Gladstone Capital Corp (GLAD) 2026 Q2 法說會逐字稿

Greetings. Welcome to the Gladstone Capital Corporation's second quarter earnings call. (Operator Instructions) Please note this conference is being recorded.

各位好。歡迎參加 Gladstone Capital Corporation 第二季財報電話會議。(接線員指示) 請注意，本次會議將被錄音。

I will now turn the conference over to Erich Hellmold, General Counsel. Thank you. You may begin.

現在我將把會議交給總法律顧問 Erich Hellmold。謝謝。您可以開始了。

Good morning, and thank you for that nice introduction. This is the earnings conference call for Gladstone Capital for the quarter ended March 31, 2026. Thank you all for calling in. We're always happy to talk to our shareholders and analysts and welcome the opportunity to provide updates on our company. Now I'll have Catherine Gerkis, our Director of Investor Relations and ESG provide a brief disclosure regarding certain regulatory matters regarding this call.

各位早安，感謝剛才精彩的介紹。這是 Gladstone Capital 截至 2026 年 3 月 31 日季度的財報電話會議。感謝各位來電參與。我們一向樂於與股東及分析師交流，也歡迎藉此機會向各位提供公司最新進展。接下來請我們的投資人關係與 ESG 總監 Catherine Gerkis，就本次電話會議涉及的若干監管事項作簡要揭露說明。

Thank you, Erich, and good morning. Today's call may include forward-looking statements, which are based on management's estimates, assumptions and projections. There are no guarantees of future performance, and actual results may differ materially from those expressed or implied in these statements due to various uncertainties, including the risk factors set forth in our SEC filings, which you can find on the Investors page of our website, gladstonecapital.com. We assume no obligation to update any of these statements unless required by law. Please visit our website for a copy of our Form 10-Q and earnings press release for more detailed information.

謝謝你，Erich，各位早安。今天的電話會議可能包含前瞻性陳述，係基於管理層的估計、假設與預測。未來績效不作任何保證，且由於各種不確定性，實際結果可能與這些陳述所明示或暗示者有重大差異，包括我們向 SEC 申報文件中所列之風險因素；您可於我們網站 gladstonecapital.com 的「投資人」頁面查閱。我們不承擔更新任何此等陳述之義務，除非法律另有要求。如需更詳細資訊，請造訪我們網站取得 Form 10-Q 與財報新聞稿副本。

You can also sign up for our e-mail notification service and find information on how to contact our Investor Relations department.

您也可以註冊我們的電子郵件通知服務，並查詢如何聯絡我們的投資人關係部門。

Now I will turn the call over to Gladstone Capital's CEO and President, Bob Marcotte.

現在我將把電話會議交給 Gladstone Capital 的執行長兼總裁 Bob Marcotte。

Thank you, Catherine. Good morning, all. I'll cover the highlights for the quarter and conclude with some comments on our near-term outlook for the company. Beginning with our last quarter's results. Fundings last quarter totaled $44 million and included three new private equity sponsored investments totaling $34 million and $10 million of additional advances to existing portfolio companies.

謝謝你，Catherine。各位早安。我將回顧本季重點，並以對公司近期展望的一些評論作結。先從上一季的結果談起。上一季撥款總額為 4,400 萬美元，其中包括三筆由私募股權贊助的新投資合計 3,400 萬美元，以及對既有投資組合公司追加墊款 1,000 萬美元。

Exits and prepayments declined relative to what we experienced in 2025 and came in at $46 million, so assets were largely unchanged for the quarter. Interest income for the period declined slightly to $23.2 million, with a 30 basis point decline in the average SOFR rates compared to last quarter as our weighted average debt yield was 11.8% for the period.

相較於我們在 2025 年的情況，退出與提前償還有所下降，金額為 4,600 萬美元，因此本季資產規模大致持平。本期利息收入小幅下降至 2,320 萬美元；由於平均 SOFR 利率較上一季下降 30 個基點，本期我們的加權平均債務收益率為 11.8%。

Other income for the period came in at $2.8 million, which was up $2.2 million from the -- on prepayment fees and dividends. Interest and financing costs declined with lower SOFR rates and reduced unused commitment fees. Net management fees rose $875,000, with the lower origination fee credits.

本期其他收入為 280 萬美元，較上一季增加 220 萬美元，主要來自提前償還費用與股利。隨著 SOFR 利率下降及未動用承諾費用減少，利息與融資成本亦有所下降。由於承作費用抵減（origination fee credits）較少，淨管理費增加 87.5 萬美元。

However, net interest -- net investment income rose $574,000 to $11.8 million for the period. Net portfolio appreciation came in at $4.2 million, largely driven by the unrealized appreciation of 3 of the larger companies in our portfolio, which continued to scale. With respect to the portfolio, the portfolio growth for the period did not have a material impact on our investment mix or spread profile as first lien debt and total debt investments came in at 70% and 90% of the portfolio cost, respectively.

然而，淨利息—淨投資收益本期增加 57.4 萬美元至 1,180 萬美元。投資組合淨增值為 420 萬美元，主要由投資組合中三家較大型公司的未實現增值所帶動，這些公司持續擴張。就投資組合而言，本期投資組合成長對我們的投資組合結構或利差概況並無重大影響；第一順位擔保債務與總債務投資分別占投資組合成本的 70% 與 90%。

Our healthcare-related industry concentration declined and is expected to fall further in the short term with a pending exits as we do not -- and we do not have any existing software-related exposures. As of the end of the quarter, our three nonearning debt investments were unchanged with a cost basis of $28.8 million or $13 million or 1.6% of debt investments at fair value. In addition, our PIK income for the quarter declined to $1.7 million or 7.4% of interest income. Since the end of the quarter, we funded two new portfolio companies representing a total of $44 million of senior secured debt.

我們在醫療保健相關產業的集中度已下降，且短期內預期將因待完成的退出而進一步降低；同時我們也沒有任何既有的軟體相關曝險。截至季末，我們三筆不生息的債務投資維持不變，成本基礎為 2,880 萬美元；按公允價值計為 1,300 萬美元，占債務投資的 1.6%。此外，本季 PIK（實物支付）收入下降至 170 萬美元，占利息收入的 7.4%。自季末以來，我們已為兩家新的投資組合公司提供資金，合計 4,400 萬美元的優先擔保債務。

And while earning assets have increased since the end of last quarter, we are expecting a couple of exits in the near term and are actively managing a healthy pipeline of investment opportunities, which should more than cover any repayments and support our continued modest asset growth. The strength of our investment outlook represents a combination of the resilience of the growth opportunities within the lower middle market and add-on financing opportunities within our existing portfolio.

雖然自上一季末以來生息資產有所增加，但我們預期近期將有幾筆退出，並正積極管理一條健康的投資機會管道，應可充分覆蓋任何償還並支持我們持續的溫和資產成長。我們投資展望的強勁，結合了低度中型市場（lower middle market）成長機會的韌性，以及我們既有投資組合中的附加融資（add-on financing）機會。

In particular, we're seeing strong demand for precision manufacturing businesses where customers are looking to move sourcing back to the US or scale in support of building defense-related backlogs. We ended the quarter with a conservative leverage position and net debt at a modest 92% of NAV and expect to continue to leverage our floating rate bank facility to support our floating rate assets thereby mitigating the impact of short-term rate decline. Our current line of credit facility totals $365 million. And as of the end of the quarter, borrowing availability is more than $150 million which is ample to support our near-term investment activities.

特別是，我們看到精密製造業的需求強勁，客戶希望將採購回流美國，或為支援國防相關訂單積壓的擴產而擴大規模。我們在季末維持保守的槓桿水準，淨負債約為淨資產價值（NAV）的 92%；並預期持續運用我們的浮動利率銀行融資額度來支持浮動利率資產，從而降低短期利率下行的影響。我們目前的信用額度總額為 3.65 億美元。截至季末，可動用借款額度超過 1.5 億美元，足以支應我們近期的投資活動。

And now I'll turn the call over to Nicole Schaltenbrand, Gladstone Capital's CFO, to provide some details on the fund's financial results for the quarter. Nicole?

接下來我將把電話會議交給 Gladstone Capital 的財務長 Nicole Schaltenbrand，請她說明本季基金的財務結果細節。Nicole？

Thanks, Bob. Good morning all. During the March quarter, total interest income declined $700,000 or 2.9% to $23.2 million as the average earning assets rose $21.7 million or 2.8% while the weighted average yield on our interest-bearing portfolio declined 40 basis points to 11.8% for the period. Total investment income was $26 million as dividends and fee income rose $2.2 million from the prior quarter. Total expenses rose $900,000 or 6.8%, driven primarily by $900,000 of higher net management fees due to higher average assets and lower closing fee credits versus the prior quarter.

謝謝你，Bob。各位早安。在 3 月季度期間，總利息收入下降 70 萬美元（或 2.9%）至 2,320 萬美元；同時平均生息資產增加 2,170 萬美元（或 2.8%），而我們計息投資組合的加權平均收益率本期下降 40 個基點至 11.8%。總投資收入為 2,600 萬美元，因股利與費用收入較前一季增加 220 萬美元。總費用增加 90 萬美元（或 6.8%），主要由淨管理費增加 90 萬美元所致，原因是平均資產較高，且相較前一季結案費用抵減（closing fee credits）較少。

Net investment income for the quarter rose $11.8 million or $0.52 per share or 116% of cash distributions per common share. The net increase in net assets resulting from operations was $15.5 million, or $0.68 per share for the quarter ended March 31 as impacted by the valuation appreciation mentioned by Bob. Moving over to the balance sheet.

本季淨投資收益為 1,180 萬美元，或每股 0.52 美元，相當於每股普通股現金配息的 116%。本季截至 3 月 31 日，營運所致淨資產增加淨額為 1,550 萬美元，或每股 0.68 美元，並受到 Bob 提到的估值增值影響。接著看資產負債表。

As of March 31, total assets rose to $925 million, consisting of $907 million in investments at fair value and $18 million in cash and other assets. Liabilities declined $3 million quarter-over-quarter to $442 million as of March 31, with the decrease in LOC borrowings. The remaining balance of our liabilities consist primarily of $149.5 million of five and seven, eighth convertible debt due 2030, $50 million of 3.75% notes due May 2027 and $35 million of 6.25% of perpetual preferred stock.

截至 3 月 31 日，總資產上升至 9.25 億美元，其中包括按公允價值計的投資 9.07 億美元，以及現金與其他資產 1,800 萬美元。截至 3 月 31 日，負債較上一季下降 300 萬美元至 4.42 億美元，主要因信用額度（LOC）借款減少。其餘負債餘額主要包括：1.495 億美元的 5 又 7/8% 可轉換債券（2030 年到期）、5,000 萬美元的 3.75% 票據（2027 年 5 月到期），以及 3,500 萬美元的 6.25% 永續特別股。

As of March 31, net assets rose $5.3 million to $483 million, and NAV per share rose from $21.13 to $21.36. Our gross leverage as of March 31 rose to 91.8% of net assets. Monthly distributions for May and June will be $0.15 per common share, which is an annual run rate of $1.80 per share. The Board will meet in July to determine the monthly distributions to common stockholders for the following quarter. At the current distribution rate for our common stock and with a common stock price at about $19.21 per share yesterday, the distribution run rate is now producing a yield of about 9.4%.

截至3月31日，淨資產增加530萬美元至4.83億美元，每股淨資產價值（NAV）由21.13美元上升至21.36美元。我們截至3月31日的總槓桿上升至淨資產的91.8%。5月與6月的每月配息將為每股普通股0.15美元，按年化計算相當於每股1.80美元的年化運行率。董事會將於7月召開會議，以決定下一季度支付給普通股股東的每月配息。以目前普通股配息水準，且昨日普通股股價約為每股19.21美元計算，目前配息運行率所對應的殖利率約為9.4%。

And now I'll turn it back to Bob to conclude.

現在我把時間交回給Bob作結。

Thank you, Nicole. In sum, it was another solid quarter for Gladstone Capital. The team continued to deliver strong earnings performance bolstered by prepayment fees and portfolio distributions which more than cover the current shareholder dividends.

謝謝你，Nicole。總結來說，這對Gladstone Capital而言又是一個穩健的季度。團隊持續交出強勁的獲利表現，並受提前償還費用與投資組合分配款的支撐，這些收入已足以覆蓋目前股東股利。

The team is doing a good job managing the portfolio, sourcing attractive private equity-backed lower middle market investment opportunities. The company is also in a very strong balance sheet position with ample borrowing capacity to prudently grow our investment portfolio and deliver the earnings to support our shareholder dividends and now we will -- operator tell our callers how to submit their questions.

團隊在管理投資組合方面做得很好，持續尋找具吸引力、由私募股權支持的低中端市場投資機會。公司資產負債表也非常強健，具備充足的借款能力，可審慎擴大我們的投資組合並創造收益，以支持股東股利；接下來我們將——請接線生告知來電者如何提交問題。

(Operator Instructions)

（接線生指示）

Erik Zwick, Lucid Capital Markets.

Lucid Capital Markets 的 Erik Zwick。

Thanks. Good morning, everyone. I wanted to start with a question, just thinking a little bit about the future path of the portfolio yield. If the Fed funds futures curve is right, there shouldn't be -- market is not expecting any changes. So base rate should be more stable. But wondering if you could talk a little bit about the spreads that you saw for your April activity as well as what's in the pipeline and how those compare to the weighted average spread for the existing portfolio?

謝謝。各位早安。我想先問一個問題，主要是思考投資組合收益率未來的走勢。如果聯邦基金期貨曲線是正確的，市場應該不會——市場並不預期有任何變動。因此基準利率應該會更穩定。但想請你談談4月活動中你們看到的利差，以及目前管線中的情況，並與現有投資組合的加權平均利差相比如何？

Thank you, Erik. Good question. The activity on the quarter, we really didn't see any compression in spreads what we were closing essentially is on par with our prior quarters. So we really don't see any degradation, and that's really coming from a couple of things. One, it's a disciplined approach and an added value approach in the lower middle market.

謝謝你，Erik。問得很好。就本季度的活動而言，我們其實沒有看到利差收窄；我們完成的交易基本上與前幾季持平。因此我們確實沒有看到任何惡化，而這主要來自幾個因素。第一，是在低中端市場採取紀律性與增值導向的方法。

We've never seen quite the same competition as upmarket transactions. Obviously, in the last quarter, there's also been a bit of a selloff with spreads backing up upmarket from us.

我們從未看到像較大型市場交易那樣激烈的競爭。顯然在上一季度，較大型市場也出現一些拋售，利差在我們所處市場之上有所回升。

And so we've seen less competitive pressure from larger transactions, which are probably backed up 50 to 75 basis points. So we really don't see, at the moment, much in the way of degradation on the outlook. So with closing spreads in the range of roughly 7% on average last quarter, I wouldn't expect much to impact there.

因此我們看到來自較大型交易的競爭壓力變小，這些交易的利差可能回升了50到75個基點。所以目前我們確實看不出展望上有太多惡化的跡象。因此，上一季度平均約7%的成交利差，我不預期會有太大影響。

We do have some impact as companies get larger, there is some trade-off, but for the most part, it's pretty stable. The other thing is I do expect that we will be funding add-ons to existing portfolio companies in the next quarter, which tend to be consistent with the existing spreads on those transactions.

確實，隨著公司規模變大會有一些影響與取捨，但整體而言相當穩定。另外，我確實預期下一季度我們將為現有投資組合公司提供附加收購（add-on）資金，這類交易的利差通常與該等交易既有利差一致。

So I think you're correct that in the near term, the pressure on margins are going to be fairly limited. When we originally reset the dividend, we were anticipating a curve where we might have 2 or 3 rate reductions over the course of 2026. Obviously, that's not happening. And the combination of lower upmarket pressure is part of that process, which is one of the reasons why we feel pretty confident in where we stand today with respect to dividend coverage.

所以我認為你說得對，短期內利潤率的壓力會相當有限。當我們最初調整股利時，我們原本預期在2026年期間可能會有2到3次降息。顯然，這並沒有發生。而較大型市場壓力降低的組合效應也是其中一部分，這也是我們對目前股利覆蓋狀況相當有信心的原因之一。

That's great. And good to hear. Looking at just the dividend income in the most recent quarter, it was up quarter-over-quarter. I'm curious if that was driven by kind of one large dividend or if there were multiple companies that contributed to it, whether you view those more as kind of onetime or if they'll be recurring?

很好。也很高興聽到這點。看最近一季的股利收入，較前一季增加。我想了解這是由單一較大的股利所帶動，還是有多家公司共同貢獻？以及你們認為這些是一次性，還是會重複發生？

There are really two components of the income. One was the prepayment fee which we broadcast at the end of last call, last quarter. The second one was a fairly large dividend, a single transaction of a company that had been scaling and we owned a slug of the business. I would expect that there may be some additional distributions coming, but they do tend to be onetime events. So I think we do have some companies that are deleveraging that are performing well.

收入其實有兩個組成部分。第一個是提前償還費用，我們在上次電話會議、上一季度結束時已對外說明。第二個是一筆相當大的股利，來自單一交易：該公司正在擴張，而我們持有該企業相當一部分的股權。我預期可能還會有一些額外分配，但它們通常屬於一次性事件。因此我認為我們確實有一些去槓桿、且表現良好的公司。

And if the private equity sponsor feels so compelled and there aren't good acquisition opportunities, distributions is something that they will look to do. We should expect that we'll see more of those in the future, but I would not -- I would continue to characterize them as onetime events, but we are monitoring that and expect some of that to be realized over the course of 2026.

如果私募股權贊助方有此意願，且沒有好的併購機會，分配（distributions）就是他們會考慮採取的作法。我們應該預期未來會看到更多這類情況，但我不會——我仍會將其定性為一次性事件；不過我們正在監控，並預期其中一部分會在2026年期間逐步實現。

Thanks. And last one for me. I know you addressed this a little bit last quarter, but just your thoughts on kind of repurchasing shares at this point, whether you view that as a good use of capital, certainly, the stock has come back a little bit from the lows a couple of months ago, but trading at a 10% discount to NAV today, curious how you view that opportunity.

謝謝。最後一個問題。我知道你們上一季稍微談到過，但想請教你們目前對回購股票的看法，是否認為這是資本的良好運用；當然，股價已從幾個月前的低點回升一些，但目前仍以較NAV約10%的折價交易，想了解你們如何看待這個機會。

Erik, we are seeing tremendous opportunities to continue to execute our plan and strategy. And based upon where that returns are being generated, scale is important. So I don't think you'll likely see us buying shares in. I think we are going to be looking to scale the capital base to capitalize on our market position in the lower middle market. The long-term returns on our portfolio have been pretty good.

Erik，我們看到非常多的機會可以持續執行我們的計畫與策略。而就回報產生的方式而言，規模很重要。所以我認為你們不太可能看到我們回購股票。我想我們會著眼於擴大資本基礎，以把握我們在低中端市場的市場地位。我們投資組合的長期報酬一直相當不錯。

We think it's best interest of the shareholders to continue to scale that opportunity and this is, frankly, a good time. Turmoil, the uncertainty and the issues in the marketplace provide a nice window for us to continue to execute against our long-term strategy.

我們認為，持續擴大這個機會符合股東的最佳利益，而且坦白說，現在是個好時機。市場的動盪、不確定性與各種問題，為我們持續依照長期策略執行提供了良好的窗口。

We've been doing this for 25 years. I think the idea is we can continue to grow it and produce good returns for our shareholders.

我們做這件事已經25年了。我認為重點是我們可以持續成長，並為股東創造良好回報。

Appreciate the commentary today.

感謝今天的分享。

Thank you.

謝謝。

Christopher Nolan, Ladenburg Thalmann.

Ladenburg Thalmann 的 Christopher Nolan。

Bob, congratulations on the promotion. And please pass our best wishes to David Gladstone. On the nonaccruals, it stepped up a little bit and your asset quality is good. Can you share with us some observations you're seeing in the market? I mean is higher fuel prices just generally creating increased stress in lower middle market, middle markets?

Bob，恭喜升任新職。也請代我們向 David Gladstone 致上最誠摯的祝福。關於不計息資產（nonaccruals），比例略有上升，但你們的資產品質仍然良好。能否分享一些你們在市場上觀察到的情況？我的意思是，較高的燃料價格是否普遍在低中端市場與中端市場造成更大的壓力？

Is it less sponsor support? Because I'm seeing increased nonaccruals across multiple BDCs, incrementally, nothing huge yet, but I'd like to get a little broader perspective, if possible.

是因為贊助商支持變少了嗎？因為我看到多家 BDC 的不計息資產（nonaccrual）都有逐步增加，雖然目前還不算嚴重，但如果可以的話，我想聽聽更宏觀一點的看法。

Sure. The only reason that our nonaccruals went up in fair value is because one of them, in particular, is performing very well. And so we're optimistic that it will be turned to a cash paying and go off nonaccrual. It's been a while for that Xcel situation to turn around, but we're feeling very good about it, given where it's executed. So it's not bad that it went up.

當然。我們的不計息資產在公允價值上升，唯一的原因是其中有一筆特別表現得非常好。因此我們樂觀認為，它會轉為開始收取現金利息，並從不計息狀態中移除。Xcel 那個案子要扭轉局面確實花了一段時間，但就目前的執行情況而言，我們對它非常有信心。所以它上升並不是壞事。

It's actually good in a weird way. In terms of your specific question around energy, we don't tend to have a lot of energy-related businesses or energy-impacted businesses.

某種奇怪的角度來看，反而是好事。就你針對能源的具體問題而言，我們通常不太投資很多與能源相關、或受能源影響的企業。

I will say that we do have businesses that might provide services and there are energy costs in delivering their products. And certainly, the delivery companies, the FedExs of the world, were very quick in adjusting their rates. And so passing through surcharges has been something that I think we've encouraged and our portfolio companies have been pretty adamant on and that's really been kind of a neutral event. It's not necessarily negatively affected their business, and it's well understood cost of doing business.

我會說，我們確實有一些企業可能提供服務，而在交付其產品時會產生能源成本。而且可以確定的是，像 FedEx 這類的配送公司很快就調整了費率。因此轉嫁附加費（surcharge）一直是我們鼓勵的作法，我們的投資組合公司也相當堅持這點，而整體而言這基本上是中性的事件。它不一定對他們的業務造成負面影響，而且這是大家都能理解的營運成本。

In terms of other energy-related matters, I would say we're seeing a little bit of slowing or uncertainty as we've said in the past we do have one or two investments that are related to the auto market. And energy and auto is a little bit up in the air right now. Certainly, whether it's electric vehicles or whether it's transitioning model years or general auto sales, they're soft. So we are closely monitoring some of those.

至於其他與能源相關的議題，我會說我們看到一些放緩或不確定性；如同過去提到的，我們確實有一到兩筆投資與汽車市場相關。而能源與汽車目前都有點不明朗。不論是電動車、車款年度轉換，或整體汽車銷售，都偏疲弱。所以我們正在密切監控其中一些投資。

We feel the business is on the right programs, but the volume in that market is relatively soft. Beyond that, obviously, one of the benefits is we have zero software. So some of I think what you're seeing is just momentum and decision-making in the software side of things. I don't think anybody is making any fast moves to grow the revenue or to expand their software investments at the moment.

我們認為這些業務在正確的專案上，但該市場的量相對偏弱。除此之外，顯然其中一個好處是我們完全沒有軟體曝險。所以我認為你看到的一部分，純粹是軟體端的動能與決策變化。我不認為現在有人會快速採取行動去拉高營收或擴大軟體投資。

I think we're all pretty impressed at the relatively low cost and incredibly efficient AI-related tools that we're all toying with. So I think that's affecting a significant number of others, and we really don't have that exposure. So right now, I would generally say we don't see a ton of slowing. We don't see much in the way of direct impact of energy. I would almost argue it's the other way around because we do have some precision manufacturing businesses.

我們大家對於那些成本相對低、效率又極高的 AI 相關工具都在試用，感到相當驚艷。所以我認為這正在影響相當多其他公司，而我們基本上沒有這方面的曝險。因此目前整體來說，我們沒有看到很明顯的放緩。我們也沒有看到能源帶來太多直接影響。我甚至可以說可能是反過來，因為我們確實有一些精密製造的企業。

They are seeing huge inbound order requests and frankly, we're being asked to fund capital expenditures to grow those businesses. So we kind of feeling like it's a decent opportunity for us if we're close to our businesses to take share and scale some of our opportunities.

他們收到大量的主動詢單（inbound order requests），坦白說，市場也在要求我們提供資本支出資金來擴張這些企業。所以我們覺得，若能貼近這些企業，這對我們而言是個不錯的機會，可以搶市占並放大部分機會。

And just as a follow-up, in general, are you seeing private equity sponsors being a little bit more hesitant in general or any equity providers or is it just sort of pretty stable?

再追問一下，整體而言，你是否看到私募股權贊助商變得更猶豫，或其他股權提供者也是？還是其實相對穩定？

I definitely think that private equity sponsors are being very diligent. Deals are not closing at the same pace. I think there's a lot of making sure the numbers are real, and there's no ambiguities. I think there's a fair bit of being cautious. But most of the businesses that we see, it's really about the long-term growth, not the financial structure, not the financial timing.

我確實認為私募股權贊助商變得非常審慎。交易成交的速度沒有以前那麼快。我認為大家更重視確認數字是真實的、沒有任何模糊空間。我認為確實有相當程度的保守。但我們看到的大多數企業，重點其實在長期成長，而不是財務結構，也不是財務時點。

Most of the lower middle market businesses on average are trading plus or minus 7x on EBITDA. That is a business that you can buy and grow and absorb some variability and headwinds and still make good money. If you're trading a large-scale business at 9.5, 10, 12 times, you don't have the cushion to be able to absorb that.

多數下中型市場（lower middle market）的企業，平均交易估值大約在 EBITDA 的正負 7 倍左右。這類企業你買進後可以成長，也能吸收一些波動與逆風，仍然可以賺到不錯的報酬。但如果你以 9.5、10、12 倍去買大型企業，你就沒有足夠的緩衝去承受那些影響。

So I suspect you're seeing much more caution upmarket because the window of growth and equity appreciation is far narrower and the exit multiple that you can get to is going to be harder to achieve. For us. the idea of trading at that lower multiple in the lower middle market, you've already got 2 to 2.5 turns of potential appreciation just from scaling the business.

所以我猜，你在較高端市場會看到更多謹慎，因為成長與股權增值的窗口更窄，而你能達到的退出倍數也更難實現。對我們而言，在下中型市場以較低倍數進場的概念是：光是把企業規模做大，就已經有 2 到 2.5 個 turns 的潛在增值空間。

And that drove one of -- a couple of our marks on the quarter. When we go into a business and trades at a lower multiple, and next thing you know it's $25 million or $30 million of EBITDA and the multiple for those businesses is 2 to 3 turns higher that's a natural appreciation that we as well as the private equity sponsors are able to achieve. So I guess it's just a much more forgiving entry point that is part of the process as long as the numbers are solid. Sorry to take so much on it, but that's a fundamental value to the lower middle market.

而這也推動了我們本季其中一筆——以及另外幾筆——估值調整（marks）。當我們進入一家以較低倍數交易的企業，接著它的 EBITDA 變成 2,500 萬或 3,000 萬美元，而這類企業的交易倍數會高出 2 到 3 個 turns，這就是一種自然的增值，我們以及私募股權贊助商都能實現。所以我想說的是，只要數字扎實，這樣的進場點就寬容得多，這也是流程的一部分。抱歉講得有點多，但這就是下中型市場的核心價值。

Okay. Thank you.

好的。謝謝。

Robert Dodd, Raymond James.

Robert Dodd，Raymond James。

Hi, everybody congratulations, Bob. Just kind of sticking with that point, I mean, the color on strong demand from precision manufacturing, I mean, it sounds for me saying that's primarily for add-ons to those already in your portfolio.

各位好，恭喜你，Bob。延續剛才那個點，你提到精密製造需求強勁的補充說明，聽起來主要是針對你們投資組合中既有公司的加碼併購（add-ons）。

And then if we step back, I mean, to your point, the upper market valuations are tighter, spreads seem to be showing maybe -- not just precision manufacturing maybe widening, certainly widening in software, but you don't have any of that. . But to your point, is -- are you starting to see any spread expansion in your end of the market, I mean I would think if something like precision manufacturing, where the demand dynamics, like you say, onshore defense et cetera, are so good.

如果我們退一步看，你也提到高端市場估值空間更緊，利差似乎可能——不只是在精密製造——有些擴大，軟體領域當然是在擴大，但你們沒有那方面曝險。.但就你說的，你們這一端的市場是否開始看到任何利差擴大？我的意思是，像精密製造這種需求動能（如你所說的在岸化、國防等）這麼強的領域。

But might be increasingly crowded from a competitive perspective for new deals, right? Obviously, the ones you already have. I mean, so do you think those markets that you're in are going to be more resistant spread expansion even if it moves in the upper market? Or any thought on how the pricing for those kind of -- the kind of businesses you do might evolve even if the upper market moves on a pricing front.

但從新交易的競爭角度來看，可能也會越來越擁擠，對吧？當然，你們已經持有的那些是另一回事。所以你認為你們所在的市場，即使高端市場利差在動，也會更不容易出現利差擴大嗎？或者你對於你們這類企業的定價，未來可能如何演變有什麼看法——即使高端市場在定價面出現變化？

I would not expect spread to be widening in our market. Just for broad strokes, the upper markets were dipping down sub-5 over LIBOR and that ROE at the leverage point was starting to get tight. The fact that the funding costs have backed up has probably pushed those spreads up to 5.5% or 5.75% or something like that. We've always been, let's say, mid-6s and I don't think that I would expect that to expand much. It's more of a relative play at 150 basis point spread to a upper market deal, the sponsor is going to say you're way too expensive.

我不預期我們的市場利差會擴大。大方向來說，高端市場曾經下探到 LIBOR 以上不到 5 個點，而在那個槓桿水位下的股東權益報酬率（ROE）開始變得吃緊。融資成本回升這件事，可能把那些利差推到 5.5% 或 5.75% 之類的水準。我們一直大概在 6% 中段左右，我不認為會有太多擴大的空間。這更像是相對比較：如果相較於高端市場交易高出 150 個基點的利差，贊助商會說你太貴了。

I'd rather continue to shop it at a 50 to 75 basis point spread, they're not going to say it's not worth my time given the size of the transaction. So I think we will see less competitive spread pressure because the sponsors understand smaller deals are going to be more expensive and on a relative basis.

我寧可繼續以50到75個基點的利差去推進這筆案子，考量到交易規模，他們不會說這不值得我花時間。所以我認為我們會看到較少的競爭性利差壓力，因為贊助方理解較小的交易相對而言會更昂貴。

I think the other point that I would make is, once these large platforms are as large as they are, it's very hard to go back down market, right? Once you're as big as you are, and there's not a ton of capital coming into the lower middle market. I mean, look at where the BDC equities are trending, look at who the brand names are that are raising the new funds. The only people that are actually accessing the capital markets or accessing funding sources that might compete with us would be the SBICs. And they are, by definition, somewhat constrained in their overall size.

我認為我想補充的另一點是，一旦這些大型平台做到現在這麼大，就很難再往下沉到較小市場，對吧？當你已經這麼大，而流入低中端市場的資金又不多。我是說，看看BDC股權的走勢，看看正在募集新基金的品牌大咖是誰。真正能進入資本市場或取得可能與我們競爭之資金來源的，只有SBIC。而且按其定義，它們在整體規模上多少受到限制。

And government SBA financing is not exactly cheap these days either. So we find ourselves particularly well positioned to compete with those folks, and we obviously have a scale advantage over them. So I don't think it goes down, but I think the pressure is less and the opportunities are going to be as -- continue to be relatively positive for us to see modest asset growth within our desired balance sheet leverage constraints.

而且如今政府的SBA融資也不算便宜。因此我們發現自己在與那些機構競爭時特別具備優勢，而且我們顯然在規模上勝過他們。所以我不認為會下滑，但我認為壓力會較小，而在我們期望的資產負債表槓桿限制內，機會將會——並將持續——相對正面，讓我們看到溫和的資產成長。

Got it. Thank you, Bob, really appreciate that, Carla.

了解。謝謝你，Bob，也非常感謝你，Carla。

Sean-Paul Adams, B. Riley.

Sean-Paul Adams，B. Riley。

Hey, good morning. It looks like the quarter was quite solid. Nonaccruals kind of went up in fair value, but it looks like they could be on the decline. So those legacy three positions might go down to two. You guys experienced NAV accretion in a quarter where there's just been a wave of NAV losses. And the zero software exposure usually means materially less impact to this widespread market repricing.

嗨，早安。看起來這一季相當穩健。不計息資產（nonaccruals）的公允價值似乎上升了，但看起來也可能正在下降。所以那三個歷史遺留部位可能會從三個降到兩個。在市場出現一波NAV下滑的季度裡，你們的NAV反而增厚。而且零軟體曝險通常意味著這次廣泛的市場重新定價對你們的影響會小很多。

You talked a little bit about spreads. And besides potentially that auto exposure, is there just any concern about just future declines in net origination volume potentially from any other partners trying to come downstream and operate in this lower middle market segment.

你們稍微談到利差。除了可能的汽車相關曝險之外，對於未來淨承作量可能下滑，是否還有任何疑慮——例如其他合作夥伴試圖往下游進入並在這個低中端市場區隔運作？

Sean-Paul, it's hard. I think I would make two observations. One, we spend a lot of time focusing on the underlying businesses. What's the long-term growth story? What's the market position.

Sean-Paul，這很難說。我想我會提出兩點觀察。第一，我們花很多時間聚焦在底層企業本身。長期成長故事是什麼？市場地位是什麼。

We don't look at these as financial transactions, we look at these as businesses, what is the organic growth of this company and what's the ability of the sponsor and our ability to support and be a partner in growth of the business. . It's a very different view in looking at the business than a financial transaction that somebody is looking to invest their capital and it's a spread and a leverage decision that they make when they buy that paper. That's a different mindset, and we've always had that business orientation and focus and that's where we align ourselves with the underlying sponsor.

我們不把這些視為金融交易，我們把它們視為企業：這家公司有多少內生成長？贊助方的能力，以及我們支持並作為企業成長夥伴的能力如何。。這種看企業的角度，和有人把它當作金融交易、只是想投入資本，並在買入那張債權時做利差與槓桿決策，是非常不同的。那是不同的思維，而我們一直以來都有這種以企業為導向的取向與專注，這也使我們能與底層贊助方站在同一陣線。

I think that's relatively unique. And the larger transactions, the larger funds, it's about putting money out and scaling and taking advantage of the opportunity, not necessarily as focused on the underlying business. So you add the fact that it's a lot more efficient to raise capital in $1 billion increments, I mean what's the math? Last year, in 2025, more than 90% of the private capital raised were in funds bigger than $1 billion. $1 billion fund is not going to come down market to compete with us.

我認為這相對而言相當獨特。而在更大型的交易、更大型的基金，重點在於把資金投出去、做規模、把握機會，不一定那麼聚焦在底層企業。再加上以每次10億美元的增量募資效率高得多，我是說，數學怎麼算？去年，也就是2025年，超過90%的私募資本募集都在規模大於10億美元的基金裡。10億美元的基金不會往下沉到市場來跟我們競爭。

It just -- it doesn't make economic sense. They can't put out the money fast enough to be able to achieve their investment opportunities. We may see -- we have -- there are plenty of guys out there that are in our ZIP code. It's four or five folks, but we're also talking about a market that's broad and deep. And if we're looking at deals a year and all we need to do is 20, that's a good flow of opportunities that we can cherry-pick to make our investments.

這——在經濟上說不通。他們無法足夠快地把資金投出去，以達成其投資機會。我們可能會看到——我們確實——有不少人在我們的地盤。大概四、五家，但我們談的也是一個廣且深的市場。如果我們一年看很多案子，而我們只需要做20筆，那就是很好的機會流量，讓我們可以精挑細選來投資。

I don't think the big guys think that way. They think about they need to get a certain percentage share, they need to get a certain investment, they need to make a certain investment scale and they're going to continue to stay up market. I think it's going to be very difficult for them to come down market and think and focus on the lower middle market the way we are. Thank you, all. I appreciate the time.

我不認為大咖是那樣想的。他們想的是需要拿到一定的市占、需要達到一定的投資量、需要做出一定的投資規模，所以他們會繼續留在較高端的市場。我認為他們要往下沉到市場，並像我們一樣思考與專注於低中端市場，會非常困難。謝謝各位。感謝撥冗。

Do you want to wrap it?

你要做個總結嗎？

Got it. I appreciate the call. Thank you.

了解。感謝這通電話。謝謝。

Thank you all. I appreciate the time. You want to wrap it.

謝謝各位。感謝撥冗。你要做個總結。

We're going to take a minute. This is David Gladstone. maybe poor. Accident in our area, so it kind of clogged up everything. There is no accident at this company.

我們先等一分鐘。我是David Gladstone。可能訊號不太好。我們這一帶發生事故，所以把一切都塞住了。我們公司這邊沒有任何事故。

It's very straightforward. We've watched all the private lending companies go over to the high technology area and God bless them. I hope they make it. We're just going to continue to do what we've done for the last 20 years, and that is look at solid small businesses and midsized businesses and finance them where they need it. So since there are no other questions, we'll see you next quarter.

事情非常單純。我們看到所有私人放貸公司都轉向高科技領域，願上帝保佑他們。我希望他們能成功。我們只會繼續做過去20年一直在做的事，也就是看優質的小型企業與中型企業，並在他們需要的地方提供融資。所以既然沒有其他問題，我們下季見。

That's the end of this call.

本次電話會議到此結束。

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. Please disconnect your lines, and have a wonderful day.

各位女士、先生，感謝您的參與。今天的電話會議至此結束。請掛斷您的線路，祝您有美好的一天。