Greetings, and welcome to Gladstone Investment Corporation's third quarter earnings conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, David Gladstone, Chief Executive Officer. All right. Thank you, Peter. Good morning, everybody. This is David Gladstone, Chairman of Gladstone Investment. This is the third quarter of our fiscal year ending March 31, 2022. This is the earnings conference call for shareholders and analysts of Gladstone Investment. Company's listed on Nasdaq under the trading symbol GAIN for the common stock, and we have two preferred, GAINN and GAINZ for the registered notes. Thank you all for calling in. We're always happy to provide updates of our shareholder, analysts, and the view of the current business environment. Our two goals here is to help you understand what has happened and also give you our best guess of the current views of the future. Now we'll hear from our General Counsel and Secretary, Michael LiCalsi. Michael. Thanks, David. Good morning, everybody. Today's call may include forward-looking statements under the Securities Act of 1933 and the Securities Exchange Act of 1934, including those regarding our future performance. These forward-looking statements involve certain risks and uncertainties and other factors even though they're based on our current plans, which we believe to be reasonable. Many factors may cause our actual results to be materially different from any future results expressed or implied by these forward-looking statements, including all risk factors listed in our Forms 10-Q and 10-K and other documents that we file with the SEC. You can find all these on the investors page of our website, that's gladstoneinvestment.com, or the SEC's website, that's www.sec.gov. 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 past performance or market information is not a guarantee of any future results. We ask everybody to take the opportunity to visit our website. Once again, gladstoneinvestment.com. Sign up for our email notification service. You can also find us on Twitter, @GladstoneComps, and on Facebook, keyword, the Gladstone Companies. Today's call is simply an overview of our results through 12/31/2021. We ask that you review our press release and Form 10-Q, both issued yesterday, for more detailed information. With that, we'll turn it over to Dave Dullum, President of Gladstone Investment. Dave. Hey, Mike. Thanks very much. Good morning to all our shareholders and analysts. I wish to welcome our CFO, Rachael Easton, who joined our team in December. Very happy to have her with us, and this is her first quarterly call, and you will hear from her shortly. As we know, there are many challenges facing our economy, labor shortages, supply chain delays, increased material costs, as well as inflationary trends. While most of our portfolio companies experienced most of those, we did make good progress towards pre-COVID operating status. As a result, I'm very happy to report on another very good quarter for Gladstone Investment. In that, we ended the third quarter of fiscal 2022 with adjusted NII of $0.26 per share, which continues the progress in what we expect will be a strong finish for fiscal year 3/31/2022 and our future earnings. The total assets of 12/31, though, decreased to $736 million from $746 million at 9/30/2021. This really is primarily due to the successful exits of two portfolio companies during that period. As a result of that, obviously these assets were taken off of the balance sheet, if you will, but that's partially offset by a few add-ons to existing portfolio companies, and also, most importantly, the continued recovery of the values of our equity holdings, which today make up around 23% of our portfolio at cost. We also, though, were able to maintain our monthly distribution of $0.075 per share, or $0.90 per share on an annual basis. We were able to pay a supplemental distribution of $0.09 per share in December 2021. Subsequent to quarter end, we declared another supplemental distribution of $0.12 per share to be paid in February, which is this month in 2022. During this quarter of fiscal year 2022, the two portfolio companies that we exited resulted in a net realized gain of $22 million and success fee income of $3.4 million. We also, as mentioned, invested $37 million in existing portfolio companies, which supported add-on acquisitions for those companies, which is a positive event. Our strategy as a buyout-focused entity, therefore, continues to successfully generate both the income for increasing monthly distributions to shareholders and also capital gains on equity from our supplemental distributions based on our capital gains, appreciation. Our balance sheet continues to be strong with very low leverage and a very positive liquidity position. This allows us to continue providing support to our portfolio companies for add-on acquisitions and interim financing if the need arises, while actively seeking new buyout opportunities and continuing to grow our assets and income. In that, the outlook really for the new acquisition market unfortunately continues to exhibit very high purchase value expectations, and there is a very strong competition from new acquisitions given the amount of capital that's out there in the buyout marketplace. As a result of this dynamic, though, we remain patient and selective in our diligence and review process while we aggressively continue seeking new buyout opportunities. In summing up the quarter and looking forward, the state of our portfolio is very good. We have a strong and liquid balance sheet, an active level of buyout activity, and the prospect of good earnings and distributions during this fiscal year and beyond. Now I'll turn it over to Rachael Easton and have her give some more detail on those specifics. Rachael. Thanks, Dave. As far as operating performance for the quarter, we continue to see improvement from the ongoing impact of the pandemic on our portfolio companies. We generated adjusted NII of $8.8 million or $0.26 per share, an increase compared to adjusted NII of $7.8 million or $0.23 per share in the prior quarter. We continue to believe that adjusted net investment income, which is net investment income exclusive of any capital gains-based incentive fees, is a useful and representative indicator of ongoing operations. Total investment income decreased quarter-over-quarter, primarily due to a relative decrease in interest income, as we had collected past due interest in the prior quarter, which did not recur to the same extent in the current quarter, as well as lower dividend income from portfolio companies, the timing of which is variable. Consistent with our prior quarter, at 12/31/2021, three of our portfolio companies continue to be on non-accrual status. Expenses decreased by $8 million this quarter, which was primarily driven by a $4.8 million decrease in capital gains-based incentive fees due to the net impact of realized and unrealized gains as required under US GAAP, as well as an increase in fee credit. We believe that maintaining liquidity and flexibility to support and grow our portfolio are key elements of our success. With the successful issuance of our 2028 Notes and related redemption of the Series E term preferred stock in the prior quarter and successful exits in December 2021, we have long-term capital in place and the full $180 million available under our credit facility. Our leverage is low, with an asset coverage ratio at 12/31 of 259.5%. Our NAV remained consistent at $13.27 per common share compared to the prior quarter. Although no net change, the reversal of unrealized depreciation on exits was offset by realized gains and unrealized appreciation of investments. Consistent with prior quarters, distributable book earnings to shareholders remain solid, especially when considering that book earnings have been reduced by $28.7 million of capital gains-based incentive fees, which equates to about $0.86 per common share, of which only $5.3 million is currently due. With that in mind, and as previously announced in January 2022, our board of directors declared another supplemental distribution to common shareholders of $0.12 to be paid out this month in February 2022. Assuming the current monthly distribution run rate of $0.90 per share per year and $0.30 per share per year in supplemental distributions for the 2022 fiscal year in total, our annual distributions would total $1.20 per common share or a yield of about 7.5% using yesterday's closing price of $15.90. That covers my part of today's call. Back to you, David. All right. Thank you, Rachael. That was a nice presentation, Rachael. I'm looking forward to you being on all of these calls going forward. Dave, you and Michael both gave good information to our shareholders. That presentation plus the 10-Q filed with the SEC yesterday should bring everyone up to date. The team has reported solid results for this quarter ending December 31, and the exits and add-on investments are nice to hear. We believe the team is in a great position to continue these successes through the remainder of the fiscal year ending March 31, 2022. I think the team would concur with me that Gladstone Investment is an attractive investment for investors seeking continuous monthly distributions and supplemental distributions from potential capital gains and other income. The team hopes to continue to show you a strong return on your investment in this fund. Now let's bring on Peter, and we'll have some questions from all of you out there listening in. Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. The first question is from Mickey Schleien with Ladenburg. Please go ahead. Yes, good morning, everyone. Dave, when we look at your portfolio's breakdown by industry, the largest segment is diversified services, which is a pretty broad description, and then there's consumer durables. In your prepared remarks, you mentioned inflation. I'd like to ask you how you feel about those companies and those sectors' ability to pass on inflation and protect their margins. Mickey, good morning. Good to hear from you. Basically, first part of that question might be where is inflation impacting us? What we're seeing there somewhat is obviously in labor cost increases and certainly in the consumer products area because of raw material costs, et cetera, and transportation costs in particular, you know, when products coming in from overseas and so on, that's where we're seeing the impact. What we have been experiencing, specifically to your question, is the ability now indeed to pass on some of those costs. For argument's sake, in some of our customer base, as an example, a Walmart, which is one of the customers we'd have for some of our portfolio companies in the consumer space, they actually are accepting, you know, price increases from us and indeed are passing those on through to the customer. It's all a function of just being very aggressive, frankly, in that regard and sticking to our guns and pushing hard with the customer set that we have. Some of them have already started putting those through. We've been seeing a positive trend in that regard and certainly hope it will. You know, we can continue doing that. Thanks, Dave. Is there any sense that you can give us about the portfolio's average interest coverage? Average interest coverage. Help me with exactly what you mean by that. You know what, we'll do that one offline, if that's okay with you. Okay. Dave, as you mentioned in your prepared remarks, you know, M&A multiples are elevated, and it doesn't look like that's likely to come down anytime soon when you think about how much capital is chasing deals. So how would you describe your interest to possibly pay higher multiples for interesting businesses than you've maybe paid historically for those types of businesses? Yeah. Well, whether I would like to do it or not, Mr. David Gladstone may not let us do that. You know, we look at it hard. Obviously, it's a function, clearly, and you mentioned in the service sector type of companies and so on, that's where we tend to see higher multiples, you know, valuations. We are slowly, you know, modeling out where if we do increase it from where we would normally think we could, as long as it works for our model, which is the most important thing, which, as you know, is coverage of interest, the fixed charge coverage on these companies and so on. The short answer is it probably slowly will see some increase on multiples that we will have to pay on some of these companies, but we're still gonna keep, you know, our constraints on the returns that we're looking for. You know, it's a competitive environment, so we have to find other ways. As an example, a couple of the companies that we invested in last year, very good companies, in one case, it's essentially a you know buying a smaller business and adding on and building out the platform, and we can get accretion as a result of the multiples that we pay for the add-on acquisitions in that regard. We'll do stuff like that. You know, we just have to be very firm in what we're willing to pay going forward. It's definitely some pressure to pay a little bit more than we'd like to. Dave, this quarter, your new investments were focused on follow-ons. Was that the type of deal you just described? In other words, was it tuck-in acquisitions or what are your portfolio companies using that money for? Yeah. This quarter, that's exactly right. We had a couple of companies where we had really good opportunity to do some add-ons, and so we were able to provide the capital to the companies to help them do that, which was a positive thing for us, obviously. Yep. Right. Thank you. I have a couple more questions. I'll get back in the queue and follow up. Thank you. Okay, thanks. Next question. Thank you. Ladies and gentlemen, again, if you have a question, please press star one on your telephone keypad. The next question is from Adrian Day with Adrian Day Asset Management. Please go ahead. Yes, good morning. Two questions, if I may. Just a sort of quick follow-up to the last discussion on competition valuation. You know, it used to be many years ago that your sort of segment of the lending market, I won't say you had to yourself, but there was a lot less competition than in larger companies. Do you think the competition you're seeing is purely due to the increase in money? Obviously, you know, we all know about that. Is that the main reason, or are you just seeing new competitors who are going to hang around in your space, what I'll call your space? Yeah. The middle market or slash lower middle market? Yeah. Yeah. Yeah. Adrian, I would say yes, it's probably as much a function of more folks coming into the business, but clearly as a result also, as you said, of more capital. Not only are they, let's call it who are our main competitors, are private equity funds, right? That's who we compete with buying businesses. They have a lot of capital that they have to deploy, but also the ability to generate leverage or get leverage from, you know, third-party lenders, right? Banks, other BDCs that are lending BDCs and so on. Clearly that leverage, as we know, has also been pretty, relatively speaking, inexpensive. Yeah, it's just a function of both of those. Of course, we assume that the expected returns that some of those firms are factoring in have got to be lower than historically, 'cause otherwise, you know, I don't know how they're paying those kind of prices. Now, whether or not increasing interest rates, which clearly are gonna start occurring and have started occurring, although you're going from a relatively low base, right? So it's not like we're getting back to the high rates we used to see back many years ago. You know, that might have some impact a bit, frankly, on leverage, and maybe that will help mitigate it a bit. But I think it's a function of just as many more folks in the market. The supply side, by the way, the number of deals that came to market last year was pretty high also. So far this year, we're seeing a little bit of a slowdown in deal supply, but we think we're gonna start seeing a pickup of that again, talking to the investment bankers. It's just, you know, getting out there and slugging every day is what we have to focus on. Okay. Listen, my second question, if I may. I was just a little bit confused. I don't know if you can help me. When you say that your total investment income was affected by the decline in collections of past due interest from companies previously on non-accrual. I'm a little bit confused by that. Do you mean the companies on non-accrual were previously you were able to collect from? That's exactly right. It's collections that occurred from past non-accruals. This took place. We had about $1.6 million of collections in the prior quarter, and we did not see that same influx take place this quarter. They would be from the same companies? In other words, some No, not necessarily. No. What Rachael said is correct. It's a good news thing, right? To the extent we had some companies that were on non-accrual last quarter, we were able to take them off of non-accrual because of performance and what have you. We also were able to get some of that paid back. Just the timing of how that occurred in that quarter from a comparative basis, we did not have those neither those companies or other companies necessarily paying any additional accrued interest that was accrued. We just had our normal interest payments in this quarter relative to the comparative, the prior quarter, where we had additional interest, if you wanna think about it that way, that came as a result of collecting from non-accrual. I got it. Okay. Thank you, sir. Thank you. Thank you. Thank you. Next question. Thank you. Ladies and gentlemen, again, if you have a question, then please press star one on your telephone keypad. The next question is from Mickey Schleien with Ladenburg. Please go ahead. Dave, to follow up, what drove the large markup of the Brunswick Bowling preferred shares? Does that represent an exit potential on that investment? Well, no. The valuation methodology was consistent with what we've always done. Part of it is that the business, frankly, really is coming back very strong. Rachael, you wanna touch on that? Yeah, absolutely. That was definitely due to an uptick in performance. You know, we are continuing to see improvement from the ongoing impact of the pandemic. That increased EBITDA, which really led to the appreciation of the investment. Yeah. This is not related to any exit activity or anything like that. This is a really good company. We're excited that it's, you know, back to almost pre-2019 well, right in the 2019 timeframe as a result of we'd also made an acquisition at the end of that year of a competitive bowling ball company. We really have a large share now of bowling balls, if you will, and the run-up at the end of 2019 was very positive. Of course, we saw a decline because of COVID through 2020, and now we're picking back up to where we're pretty close to where we were at the end of 2019, and that's all that reflects. That's good news, Dave. Rachael, welcome, first of all, and a couple of more modeling questions. What is the debt portfolio's average LIBOR floor? Our assets that we have our LIBOR floor, most of them are, you know, it's LIBOR plus, but we also put our own floor on it, so it's generally around 10%. Okay. Dave or Rachael, can you give us a little bit of color on the large credit from the advisor to the base management fee? It was particularly big this quarter. You know, what was the nature of that, and what is the outlook for that line item? Yes, absolutely. That fee this quarter was primarily due to a fee paid to the advisor associated with the exit of Pioneer Square Brands, and then that's being credited against our fees due. You know, that is not really comparable quarter over quarter. It's gonna be volatile. Yeah. Mickey, as you know, the way we do this is when we both make an acquisition and also when we exit a company, if we generate a fee for the transaction because of the interaction with the advisor, we have a relationship where the advisor would collect some of that fee, and then they credit that back to us through our actual management fee from the advisor to GAIN. So again, as Rachael said, you know, it's inconsistent, right? It's gonna occur both when we have acquisitions and we have dispositions if we generate a fee. It's a positive overall. It's just a function of the advisor collecting, you know, essentially getting the money in the transaction and crediting it back to us through our management fee paid to them. Yeah, I understand the accounting, Dave. It was just that the number was pretty large. Well, it was a good exit. Yeah, no, it was. Congratulations. It was a very good exit. And what is your estimated undistributed taxable income following these exits? Can you give us any insight on that and how you expect to distribute that? Well, right now we have $17.4 million, and this is the GAAP undistributed income on the balance sheet. Obviously we do have some book to tax differences there. These amounts are available for distributions and due. I don't know if you wanna speak more to kind of our forward outlook there, but. Yeah, I think, well, Mickey, first of all, as you know, our general, I don't know what to call it, policy approach plan is, you know, first we focus on the monthly distributions, which we've been able to get up to $0.075 per share, $0.90 on an annual basis. You know, we never wanna get ahead of ourselves, try not to anyway, but we will keep trying to increment that as slowly as possible. It's been a good model for all of the Gladstone Companies by and large. We would, you know, we certainly wanna do that. We were able to increase that a little bit last year. We focus on that mainly coming out of operating income. Now, having said that, the distributions that we make on the supplementals, again, come as a result of the capital gains that we've been generating. Then we start getting into this. This, again, a good thing, and I'm getting a little bit over my head in this regard, but now we start having classification of income that might be sitting there, both if it's from cap gains or from ordinary income. As we look forward, we might be able to consider taking and increasing our monthly distribution, but some of that might be coming from this accrued, you know, income and then from sort of would have a designation as capital gains. It's be a blend of those going forward, but right now we don't have any suggested change to that. Just keep doing a good job on our monthly distribution, sort of from operations and are continuing increasing as much as we can our supplemental distributions as a result of cap gains. Yeah. That was all what I was referring to, David. Thanks for that explanation. Those are all my questions. I appreciate your time, and congratulations. Thank you. on a strong quarter. Thanks for your questions. We have any other questions? There are no further questions. Ladies and gentlemen, we have reached the end of the question and answer session, and I would like to turn the call back to Mr. David Gladstone for closing remarks. Well, thank you all for tuning in. Had a great quarter. Think we'll have a good quarter this time, and we'll see you next quarter. That's the end of the call. Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.