Gladstone Investment Corp (GAIN) 2025 Q2 法說會逐字稿

Greetings. Welcome to Gladstone Investment Corporation Second Quarter Earnings Call. (Operator Instructions) As a reminder, this conference is being recorded.

問候。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。

It is now my pleasure to introduce David Gladstone, Chief Executive Officer. Thank you, Mr. Gladstone, you may begin.

現在我很高興向大家介紹執行長大衛‧格拉德斯通 (David Gladstone)。謝謝你，格萊斯頓先生，你可以開始了。

Okay, Sherry, thanks very much. This is David Gladstone, Chairman of Gladstone Investment, and this is the second quarter of fiscal year ending 2025, ends on September 30, 2024, Earnings Conference Call for shareholders and analysts, or our chance to talk with you and tell you about what we're doing and where we're going.

好的，雪莉，非常感謝。我是 Gladstone Investment 董事長 David Gladstone，這是截至 2025 年的第二季財年，截至 2024 年 9 月 30 日，股東和分析師收益電話會議，或者我們有機會與您交談並告訴您我們的內容我們正在做什麼以及我們要去哪裡。

But before we get started, I'm going to turn it over to our Chief Counsel -- what else do you do, Mike?

但在我們開始之前，我要把它交給我們的首席法律顧問——麥克，你還做什麼？

Enough.

足夠的。

Okay. Let's hear from Michael.

好的。讓我們聽聽邁克爾的意見。

(laughter) Good morning, everybody. Today's call may include forward-looking statements on the Securities Act 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. Now 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 listed on our Forms 10-Q, 10-K and various other documents we filed with the SEC. You can find all these documents on the Investors page of our website at gladstoneinvestment.com or the SEC's website, which is www.sec.gov. 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.

（笑聲）大家早安。今天的電話會議可能包括有關 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。現在，許多因素可能導致我們的實際結果與這些前瞻性陳述所表達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 表格以及我們向公司提交的各種其他文件中列出的所有風險因素。您可以在我們網站的投資者頁面（gladstoneinvestment.com）或 SEC 網站（www.sec.gov）上找到所有這些文件。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。

Please also note, past performance or market information, not a guarantee of future results. We ask you to visit our website, gladstoneinvestment.com, sign up for our e-mail notification service. You can also find us on Facebook, keyword, the Gladstone Companies. And on Twitter, which is now X, the handle there is GladstoneComps, @GladstoneComps on X.

另請注意，過去的業績或市場資訊並不是對未來結果的保證。我們要求您造訪我們的網站gladstoneinvestment.com，註冊我們的電子郵件通知服務。您也可以在 Facebook 上找到我們，關鍵字是 Gladstone Companies。在 Twitter（現在是 X）上，用戶名是 GladstoneComps，@GladstoneComps on X。

Today's call is simply an overview of our results through September 30, 2024, 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 2024 年 9 月 30 日的結果的概述，因此我們要求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。

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

接下來，我將把它交給 Gladstone Investment 總裁 Dave Dullum。

Mike, thank you very much, and good morning. Welcome to all our shareholders and analysts. For the second quarter of fiscal year '25, I'm pleased to report that the GAIN team has continued to produce consistent and positive quarter-over-quarter results. We ended the second quarter of this fiscal '25 on 9/30 '24 with adjusted NII of $0.24 per share and total assets of $869 million, which is a bit down from prior quarter, but we'll explain that in a minute.

麥克，非常感謝你，早安。歡迎所有股東和分析師。對於 25 財年第二季度，我很高興地報告，GAIN 團隊繼續取得一致且積極的季度業績。我們於2024 年9 月30 日結束了本財年第二季度，調整後的NII 為每股0.24 美元，總資產為8.69 億美元，比上一季略有下降，但我們稍後會對此進行解釋。

We are in an extremely active investing period, and I believe this will continue for a while. We have been and continue to review and conduct due diligence on a significant number of new investment opportunities.

我們正處於一個極其活躍的投資時期，我相信這種情況將持續一段時間。我們一直並將繼續對大量新的投資機會進行審查和盡職調查。

At the same time, we've been managing various activities within our 22 existing portfolio companies. We invested about $18.5 million in the form of a secured first lien debt which was to help fund an add-on acquisition for one of our existing portfolio companies, Nocturne Luxury Villas. As I've mentioned in prior calls, this follows some of our other significant add-on activities at a few of our other portfolio companies over the past year, where these add-on opportunities will allow us to increase our investment, build value in companies where we have confidence in the management team, have a strong belief in its future, and enhancing the opportunity for future equity gains.

同時，我們一直在管理 22 家現有投資組合公司內的各種活動。我們以有擔保的第一留置權債務的形式投資了約 1850 萬美元，旨在為我們現有投資組合公司之一 Nocturne Luxury Villas 的附加收購提供資金。正如我在之前的電話會議中提到的，這是在過去一年中我們在其他一些投資組合公司開展的一些其他重要附加活動之後進行的，這些附加機會將使我們能夠增加投資，在以下方面創造價值：我們對管理團隊充滿信心，對其未來充滿信心，並增強未來股權收益機會的公司。

This quarter, we also had a very successful exit of our portfolio company, Nth Degree, where we generated a meaningful realized capital gains of around $42.3 million.

本季度，我們也非常成功地退出了我們的投資組合公司 Nth Degree，我們實現了約 4,230 萬美元的有意義的已實現資本收益。

We maintained our monthly distribution shareholders at $0.08 per share or $0.96 per share on an annual basis. We also declared a supplemental distribution of $0.70 per share during the quarter that was paid in October.

我們維持每月股東分配額為每股 0.08 美元，每年為每股 0.96 美元。我們也宣佈在 10 月支付的季度內追加每股 0.70 美元的分配。

Now this large supplemental distribution is a direct result of our buyout strategy and our ability to reward our shareholders with meaningful supplemental distributions from the realized capital gains generated on the equity portion of our exits, further reinforcing our model of a buyout focused fund. It remains our intent to continue rewarding our shareholders with meaningful supplemental distributions from the realized capital gains on exit. And as our portfolio continues to mature and equity values increase, we will constructively harvest these gains for the benefit of shareholders.

現在，這種大規模的補充分配是我們的收購策略的直接結果，也是我們透過退出股權部分所實現的資本利得來回報股東的有意義的補充分配的能力，進一步強化了我們以收購為重點的基金模式。我們仍然打算繼續透過退出時實現的資本利得進行有意義的補充分配來獎勵我們的股東。隨著我們的投資組合不斷成熟，股權價值不斷增加，我們將建設性地收穫這些收益，造福股東。

It is important here, though, to emphasize that we will always be investing in new portfolio companies and strive to balance the timing of exits without sacrificing the level of debt assets that produce the income to support and grow our monthly dividends, which is extremely important to our shareholders.

不過，在這裡重要的是要強調，我們將始終投資於新的投資組合公司，並努力平衡退出時機，而不犧牲產生收入以支持和增加每月股息的債務資產水平，這一點極其重要致我們的股東。

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

現在，我們的資產負債表繼續保持強勁，槓桿率較低，流動性狀況良好，並且我們的信貸安排具有額外的可用性。正如我所提到的，我們繼續為我們的投資組合公司提供附加收購支持，並在需要時提供臨時融資，同時透過新的收購積極成長我們的資產。

Now looking forward, and obviously, there are many uncertainties as we look over the next number of years, but we feel very good about where we are. And as I mentioned, we are seeing an increase in opportunities for new acquisitions, and there seems to be growing momentum in new deals coming to market. There is significant liquidity in the M&A market, which makes for a very competitive environment with upward pressure on valuations. We will have to aggressively compete and acquire new companies that we believe fit our financial model by investing a combination of debt and equity, maintaining our principles of being a value investor and generating income on a current basis with upside through capital appreciation.

現在展望未來，顯然，我們展望未來幾年存在許多不確定性，但我們對目前的狀況感覺非常好。正如我所提到的，我們看到新收購的機會增加，而且市場上新交易的勢頭似乎也在增長。併購市場存在大量流動性，競爭非常激烈，估值面臨上行壓力。我們必須積極競爭，透過債務和股權的組合投資，收購我們認為適合我們財務模式的新公司，維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產生收入並帶來上行空間。

With the current level of analysis and due diligence we are doing on our number of new buyouts, I'm encouraged that we will be adding to our assets with new portfolio companies in the very near term. 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, a positive level of buyout activity and the prospect of continued very good earnings and distributions over the next year.

根據我們目前對新收購數量進行的分析和盡職調查的水平，我很高興我們將在短期內透過新的投資組合公司增加我們的資產。總結本季並展望未來，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性資產負債表、積極的收購活動水平以及明年持續良好的收益和分配的前景。

So with that, I'd like to turn it over to Rachael Easton, our CFO, and have her elaborate on more detail on the financial results. Rachael?

因此，我想將其交給我們的財務長 Rachael Easton，並讓她詳細闡述財務業績的更多細節。雷切爾？

Thank you, Dave, and good morning. Looking at our operating performance in the second quarter of fiscal year '25, we generated total investment income of $22.6 million, up from $22.2 million in the prior quarter.

謝謝你，戴夫，早安。從我們 25 財年第二季的經營業績來看，我們的總投資收入為 2,260 萬美元，高於上一季的 2,220 萬美元。

Net expenses for the quarter were $15.3 million, up from $9.8 million in the prior quarter. This increase was primarily due to a $5.4 million increase in accrued capital gains-based incentive fees due to the net impact of realized and unrealized gains and losses during the quarter as required under US GAAP. This resulted in net investment income for the quarter of $7.3 million compared to $12.4 million in the prior quarter.

本季淨支出為 1,530 萬美元，高於上一季的 980 萬美元。這一增長主要是由於根據美國公認會計準則的要求，本季度已實現和未實現損益的淨影響導致基於應計資本收益的獎勵費用增加了 540 萬美元。這導致本季淨投資收入為 730 萬美元，而上一季為 1,240 萬美元。

Adjusted net investment income, which is net investment income or loss exclusive of any accrued capital gains-based incentive fees for the quarter was $8.9 million or $0.24 per share, up slightly but remaining consistent on a per share basis from $8.6 million or $0.24 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.

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890 萬美元，即每股0.24 美元，略高於860 萬美元，即每股0.24 美元，但與每股基本保持一致上一季。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。

Consistent with the prior quarter at September 30, 2024, we continue to have four portfolio companies that are on nonaccrual status. Overall, there are no portfolio-wide credit concerns. We continue working closely with these companies to get back on accrual status when possible. We continue to see improvement at one of the companies in particular that has been on nonaccrual for some time, as they are back to generating a profit, and we continue to work closely with them.

與截至 2024 年 9 月 30 日的上一季一致，我們仍有四家投資組合公司處於非應計狀態。整體而言，不存在整個投資組合範圍內的信用問題。我們將繼續與這些公司密切合作，盡可能恢復應計狀態。我們繼續看到其中一家公司的情況有所改善，特別是一段時間以來一直採用非應計利潤的公司，因為他們已經恢復盈利，我們將繼續與他們密切合作。

Valuations in the aggregate were up $3.9 million across the portfolio, excluding the reversal of unrealized appreciation related to the exit of Nth Degree. This unrealized appreciation was driven by higher valuation multiples across the portfolio and increased performance at a number of our portfolio companies, which was partially offset by decreased performance at other portfolio companies.

不包括與 Nth Degree 退出相關的未實現升值逆轉，整個投資組合的估值總計上漲了 390 萬美元。這種未實現的升值是由於整個投資組合的估值倍數較高以及我們許多投資組合公司的業績成長所推動的，但其他投資組合公司的業績下降部分抵消了這一影響。

Our NAV decreased to $12.49 per share compared to $13.01 per share at the end of the prior quarter. The decrease was primarily driven by $0.94 per share of distributions declared to common shareholders during the quarter, of which $0.70 per share was a supplemental distribution paid in October.

我們的資產淨值從上一季末每股 13.01 美元下降至每股 12.49 美元。這一下降主要是由於本季向普通股股東宣布的每股 0.94 美元的分配，其中每股 0.70 美元是 10 月支付的補充分配。

Our NAV was also impacted by $0.93 per share of net unrealized depreciation on investments which was comprised of $0.11 per share of unrealized appreciation experienced across the portfolio and $1.04 per share of unrealized depreciation due to that reversal of unrealized appreciation on the exit, as previously mentioned. These amounts were partially offset by increases in NAV of $1.15 per share of realized gains on investments and $0.20 per share of net investment income.

我們的淨值也受到每股0.93 美元的投資未實現淨折舊的影響，其中包括投資組合中每股未實現升值0.11 美元，以及由於退出時未實現升值逆轉而導致的每股未實現折舊1.04 美元，如前所述。這些金額被每股已實現投資收益的資產淨值增加 1.15 美元和每股淨投資收入增加 0.20 美元所部分抵銷。

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 approximately $160 million available on our $200 million credit facility. Overall, our leverage remains relatively low with an asset coverage ratio at September 30 of 229.3% providing us plenty of cushion to the required 150% coverage.

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。截至昨天發布的消息，我們的 2 億美元信貸額度中約有 1.6 億美元可用。總體而言，我們的槓桿率仍然相對較低，截至 9 月 30 日的資產覆蓋率為 229.3%，為我們達到所需的 150% 覆蓋率提供了充足的緩衝。

Consistent with prior quarters, distributable book earnings to shareholders remained 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.

與前幾季一致，股東可分配帳面收益依然強勁。我們以 2000 萬美元或每股 0.55 美元的溢出額開始了本財年。我們的每月派息維持在每股 0.08 美元，年度運行率為每股 0.96 美元。

In September, as mentioned, we declared a $0.70 per share supplemental distribution, which was paid in October. And we will look to continue funding future supplemental distributions as we recognize realized capital gains on the equity portion of future exits. Using the monthly distribution run rate of $0.96 per share per year and $0.70 per share in supplemental distributions paid so far in fiscal year 2025, our aggregate estimated fiscal year distributions would yield about 12% using yesterday's closing price of $13.80.

如前所述，9 月，我們宣布每股 0.70 美元的補充分配，並於 10 月支付。當我們確認未來退出的股權部分已實現的資本利得時，我們將繼續為未來的補充分配提供資金。使用每年每股 0.96 美元的月度分配運行率和 2025 財年迄今為止支付的補充分配每股 0.70 美元，我們估計的財政年度分配總額將根據昨天收盤價 13.80 美元產生約 12%。

This covers my part of today's call. Before turning the call back over to David to wrap us up, I would like to take a moment to mention that as announced last month, today will be my last earnings call and my last day with Gladstone Investment. I'm proud of the work I've done for the past three years with Dave, David, and the team as I pursue a personal change.

這就是我今天電話會議的部分內容。在將電話轉回給大衛結束我們之前，我想花點時間提一下，正如上個月宣布的那樣，今天將是我的最後一次財報電話會議，也是我在格拉德斯通投資公司的最後一天。在我追求個人改變的過程中，我為過去三年與戴夫、大衛和團隊所做的工作感到自豪。

I'd also like to introduce everyone on the call to Taylor Ritchie, who has been with Gladstone Investment for the past six years in the role of Controller and Director of Financial Reporting. We are all very excited to have him step into the CFO role from what we believe will be a seamless transition.

我還想向參加電話會議的所有人介紹泰勒·里奇 (Taylor Ritchie)，他在過去六年中一直在 Gladstone Investment 工作，擔任財務報告總監和財務總監。我們都很高興他從財務長的職位上走出來，我們相信這將是一個無縫的過渡。

I'll now hand it over to you, David to wrap us up.

現在我將把它交給你，大衛，讓我們結束。

All right. Thank you, Rachael. We don't like to see you go, but glad you're replaced by a really strong accounting guy. And good information that you've given us over the years has just been wonderful.

好的。謝謝你，瑞秋。我們不喜歡看到你離開，但很高興你被一位非常強大的會計人員取代。多年來您給我們的好資訊真是太棒了。

This calls the 10-Q -- this call and the 10-Q we filed at the SEC yesterday should bring everybody up to date. The team has reported solid results for the quarter ending September 30, 2024 and we believe the team is in a great position to continue to successes through the rest of the fiscal year that ends in March 30.

這稱為 10-Q——這次電話會議和我們昨天向 SEC 提交的 10-Q 應該讓每個人都了解最新情況。該團隊報告了截至 2024 年 9 月 30 日的季度的穩健業績，我們相信該團隊處於有利地位，能夠在截至 3 月 30 日的財年剩餘時間內繼續取得成功。

Gladstone investment is, if you think about it, an attractive investment for people. And once, we had an interview of Berkshire Hathaway, and they asked him, would you like to have something that pays a dividend just every quarter forever and a day, or would you rather have more income but have it come in at variable times, as we do in our company? He selected that one. He always likes to get the most money out of it, a a company that he's invested in.

如果你仔細想想，格萊斯頓投資對人們來說是一項有吸引力的投資。有一次，我們接受了伯克希爾·哈撒韋公司的採訪，他們問他，你想要一種永遠每個季度、每天支付股息的東西，還是你寧願有更多的收入，但在不同的時間進來，就像我們在我們公司做的那樣？他選擇了那個。他總是喜歡從他投資的公司中獲得最多的錢。

So we believe Gladstone Investment is a very attractive investment for seeking continuous monthly distributions. We meet that one and we've been doing it forever. And then there's supplemental distributions that come from capital gains in one of our portfolio companies goes public or is sold. The team hopes to continue to show you strong returns on your investments in this fund.

因此，我們相信格萊斯頓投資對於尋求連續的每月分配是一項非常有吸引力的投資。我們遇到了那個人，並且我們一直在這樣做。然後是我們投資組合公司之一上市或出售的資本利得的補充分配。團隊希望繼續向您展示對該基金的投資帶來的豐厚回報。

Now let's stop here and ask for questions. Sherry, if you'll come on, that would be good.

現在讓我們在這裡停下來提問。雪莉，如果你能來，那就太好了。

(Operator Instructions) Mickey Schleien, Ladenburg Thalmann.

（操作員說明）Mickey Schleien、Ladenburg Thalmann。

Dave, a couple of questions today. I've noticed that the fee credits from the external manager for their portfolio company managerial assistants have been running much lower quarterly this year than last fiscal year. Can you give us some insight into what's causing that decline? And what's the outlook for that line item?

戴夫，今天有幾個問題。我注意到，外部經理為其投資組合公司管理助理提供的費用抵免今年季度比上一財年低得多。您能否向我們介紹一下導致這種下降的原因？該訂單項目的前景如何？

Rachael?

雷切爾？

So when looking at -- that's going to be correlated to the deal activity that takes place during the quarter. So it's a little bit challenging to project that out. But I think you can look at the last couple of quarters have been a little bit quieter from an investment perspective. So that's why it's a little bit lower.

因此，當我們觀察時，這將與本季發生的交易活動相關。因此，將其投射出來有點具有挑戰性。但我認為，從投資的角度來看，過去幾季的表現有些平靜。所以這就是為什麼它有點低。

Mickey, there's not a fundamental change in anything we do or whatever, just the timing as much as anything, as Rachael pointed out.

米基，正如雷切爾指出的那樣，我們所做的任何事情都沒有根本性的變化，只是時間發生了變化。

Yes, I understand. I just thought that some of that was also due to sort of ongoing assistance. But I do understand your answer.

是的，我明白。我只是認為其中一些也是由於持續的援助。但我確實理解你的回答。

My follow-up question relates to Hobbs, which has been on nonaccrual for more than two years, which would seem like more than enough time to address whatever its issues are. Can you update us on what the company has done over that two years to get back on track? And when do you expect it to go back on accrual? And if it's not possible, have you thought about selling it?

我的後續問題與霍布斯有關，該公司已經實行非應計制已有兩年多了，這似乎有足夠的時間來解決其問題。您能否向我們介紹一下該公司在過去兩年中為重回正軌所做的努力？您預計什麼時候會恢復應計？如果不可能的話，你有沒有想過賣掉它？

So yes, as I think we alluded to in the script, I think Rachael mentioned in her part that one of those companies is actually now profitable, indeed, that would be Hobbs. And the answer to your question is two things. One, we -- I think I've mentioned actually in prior calls, we've made change to the senior management team and we're really excited about the team that's there now, both the CEO and also the CFO, which is actually -- he has been relatively new to the company, but now about six months or so. So we've got a really solid management team. That's the first thing.

所以，是的，正如我認為我們在劇本中提到的那樣，我認為瑞秋在她的部分中提到，其中一家公司實際上現在已經盈利，事實上，那就是霍布斯。你的問題的答案有兩件事。第一，我想我實際上在之前的電話會議中已經提到過，我們已經對高級管理團隊進行了調整，我們對現在的團隊感到非常興奮，包括首席執行官和首席財務官，這實際上是——他剛到公司不久，但現在大約六個月左右了。所以我們有一個非常可靠的管理團隊。這是第一件事。

From the business perspective, keeping in mind that the nature of the business and where it a bit got off track to be perfectly honest, is they do contracting with general contractors who are building initially single-family homes, multifamily homes, and they've been actually expanding into some industrial commercial type projects.

從商業角度來看，請記住，業務的性質以及完全誠實地說有點偏離正軌的地方是，他們與最初建造單戶住宅、多戶住宅的總承包商簽訂合同，並且他們已經實際上已經擴展到一些工業商業類型的項目。

The problem that occurred back -- going back a couple of years now is always long-term contract truthfully, were either not very well priced, not very well managed. And so as a result of that, and recognizing that most of that accounting is done on a percentage of completion basis that we would end up with jobs that have what they -- in that -- in their terminology called job fade. So they actually are not being able to recoup some of their expenses as the job potentially would go along, recognizing some of these jobs could go on for over a year, right? So that -- we finally got a grasp to be truthful on that aspect of it, number one.

幾年前出現的問題實際上總是長期合同，要么價格不太好，要么管理得不好。因此，由於認識到大部分會計工作都是根據完成百分比進行的，因此我們最終會得到一些工作，這些工作在他們的術語中稱為「工作褪色」。因此，他們實際上無法收回部分費用，因為工作可能會持續下去，因為他們認識到其中一些工作可能會持續一年多，對嗎？因此，第一，我們終於掌握了在這方面保持誠實的態度。

Number two, also, they were able to then start taking jobs where they have a much higher margin, a much higher reliability of being able to manage and reduce and eliminate frankly, job fade properly pricing and proper project management going forward. That also allowed for, believe it or not, a slightly lower revenue. This company is over $100 million plus in revenues, getting it down to a level that we're actually taking business only at a certain margin level and sticking with it. So that's all starting to come through the system currently. So therefore, that's kind of what we have done, how we work with the business and how we've helped get it to the level it is at.

第二，他們也能夠開始接受利潤更高的工作，坦率地管理、減少和消除工作的可靠性更高，工作衰退適當的定價和適當的專案管理。不管你信不信，這也導致了收入略有下降。這家公司的收入超過 1 億美元，我們實際上只在一定的利潤水平上開展業務並堅持下去。目前，這一切都開始透過系統實現。因此，這就是我們所做的事情、我們如何與企業合作以及我們如何幫助它達到目前的水平。

My hope would be, and it's just that that coming back on accrual status could occur frankly, probably not within the next six months, but sometime, hopefully, shortly after that, we might start being able to bring some of it, maybe not all of it back on accrual. So it's a long answer to your question, but again, it's a good, solid business, good management team, making money now and also, frankly, not requiring any additional cash or support from us, which is a good thing.

我的希望是，坦白說，恢復應計狀態可能不會發生，可能不會在接下來的六個月內發生，但有時，希望在那之後不久，我們可能會開始能夠帶來其中一些，也許不是全部的應計費用。所以這是對你問題的一個很長的回答，但同樣，這是一個良好、可靠的業務，良好的管理團隊，現在正在賺錢，而且坦率地說，不需要我們提供任何額外的現金或支持，這是一件好事。

That's really good to hear, Dave. And in terms of the profitability you've mentioned, are they generating enough cash flow to service the debt at this point? Or are we not there yet?

很高興聽到這個消息，戴夫。就你提到的獲利能力而言，他們目前是否能產生足夠的現金流來償還債務？或者我們還沒到那一步？

No. As I mentioned, looking forward to getting back on accrual and start to pay, it's probably going to be a six-, nine-month time frame. We start to gain some because right now, they're generating cash, but it's obviously flowing back into the business from a working capital perspective.

不。正如我所提到的，期待恢復應計費用並開始付款，這可能需要六到九個月的時間範圍。我們開始獲得一些收益，因為現在他們正在產生現金，但從營運資本的角度來看，它顯然正在回流到業務中。

Those are my questions for this morning. And Rachael, good luck on your future endeavors.

這些是我今天早上的問題。瑞秋，祝你未來一切順利。

Can we have -- who's up next? Bryce?

我們可以──下一個是誰？布萊斯？

Bryce Rowe, B. Riley Securities.

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

Congrats to Rachael and to Taylor. It's exciting stuff. I wanted to start, Dave, with -- you made this comment about an extremely active kind of opportunities out there. I don't know if I've heard you described it like that before. Can you talk about or give us maybe a little detail around that comment? And if you could size up the opportunity in terms of the pipeline I don't know if you can, but that would certainly be helpful for us to kind of rightsize that comment?

恭喜瑞秋和泰勒。這是令人興奮的事。戴夫，我想首先——你對那裡的一種極其活躍的機會發表了評論。我不知道我以前是否聽過你這樣描述過。您能否談談或給我們提供有關該評論的一些細節？如果您可以根據管道來評估機會，我不知道您是否可以，但這肯定會對我們調整該評論的規模有所幫助？

No, I did use that word, and it's an adjective that I'm going to -- going forward, probably not use again, Bryce. But no, seriously, I don't want to obviously say anything here that we shouldn't say, but I can only tell you that we are running very hard at all levels.

不，我確實用過這個詞，而且是一個形容詞，我以後可能不會再使用了，布萊斯。但不，說真的，我不想在這裡明確地說任何我們不該說的話，但我只能告訴你，我們在各個層面都在非常努力地運作。

One of my partners and Senior Managing Director is actually sitting next to me here in this call this morning. She is very active on stuff that she is doing in terms of a couple of deals that, frankly, are going to hopefully close within the next, I don't know, month or two alongside of new deals that we're working on. It just truly is all of a sudden, over the last, I would say, few months are leading up to it that the number of deals that we've been actually putting not only indications of interest on LOIs on that we like as good businesses, a number of which, by the way, we've also -- I think I mentioned in there that valuations are also seeing a pretty high -- we're seeing some pretty high valuation.

在今天早上的電話會議中，我的一位合夥人兼高級董事總經理實際上就坐在我旁邊。她對她正在做的幾筆交易非常積極，坦白說，這些交易預計將在接下來的一兩個月內完成，我不知道，以及我們正在處理的新交易。我想說的是，在過去的幾個月裡，我們實際上進行的交易數量不僅表明了對意向書的興趣，而且還表明我們喜歡作為優秀的企業順便說一句，其中一些我們也- 我想我在那裡提到估值也相當高- 我們看到了一些相當高的估值。

So we've lost some opportunities because we were maybe two, three turns of EBITDA lower than where the next level is going to be. So that's really -- it's just overall just a lot of positive activity. We're not looking at stuff that's wasting our time. It's really good, high-quality stuff. So the quantity is higher. The quality I would also say is higher.

因此，我們失去了一些機會，因為我們的 EBITDA 可能比下一個水平低兩到三週。所以總的來說，這確實是很多正面的活動。我們不會看那些浪費我們時間的東西。確實是好東西，高品質。所以數量比較多​​。我還想說品質更高。

And I think also the -- and the third part, frankly, the size of the companies we're looking at and are winning and able to now bid on and work through is a bit higher than we've historically done as well. So that's why I'm extremely enthusiastic about where we are.

我認為第三部分，坦白說，我們正在考慮的、正在獲勝的、現在能夠競標和完成工作的公司的規模也比我們歷史上做過的要高一些。這就是為什麼我對我們現在的處境非常熱情。

And of course, we got to keep just slogging. And I mentioned we're doing the due diligence. And that, obviously, as you know, we are very careful in how we do that. So that's why there's a lot of activity going on right now within the overall team and the portfolio.

當然，我們必須繼續努力。我提到我們正在做盡職調查。顯然，如您所知，我們在這樣做時非常謹慎。這就是為什麼整個團隊和產品組合中現在正在進行大量活動。

And Dave, I mean, how do you handicap? You made the comment about some transactions being a little more higher price than you'd like from a multiple EBITDA perspective, what gives you confidence that the deals that are getting closer to the finish line are running into that same issue?

戴夫，我的意思是，你如何設置障礙？您評論說，從多重 EBITDA 角度來看，某些交易的價格比您希望的要高一些，是什麼讓您相信越來越接近終點線的交易也會遇到同樣的問題？

Yes, only because of the way our process works, if -- let me define it all with you getting close to the finish line. For us, there are two levels. One would be when we do what we call an indication of interest, which means we're putting out what we say we're willing to do. That leads generally then to an opportunity, as you would know, to go and meet the management team, et cetera, if we sort of made that first cut, right? So after we've done that, we then think this is worthy of moving to the next level, we do some work, we then would put together what we call a letter of intent, which now pretty much solidifies for us what we're willing to pay.

是的，只是因為我們的流程的運作方式，如果——讓我在你接近終點線時定義這一切。對我們來說，有兩個層次。其中之一是當我們做所謂的興趣表示時，這意味著我們正在推出我們所說的願意做的事情。如你所知，這通常會帶來一個機會，去見管理團隊等等，如果我們進行了第一次削減，對嗎？因此，在我們完成之後，我們認為這值得進入下一個階段，我們做了一些工作，然後我們會整理出我們所說的意向書，現在它幾乎鞏固了我們的目標願意付出。

That LOI has to get approved by our investment committee. And if that is the case, we then submit that back. So at that point, that's getting close to the finish line, right? So when we do that, we generally have a relatively high degree of confidence that we are going to probably get selected. We don't always do. If we get selected, then frankly, and that's kind of in a stage we're in with a number of companies right now, it's really up to us in terms of finalizing the due diligence and unless we find something that really our preliminary work, so it comes out of the woodwork that we don't think really fits, we're going to get that deal done. And that's why I'd say those that I would put into that category, we have a reasonably high degree of confidence we're going to get closed here in the next x number of months.

該意向書必須得到我們投資委員會的批准。如果是這種情況，我們會將其提交回來。那麼到那時，就已經接近終點線了，對嗎？因此，當我們這樣做時，我們通常對自己可能會被選中有相對較高的信心。我們並不總是這樣做。如果我們被選中，那麼坦白說，這就是我們現在與許多公司合作的階段，這實際上取決於我們完成盡職調查，除非我們找到真正屬於我們初步工作的東西，因此，我們認為這確實不合適，但我們將完成這筆交易。這就是為什麼我會說，我將把這些歸入該類別，我們有相當高的信心，我們將在接下來的幾個月內關閉這裡。

So I don't know if that helps you, but I don't -- I can't be any more really specific than that. But I've got folks sitting around the table that would probably hit me over the head if I got more specific.

所以我不知道這是否對你有幫助，但我沒有——我不能比這更具體了。但如果我說得更具體，坐在桌子旁的人可能會讓我大吃一驚。

That's fine, Dave. And kind of in that context, as we think about funding new deals. I mean, obviously, you've got plenty of room on the credit facility at this point? How do you kind of weigh that relative to maybe raising equity by the ATM or looking at the unsecured market for another debt raise?

沒關係，戴夫。在這種背景下，當我們考慮為新交易提供資金時。我的意思是，顯然，您現在有足夠的信貸空間？相對於透過自動櫃員機籌集股本或在無擔保市場上進行另一次債務籌集，您如何權衡這一點？

It's something, obviously, we're looking at doing it. But I'll turn it over to Rachael, I'd like to have her address that.

顯然，我們正在考慮這樣做。但我會把它交給瑞秋，我想讓她解決這個問題。

Yes, absolutely. I think we historically have kept a very conservative balance sheet, and it's kind of for this reason, right? It's -- so we have the flexibility and the liquidity available to be nimble when the team has the opportunities in place that need funding. So obviously, utilizing the large capacity we have available on our credit facility is something where we consider to be very important.

是的，絕對是。我認為我們歷史上一直保持著非常保守的資產負債表，這也是因為這個原因，對吧？因此，當團隊有需要資金的機會時，我們擁有靈活性和流動性，可以保持敏捷。顯然，我們認為利用信貸額度的大容量非常重要。

And then two quarters ago, we -- or might have been last quarter, excuse me, we kicked off our new $75 million ATM program, and we have not tapped into that yet. So we consider that to be a very meaningful kind of lever within our capital raising mechanism. And also, we are -- we remain open to the potential of other future debt issuances as well, whether that might be in the near term or further out into the future. But I think we kind of look at it all holistically and what makes sense in order to fund the pipeline.

然後兩個季度前，我們——或者可能是上個季度，對不起，我們啟動了新的 7500 萬美元 ATM 計劃，但我們尚未利用該計劃。因此，我們認為這是我們融資機制中非常有意義的槓桿。而且，我們仍然對未來其他債務發行的潛力持開放態度，無論是在短期內還是在未來更遠的將來。但我認為我們應該從整體上看待這一切，以及為管道提供資金的意義所在。

I think another way to briefly add to that is we are in a position where as we need to, and there's a good likelihood we might, obviously, as we hopefully continue growing, we will go and access certainly, the ATM market, if we need to, if the stock is trading above NAV. And likewise, more long-term permanent capital which is a positive thing for us. So yes, we feel reasonably good around where we are today about the ability to raise capital as we need it for the new deals that we're looking at doing, including working with our line of credit that we currently have.

我認為另一種簡單補充的方式是，我們處於需要的位置，而且顯然，隨著我們希望繼續成長，我們很可能會進入 ATM 市場，如果我們如果股票交易價格高於資產淨值，則需要這樣做。同樣，更多的長期永久資本對我們來說是一件正面的事情。所以，是的，我們對目前籌集資金的能力感到相當滿意，因為我們需要資金來進行我們正在考慮的新交易，包括使用我們目前擁有的信貸額度。

Obviously, we do a new deal, we'll use a line of credit, we get to that point. And then we think, okay, let's go raise long-term permanent capital and use that capital and then pay down the line of credit and so on and so forth. So with the conversations we've certainly had with bankers and others, we feel pretty good about that.

顯然，我們達成了一項新協議，我們將使用信用額度，我們就達到了這一點。然後我們想，好吧，讓我們籌集長期永久資本並使用該資本，然後償還信貸額度等等。因此，透過我們與銀行家和其他人的對話，我們對此感覺非常好。

Two more questions for me, kind of housekeeping. Number one, the dividend income in the quarter. I assume that was just one portfolio company. Any detail around that?

還有兩個問題想問我，像是家事管理。第一，本季的股息收入。我認為這只是一家投資組合公司。有什麼細節嗎？

That's correct. Yes. It was just one portfolio company. Really no additional detail. They were in the position to be able to pay us some dividend income. So as you know, that can be kind of volatile quarter-over-quarter and is a little bit challenging to project out, but yes, just one company there.

這是正確的。是的。這只是一家投資組合公司。確實沒有額外的細節。他們有能力向我們支付一些股息收入。如您所知，季度環比可能會出現波動，並且預測起來有點困難，但是，是的，只有一家公司。

And then the portfolio, the debt yield was steady in the quarter. Certainly, haven't really seen that across the space. We've seen a lot of yield compression so far with earnings season. When do your debt investments -- when does the interest rate reset for those that are floating rate?

然後是投資組合，本季債務收益率保持穩定。當然，在整個空間中還沒有真正看到過這種情況。到目前為止，我們已經看到財報季的殖利率大幅壓縮。您的債務投資何時進行－浮動利率的利率何時重置？

So 100% of our portfolio is variable rate debt. So they're actually -- there's some ins and outs kind of in that number. So while it remains consistent quarter-over-quarter, obviously, we did see the impact of decreasing so far in there. It was just generally offset by changes within the portfolio. So specifically, Nth Degree, the exit during the quarter, it just had a yield that was a little bit lower than the total average. So by removing that, it kind of was an offsetting increase.

因此，我們的投資組合 100% 是可變利率債務。所以他們實際上——這個數字中有一些來龍去脈。因此，儘管季度環比保持一致，但顯然我們確實看到了迄今為止的影響有所下降。它通常被投資組合內的變化所抵消。具體來說，Nth Degree，即本季的退出，它的收益率只是略低於總平均水平。因此，透過消除這一點，這在某種程度上是一種抵消性的成長。

And remember, Bryce, we also have floors that even though we have the floating we've benefited some extent by that, obviously, with SOFR being up where it is. We don't -- I guess I may be thinking about this too much the wrong way, but I don't feel too strong about this issue of compression of yield because of the way in which we think about and certainly new deals we do and deals we've done in the past where we think very carefully about the floors that we want to have to achieve relative to the total dollars that we invest.

請記住，布萊斯，我們也有地板，儘管我們有浮動，但顯然，我們在一定程度上從中受益，因為 SOFR 處於原來的位置。我們不——我想我可能以錯誤的方式思考這個問題，但由於我們思考的方式以及我們所做的新交易，我對收益率壓縮的問題並沒有太強烈的感覺以及我們過去做過的交易，我們非常仔細地考慮我們想要達到的相對於我們投資總額的底線。

And we may have talked about this in the past and what have you. When we look at yield on our total dollar investment, which means both the equity and the debt, we have a level that we want to strive to get to. So we either will set the floor on the debt pieces so that we can blend that yield around the assets that we're putting out. So yes, I think we feel like we're in pretty decent shape. Would you agree with that?

我們過去可能已經討論過這個問題，您也討論過什麼。當我們考慮總美元投資（包括股權和債務）的收益率時，我們有一個想要努力達到的水平。因此，我們要麼為債務部分設定下限，以便我們可以將收益率與我們所推出的資產混合起來。所以是的，我認為我們感覺我們的狀態相當不錯。你同意嗎？

Yes. And so in reference to what Dave's discussing in the floors, looking at our debt portfolio on a weighted average basis overall, it's about 12% floors in place. So that's going to be the minimum we'll ever get to.

是的。因此，參考戴夫在地板上討論的內容，從整體加權平均的角度來看我們的債務組合，大約有 12% 的地板到位。所以這將是我們能達到的最低限度。

Matthew Hurwit, Jefferies.

馬修·赫維特，傑弗里斯。

First question, I noticed in your Q, it looks like the weighted average revenue of the portfolio on the first lien decreased about 9%, but then EBITDA was up 7% quarter-on-quarter. So was that mostly Nth Degree or portfolio mix? Or was there some sort of cost efficiency in the portfolio? Or I'm just curious about that movement?

第一個問題，我在你的問題中註意到，第一留置權的投資組合的加權平均收入下降了約 9%，但 EBITDA 環比增長了 7%。那麼這主要是 N 學位或投資組合嗎？或者投資組合中是否存在某種成本效率？還是我只是對那個動作感到好奇？

So I think from a revenue perspective, that's just going to be for the portfolio companies that are being valued using a revenue multiple. So that's only a small part of the portfolio as a whole. When we look at kind of performance across the portfolio as it impacted fair value this quarter, we had a pretty good amount that was up in performance. So then you'll see that in the increasing EBITDA range. And then that was sort of offset by a handful of companies that saw a decreased performance, whether that is EBITDA or revenue. So the company is using a revenue multiple, just saw a decrease this quarter.

因此，我認為從收入的角度來看，這僅適用於使用收入倍數進行估值的投資組合公司。所以這只是整個投資組合的一小部分。當我們查看整個投資組合的績效時，因為它影響了本季的公允價值，我們的績效有相當大的成長。那麼你會看到 EBITDA 範圍不斷增加。然後，這在某種程度上被少數公司的業績下降所抵消，無論是 EBITDA 還是收入。因此，該公司使用的營收倍數只是本季有所下降。

And then could you just walk through some of the puts and takes again on the net unrealized depreciation in the quarter. I noticed the portfolio fair value percent of cost went from $1.05 to $1.02 quarter-on-quarter. I'm kind of curious if there's some conservatism being baked into fair value estimates or yes, it's a multipart, but that would be helpful.

然後，您可以瀏覽一些看跌期權，並再次考慮本季未實現的淨折舊嗎？我注意到投資組合公允價值成本百分比從季度環比 1.05 美元升至 1.02 美元。我有點好奇公允價值估計中是否包含一些保守主義，或者是的，它是一個多部分，但這會有所幫助。

So from a fair value perspective, we had the exit of Nth Degree, which is a very -- it's a $42 million realized gain. So for our portfolio, that was a fairly outsized unrealized appreciation that we have been carrying until exit when it was realized. So that's really responsible for the overall, I'd say, portfolio decrease when you're looking at that fair value percentage.

因此，從公允價值的角度來看，我們退出了 Nth Degree，並實現了 4,200 萬美元的收益。因此，對於我們的投資組合來說，這是一個相當大的未實現升值，我們一直持有到退出時才實現。因此，當你考慮公允價值百分比時，我想說，這確實是造成投資組合整體下降的原因。

Overall, excluding that reversal of any unrealized appreciation related to Nth Degree when it was exited, we did experience about $0.11 per share of unrealized appreciation across the portfolio in the aggregate. So excluding that, we did see fair values across the Board go up. And then were you asking -- you're sorry, asking just to go through kind of the NAV changes again?

總體而言，排除與 Nth Degree 退出時相關的任何未實現升值的逆轉，我們整個投資組合確實經歷了每股約 0.11 美元的未實現升值。因此，排除這一點，我們確實看到公允價值全面上漲。然後你是不是在問——很抱歉，只是要求再次進行資產淨值變更？

Yes. It was just some of the puts and takes on the net unrealized appreciation, which I think you mostly covered. And then if I could ask -- sorry, go ahead.

是的。這只是網上未實現升值的一些看跌期權和看跌期權，我認為您大部分都涵蓋了。然後如果我可以問的話——抱歉，請繼續。

No. What's your next question?

不。你的下一個問題是什麼？

The last one is not asking to be policy experts, but do you see any high-level impact from the election outcome at this point on your business or portfolio businesses in particular that are worth calling out, they're positive or negative?

最後一個並不是要求成為政策專家，但您是否認為選舉結果目前對您的業務或投資組合業務有任何高層影響，特別是值得指出的，是積極的還是消極的？

So Matthew, we're not policy experts either. And again, only taking a quick look, obviously, things will settle down. We'll see things go up, go down, et cetera. The obvious one, perhaps, and it's something we are looking at all the time. We've been living with it for a number of years, obviously, would be issues around tariffs and some of our companies that actually do have products produced overseas, China to some extent. Now I would say that most of those companies that we have a couple of things.

所以馬修，我們也不是政策專家。再說一次，只要快速看一下，顯然，事情就會安定下來。我們會看到事情上升、下降等等。也許這是顯而易見的，也是我們一直在關注的事情。顯然，我們已經忍受了很多年了，顯然，這將是關稅問題，而我們的一些公司實際上確實在海外（某種程度上是中國）生產產品。現在我想說的是，我們大多數公司都有一些東西。

One, we've already been living in somewhat of a tariff oriented environment for a number of years with those companies. Some of them have also shifted their production knowingly to other countries where it works, some of them come back to United States. But I would say, as of right now, I don't honestly say that I can tell you that I see any major issue based on as a result of any changes that might be coming over the next -- we'll start hearing about sometime, I guess, in the next six months or so. But we're obviously aware of it and we'll take a look at it.

第一，多年來我們已經與這些公司一起生活在某種關稅導向的環境中。他們中的一些人也故意將生產轉移到其運作的其他國家，其中一些人回到了美國。但我想說，截至目前，我並不能誠實地說我可以告訴你，我看到任何重大問題都是基於接下來可能發生的任何變化——我們將開始聽到有關我想，在接下來的六個月左右的某個時候。但我們顯然已經意識到了這一點，我們會對此進行研究。

Mickey, Ladenburg Thalmann.

米奇，拉登堡塔爾曼。

Just Rachael, just one sort of modeling question. The income-based incentive fee was lower than I anticipated based on your pre-incentive fee NII. Is there some noise in that number? Or any explanation as to why it's probably lower than we would expect?

只是瑞秋，只是一種建模問題。基於收入的激勵費低於我根據您的預激勵費 NII 的預期。這個數字有噪音嗎？或者有什麼解釋可以解釋為什麼它可能低於我們的預期嗎？

Nothing that to call out. There was nothing unusual in there. I think it's just a result of the calculation. So yes, -- and coming out, reduce the asset base. Yes, I can't think of anything else that would have impacted your modeling.

沒什麼好說的。裡面並沒有什麼異常的地方。我認為這只是計算的結果。所以是的，並且出來減少資產基礎。是的，我想不出還有什麼會影響你的建模。

Does the dividend payable have any impact on that calculation?

應付股利對計算有影響嗎？

No.

不。

Okay. Next question.

好的。下一個問題。

There are no further questions at this time. I would like to hand it back off to management.

目前沒有其他問題。我想把它交還給管理階層。

Actually, we just got one. [Mark Faron], he's a private investor.

事實上，我們只得到了一個。 [馬克法倫]，他是一位私人投資者。

I don't know if you all can hear me, but I just wanted to thank Rachael for all her years of service. She's a clear-headed, no-nonsense advocate, but her insights have been really, really great for us individual investors. And a big shout-out to Dave and Michael and Dave. And you guys just do a fantastic job taking care of us individual investors. So thank you very much.

我不知道你們是否都能聽到我的聲音，但我只是想感謝 Rachael 多年來的服務。她是一位頭腦清醒、嚴肅的倡導者，但她的見解對我們個人投資者來說真的非常非常有用。並向戴夫、麥可和戴夫大聲喊叫。你們在照顧我們個人投資者方面做得非常出色。非常感謝。

Thank you for being a shareholder. And how much do we owe you for that discussion? You already paid him with that special dividend.

感謝您成為股東。為了這次討論我們欠你多少錢？你已經向他支付了特別股息。

Over and over again.

反覆。

Okay. Thank you again for saying that. We'll move on now to say goodbye to all of you for this quarter, and we'll see you again next quarter. That's the end of this conference.

好的。再次感謝你這麼說。我們現在將繼續與本季度的所有人告別，我們將在下個季度再次見到您。本次會議到此結束。

Thank you. This will conclude today's conference. You may disconnect at this time, and thank you for your participation.

謝謝。今天的會議到此結束。此時您可以斷開連接，感謝您的參與。