Gladstone Investment Corp (GAIN) 2024 Q3 法說會逐字稿

Greetings and welcome to the Gladstone Investment Corporation third-quarter earnings call. (Operator Instructions) As a reminder, this conference is being recorded.

您好，歡迎參加格萊斯頓投資公司第三季財報電話會議。（操作員指示）謹此提醒，本次會議正在錄製中。

It is now my pleasure to introduce your host, David Gladstone. Thank you, Mr. Gladstone. You may begin.

現在我很高興向大家介紹你們的主持人大衛‧格萊斯頓。謝謝你，格萊斯頓先生。你可以開始了。

Thank you, Cath. That was a good beginning. This is David Gladstone, Chairman of Gladstone Investment. This is the third quarter that we're going to be talking about the year ending December 31, 2023. Our fiscal year ends in a couple of months, and earnings conference call is for all the shareholders and analysts that follow us. We're listed on Nasdaq under the symbol GAIN, that’s the common stock; and then there is GAINN, GAINZ, and GAINL, all three of these are different registered notes, so you can buy those if you wish as well. We won't be talking much about them today.

謝謝你，凱絲。這是一個好的開始。我是格萊斯頓投資公司董事長大衛‧格萊斯頓。這是我們要討論的截至 2023 年 12 月 31 日的第三季。我們的財政年度還有幾個月就結束了，收益電話會議是為所有關注我們的股東和分析師舉行的。我們在納斯達克上市，代號為 GAIN，即普通股；然後是 GAINN、GAINZ 和 GAINL，這三個都是不同的註冊紙幣，所以如果您願意，也可以購買它們。今天我們不會談論太多它們。

Thank you for calling in. We're always happy to provide an update to our shareholders and analysts to provide our view of the current business environment. So there's really two goals here: help you understand what has happened in the past; and even though we don't have a crystal ball, we'll give you our current view of the future.

感謝您的來電。我們總是很樂意向股東和分析師提供最新信息，以提供我們對當前商業環境的看法。所以這裡其實有兩個目標：幫助你了解過去發生的事情；即使我們沒有水晶球，我們也會向您提供我們對未來的當前看法。

And now, we'll hear from our Deputy General Counsel, Erich Hellmold. Erich?

現在，我們將聽取副總法律顧問 Erich Hellmold 的演講。埃里希？

Thank you, and good morning everyone. 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. 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 risk factors listed in our Forms 10-Q, 10-K, and other documents we file with the SEC. These can all be found on the Investors page of our website at www.gladstoneinvestment.com or the SEC's website at www.sec.gov.

謝謝大家，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，包括我們的10-Q、10-K 表格以及我們向SEC 提交的其他文件中列出的所有風險因素。這些都可以在我們網站 www.gladstoneinvestment.com 的投資者頁面或 SEC 網站 www.sec.gov 上找到。

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 not a guarantee of future results. Please take the opportunity to visit our website, www.gladstoneinvestment.com, and sign up for our email notification service. You can also find us on Twitter @GladstoneComps; and on Facebook, keyword The Gladstone Companies.

我們不承擔公開更新或修改任何前瞻性聲明的義務，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並不能保證未來的結果。請藉此機會造訪我們的網站 www.gladstoneinvestment.com，並註冊我們的電子郵件通知服務。您也可以在 Twitter 上找到我們：@GladstoneComps；在 Facebook 上，輸入關鍵字 The Gladstone Companies。

Today's call is simply an overview of our results through December 31, 2023. So we ask that you review our press release and Form 10-Q, both issued yesterday, for more detailed information.

今天的電話會議只是我們截至 2023 年 12 月 31 日的表現的概述。因此，我們要求您查看昨天發布的新聞稿和 10-Q 表格，以了解更多詳細資訊。

Now I'll turn it over to Dave Dullum, President of Gladstone Investment.

現在我將把它交給 Gladstone Investment 總裁 Dave Dullum。

Thanks, Erich, and good morning, everyone. We are happy to report that GAIN produced very good results for the third quarter of fiscal year '24, which follows on the previous solid first two quarters of fiscal year '24, which of course ends in March. We ended the third quarter of fiscal year '24 on 12/31/2023 with adjusted NII of $0.26 per share and total assets of $918 million. You'll learn more about this from Rachael Easton, our CFO, when she describes the details around that. Again, those are good results.

謝謝埃里希，大家早安。我們很高興地向大家報告，嘉盛在 24 財年第三季度取得了非常好的業績，這是繼 24 財年前兩個季度的強勁業績之後，當然，該財年於 3 月份結束。我們於 2023 年 12 月 31 日結束了 24 財年第三季度，調整後的 NII 為每股 0.26 美元，總資產為 9.18 億美元。當我們的財務長 Rachael Easton 描述相關細節時，您將了解更多相關資訊。再說一次，這些都是很好的結果。

In regards to activity for the quarter, we did invest $65 million, which helped us to fund an add-on acquisition in one of our existing portfolio companies. And again, obviously, we are always looking and doing new deals, making new investments and new acquisitions, and that continues to be our goal and objective. However, doing add-ons to certain of our existing portfolio companies is really an important aspect of our value-building process because it allows us to increase our investment in companies where we know the management team, the business itself, and where we have a strong belief in its future, and it continues to allow us to really build very good value in these fundamental businesses. So we'll continue to do that as necessary and then in certain specific cases, obviously, while pursuing our main business, which is adding new acquisitions as we go along.

就本季的活動而言，我們確實投資了 6,500 萬美元，這幫助我們為現有投資組合公司之一的追加收購提供了資金。顯然，我們一直在尋找和開展新交易、進行新投資和新收購，這仍然是我們的目標。然而，對我們現有的某些投資組合公司進行附加投資確實是我們價值建構過程的一個重要方面，因為它使我們能夠增加對我們了解管理團隊、業務本身以及我們擁有的公司的投資。我們對其未來抱持著堅定的信念，這將繼續讓我們在這些基礎業務中真正創造出非常好的價值。因此，我們將繼續在必要時這樣做，然後在某些特定情況下，顯然，同時追求我們的主要業務，即隨著我們的發展增加新的收購。

We also, as we have in our buyout strategy, exits and we did have a very successful exit with one of our portfolio companies where we actually generated pretty meaningful realized capital gain for us of about $43.5 million. We were able to maintain our monthly distribution to shareholders at $0.8 per share or $0.96 per share on an annual basis, and we paid an aggregate supplemental distribution of $1 per share during November and December of 2023.

正如我們在收購策略中所做的那樣，我們也退出了，我們確實非常成功地退出了我們的投資組合公司之一，我們實際上為我們創造了相當有意義的已實現資本收益，約為4350萬美元。我們能夠將向股東的每月分配維持在每股 0.8 美元或每年每股 0.96 美元，並且我們在 2023 年 11 月和 12 月期間總共支付了每股 1 美元的補充分配。

Again, this large supplemental distribution is a result of the buyout strategy and of our ability to continue rewarding our shareholders with these meaningful distributions from realized capital gains, which are generated on the equity portion of our exits, in addition, of course, to the income that we continue to generate for the monthly distributions, and which is obviously very important for the basis of distributions to our shareholders on a monthly basis.

同樣，這種大規模的補充分配是收購策略的結果，也是我們有能力繼續透過已實現的資本利得的有意義的分配來獎勵我們的股東的結果，這些分配是在我們退出的股權部分中產生的，當然，除此之外，我們繼續為每月分配產生收入，這對於每月向股東分配的基礎顯然非常重要。

Our balance sheet continues to be strong, with very low leverage and a very positive liquidity position, with additional availability on our credit facility. So we will continue providing support to our portfolio companies, both for add-on acquisitions, interim financing if the need arises, while actively growing our assets through new buyouts.

我們的資產負債表仍然強勁，槓桿率非常低，流動性狀況非常積極，我們的信貸額度還具有額外的可用性。因此，我們將繼續為我們的投資組合公司提供支持，包括追加收購、必要時的臨時融資，同時透過新的收購積極成長我們的資產。

Turning to the outlook, the deal flow, as we call it, appears to be picking up somewhat as the sellers who have been holding back over the past six months or so are testing the market. And we do hear from the merger and acquisition groups, the investment bankers who are our primary sources for new acquisition opportunities, that the backlog of new opportunities has been building. It seems like the last six months or so of last year were fairly slow somewhat, and deals were coming to the market and they were being taken back, et cetera.

談到前景，我們所說的交易量似乎有所回升，因為過去六個月左右一直按兵不動的賣家正在測試市場。我們確實從併購團體和投資銀行家那裡聽到，他們是我們新收購機會的主要來源，新機會的積壓一直在增加。去年最後六個月左右的時間似乎相當緩慢，交易不斷進入市場，又被收回，等等。

Now, it looks like there continue to be a bit of an increase in this regard, maybe somewhat as a result of interest rates perhaps coming down, et cetera, but in any event, we continue working on a few new possible buyout deals, and we're currently in that early phase of the process. There does continue to be very significant liquidity in the market, meaning that our competitive situation is, of course, being challenged all the time. So we're going to remain value sensitive while we aggressively compete for new acquisitions.

現在，這方面的情況似乎繼續有所增加，可能在某種程度上是由於利率下降等原因，但無論如何，我們將繼續致力於一些新的可能的收購交易，並且我們目前正處於該過程的早期階段。市場上確實仍然存在非常大量的流動性，這意味著我們的競爭狀況當然一直受到挑戰。因此，在積極爭奪新收購的同時，我們將保持對價值的敏感度。

So in summing up the quarter and looking forward, we believe the state of our portfolio is very good. We have a strong and liquid balance sheet, an active level of buyout activity, and continued prospects of very good earnings and distributions over the next year.

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。我們擁有強勁且流動性強的資產負債表、活躍的收購活動以及明年持續良好的獲利和分配前景。

So I'll turn it over to Rachael Easton, our CFO, and she can give more details on the finances of the quarter. Rachael?

因此，我會將其交給我們的財務長 Rachael Easton，她可以提供有關本季財務的更多詳細資訊。雷切爾？

Thank you, and good morning, everyone. Looking at our operating performance in the third quarter of fiscal year '24, we generated total investment income of $23.1 million. That was up from $20.3 million in the prior quarter. This increase was primarily due to increased interest income, which was driven by new debt investments made in the quarter, as well as higher dividend and success fee income resulting from fees received associated with an exit during the quarter as compared to not receiving any of these fees in the prior quarter.

謝謝大家，大家早安。從我們 24 財年第三季的經營業績來看，我們的總投資收入為 2,310 萬美元。這一數字高於上一季的 2,030 萬美元。這一增長主要是由於利息收入增加，這是由本季度新的債務投資推動的，以及與未收到任何這些費用相比，本季度收到的與退出相關的費用所帶來的股息和成功費用收入的增加。上一季的費用。

Net expenses as of December 31, 2023 were $13.3 million. This was down from $22 million in the prior quarter. This decrease is primarily due to a $10.4 million decrease in accrued capital gains based incentive fees due to the net impact of realized and unrealized gains and losses as required under US GAAP. This decrease was partially offset by an increase in borrowing costs. This resulted in net investment income for the quarter of $9.7 million compared to net investment loss of $1.7 million in the prior quarter. This fluctuation is primarily due to the large accrued capital gains based incentive fees recognized during the prior quarter.

截至 2023 年 12 月 31 日的淨費用為 1,330 萬美元。這比上一季的 2200 萬美元有所下降。這一減少主要是由於美國公認會計準則要求的已實現和未實現損益的淨影響導致基於應計資本利得的激勵費減少了 1,040 萬美元。這一下降被借貸成本的增加部分抵消。這導致本季淨投資收入為 970 萬美元，而上一季的淨投資損失為 170 萬美元。這種波動主要是由於上一季確認的基於獎勵費用的大量應計資本利得。

Adjusted net investment income, which is net investment income or loss exclusive of any accrued capital gains based incentive fees for the quarter, was $9.1 million or $0.26 per share, up $0.02 from $8.1 million or $0.24 per share in that 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 December 31, 2023, we continue to have three portfolio companies that are on nonaccrual status and we will continue working with those companies to get back on accrual status when possible.

調整後的淨投資收益（即不包括本季基於任何應計資本收益的激勵費用的淨投資收益或損失）為910 萬美元或每股0.26 美元，比上一季的810 萬美元或每股0.24美元增加了0.02 美元。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。與截至 2023 年 12 月 31 日的上一季一致，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，盡可能恢復應計狀態。

We believe that maintaining liquidity and flexibility to support and grow our portfolio are key elements of our success. With our three public note issuances, we have long-term fixed rate capital in place. And as announced yesterday, we have amended and expanded our credit facility, increasing the capacity to $200 million. And as of yesterday's release, we had over $120 million available of that capacity. Additionally, during the quarter, we were very successful on our common stock ATM program, raising approximately $21 million in net proceeds, as well as an additional $7.7 million in net proceeds raised in January, with all sales being accretive and above then-current NAV. We anticipate continuing to be active in the ATM program.

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。透過發行三筆公開票據，我們擁有長期固定利率資本。正如昨天所宣布的，我們修改並擴大了我們的信貸額度，將容量增加到 2 億美元。截至昨天發布，我們擁有超過 1.2 億美元的可用容量。此外，在本季度，我們的普通股ATM 計畫非常成功，籌集了約2,100 萬美元的淨收益，並在1 月份額外籌集了770 萬美元的淨收益，所有銷售額均實現增值並高於當時的資產淨值。我們預計將繼續積極參與 ATM 計劃。

Overall, our leverage remains relatively low, with an asset coverage ratio at December 31, 2023, of 207%, providing plenty of cushion to the required 150% coverage. Our NAV decreased $13.01 per share for the quarter compared to $14.03 per share at the end of the prior quarter. The decrease was primarily driven by $1.36 per share in net unrealized depreciation on investments and $1.24 per share of distributions paid to common shareholders during the quarter, of which $1 per share related to supplemental distributions. These decreases were partially offset by $1.27 per share of realized gains on investments and $0.28 per share of net investment income.

總體而言，我們的槓桿率仍然相對較低，截至 2023 年 12 月 31 日的資產覆蓋率為 207%，為所需的 150% 覆蓋率提供了充足的緩衝。本季我們的資產淨值每股下降 13.01 美元，而上一季末每股資產淨值為 14.03 美元。下降的主要原因是每股 1.36 美元的投資未實現淨折舊以及本季度支付給普通股股東的每股 1.24 美元的分配，其中每股 1 美元與補充分配相關。這些下降被每股已實現投資收益 1.27 美元和每股淨投資收益 0.28 美元部分抵消。

Consistent with prior quarters, distributable book earnings to shareholders remained 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 per month for an annual run rate of $0.96 per share. During this past quarter in November and December 2023, we paid an aggregate $1 per share of supplemental distributions. We look to continue funding future supplemental distributions as we recognize realized capital gains on the equity portion of our exits.

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一致，為每月每股 0.08 美元，年運行率為每股 0.96 美元。在 2023 年 11 月和 12 月的上一個季度，我們總共支付了每股 1 美元的補充分配。我們希望繼續為未來的補充分配提供資金，因為我們確認了退出股權部分已實現的資本利得。

Using the monthly distribution run rate of $0.96 per share per year and $1.24 per share in supplemental distributions paid so far in the 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 $13.96.

使用每年每股 0.96 美元的月度分配運行率和 2024 財年迄今為止支付的補充分配每股 1.24 美元，我們估計的財年分配總額將至少為每股普通股 2.20 美元，即收益率約為 16%使用昨天的收盤價13.96 美元。

This covers my part of today's call. Back to you, David.

這就是我今天電話會議的部分內容。回到你身上，大衛。

Oh, thank you very much. That was a very, very good quarter. Rachael and Dave, you've done a great job; and Erich, good information for our shareholders. This call and the 10-Q filed yesterday with the Securities and Exchange Commission should bring everyone up to date. Our team has reported solid results for the quarter ending December 31, including the add-on investments and exit activity associated with net realized gains. We believe the team is in a great position to continue these successes through the remainder of the fiscal year; that fiscal year ends March 31, 2024.

好的非常感謝。那是一個非常非常好的季度。瑞秋和戴夫，你們做得很好；埃里希（Erich），為我們的股東提供了很好的資訊。這次電話會議以及昨天向美國證券交易委員會提交的 10-Q 報告應該能讓所有人了解最新情況。我們的團隊報告了截至 12 月 31 日的季度的穩健業績，包括與已實現淨收益相關的附加投資和退出活動。我們相信，團隊有能力在本財年剩餘時間內繼續取得這些成功；該財政年度截至 2024 年 3 月 31 日。

I just think Gladstone Investment is an attractive investment for investors at this point in time. You've got monthly distributions and then you've got supplemental distributions from the potential capital gains and some other income. The team hopes to continue, of course, to show you a strong return. And rather than keep talking about it, let's get some questions from the analysts and shareholders that are on the line.

我只是認為格萊斯頓投資目前對投資者來說是一項有吸引力的投資。你有每個月的分配，然後你有來自潛在資本利得和一些其他收入的補充分配。當然，團隊希望繼續向大家展現強勁的回報。我們不再繼續討論這個問題，而是先向線上的分析師和股東提出一些問題。

So, operator, if you'll come on and manage that, that'd be good.

所以，接線員，如果你能來解決這個問題，那就太好了。

(Operator Instructions) Mickey Schleien, Leidenberg Capital.

（操作員指令）Mickey Schleien，Leidenberg Capital。

Yes, good morning, everyone. Dave, wanted to understand from you how your portfolio companies are progressing in terms of their revenues and margins outside of consumer. We're all aware that the consumer-facing companies have headwinds, but are you seeing any trends in the rest of the portfolio?

是的，大家早安。戴夫，想從您那裡了解您的投資組合公司在消費者以外的收入和利潤方面的進展。我們都知道面向消費者的公司面臨阻力，但您是否看到其他投資組合中的任何趨勢？

Hey, Mickey. Good morning. Nice to talk to you. Not truly, not really. We're seeing, I would say, pretty consistent, not decline, but little slower, call it growth, but things are holding up pretty well across the board. Cost of materials, in some cases, and distribution costs, which impacted some of our industrial companies, et cetera, from the supply chain side, I would say those have eased a bit. So that's obviously held on that end. But frankly, all in all we're seeing, I would say, a fairly, just again, moderate, go slow, but nothing dramatic one way or the other.

嘿，米奇。早安.很高興和你聊天。不真實，不真實。我想說，我們看到的情況非常穩定，沒有下降，但速度稍慢，稱之為增長，但整體情況都保持得很好。在某些情況下，材料成本和分銷成本從供應鏈方面影響了我們的一些工業公司等，我想說這些已經有所緩解。所以這顯然是在這一端舉行的。但坦白說，我想說，總而言之，我們看到的是一種公平、公正、溫和、緩慢的發展，但無論從哪方面來看都沒有什麼戲劇性的。

Interestingly, some of our consumer-products companies actually are doing reasonably well, even though, as you said, the consumer side tends to be a little bit slower right now. But generally, I'd say pretty stable.

有趣的是，我們的一些消費品公司實際上做得相當不錯，儘管正如您所說，消費者方面目前往往會慢一些。但總的來說，我想說相當穩定。

That's good to hear. Dave, in terms of deal flow, we're hearing that part of what we're seeing, I'm not sure that's the case with you, but part of what we're seeing is private equity funds conducting dividend recaps for their stronger performers in order to extract some results for themselves and for their shareholders. Is that something you're considering doing in the near future for some of your better-performing companies, which also may help optimize their balance sheets?

聽起來還不錯。戴夫，就交易流程而言，我們聽到了我們所看到的部分情況，我不確定您的情況是否如此，但我們所看到的部分情況是私募股權基金正在進行股息回顧，以提高其實力表演者為了自己和股東獲得一些成果。您是否正在考慮在不久的將來為一些業績較好的公司做一些事情，這也可能有助於優化他們的資產負債表？

Right, right. Nothing, honestly, right now. As you know, we have done a couple of dividend recaps over the last couple of years. One company in particular we did a couple, actually, with that company; and then one other one, we did one last year, and those were for all the reasons you mentioned. But as of right now, it's not something -- we are always looking at it because it is a good way, especially if it's a good business that we like and we're able to stay involved in a very meaningful way, as you say, extract some value for shareholders and for the management teams, by the way, of those companies. And anytime we've done it, it's always been in sync with the management teams of our portfolio companies, which, as you know, is something that's really important to us.

是的是的。老實說，現在什麼都沒有。如您所知，我們在過去幾年中進行了幾次股息回顧。特別是一家公司，我們實際上與那家公司做了一些合作；然後是另外一個，我們去年做了一個，這些都是你提到的所有原因。但就目前而言，這並不是什麼——我們一直在關注它，因為這是一個好方法，特別是如果這是我們喜歡的好業務，並且我們能夠以非常有意義的方式參與其中，正如你所說順便說一句，為這些公司的股東和管理團隊提取一些價值。無論何時我們這樣做，它總是與我們投資組合公司的管理團隊保持同步，正如你所知，這對我們來說非常重要。

So right now, I don't see that necessarily. And then my only other commentary on the market in general, as I mentioned briefly, is there seemed to have been really kind of a weird last half of last year where a fair number of deals were in the market, then they got pulled, et cetera, and they seemed to be slowly coming back right now. So we are seeing a bit of, again, of a pickup, at least in the, quote, deal flow. I will tell you that the ones that we're looking at and we're serious about, as usual, we're going in with values that make sense for us and that seems to be working reasonably well. Others, frankly, there's still some crazy values that are at least being paid and we can't compete in those, are not going to compete in those. But generally, I'd say the outlook looks reasonably good.

所以現在我認為不一定。然後，正如我簡要提​​到的那樣，我對市場的唯一其他評論是，去年下半年似乎確實有點奇怪，市場上有相當多的交易，然後它們被取消了，等等等等，他們現在似乎正在慢慢回來。因此，我們再次看到了一些回升，至少在報價和交易流程中是如此。我會告訴你，我們正在考慮並認真對待的那些，像往常一樣，我們正在採用對我們有意義的價值觀，而且似乎運作得相當好。其他人，坦率地說，仍然有一些瘋狂的價值至少得到了支付，而我們無法在這些方面競爭，也不會在這些方面競爭。但總的來說，我認為前景看起來相當不錯。

Oh, okay. That's interesting and helpful. Dave, my last question. The more liquid markets for credit have reopened, as we all know. Are you concerned about refinancing risk for some of your better performing investments? In other words, could some of these investments go to other suppliers of debt capital at cheaper rates than you're offering them and you'd be taken out?

哦好的。這很有趣而且很有幫助。戴夫，我的最後一個問題。眾所周知，流動性較強的信貸市場已重新開放。您是否擔心一些表現較好的投資的再融資風險？換句話說，其中一些投資是否可以以比您提供的利率更便宜的價格流向其他債務資本供應商，然後您就會被淘汰？

Yes, no, that's a great question, and obviously something we always look at and have looked at over many, many years. And frankly, I can only think of one company where that actually happened was an unusual circumstance. I would say the fact that our capital is really, as you know, is a combination of the debt and the equity in the transaction. So the effective yield, so to speak, is comparison to say what just pure debt might be even with this environment where debt is coming down. I would say we're still very competitive in that regard. The relationship with the portfolio companies is probably as important as anything.

是的，不，這是一個很好的問題，顯然也是我們多年來一直在關注的問題。坦白說，我只能想到一家公司實際發生的情況是不尋常的。我想說的是，正如您所知，我們的資本實際上是交易中債務和股權的組合。因此，可以說，有效收益率是與純粹債務的比較，即使在債務下降的環境下也是如此。我想說我們在這方面仍然非常有競爭力。與投資組合公司的關係可能​​與任何事情一樣重要。

And then the other aspect to that is while, as you point out, the spreads might be getting a bit tighter, meaning interest rates are coming down, the availability still, I think, at least from what we're seeing, is not just all of a sudden that floodgates have opened, so to speak, right, and you can get all the capital you need at low rates. So right now, honestly, I'm not seeing any challenges for our portfolio companies in that regard. Could it happen? Sure. But I'm not seeing anything right now ,and so I'm not overly concerned we're going to get taken out in any situations that we may not want to be taken out of.

另一方面，正如您所指出的，利差可能會變得更窄，這意味著利率正在下降，但我認為，至少從我們所看到的情況來看，可用性仍然不僅僅是突然之間，閘門打開了，可以這麼說，對吧，你可以以低利率獲得你需要的所有資本。因此，老實說，目前我沒有看到我們的投資組合公司在這方面面臨任何挑戰。它會發生嗎？當然。但我現在沒有看到任何東西，所以我不太擔心我們會在任何我們可能不想被帶走的情況下被帶走。

I understand. Those are all my questions this morning. I appreciate your time. Thank you.

我明白。這些都是我今天早上的問題。我很感激你的時間。謝謝。

Okay, any questions? Any further questions from people?

好的，有什麼問題嗎？人們還有其他問題嗎？

Kyle Joseph, Jefferies.

凱爾·約瑟夫，杰弗里斯。

Hey, good morning. Thanks for taking my questions. I just want to get your thoughts on leverage. Obviously, you guys have a lot of dry powder right now, and it sounds like you're getting more optimistic about deal flow into '24. But just talk about where you're comfortable taking leverage to if we do get that deal flow? Or is it really just more of a function of the market and what deals get done?

嗨，早安。感謝您回答我的問題。我只是想了解您對槓桿的看法。顯然，你們現在有很多乾粉，而且聽起來你們對 24 年的交易流變得更加樂觀。但只要談談如果我們確實獲得了交易流，您願意在哪些方面發揮槓桿作用？或者它實際上更多地只是市場的功能以及完成的交易？

Hey, Kyle, good morning. I think what you said, a function of the market and what deals we get done, so as you know, we keep a pretty conservative leverage profile, I think, compared to the greater BDC peer group. And that's something we do believe is really important. But it's also to provide us the flexibility to support that potential new deal flow. So we want to be able to be in a position where if we need to fund new deals, we have the ability to take on additional borrowings, and it doesn't threaten breaking that 150% test.

嘿，凱爾，早安。我認為你所說的，是市場的函數以及我們完成的交易，所以如你所知，我認為，與更大的 BDC 同行群體相比，我們保持著相當保守的槓桿狀況。我們確實認為這非常重要。但這也為我們提供了支持潛在新交易流的靈活性。因此，我們希望能夠在需要為新交易提供資金的情況下，有能力承擔額外的借款，並且不會威脅到打破 150% 的測試。

And Kyle, I might just briefly add to that, and as Rachael said in her part of the call, we've had a fairly successful ATM program, of course, which we sort of put in place, being able to, and we're very rigorous on what the cushion is, if you will, relative to NAV, and we're going to stick with that. So we're not going to do anything crazy there, but it gives us the ability to, especially looking forward in the expectation, hopefully we can start doing some newer deals and obviously using some of this leverage, that we're likewise providing the support from the equity side to, as Rachael said, be able to maintain a level of the coverage ratio that's not going to put us at risk in that regard.

凱爾，我想簡單地補充一下，正如瑞秋在電話中所說，我們已經有了一個相當成功的 ATM 計劃，當然，我們已經實施了該計劃，並且能夠做到這一點，而且我們’如果你願意的話，我們對相對於淨值的緩衝非常嚴格，我們將堅持這一點。因此，我們不會在那裡做任何瘋狂的事情，但它使我們有能力，特別是在期望中，希望我們可以開始做一些新的交易，並且顯然使用其中的一些槓桿，我們同樣提供瞭正如雷切爾所說，來自股權方面的支持能夠維持一定程度的覆蓋率，不會讓我們面臨這方面的風險。

Got it, very helpful. And then one follow-up from me, just talking about the competitive environment of, essentially, lower middle market private equity. Obviously, you expect deal flow to pick up, but on the other side would be competition. Has the market really changed, as we've seen rates go from essentially zero to substantially higher, even with some potential cuts this year?

明白了，非常有幫助。然後是我的一個後續行動，主要是談論中低端市場私募股權的競爭環境。顯然，您預計交易量會增加，但另一方面會出現競爭。市場真的發生了變化嗎？正如我們所看到的，利率從基本為零到大幅上漲，即使今年可能會出現一些降息？

Yes, I would say the market -- really, what we're seeing and what kind of got reflected, I think, near the end of last year, at least from our perspective -- it may not be across the board, but I can only speak from our vision -- is that the rates coming -- going up, of course, helped to slow down the ability for not only the cost, but also the amount of leverage that was being available. So those deals, I think, that were getting done were, to some extent, perhaps being over equitized, if you will, to get the deals done. We're seeing that might change a little bit, but not to the point where I think it's again going to be all of a sudden leverage goes back to really high multiples of EBITDA. I think it's still going to be fairly cautious and careful.

是的，我想說的是，市場——實際上，我們所看到的以及所反映的情況，我認為，在去年年底附近，至少從我們的角度來看——它可能不是全面的，但我認為只能從我們的願景出發——利率的上升——當然，不僅會降低成本，而且會降低可用槓桿的能力。因此，我認為，在某種程度上，那些正在完成的交易可能是過度股權化的，如果你願意的話，為了完成交易。我們看到情況可能會發生一些變化，但不會達到我認為槓桿率會突然回到 EBITDA 的高倍數的程度。我認為仍然會相當謹慎和小心。

And again, I think, as I said, even though there are some deals we're seeing where the relative enterprise value might be one or two turns higher than we think it's worth, clearly there are folks willing to do those deals, and if they are, I think they are having to do a little bit more equity than debt. I don't think the debt side of the equation has gotten to the point yet where we're back to much higher leverage per transaction even at these higher values. If that makes any sense.

再說一次，我認為，正如我所說，即使我們看到一些交易的相對企業價值可能比我們認為的價值高一兩圈，但顯然有人願意做這些交易，如果他們是的，我認為他們必須做比債務更多的股本。我認為債務方面還沒有達到這樣的程度：即使在這些更高的價值下，我們每筆交易的槓桿率也還沒有恢復到更高的水平。如果那有意義的話。

Yes, very helpful. Thanks for taking my questions.

是的，非常有幫助。感謝您回答我的問題。

Okay, next question?

好吧，下一個問題？

Bryce Rowe, B. Riley Securities.

布萊斯‧羅 (Bryce Rowe)，B. 萊利證券 (Riley Securities)。

Thanks a lot. Good morning. Hey, I wanted to ask about the upsized credit facility. You've had, I guess, some changes. I think you took the available amount down last quarter and obviously it's moved back up. So maybe there was a bit of a process to get to that higher level. Could you just, if you can, talk about that process. Did you add some banks to the facility? Just any kind of detail there would be helpful. Thanks.

多謝。早安.嘿，我想問一下擴大信用額度的事。我想你已經發生了一些變化。我認為上個季度您減少了可用金額，但顯然它又增加了。所以也許需要一個過程才能達到更高的水平。如果可以的話，您能談談這個過程嗎？您是否在該設施中添加了一些銀行？只要有任何細節都會有幫助。謝謝。

Yes, absolutely. Good morning, Bryce. So yes, we were really excited to announce yesterday that we have expanded the credit facility up towards $200 million. When we went through our regular amendment process, which closed in October at the beginning of the quarter and we weren't able to announce in our last earnings call, we had taken it down to $135 million, and that was a result of just losing a couple of banks during that process.

是的，一點沒錯。早上好，布萊斯。所以，是的，我們昨天非常高興地宣布，我們已將信貸額度擴大到 2 億美元。當我們完成定期修訂程序時（該程序於 10 月季度初結束），我們無法在上次財報電話會議中宣布這一消息，我們已將其減少至 1.35 億美元，而這是因為損失在此過程中，有幾家銀行。

We were working on this expansion. Unfortunately, we couldn't get the two to close at the same time. So we were able to increase the facility by bringing in a new bank. We brought in Fifth Third, and we were also able to increase one of the other bank's commitments as well to get back up to that $200 million amount. And we believe this additional capacity is really important in providing flexibility as we contemplate future pipeline in the deal flow process.

我們正在致力於這個擴展。不幸的是，我們無法讓兩者同時關閉。因此，我們能夠透過引進一家新銀行來增加設施。我們引入了 Fifth Third，並且我們還能夠增加另一家銀行的一項承諾，以恢復到 2 億美元的金額。我們相信，當我們考慮交易流程中的未來管道時，這種額外的能力對於提供靈活性非常重要。

Got it. That's helpful context, Rachael. And then maybe one for Dave. You had this add-on opportunity for an existing portfolio company here this quarter. Can you just talk a little bit about that? And then other maybe opportunities in the pipeline for your existing portfolio companies to do add-on acquisitions. Thanks.

知道了。這是有用的背景，瑞秋。然後也許是給戴夫的。本季度，您為現有投資組合公司提供了這個附加機會。你能簡單談談這個嗎？然後，您現有的投資組合公司可能還有其他機會進行附加收購。謝謝。

Sure. So that particular one, Bryce, was a company that we've had in the portfolio for a few years. It's somewhat of an industrial-based business. We've been really improving it all around, both from the overall management level, et cetera. And we had an opportunity to acquire a fairly substantial-sized business to bring into it, which was really integrated very nicely with the product. And it not only gave us additional capacity, manufacturing capacity, but also distribution and access actually in Europe and other parts of the country. So we took our company from order magnitude.

當然。因此，布萊斯（Bryce）是我們投資組合中的一家公司，已經好幾年了。這在某種程度上是一個以工業為基礎的業務。我們確實在各個方面進行了改進，無論是從整體管理水平還是其他方面。我們有機會收購一家規模相當大的企業並將其納入其中，該企業與產品確實非常好地結合在一起。它不僅為我們提供了額外的產能、製造能力，而且還為我們提供了在歐洲和該國其他地區的實際分銷和准入機會。因此，我們將我們的公司提升了一個數量級。

Now, I'm not going to give you specifics, but order magnitude, about $40 million, $50 million in revenue to over $100 million in revenue, and very significant increase in the EBITDA. And I would say that the integration has come along really well. So we've clearly enhanced the overall value. So I feel really good about that transaction without, by the way, getting that particular company in a very highly leveraged situation, relatively speaking. So really, really good opportunity.

現在，我不會向您提供具體細節，但會提供數量級，大約 4000 萬美元、5000 萬美元的收入到超過 1 億美元的收入，以及 EBITDA 的顯著增長。我想說，整合進展得非常順利。所以我們明顯提高了整體價值。因此，順便說一句，相對而言，我對這筆交易感覺非常好，而且不會讓該特定公司處於槓桿率非常高的境地。所以真的非常非常好的機會。

So we'll continue, and yes, some of our existing portfolio companies are seeing some opportunities like that, and we continue. Some of them are on the smaller end. Some of them do not require additional financing from GAIN per se because their own balance sheets are strong enough to handle some smaller add-ons where it really makes some sense, whether it be a product line or what have you.

所以我們將繼續，是的，我們現有的一些投資組合公司正在看到類似的機會，我們將繼續。其中一些位於較小的一端。其中一些公司本身不需要嘉盛集團的額外融資，因為他們自己的資產負債表足夠強大，可以處理一些真正有意義的較小的附加項目，無論是產品線還是你擁有的其他產品。

And so, yes, we continue to do that because, frankly, as I said in my remarks, and you appreciate, if we can keep adding value to an existing portfolio company, again, where overall we know it and it's accretive, we're happy to do that. One other company, another one of our portfolio companies actually, where they made a fairly good sized acquisition and we were able to go back in as well and help to add to that particular investment as well. And so the short answer is, yes, we're going to continue looking at those opportunities.

所以，是的，我們繼續這樣做，因為，坦率地說，正如我在演講中所說的那樣，並且您很欣賞，如果我們能夠繼續為現有投資組合公司增加價值，那麼總的來說，我們知道這一點並且它具有增值性，我們'我很高興這樣做。另一家公司，實際上是我們的投資組合公司中的另一家，他們進行了相當大的收購，我們也能夠回去並幫助增加該特定投資。所以簡短的回答是，是的，我們將繼續尋找這些機會。

That's great. I appreciate the time.

那太棒了。我很感激時間。

Question?

問題？

This concludes our question-and-answer session. I would like to turn the floor back over to David Gladstone for closing comments.

我們的問答環節到此結束。我想把發言權交還給大衛·格拉德斯通（David Gladstone）以供結束評論。

Thank you. That was a good quarter. And I think when we put the numbers together for the year end of March 31, one of our best years ever, I think we'll probably be over $1 billion in assets by then. But anyway, I don't have a crystal ball, so I have no idea what's really going to happen. But we're guessing that things are back strong and growing. A lot of people in the investing world are thinking that business development companies, like this one, are a place to put some money. But thank you all, and that's the end of this presentation.

謝謝。那是一個不錯的季度。我認為，當我們將截至 3 月 31 日的年度（我們有史以來最好的年份之一）的數字放在一起時，我認為到那時我們的資產可能會超過 10 億美元。但無論如何，我沒有水晶球，所以我不知道會發生什麼事。但我們猜測情況會恢復強勁並成長。投資界的許多人認為像這家這樣的業務開發公司是一個可以投入資金的地方。但謝謝大家，本次演講就到此結束。

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

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。