Gladstone Investment Corp (GAIN) 2025 Q1 法說會逐字稿

Greetings and welcome to the Gladstone Investment Corporation First 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一季財報電話會議。（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, Chairman of the Gladstone Investment Corporation. Thank you, Mr. Gladstone. You may begin.

現在我很高興向您介紹主持人，格萊斯頓投資公司董事長戴維·格萊斯頓。謝謝你，格萊斯頓先生。你可以開始了。

Well, thank you. This is good morning. This is David Gladstone, Chairman of Gladstone Investment. This is the first quarter for a fiscal year ending June 30, 2024 earnings conference call for shareholders and analysts of Gladstone Investment listed on NASDAQ under the trading symbol GAIN for the common stock and GAINN and GAINZ and GAINL for the three different registered notes that we have outstanding.

嗯，謝謝。這是早安。我是格萊斯頓投資公司董事長大衛‧格萊斯頓。這是截至2024 年6 月30 日的財年第一季的財報電話會議，該公司在納斯達克上市，普通股交易代碼為GAIN，我們的三種不同註冊票據交易代碼為GAINN、GAINZ 和GAINL。

Thank you all for calling in. We are always happy to provide an update for our shareholders and analysts and provide our view of the current business environment. Two goals of this call is to help you understand what happened to your company and give you our current view of the future. And now we'll hear from our General Counsel, Michael LiCalsi, who's going to talk about forward-looking statements.

感謝大家的來電。我們總是很樂意為股東和分析師提供最新信息，並提供我們對當前商業環境的看法。本次電話會議的兩個目標是幫助您了解貴公司發生的事情並為您提供我們對未來的當前看法。現在我們將聽取總法律顧問 Michael LiCalsi 的發言，他將談論前瞻性陳述。

Thanks, David. Good morning, everybody. Today's call may include forward-looking statements into 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.

謝謝，大衛。大家早安。今天的電話會議可能包括《1933 年證券法》和《1934 年證券交易法》的前瞻性陳述，包括有關我們未來績效的陳述。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。

Now, many factors may cause our actual results to be materially different. For many future results expressed or implied by these forward-looking statements, including all the risk factors, you can find them in our Forms 10-Q and 10-K and other documents that we file with the SEC and they can be found on the Investors page of our website www.gladstoneinvestment.com or on the SEC's website, which is www.sec.gov.

現在，許多因素可能會導致我們的實際結果有重大差異。對於這些前瞻性陳述明示或暗示的許多未來結果，包括所有風險因素，您可以在我們向 SEC 提交的 10-Q 和 10-K 表格以及其他文件中找到它們，並且可以在我們網站www.gladstoneinvestment. com 或SEC 網站www.sec.gov 的投資者頁面。

Now we undertake no obligation to publicly update or revise any of these forward-looking statements whether as a result of new information, future events, or otherwise, except as required by law. Please also note that a past performance or market information is no guarantee of any future results. We ask that you visit our website. Once again, it's gladstoneinvestment.com. Sign up for our email notification service. You can also find us on Twitter, which is @GladstoneComps, or on Facebook. Key word there is The Gladstone Companies.

現在，我們沒有義務公開更新或修改任何這些前瞻性陳述，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並不能保證任何未來的結果。我們要求您造訪我們的網站。再說一遍，這是gladstoneinvestment.com。註冊我們的電子郵件通知服務。您也可以在 Twitter（@GladstoneComps）或 Facebook 上找到我們。關鍵字是格萊斯頓公司。

Today's call is an overview of our results through June 30, 2024. So please review our press release and Form 10-Q, both issued yesterday, for more detailed information.

今天的電話會議概述了我們截至 2024 年 6 月 30 日的表現。因此，請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。

Thank you. With that, I turn it over to Gladstone Investments President, Dave Dullum.

謝謝。說完，我將其轉交給格萊斯頓投資公司總裁戴夫‧杜勒姆 (Dave Dullum)。

Hey, Mike. Thank you very much. And everyone, welcome. We are pleased to report again that the GAIN team produced very good results for the first quarter for fiscal year '25, which ended March '24 -- '25, sorry, following on the previous solid fourth quarter and annual results for fiscal '24.

嘿，麥克。非常感謝。大家好，歡迎。我們很高興再次報告，GAIN 團隊在截至 24 年 3 月的 25 財年第一季取得了非常好的業績 - 25 抱歉，繼之前穩健的第四季度和 24 財年年度業績之後。

We ended the first quarter of fiscal year '25 on 6/30/24 with adjusted NII of $0.24 per share and total assets of $914 million. So this quarter was very active both from working on significant number of new investment opportunities, while managing some of the various activities within our '23 existing portfolio companies.

我們於 2024 年 6 月 30 日結束了 25 財年第一季度，調整後的 NII 為每股 0.24 美元，總資產為 9.14 億美元。因此，本季非常活躍，一方面致力於大量新投資機會，另一方面管理我們 23 家現有投資組合公司內的一些各種活動。

Now, while we made no new acquisitions in the quarter, subsequent to the quarter end, we invested $18.5 million in the form of secured first lien debt to fund an add-on acquisition to one of our existing portfolio companies, where we actually have a significant equity position. So this follows some of the other important add-on activities at a few of our portfolio companies over the past year.

現在，雖然我們在本季度沒有進行新的收購，但在季度末之後，我們以有擔保的第一留置權債務的形式投資了1850 萬美元，為我們現有投資組合公司之一的附加收購提供資金，我們實際上在該公司擁有重大股權狀況。因此，這是我們的一些投資組合公司在過去一年中開展的一些其他重要附加活動的結果。

Now, as I've mentioned on prior calls, these add-on opportunities allows us to increase our total investment, build value in the companies where we know the management team and where we have a strong relief in its future and enhancing the opportunity for future equity gains.

現在，正如我在之前的電話會議中提到的那樣，這些附加機會使我們能夠增加總投資，為我們了解管理團隊、對未來有很大信心的公司創造價值，並增加未來的股權收益。

Now, this activity is not a substitute for making new acquisitions and is a component of our investing strategy as it allows us to continue building our assets and income, certainly in times when valuations through new acquisitions is a challenge.

現在，這項活動並不能取代進行新的收購，而是我們投資策略的一部分，因為它使我們能夠繼續建立我們的資產和收入，當然在透過新收購進行估值是一個挑戰的時候。

Now the stability of our operating model allowed us to maintain our monthly distribution of shareholders at $0.08 per share or $0.96 per share on an annual basis. Recall that we paid $1.24 of supplemental distributions in fiscal '24 and while we've not paid any during this quarter we're reporting on, our history of supplemental distributions demonstrates the success of the buyout strategy and is our intent to continue rewarding our shareholders with meaningful supplemental distributions from the realized capital gains on exits. As our portfolio, of course, goes through maturity cycles and equity values will increase, we will continue to constructively harvest these gains for the benefits of shareholders.

現在，我們營運模式的穩定性使我們能夠將每月股東分配維持在每股 0.08 美元或每年每股 0.96 美元。回想一下，我們在 24 財年支付了 1.24 美元的補充分配，雖然我們在報告的本季度沒有支付任何費用，但我們的補充分配歷史證明了收購策略的成功，也是我們繼續回報股東的意圖從退出時實現的資本利得中進行有意義的補充分配。當然，隨著我們的投資組合經歷成熟週期並且股權價值將會增加，我們將繼續建設性地收穫這些收益，以造福股東。

Now, since exits generally involve a pay down of our debt, we strive to balance the timing of these exits without sacrificing the level of debt assets that produce the income to support the monthly dividends and their growth. Our balance sheet continue to be strong with low leverage and good availability on our credit facility.

現在，由於退出通常涉及償還債務，因此我們努力平衡這些退出的時間，而不犧牲產生支持每月股息及其增長的收入的債務資產水平。我們的資產負債表持續保持強勁，槓桿率較低，信貸額度良好。

Now, we currently have four companies on non-accrual, two of which we just put on non-accrual, which represent about 7.8% of the fair value of the debt investments in our portfolio. I really want to stress that this is not indicative of any portfolio-wide concerns. Two of these companies combine to represent approximately $32 million of the total amount of the debt. And both of these are now profitable. We anticipate returning these to accrual status sometime within the next year. We also have meaningful equity holdings in those two companies. So again, this will happen from time-to-time, but we work with these companies to get them back where they need to be. And again, I do want to stress that our portfolio is functioning at a very high level, and I'm not concerned about having these two companies just recently going on non-accrual status.

現在，我們目前有四家非應計公司，其中兩家我們剛剛列入非應計項目，約占我們投資組合中債務投資公允價值的7.8%。我真的想強調，這並不表示任何投資組合範圍內的擔憂。其中兩家公司合計債務總額約 3,200 萬美元。現在這兩個項目都已經獲利。我們預計在明年的某個時候將這些恢復為應計狀態。我們也持有這兩家公司的大量股權。同樣，這種情況會時不時地發生，但我們與這些公司合作，讓他們回到他們需要的地方。再次，我確實想強調，我們的投資組合正在以非常高的水平運作，我並不擔心這兩家公司最近才進入非應計狀態。

So as far as the outlook is concerned, as I mentioned in the beginning, we are seeing an increase in opportunities for new acquisitions. There seems to be growing momentum in new deals coming to the market, especially as the past few quarters have been relatively quiet. There is significant liquidity in the M&A market and is a very competitive environment with upward pressure on valuations. This means we will aggressively compete for new acquisitions that we believe fit our model of providing debt and equity, while maintaining our principles of being a value investor and generating income on a current basis with upside through capital appreciation. We currently are actively working on a number of new bios in various due diligence phases.

就前景而言，正如我在一開始提到的，我們看到新收購的機會增加。市場上新交易的勢頭似乎不斷增長，尤其是在過去幾季相對平靜的情況下。併購市場流動性充沛，競爭非常激烈，估值面臨上行壓力。這意味著我們將積極競爭新的收購，我們認為這些收購符合我們提供債務和股權的模式，同時保持我們作為價值投資者的原則，並透過資本增值在當前基礎上創造收入並帶來上行空間。我們目前正在各個盡職調查階段積極開發一些新的履歷。

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, a positive level of buyout activity, and the prospect of continuing 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、積極的收購活動以及明年繼續保持良好盈利和分配的前景。

For more detail, I'm going to now turn it over to our CFO, Rachael Easton. Rachael?

有關更多詳細信息，我現在將其交給我們的財務長 Rachael Easton。雷切爾？

Thank you, Dave, and good morning, everyone. Looking at our operating performance in the first quarter of fiscal year '25, we generated total investment income of $22.2 million, down slightly from $23.6 million in the prior quarter. This was due to decreased interest income as a result of two portfolio companies going on non-accrual status and lower success fee income, which can be variable in timing due to amounts that did not occur to the same magnitude in the current quarter.

謝謝戴夫，大家早安。從我們 25 財年第一季的營運表現來看，我們的總投資收入為 2,220 萬美元，略低於上一季的 2,360 萬美元。這是由於兩家投資組合公司進入非應計狀態而導致利息收入減少，以及成功費用收入降低，由於本季度發生的金額不同，因此成功費用收入的時間可能會發生變化。

Net expenses for the quarter were $9.8 million, down from $18.3 million in the prior quarter. This decrease was primarily due to a $9.4 million aggregate decrease in accrued capital gains-based incentive fees, which is due to the net impact of realized and unrealized gains and losses as required under US- GAAP and income-based incentives.

本季淨支出為 980 萬美元，低於上一季的 1,830 萬美元。這項減少主要是由於應計資本利得激勵費總計減少了 940 萬美元，這是由於美國公認會計準則和基於收入的激勵措施所要求的已實現和未實現損益的淨影響所致。

This resulted in a net investment income for the quarter of $12.4 million, up from $5.3 million in the prior quarter. Adjusted net investment income, which is net investment income exclusive of any accrued capital gains-based incentive fees for the quarter was $8.6 million or $0.24 per share, down slightly, but remaining consistent on a per share basis from $8.8 million or $0.24 per share in the prior quarter.

這使得本季的淨投資收入達到 1,240 萬美元，高於上一季的 530 萬美元。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）為860 萬美元，即每股0.24 美元，略有下降，但與2017 年的880 萬美元，即每股0.24美元保持一致。

We continue to believe that adjusted net investment income is a useful and representative indicator of our ongoing operations. As Dave mentioned, during the quarter ended June 30, 2024, we had certain loans to two portfolio companies placed on non-accrual status, bringing the total to four companies on non-accrual. We believe the stress at these two new companies will be short-term and we'll continue working closely with them to get back on accrual status when possible. In one case, the company has a smaller legacy debt investment where we have no equity, and we are looking to ultimately have our debt repaid at some time in the future.

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。正如戴夫所提到的，在截至 2024 年 6 月 30 日的季度中，我們向兩家投資組合公司提供了某些處於非應計狀態的貸款，使非應計狀態的公司總數達到四家。我們相信這兩家新公司面臨的壓力將是短期的，我們將繼續與他們密切合作，盡可能恢復應計狀態。在一種情況下，該公司有較小的遺留債務投資，而我們沒有股權，我們希望最終在未來某個時候償還債務。

For the second company, the industry is cycling down a bit right now, and while there is some stress, we do see near-term relief with increasing industry rebound. We anticipate bringing this company back on accrual in the near-term. Overall, there are no portfolio-wide credit concerns. These are two specific instances where companies are unable to currently service their debt, and it is not indicative of any portfolio-wide trends.

對於第二家公司來說，該行業目前正在下滑，雖然存在一些壓力，但隨著行業反彈的加劇，我們確實看到了近期的緩解。我們預計該公司將在短期內恢復應計收益。整體而言，不存在整個投資組合範圍內的信用問題。這是公司目前無法償還債務的兩個具體實例，並沒有顯示任何投資組合的趨勢。

Additionally, we are seeing continuing improvement at one of the companies that has been on non-accrual for some time. They are back to generating a profit and we continue to work closely with them. Valuations in the aggregate were down $18.9 million. This was driven by lower valuation multiples across the portfolio and decreased performance at a number of our portfolio companies. This was partially upset by increased performance at several other portfolio companies.

此外，我們看到其中一家已經實行非應計有一段時間的公司持續改善。他們已恢復盈利，我們將繼續與他們密切合作。總估值下降了 1890 萬美元。這是由於整個投資組合的估值倍數較低以及我們許多投資組合公司的業績下降所致。這在一定程度上是由於其他幾家投資組合公司業績的成長而造成的。

Our NAV decreased to $13.01 per share, compared to $13.43 per share at the end of the prior quarter. The decrease was primarily driven by $0.52 per share of net unrealized depreciation on investments and $0.24 per share of distributions paid to common shareholders. This was partially offset by $0.34 per share of net investments.

我們的資產淨值下降至每股 13.01 美元，而上一季末每股資產淨值為 13.43 美元。下降的主要原因是每股 0.52 美元的投資未實現淨折舊以及每股 0.24 美元支付給普通股股東的分配。這被每股淨投資 0.34 美元部分抵消。

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 of yesterday's release, we had over $113 million available on our $200 million credit facility.

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，我們擁有了長期固定利率資本，截至昨天發布的信息，我們的 2 億美元信貸額度中擁有超過 1.13 億美元的可用資金。

Additionally, we entered into a new ATM program during the quarter in which we have the ability to sell up to 75 million shares of our common stock, and we anticipate continuing to be active in that ATM. Overall, our leverage remains relatively low, with an asset coverage ratio at June 30, 2024, of 216%, providing plenty of cushion to the required 150% coverage.

此外，我們在本季度啟動了一項新的 ATM 計劃，其中我們有能力出售最多 7,500 萬股普通股，我們預計將繼續活躍於該 ATM 。總體而言，我們的槓桿率仍然相對較低，截至 2024 年 6 月 30 日的資產覆蓋率為 216%，為所需的 150% 覆蓋率提供了充足的緩衝。

Consistent with prior quarters, distributable book earnings to shareholders remains strong. We started the fiscal year with $20 million or $0.55 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. Additionally, we will look to continue funding future supplemental distributions as we recognize realized capital gains on the equity portion of future 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 2,000 萬美元，即每股 0.55 美元，我們的每月分配保持一致，為每股 0.08 美元，年運行率為每股 0.96 美元。此外，我們將繼續為未來的補充分配提供資金，因為我們確認了未來退出的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, our aggregate estimated fiscal year distributions would yield about 7.3% using yesterday's closing price of $13.19.

使用每年每股 0.96 美元的月度分配運行率，以昨天 13.19 美元的收盤價計算，我們預計的財政年度分配總額將產生約 7.3% 的收益。

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。

Thank you, Rachael. Very nice report. Dave and Michael, good information to our shareholders. This call and the 10-Q that we filed with the SEC yesterday should bring everybody up-to-date on what's going on at your company.

謝謝你，瑞秋。非常好的報告。戴夫和邁克爾，為我們的股東提供了很好的資訊。這次電話會議以及我們昨天向 SEC 提交的 10-Q 報告應該能讓大家了解貴公司的最新情況。

The team has reported solid results for the quarter ending June 30, '24 and we believe the team will be in a great position to continue these successes through the remainder of the fiscal year and hope on into the future. We believe Gladstone Investment is an attractive investment for investors seeking continuous monthly distributions and supplemental distributions from potential capital gains and other fees and other income. The team hopes to continue to show you a strong return on your investment.

該團隊報告了截至 24 年 6 月 30 日的季度的穩健業績，我們相信該團隊將處於有利地位，能夠在本財年剩餘時間內繼續取得這些成功，並對未來充滿希望。我們認為，格萊斯頓投資對於尋求連續每月分配以及從潛在資本利得和其他費用和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豐厚的投資回報。

Well, now let's stop with the report and see if we have some questions from analysts or stockholders that they'd like us to respond to.

好吧，現在讓我們停止報告，看看分析師或股東是否有一些問題希望我們回答。

Thank you. We will now be conducting a question-and-answer session. (Operator Instructions)

謝謝。我們現在將進行問答環節。（操作員說明）

Mickey Schleien, Ladenburg Thalmann & Co. Inc.

米奇‧施萊恩 (Mickey Schleien)、拉登堡塔爾曼公司

Yes, good morning everyone. Dave, when we look at the forward interest rate curve and consider that all your debt investments are at floating rates and most of your debt liabilities are at fixed rates, there's a scenario where NII per share could decline below your distribution, assuming no changes in the size of the portfolio or its credit quality.

是的，大家早安。戴夫，當我們查看遠期利率曲線並考慮到您所有的債務投資均為浮動利率，而您的大部分債務負債均為固定利率時，假設每股NII 沒有變化，可能會低於您的分配。

So GAIN has a great track record of not cutting the dividend and I like to understand what levers you can pull to avoid that scenario and would the board be comfortable with NII running below the dividend for a while?

因此，嘉盛集團在不削減股利方面有著良好的記錄，我想了解可以採取哪些手段來避免這種情況，以及董事會是否會接受NII暫時低於股利水準？

Yes, Mickey thanks for the question. Yes, I'm not sure I can answer it really the way you're asking. What I'll tell you is this right now as we look forward and of course we do our projections and try to understand where our portfolio is, we don't see, frankly, a decline in that spread where we would be looking to cut our dividend.

是的，米奇，謝謝你的提問。是的，我不確定我能否真正按照您的要求回答。我現在要告訴你的是，當我們展望未來時，我們當然會進行預測並嘗試了解我們的投資組合在哪裡，坦白說，我們沒有看到我們希望削減的利差下降我們的股息。

And as you point out, this is not something that we consider doing. We also remember supplement our kind of call it the spread income with other income that we generate during any one period of our portfolio. And as a result of that, we would expect that we will continue to have total NII available for distribution above what our run rate dividend is.

正如您所指出的，這不是我們考慮做的事情。我們還記得我們將其稱為利差收入與我們在投資組合的任何時期內產生的其他收入的補充。因此，我們預計可分配的總NII將繼續高於我們的運行率股息。

And Rachael, would you like to add to that?

瑞秋，你想補充一下嗎？

Yes, absolutely. Good morning, Mickey. You know, as you said, as rates come down, we will see yields begin to compress. But you did say most of our debt is fixed rate, but we also do have variable debt on our line of credit. So we will also see those borrowing costs come down a bit. You know, we obviously look to maintain the same level of performance across both high and low interest rate environments. And so even with those narrowing, the potential for narrowing spreads, there's no real concern given the way we structure our deals. Our debt portfolio has floored generally in the 11.5% to 12% range. And we look at that as protection in a lower interest rate environment.

是的，絕對是。早上好，米奇。正如您所說，隨著利率下降，我們將看到收益率開始壓縮。但您確實說過我們的大部分債務都是固定利率，但我們的信用額度上也確實有可變債務。因此，我們也會看到借貸成本略有下降。您知道，我們顯然希望在高利率和低利率環境下保持相同的性能水平。因此，即使這些收窄，利差有可能收窄，考慮到我們建立交易的方式，也沒有真正的擔憂。我們的債務投資組合總體上已降至 11.5% 至 12% 的範圍內。我們將其視為較低利率環境下的保護。

Yes, which is how we've always managed it, actually, which is why we've been able to keep, not like a typical lender, if you will, we've been able to manage that. Plus we again harvest dividends when we can from the equities on our portfolio as well. And so again, we would not anticipate the scenario that you suggested.

是的，這就是我們一直以來的管理方式，實際上，這就是為什麼我們能夠保持這一點，而不是像典型的貸方那樣，如果你願意的話，我們已經能夠做到這一點。此外，當我們可以從投資組合中的股票中獲得股利時，我們也會再次獲得股利。同樣，我們不會預料到您所建議的情況。

And Mickey, just that --

還有米奇，僅此而已--

Yes, I'm sorry.

是的，對不起。

Right. Just so you know, Mickey, we have run many of our companies. As you know, we have four of them that are dividend-oriented. We've run any number of them over the time in which earnings were lower for several quarters, and we continued paying the dividend. So I don't anticipate that slowing down this company.

正確的。米奇，你知道，我們經營許多公司。如您所知，我們有四個以股息為導向的公司。在獲利連續幾個季度較低的時期，我們經營過很多這樣的公司，但我們繼續支付股息。所以我預計這不會放慢這家公司的發展速度。

Yes, I appreciate that. Rachael, could you repeat what the average sofa floors are on your debt investments?

是的，我很欣賞這一點。瑞秋，你能重複一下你的債務投資的平均沙發地板是多少嗎？

In the aggregate there it's between 11.5% to 12%.

總體而言，這一比例在 11.5% 至 12% 之間。

Okay. Give me a second. That's the total then. Dave, in terms of the pipeline for new acquisitions, could you give us an idea perhaps of how many term sheets you've got out there and the likelihood that you expect some of those to close you know over the next year?

好的。等一下。那麼總數就是這樣了。戴夫，就新收購的管道而言，您能否向我們介紹您已經提供了多少條款清單，以及您預計其中一些項目在明年完成的可能性？

Yeah, I wish, I could give you that specific number, recognize that at any point in time and with our deal team, we are working on probably 15, 16 plus companies. And we have the process, as you know, that we see an initial investment. We do a fair amount of work on it. We prepare what we call an indication of interest, presumably to the investment banker that brought us the deal.

是的，我希望，我可以給你這個具體數字，認識到在任何時候，我們的交易團隊正在與大約 15、16 家以上的公司合作。如您所知，我們有一個流程來進行初始投資。我們在這方面做了相當多的工作。我們準備所謂的興趣指示，大概是向為我們帶來交易的投資銀行家。

And then assuming we get accepted at that level, that then involves spending time then with the management teams of the companies, getting better knowledge, doing some more due diligence on the side, and then assuming we like what we're seeing, we go ahead and put in what we call a letter of intent, which is approved by our investment committee.

然後假設我們在這個級別上被接受，那就需要花時間與公司的管理團隊在一起，獲得更好的知識，做一些更多的盡職調查，然後假設我們喜歡我們所看到的，我們就去並提交我們所謂的意向書，該意向書已得到我們投資委員會的批准。

And if that gets accepted by the seller, then of course we move through the final process. So it's a lot of moving parts, if you will. So I'm not in a position to really give you a specific number to be perfectly honest with you. It's just that it's a constant process. And what I think of it is we'd like to be able to maybe close three to four or five new deals in a 12-month period. I mean, that's kind of our goal. And the size might vary and then remembering, too, that we have this whole add-on acquisition.

如果賣家接受了，那麼我們當然會完成最後的流程。所以如果你願意的話，它有很多移動部件。所以說實話，我無法給你一個具體的數字。只是這是一個持續的過程。我的想法是，我們希望能夠在 12 個月內完成三到四到五筆新交易。我的意思是，這就是我們的目標。規模可能會有所不同，然後還要記住，我們擁有整個附加收購。

So again, we have our goals. We set in mind how much we think we are able to put out in a year, and we strive to do that. So it's a constant activity between the IOIs and the LOIs, and then ultimately getting the deals done. And as you know, once we get approval to move forward, you know, it can be a two-month timeframe to do due diligence, get the deal done.

再說一次，我們有我們的目標。我們牢記我們認為一年內能夠投入多少，並努力做到這一點。因此，這是 IOI 和 LOI 之間持續不斷的活動，然後最終完成交易。如您所知，一旦我們獲得批准繼續推進，您知道，可能需要兩個月的時間來進行盡職調查並完成交易。

So that there are a lot of moving parts, but consistent with how we've operated in the past, maybe that's more important, is kind of what our look forward would be in terms of new deals.

因此，有許多變化的部分，但與我們過去的運作方式一致，也許更重要的是，這就是我們對新交易的期望。

Yes, I appreciate that. Rachael made several comments about credit quality, but it was pretty quick so I want to back up and ask a couple of questions about that. You mark down Nth Degree, Mason West and Horizon facilities. I think that was most of the decline this quarter. You know, is there some trend there or, you know, can you give us some insight as to what happened with those companies?

是的，我很欣賞這一點。雷切爾（Rachael）對信用品質發表了幾條評論，但速度很快，所以我想支持並問幾個相關問題。您記下 Nth Degree、Mason West 和 Horizo​​​​n 設施。我認為這是本季下降的主要原因。你知道，那裡有一些趨勢嗎？ 或者，你知道，你能給我們一些關於這些公司發生了什麼的見解嗎？

Well, I think without going into a lot of the detail, Nth Degree, pick that as an example. Now that's a company that has a very significant EBITDA level. And I think there we had a slight down tick in the multiple. And you've got to keep in mind in any of these companies. If you have even almost a half a turn on an EBITDA company doing, let's say, $20 million to $60 million of EBITDA, which in some cases that's true. That's a fairly significant dollar movement.

好吧，我認為無需深入討論很多細節，Nth Degree，就選它作為例子。現在這家公司的 EBITDA 水準非常高。我認為我們的市盈率略有下降。在這些公司中，你必須牢記這一點。如果您對 EBITDA 公司有近半輪的投資，比如說，其 EBITDA 為 2000 萬至 6000 萬美元，在某些情況下確實如此。這是相當重大的美元走勢。

So I think what you're seeing is that more than anything else. I will say to you that all of those companies that you mentioned, Nth Degree, of course, is an exceptional business, generating very, very significant EBITDA. Mason West is a very solid business. Horizon is a good, very good business. They're the one that provides labor to the rental car business. And there has been some softness in that market. No surprise there.

所以我認為你所看到的比其他任何事情都更重要。我要對你說的是，你提到的所有這些公司，Nth Degree，當然都是一家傑出的企業，產生非常非常可觀的 EBITDA。Mason West 是一家非常穩固的企業。Horizo​​n是一個很好、非常好的生意。他們是為汽車租賃業務提供勞動力的人。該市場出現了一些疲軟。這並不奇怪。

Having said that, they are still very profitable, doing very well. And so again, I think you've got to be careful when we look at some of these changes when you do have both a multiple coming down, which we of course don't control, and likewise a small downtick even in EBITDA that can relate or translate into a meaningful dollar decline in the actual value of the asset. Does that make sense?

話雖如此，他們仍然很賺錢，而且做得很好。再說一次，我認為當我們考慮其中一些變化時，你必須小心，因為你的倍數確實下降了，我們當然無法控制，同樣，即使是 EBITDA 也有小幅下降，這可能會導致關聯或轉化為資產實際價值的顯著美元下降。這樣有道理嗎？

Having said that, they are they are still very profitable, doing very well. And so again, I think you've got to be careful when we look at some of these changes when you do have both the multiple coming down, which we of course don't control.

話雖如此，他們仍然很賺錢，而且做得很好。再說一次，我認為當我們看到其中一些變化時，當你的倍數確實下降時，你必須小心，這當然是我們無法控制的。

And likewise, a small downtick even in EBITDA that it can relate to a or translate into a meaningful dollar decline in the actual value of the asset.

同樣，即使是 EBITDA 的小幅下降也可能與資產實際價值的美元大幅下降有關或轉化為有意義的下降。

I understand. Yeah, I understand. And in terms of diligent delivery, which is a new non-accrual, that debt investment still marked at par. I think Rachel may have alluded to that as something you expect to put back on accrual soon. Am I correct or did I misinterpret those remarks?

我明白。是的，我明白。就勤奮交付而言（這是一種新的非應計收益），債務投資仍以面額計算。我認為雷切爾可能已經提到了這一點，您希望很快就能恢復應計利息。我是對的還是我誤解了這些言論？

Yes, that is, I think, as was alluded to, is where we only have that small debt investment, if you will. It's a legacy. It has been, frankly, paying its interest really good. It's been going through a process potentially of an exit of some sort. They've been working on it over a number of years and so on. So what we anticipate, I think what she was alluding to, and Rachael can correct me here, is that that's one that we would hope and anticipate maybe we actually get the debt paid off and we're done with it sometime in the next period.

是的，我認為，正如所提到的，如果你願意的話，我們只有少量的債務投資。這是一個遺產。坦白說，它支付的利息確實很好。它正在經歷一個可能會退出的過程。他們已經為此努力了很多年等等。所以我們的預期，我認為她所暗示的，雷切爾可以在這裡糾正我，是我們希望並預期的，也許我們真的得到了債務的還清，並且我們在下一個時期的某個時候完成了它。

So yes, that's where that one comes in. That's not one that we have any equity in and you know frankly it's just kind of a hate to say it's sort of a tag end of an investment we had from before.

所以是的，這就是那個進來的地方。這不是我們擁有任何股權的項目，坦白說，我們討厭說這是我們之前投資的一個標籤。

And the issues on B&T are just this down cycle and spend by telecom or is that something else?

B&T 的問題只是這個下行週期和電信支出還是其他原因？

No, it's pretty much spend by telecom they're actually seeing an uptick in that business right now, as a matter of fact. And again, I'd say B&T, Hobbs that has been on non-accrual for a while, I think I alluded to, again, both companies are profitable.

不，這幾乎是電信的支出，事實上，他們現在實際上看到該業務有所成長。再說一遍，我想說 B&T 和 Hobbs 已經有一段時間採用非應計利潤了，我想我再次提到，兩家公司都是盈利的。

Where we obviously, as you know, work with these companies to get them back in a position where at some point where they are going to clearly get them back on accrual and/or work to exit those businesses, but right now I'd say they're both you know headed in the right direction and we're just working through what we have to work through with them, but yes there was slight you know it's not even as much a little bit of a downturn as some of their customers that they have to work with people like Verizon, AT&T what-have-you it can be a very challenging customer to some degree and the team is really there at B&T, done a really good job.

如你所知，我們顯然與這些公司合作，讓他們回到一個位置，在某個時候，他們將明確地讓他們恢復應計和/或退出這些業務的工作，但現在我會說你知道，他們都在朝著正確的方向前進，我們只是在與他們一起解決我們必須解決的問題，但是，是的，有輕微的影響，你知道，這甚至不像他們的一些客戶那麼低迷他們必須與Verizon 、AT&T 等公司合作，從某種程度上來說，這可能是一個非常具有挑戰性的客戶，而B&T 的團隊確實在那裡，做得非常好。

And I feel like we're, you know, again, in the right direction with those guys. And this was kind of a temporary and actually we have a revolving line of credit piece there that is did not go in on accrual actually.

我覺得我們和這些人再次朝著正確的方向前進。這是暫時的，實際上我們有一個循環信用額度，實際上並沒有計入應計利息。

Yes, I saw that.

是的，我看到了。

Total investment, yes.

總投資，是的。

And my last question I do appreciate your patience. There was an increase in G&A quarter-to-quarter was pretty meaningful. Rachael, is there any insight you can give us on that, and what's the outlet for G&A?

我的最後一個問題非常感謝您的耐心。G&A 季度環比的成長是相當有意義的。Rachael，您對此有何見解？

Yes, so that will be a one-time hit. There was bad debt expense related to the write-off of prior period income related to B&T and Diligent one.

是的，所以這將是一次性的打擊。存在與 B&T 和 Diligent one 相關的前期收入沖銷相關的壞帳費用。

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

好的。這些都是我今天早上的問題。我很感激你的時間。謝謝。

Thanks Mickey.

謝謝米奇。

Okay. Thank you very much. Do we have anybody else that wants to ask us a question? We would like more questions.

好的。非常感謝。有其他人想問我們問題嗎？我們想要更多問題。

Thank you. (Operator Instructions)

謝謝。（操作員說明）

Bryce Rowe, B. Riley Securities.

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

Thanks a lot. Good morning. I think Mickey handled most of my questions as well. Rachael, I did want to ask about the fee income. I guess it was either other or success fee income here in the quarter. Can you give us a sense for the source of that, given the lack of activity in the quarter?

多謝。早安.我想米奇也解決了我大部分的問題。Rachael，我確實想問費用收入。我想這要不是本季的其他費用收入，就是成功費用收入。鑑於本季缺乏活動，您能否讓我們了解其來源？

Sure. So, you know, as we've talked about, I think, in the past, that other income line item is a little bit variable, period-over-period, and can be challenging to compare. It's generally made up of dividends on our preferred investments or success fee income from our portfolio companies. That success fee income, as you said, is generally due upon a change in control or an exit.

當然。所以，你知道，正如我們所討論的，我認為，在過去，其他收入項目在不同時期之間存在一些變化，並且可能難以比較。它通常由我們優先投資的股息或我們投資組合公司的成功費收入組成。正如您所說，成功費用收入通常是在控制權發生變化或退出時產生的。

So oftentimes some of our portfolio companies for various reasons do choose to prepay. So that was the case this quarter. We had one of our portfolio companies choose to prepay about $1.6 million of their outstanding success fees.

因此，我們的一些投資組合公司常常出於各種原因選擇預付款。本季的情況就是如此。我們的投資組合公司之一選擇預付其未償成功費用中約 160 萬美元。

Okay.

好的。

Which is a good thing.

這是一件好事。

Yes.

是的。

Yes, understood. And then in terms of non-accruals, and I guess it relates to that comment about the bad debt expense and other G&A expense. What was the timing of those companies being put on non-accrual? I'm just trying to understand if the yield for the quarter or the interest income for the quarter had some level of interest income from those newly non-accrualed investments?

是的，明白了。然後就非應計費用而言，我想這與有關壞帳費用和其他一般及行政費用的評論有關。這些公司何時被設為非應計利潤？我只是想了解該季度的收益率或該季度的利息收入是否從這些新的非應計投資中獲得了一定程度的利息收入？

Yes, so both companies were placed on non-accrual as of April 1, so as of the beginning of the quarter, So that yield excludes any income related to B&T or Diligent. So we essentially did not recognize about $750,000 of income we otherwise would have this quarter.

是的，所以從 4 月 1 日起，兩家公司都被置於非應計利潤狀態，因此從本季度初開始，該收益率不包括與 B&T 或 Diligent 相關的任何收入。因此，我們基本上沒有確認本季約 75 萬美元的收入。

Okay. And then maybe one more for you, Dave. In terms of, I think you've talked quite a bit in the last, I don't know, 12 to 18 months about the competitive conditions and trying to get new deals signed up. And Mickey did ask about number of term sheets that are out there right now. Just kind of curious if there's been any change in competitive conditions, whether, you know, whether more competitive or less?

好的。戴夫，也許還有一份給你。就而言，我認為你在過去 12 到 18 個月裡談論了很多關於競爭條件和試圖簽署新交易的內容，我不知道。米奇確實詢問了目前已​​有的投資意向書的數量。只是有點好奇競爭條件有沒有變化，你知道，競爭是更加激烈還是激烈？

I'd say it's probably about the same, that one I call a change, as trying to suggest, is that you look back over the last quarter or so before this quarter, let's say the deal flow was okay, and the deals that we were seeing, and this affects everybody obviously, we compete with some of those companies, as you might well know from your firm's investment banking side as well, some deals that were being sold, they backed off of them, they pulled them, what have you. So we went through what I'd call a period of slowdown, so to speak, in terms of quality deals. We're seeing that pick up for sure.

我想說，這可能是一樣的，我稱之為變化，正如試圖建議的那樣，你回顧一下本季度之前的上一個季度左右，假設交易流程還不錯，我們的交易也很好。 ，這顯然影響到每個人，我們與其中一些公司競爭，正如您從公司的投資銀行方面也可能知道的那樣，一些正在出售的交易，他們退出了，他們撤回了它們，發生了什麼你。因此，我們經歷了一段我稱之為優質交易放緩的時期。我們肯定會看到這種情況有所改善。

So we're seeing deals come back on the market that might have been pulled that are now coming back. However, the appetite from the buyside is pretty high and people are really striving to get money out. So as a result of that, yes, it's as competitive, because of the amount of money that's available. And I'd say, though, the deal flow, which is the other side of that equation, is picked up. So that's giving us a little more opportunity to see, frankly, more deals that are legitimate, that fit our profile, that we can compete on.

因此，我們看到市場上原本可能被取消的交易現在又回來了。然而，買方的興趣相當高，人們確實在努力賺錢。因此，是的，由於可用資金的數量，它具有競爭力。不過，我想說的是，交易流，也就是方程式的另一邊，已經恢復了。坦白說，這給了我們更多的機會來看到更多合法的、符合我們形象的、我們可以參與競爭的交易。

But again, it still is challenging because, you know, multiples are relatively high, you know, for the deal. So I'd say about the same, but the deal flow is higher and better, which is a good thing.

但同樣，這仍然具有挑戰性，因為你知道，這筆交易的本益比相對較高。所以我想說的是同樣的事情，但是交易流量更高更好，這是一件好事。

Okay. Okay. I think that's it for me. I appreciate the time.

好的。好的。我想這對我來說就是這樣。我很感激時間。

Okay. Do we have any more questions.

好的。我們還有什麼問題嗎？

There are no further questions at this time. I'd like to turn the floor back over to Mr. Gladstone for closing remarks.

目前沒有其他問題。我想請格萊斯頓先生致閉幕詞。

Oh, shucks. I'm sorry. We don't have more questions. We really enjoy the questions that you give us. But I understand, we've given you a lot of answers and take some time to digest that. We appreciate you all being our shareholders and we'll see you again next quarter. That's the end of this call.

哦，糟糕。對不起。我們沒有更多問題了。我們非常喜歡您向我們提出的問題。但我理解，我們已經給了你很多答案，需要一些時間來消化。我們感謝你們成為我們的股東，我們下個季度再見。本次通話就到此結束。

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.

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。