，涉及管道等，這比石油和天然氣更廣泛。

So we had the base business, SFEG, which is based in Houston, and we acquired a company called Climax, which is actually based in Portland, Oregon that has operations, frankly, throughout the world. And that's -- as SFEG does by the way. We made an acquisition with them in France about 2 years or so ago that expanded our product line.

因此，我們的基礎業務是 SFEG，總部位於休士頓，我們也收購了一家名為 Climax 的公司，該公司實際上總部位於俄勒岡州波特蘭，坦白說，該公司的業務遍及世界各地。順便說一下，這就是 SFEG 所做的。大約兩年前，我們在法國收購了他們，擴大了我們的產品線。

We also have operations in the U.K. So the combined entity today, by the way, is something in excess of $100 million in revenues and a very significant EBITDA sort of close to 20% EBITDA margins. So collectively, they have a very broad suite of products going to mainly pipeline both in terms of field operations as well as in the manufacturing process, and again, a very strong management team.

我們在英國也有業務。順便說一下，今天合併後的實體的收入超過 1 億美元，EBITDA 利潤率非常可觀，接近 20%。因此，總的來說，他們擁有非常廣泛的產品套件，主要用於現場操作和製造流程，並且擁有非常強大的管理團隊。

And so we like the whole thing. It's very strong. We put in a significant amount of money. It's a big investment for us. We have significant ownership. And in our general structure, even though we might have a second lien, a lot of times, the first lien is going to be the lender, the bank who we bring in as a revolving line of credit.

所以我們喜歡整件事。它非常強大。我們投入了大量資金。這對我們來說是一筆很大的投資。我們擁有重要的所有權。在我們的整體結構中，即使我們可能有第二留置權，但很多時候，第一留置權將是貸款人，也就是我們作為循環信貸額度引入的銀行。

And so that's not unusual, frankly, that we would have someone in a first lien position above our debt, which looks -- the language might look more like a mezzanine or what have you. But again, of course, we own a significant portion of the equity. I don't know if that helps or not.

因此，坦白說，這並不罕見，我們會有一個人在我們的債務之上擁有第一留置權，這看起來——語言可能看起來更像是夾層或你擁有的東西。但當然，我們擁有很大一部分股權。我不知道這是否有幫助。

Just to make sure I understand the first lien then is a bank revolver probably with accounts receivable and inventory, as the collateral and you have claims on the rest of the company's assets. Is that correct?

只是為了確保我理解第一個留置權是銀行左輪手槍，可能以應收帳款和庫存作為抵押品，並且您對公司的其餘資產擁有債權。那是對的嗎？

Correct. Yes.

正確的。是的。

Okay. That's helpful. I appreciate it.

好的。這很有幫助。我很感激。

And again, that's not unusual, right, for us -- certainly bigger companies.

再說一遍，這對我們來說並不罕見——當然是大公司。

Sure. I understand. That's all my questions. And again, congratulations on a very good quarter.

當然。我明白。這就是我的所有問題。再次恭喜您取得了非常好的季度業績。

Great to see you recently, by the way. Thanks for coming.

順便說一句，很高興最近見到你。感謝你的到來。

Our next question comes from Bryce Rowe with B. Riley.

我們的下一個問題來自 Bryce Rowe 和 B. Riley。

And congratulations on the exit, David. I wanted to first ask about the level of spillover. Rachael, you did hit on what spillover was as of the end of the last year. Can you give us an update as to where that sits now? And if you could give it to us pro forma for the dividends declared for the December quarter as well as this gain that you just realized.

恭喜你退出，大衛。我想先詢問溢出的程度。瑞秋，你確實發現了截至去年年底的溢出效應。可以為我們介紹一下現在的最新情況嗎？如果您能將 12 月季度宣布的股息以及您剛剛實現的收益形式提供給我們。

Thank you for your question. So that is correct we -- I mentioned in my prepared remarks, we started the year with that $32 million or about $0.95 a share. In spillover, we do not provide updates during the quarter. But I think given that we plan to declare a regular monthly distribution of $0.08 per month, coupled with the dollar that we declared supplemental and an additional $0.24 in supplemental. You can see we have well made our way through that spillover that we started the year with.

謝謝你的問題。所以這是正確的——我在準備好的演講中提到，我們以 3200 萬美元或每股 0.95 美元開始了今年。在溢出效應中，我們在本季不提供更新。但我認為，鑑於我們計劃宣布每月定期分配 0.08 美元，加上我們宣布的補充金額和額外的 0.24 美元補充金額。你可以看到，我們已經很好地度過了年初的溢出效應。

I can tell you that is the amount we are comfortable with, rolling into next year, but I cannot, unfortunately, give you update kind of mid-quarter and where we are.

我可以告訴你，這是我們對明年感到滿意的數額，但不幸的是，我無法向你提供季度中期的最新情況以及我們的情況。

Understood. Let's see. In terms of the fair value marks within the portfolio in the quarter here, Dave. I mean, obviously, they reflect the Counsel Press exit. But also, as you noted in your prepared remarks, good upside from several different investments in the quarter. You mentioned higher multiples as well as better company performance. Could you maybe expand on that comment a bit?

明白了。讓我們來看看。戴夫，就本季投資組合的公允價值分數而言。我的意思是，顯然，它們反映了法律顧問出版社的退出。而且，正如您在準備好的發言中指出的那樣，本季幾項不同的投資也帶來了良好的成長。您提到了更高的本益比以及更好的公司業績。您能否稍微擴充一下該評論？

I'll take a shot and then certainly, Rachael, please feel free because you -- I would say that of all of the portfolio companies there are, the majority of them were benefited by a little bit of up in multiple [EBIT] as well as up in EBITDA. And then some of the others, which are still fundamentally very strong companies just quarter-to-quarter, even though they were slightly off EBITDA-wise, slightly up with multiple.

我會嘗試一下，然後當然，Rachael，請放心，因為你——我想說，在所有的投資組合公司中，大多數都受益於多個 [EBIT] 的一點點增長，因為EBITDA 也有所上升。然後是其他一些公司，儘管它們的 EBITDA 略有下降，倍數略有上升，但從根本上看，它們在季度與季度之間仍然是非常強大的公司。

And so there were some changes in probably 6 or so of the portfolio companies where we had a slight, again, change downwards from the prior quarter, but nothing where I am certainly concerned about from just a valuation perspective. Rachael, you got any -- you want to add to that?

因此，大約有 6 家左右的投資組合公司發生了一些變化，與上一季相比，我們的變化再次略有下降，但僅從估值角度來看，我當然不擔心這些變化。 Rachael，你有什麼要補充的嗎？

I don't think so. And if there's something specific, you'd like to call out. I think we saw some really great unrealized depreciation at companies like Educators, Brunswick Bowling, Nth Degree, SFEG which Dave, you touched on earlier.

我不這麼認為。如果有什麼具體的事情，你想大聲說出來。我認為我們在 Educators、Brunswick Bowling、Nth Degree、SFEG 等公司看到了一些非常大的未實現折舊，戴夫，你之前提到過。

Yes, I think, Bryce, again, without going through each company per se, what have you, I don't see any significant change, as you know, quarter-to-quarter, month-to-month, just because, again, as you know, somewhat it gets magnified, right? If you have 7 or 8x multiple and you get a modest change in EBITDA, that multiple can have a little bit of $1 million as an example. I'm making that up of a reduction in a valuation on something that might be worth, $30-plus million. I mean, so again, I don't see any significant concerns relative to the few that we did have on a slight decline valuation-wise.

是的，我想，布萊斯，再一次，在沒有仔細檢查每家公司本身的情況下，你有什麼，我沒有看到任何重大變化，正如你所知，每個季度、每個月，只是因為，再一次，如你所知，它在某種程度上被放大了，對吧？如果您有 7 或 8 倍的倍數，而 EBITDA 略有變化，那麼該倍數可能會達到 100 萬美元。我正在透過降低某件可能價值 30 多萬美元的估價來彌補這一點。我的意思是，與我們確實在估值方面略有下降的少數情況相比，我沒有看到任何重大擔憂。

Okay. Okay. That's helpful. And then last 1 for me, just looking at the balance sheet structure. You're using the credit facility a bit more with portfolio growth. And if I heard you correctly, $65 million into SFEG would likely kind of call into using that even a bit more unless you access other sources of capital. So if you could just speak to your comfort with the capital structure at this point, would you look to add more notes like you've done here recently? Are you comfortable with where the balance sheet structure is or the capital structure is at this point?

好的。好的。這很有幫助。最後一個對我來說，只是看看資產負債表結構。隨著投資組合的成長，您會更多地使用信貸額度。如果我沒聽錯的話，6500 萬美元投入 SFEG 可能會需要更多地使用它，除非你獲得其他資金來源。因此，如果您現在可以談談您對資本結構的滿意程度，您是否會像最近在這裡所做的那樣添加更多註釋？您對目前的資產負債表結構或資本結構感到滿意嗎？

Yes. Well, again, I'll have Rachael add in here, but that amount that we have currently available on our line, of course, is the net amount currently based upon the cash coming in from, say, Counsel Press, et cetera -- the new investment, et cetera. So as of where we are today, that certainly is available capital for anything net new that we plan to do. We also, obviously, as I mentioned -- generally, we're in the market sometimes looking to exit certain of our portfolio companies and is some of that might occur over the next, say, 6 months or so, that capital likewise will obviously come in.

是的。好吧，我會讓 Rachael 在這裡補充一下，但是我們目前在線上可用的資金當然是目前基於來自 Counsel Press 等機構的現金的淨額 -新的投資等等。因此，就我們今天的情況而言，這肯定是我們計劃要做的任何新事物的可用資本。顯然，正如我所提到的，一般來說，我們在市場上有時會尋求退出某些投資組合公司，其中一些可能會在未來（例如 6 個月左右）內發生，資本同樣顯然會進來。

So short answer is right today, yes, we feel pretty good about where we are. We always will continue obviously exploring the idea of going out and doing another, say, baby bond. And as we look forward to our deal flow and the opportunities coming forward, we certainly would look to potentially access that market and have the availability then on our line to provide the ups and downs. So today, I think we feel we're in good shape. Rachael?

所以今天的簡短回答是正確的，是的，我們對自己的處境感覺很好。我們總是會繼續顯然地探索出去做另一件事的想法，例如嬰兒債券。當我們期待我們的交易流和未來的機會時，我們當然會尋求潛在的進入該市場的機會，並在我們的線路上提供可用性來提供起伏。所以今天，我認為我們感覺狀態良好。雷切爾？

I completely agree, Dave. I think 1 other thing to add to that is continuing to use our ATM program when...

我完全同意，戴夫。我認為另一件事要補充的是繼續使用我們的 ATM 程序，當...

Right. Certainly supplemental, but we don't certainly concern about anything from a ratio perspective in terms of the fixed asset or the asset coverage ratio. And again, we are pretty active in keeping in touch with what's going on in the market. So if we need to do something, we'll do it. But right now, we feel pretty good.

正確的。當然是補充，但從固定資產或資產覆蓋率的比率角度來看，我們當然不關心任何事情。再說一遍，我們非常積極地關注市場動態。因此，如果我們需要做某事，我們就會做。但現在，我們感覺很好。

Our next question comes from (inaudible) with Jefferies.

我們的下一個問題來自（聽不清楚）傑弗里斯。

I wonder if you could shed a little more light on the macro picture, as we approach year-end and navigate budget projections for '24. Are any sectors seeing more headwinds than others? Or any sectors or end markets seeing pushback and passing price through to customers?

我想知道您是否可以在我們接近年底並進行 24 年預算預測之際，對宏觀情況進行更多的闡述。是否有任何行業比其他行業面臨更多阻力？或是否有任何行業或終端市場出現阻力並將價格轉嫁給客戶？

Sure. No surprise perhaps the companies that we own that are in the, say, consumer product space. I would say we've obviously seen a little softness in some of those, nothing of any great significance at this point. But -- and we certainly have been able to pass through any cost increases that we were having. A lot of it, as you know, coming from the earlier increases in supply chain, transportation costs, et cetera. We've seen that come down pretty significantly, and that's been a positive thing. So in terms of as we look forward, even though in a few cases, we might be seeing some softness at the retail level in terms of revenue.

當然。我們擁有的消費品領域的公司也許並不奇怪。我想說的是，我們顯然在其中一些方面看到了一些軟弱，但目前沒有任何重大意義。但是——我們當然已經能夠承受我們所經歷的任何成本增加。如您所知，其中許多來自供應鏈、運輸成本等的早期增加。我們已經看到這一數字顯著下降，這是一件積極的事情。因此，就我們的展望而言，即使在少數情況下，我們可能會看到零售層面的收入出現一些疲軟。

Likewise, we're able to offset that to some degree with lowering our own costs. So from a margin perspective, we've actually seen a few cases where margins have improved even though overall volume has gone down. So net-net, I think we're not seeing any -- right now any big issues there but clearly anticipating there could be a bit of a slowdown in some of the consumer-type product areas from the -- some of the business service areas, and we have a fairly significant investment in that category as you might know. Most of those companies are pretty much operating according to plan.

同樣，我們可以透過降低我們自己的成本來在一定程度上抵消這一影響。因此，從利潤率的角度來看，我們實際上已經看到了一些儘管總體銷量下降但利潤率卻有所提高的案例。因此，我認為我們目前沒有看到任何重大問題，但顯然預計某些消費性產品領域可能會出現一些放緩，例如一些商業服務您可能知道，我們在該類別上進行了相當大的投資。這些公司中的大多數幾乎都按計劃運作。

One or 2 might see a little bit again of a slowdown depending on what the sectors they are in. But again, everything seems to be holding up fairly well. And as we look forward, obviously, with our portfolio companies, we're trying to be conservative, wanting to be sure that they maintain margin, not just look to the top line. So all in all, I think we feel reasonable, again in good shape going forward.

一兩個公司可能會再次出現一點放緩，具體取決於他們所處的行業。但同樣，一切似乎都保持得相當好。顯然，當我們展望未來時，對於我們的投資組合公司，我們試圖保持保守，希望確保他們保持利潤率，而不僅僅是專注於營收。總而言之，我認為我們感覺合理，並且再次處於良好的狀態。

There are no further questions in queue at this time. Mr. Gladstone. I'd like to turn it back to you for closing comments.

目前隊列中沒有其他問題。格萊斯頓先生。我想將其轉回給您以供結束評論。

All right. Thank you all for calling in. It was a good quarter, last quarter, and this quarter that we're in, and it looks like a super quarter. So we're all feeling good today and see you next time. That's the end of our comments.

好的。感謝大家的來電。這是一個很好的季度，上個季度，以及我們所處的這個季度，看起來像是一個超級季度。今天我們都感覺很好，下次再見。我們的評論到此結束。

Thank you. This does conclude today's teleconference. You may disconnect your lines at this time, and thank you for your participation, and have a great day.

謝謝。今天的電話會議到此結束。此時您可以斷開線路，感謝您的參與，祝您有美好的一天。