Greetings, and welcome to the Gladstone Investment Q2 Earnings Call. At this time, all participants are in listen only mode. A brief 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. It is now my pleasure to introduce your host, David Gladstone, Chief Executive Officer. Thank you, sir. You may begin. Well, thank you, Latonya. That was a very nice introduction, and good morning to all of you that are listening in. This is David Gladstone, Chairman, Gladstone Investment. This is the Q2 ending. That's for the fiscal year that ends March 31, 2023. We're ending the quarter at September 13, 2022 to talk to you about. All the shareholders and analysts that are on, hopefully, you're all ready to ask us lots of good questions when we get to that part of it. We are talking about the symbol GAIN, as well as two others. GAIN is the common stock, and GAINN and GAINZ is for the registered notes and things that we've listed as well. Thank you for calling in. We're always happy to provide updates to shareholders and analysts who are on the phone call. There are two goals here to help you understand what happened in the last quarter and also to give you a current view of the future. Now, I'll start out with our General Counsel as we always do, 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 Form 10-Q, Form 10-K, and other documents we file with the SEC. You can find them on the Investors page of our website. It's www.gladstoneinvestment.com, or the SEC's website, which is www.sec.gov. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. Please also note that any past performance or market information is not a guarantee of any future results. We ask that you 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. Now, today's call is simply an overview of our results through 9/30/2022. We ask that you review our press release in 10-Q, both issued yesterday, for more detailed information. With that, I'll turn it over to Gladstone Investment's president, Dave Dullum. Hey, Mike. Thank you very much, and good morning, everyone. Welcome. Again, we're pleased to report that GAIN had another good quarter for fiscal year 2023. This follows on the previous solid Q1 of the fiscal year. We clearly are in a challenging period with rising interest rates and inflationary costs. However, our portfolio companies, we're happy to say, are meeting these challenges. As a result, we ended the Q2 of fiscal year 2023, which was on 9/30/2022, with adjusted NII of $0.29 per share and total investments at fair value of $738 million, which is up from $690 million at 6/30/2022. Our deal activity this quarter was fairly good, as we made one new acquisition in investing $39 million. We also invested $30 million and recapitalized one of our existing portfolio companies. Now, in connection with this investment, we received a return of our preferred equity investment of $10 million. We received dividend and success fee income of $4.8 million and recognized a realized gain of $2.2 million, thereby increasing our debt investment in that company when the dust settled to $57.7 million. Again, we were able to generate capital gains, fee income, and indeed increase our actual investment in this portfolio company. I should note that we will have opportunity for recapitalizations from time to time. Now, these are positive events as they generally allow us to generate capital gains and other income while increasing our investment in a company where clearly we know the management team and the business. It's a good opportunity. With the buyout market still frothy, meaning relatively expensive, and pretty competitive, this is a good way for us to create value within the portfolio and therefore reward shareholders. Now, subsequent to the quarter end, we invested an additional $8.4 million to fund an add-on acquisition to one of our portfolio companies. Also, subsequent to the quarter end, we announced a 6.7% increase in our monthly dividend to $0.08 per share, excuse me, up from $0.075 per share for a new annual run rate of $0.96 per share. Additionally, we declared a supplemental distribution of $0.12 per share, which will be paid in December of 2022. We currently anticipate being able to fund future supplemental distributions, and this comes as we recognize realized gains, excuse me, realized cap gains on the equity portion of future exits and potentially from other recapitalizations that we might do. Our buyout-focused strategy continues to successfully generate both income from monthly distributions to shareholders and capital gains on equity for supplemental distributions. Now, we did experience a small decline in valuations in the aggregate across our portfolio. Now, this was primarily as a result of declining valuation multiples, even though we had increases in EBITDA in many of our portfolio companies. Our balance sheet continues to be strong, with low leverage and a very positive liquidity position with significant availability in our credit facility. You'll hear a lot more about this from Rachael Easton, our CFO. 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 growing our assets. Looking forward, even though there does seem to be some moderation in the multiples being used to determine the values of buyouts, the market is still very competitive, with deal flow being strong and significant liquidity in buyout funds, of course, who is our competition. We will remain patient and selective in our due diligence and review process while aggressively seeking new acquisitions and implementing recapitalizations with existing portfolio companies as appropriate. Well, that lets you know that the new acquisition effort is very important and is a high priority for us. In summing up the quarter and looking forward, we believe the state of our portfolio is very good. We have a strong and liquid balance sheet, an active level of buyout activity, and continued prospect of good earnings and distributions over the next year. Rachael, will you tell us a little bit more detail about all of that? Absolutely. Thanks, David. Good morning. I'll start with a summary of the fund's operating performance for the quarter ended September 30, 2022. In the Q2 of fiscal year 2023, we generated adjusted net investment income of $9.7 million or $0.29 per share. This was up from $8.3 million or $0.25 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. The increase in adjusted NII was driven by an increase in total investment income to $20.8 million compared to $19.3 million in the prior quarter, as well as a decrease in net expenses to $9.4 million from $11.9 million in the prior quarter. The $1.5 million increase we saw in total investment income was primarily due to an increase in debt investments in the current quarter, as well as an increase in LIBOR impacting our interest rates. Additionally, driving the increase in interest income, we had one portfolio company that was previously on non-accrual come back on accrual status this quarter. Going forward, there are two portfolio companies that remain on non-accrual status, and we will continue working with those companies to get back on accrual status if possible. The $2.5 million decrease in net expenses we experienced was primarily driven by a decrease in accrued capital gains-based incentive fees. This is due to the net impact of realized and unrealized gains and losses as required under U.S. GAAP. We believe that maintaining liquidity and flexibility to support and grow our portfolio are key elements to our success. We have long-term capital in place, and at 9/30/2022 had $163.4 million available on our $180 million credit facility. Additionally, we raised approximately half a million dollars in net proceeds under our new common stock ATM program, all sales of which were above NAV. Overall, our leverage is low, with an asset coverage ratio at 9/30/2022 of 254.1%. Our NAV per share declined during the quarter to $13.31 per share at 9/30. This is compared to $13.44 per share in the prior quarter. The decrease was primarily driven by $10.6 million of net unrealized appreciation and $7.5 million of distributions paid to common shareholders. These amounts were partially offset by $11.4 million of net investment income and $2.3 million of realized gains on investments. Consistent with prior quarters, our distributable book earnings to shareholders remain strong. With that in mind, and as previously announced, in October 2022, our board of directors increased our monthly distribution run rate to $0.96 per share per year and declared a $0.12 per share supplemental distribution to be paid in December of this year. Using the new monthly distribution run rate of $0.96 per share per year and the $0.24 per share in supplemental distributions paid and declared so far for the year, noting that this may not actually be indicative of what ultimately may be declared for the year, our fiscal year distributions would total $1.20 per common share or a yield of about 9.2% using yesterday's closing price of $12.99. This covers my part of today's call. Back to you, David. Oh, thank you. Very nice, Rachael. It was very nice for Dave and Michael as well, who've given good information to our shareholders. This call and the 10-Q filed with the SEC yesterday should bring everyone up to date on the company. The team has reported solid results for the quarter, and we believe the team is in a great position to continue these successes through the remainder of our fiscal year ending March 31, 2023. I'm telling you, getting over 9% yield on the price of the stock these days is very strong return. Hope all of you call your broker and get some shares. We believe that Gladstone Investment is an attractive investment, and we're seeking continuous monthly distributions and supplemental distributions from potential capital gains and other income. The team hopes to continue to show you strong returns for your investment, and we will take good care of your money. As you know, most of us here at the company have a lot of shares in this company as well as the other funds. Now I'm gonna stop, and we'll ask our analyst friends and maybe some shareholders to ask us some questions, and we'll do our best to give you a good answer. Thank you. We will now conduct 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 a 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. Once again, that's star one at this time. One moment while we poll for our first question. Our first question comes from Mickey Schleien with Ladenburg Thalmann. Please proceed. Good morning, everyone. Dave, wanted to ask you about how business owners are behaving in terms of their willingness to perhaps sell their businesses when we think about, you know, the headwind of rising interest rates for them and the headwinds also from a potential recession. In other words, is that driving them to have more interest in selling and providing you perhaps a bigger pipeline than you have in the past? Hey, Mickey, good morning. Thanks for that question. I can't honestly tell you that we're seeing that. I would say that there has been probably a bit of a slowdown in a pure family-owned or controlled business, somewhat to that degree. Obviously, there are other variables such as, you know, what sort of succession there is. What we're finding, we've had a few situations like this where you start getting into diligence and, you know, the values come down when you really get into it, and as a result of that, actually the sellers then will back off and not move forward. To your point, there is a bit of that, where they'd love to try to sell it, but if it's not at a value, they'd rather, you know, stick with it and so on. I wouldn't say that that's really helping improve the deal flow in that regard. Then the other obvious seller group would be, you know, other private equity firms, frankly, and they're more looking to, if they're at the point where they need to exit, they're gonna exit sort a regardless. Having said all of that, as I mentioned, there's still enough demand, if you will, and capital that is still keeping some of those valuations at a higher value than frankly we think we can support. Net-net it's a struggle. Okay. I appreciate that, Dave. You know, your portfolio sort of includes many companies that are, you know, fundamental businesses focused on the U.S. economy. I think it'd be really interesting to understand if you could just give some sense of how their revenues are developing and their margins as well, given all this tightening that the Fed is doing. I would say we're starting to just feel a little bit of a slowdown. As you know, we have what I think of as three sort a categories. I don't call them necessarily industries, but categories. Manufacturing, business services and, you know, especially consumer. We're starting to see a little bit of a slowdown, I would say, on the demand side on the consumer side. Manufacturing, that's slowing a little bit also. Then on the business services side, that's actually pretty robust right now. The bigger challenge continues to be in certain categories, finding labor. Even though, you know, we know that there are folks that are not looking for jobs, frankly, which I think impacts the way in which we think of unemployment. Having said that, the bigger challenge really is more around good quality labor. Prices and labor prices seem to be moderating a bit and obviously supply chain struggles are improving also. We've seen clearly the cost, for argument's sake, of importing from, say, China or the Far East, where you were dealing with container costs that were $15,000-$20,000 back, you know, not but six months ago. Now those are back more normal, kind of in the $5,000-$7,000 per container type of cost. That impacts clearly those companies that we have that are importing. We're seeing improvement there. Across the board, I would say it's starting to slow a little bit, but nothing dramatic in that regard. Dave, when you think about all those comments you just made, and look at the forward interest rate curves, what level of concern do you have regarding your company's ability to fund their debt service in terms of, you know, cash interest coverage ratios and their ability to absorb what looks like gonna be, you know, meaningfully higher interest rates over the next couple of quarters? Right. Currently as you know, the way our deals are structured, you know, with a LIBOR plus, you know, and floors, we've been always pretty much in the category where we're above the floors. We're at our floors, if you will. Now with LIBOR increasing, we're starting to see a bit of an increase over and above what they've been paying. Because our floors, so to speak, have been relatively high, I would say, because as you know, the yield on our total portfolio is 11.9%-12%. We're not seeing as big an impact right now. The other thing obviously, which you know as you well know, because of the way in which we own these companies and the way in which we capitalize these companies, we have a little bit of flexibility if we were needing to give our companies some help, so to speak, and you know, in a deferral or a slight reduction if things really got tight, which we've had to do in the past from time to time. Right now, we're not seeing that to be a big problem with any of our portfolio companies. We obviously have two that have been on non-accrual for a while, one that actually came off of non-accrual, which is a very good thing. The two that are currently on non-accrual, and as Rachael said, you know, we're working hard with those companies. I think one of them, very good chance it will sometime in the next six-nine months could come off non-accrual. The other one, not so sure. That's not a huge, frankly, driver to affect our results going forward. I appreciate that, Dave. Couple last questions, more housekeeping sort of questions. The portfolio's weighted average yield climbed only 20 basis points, but during that period, LIBOR increased 150 basis points. You just talked about LIBOR floors. Were your LIBOR floors so high that that accounts for that change? Or is there something else that I should understand? You're right there. Our floors are generally around 2%-3% across the portfolio. You know- Okay. I think as LIBOR continues to increase this quarter, we should see that yield lift as well. Okay. You see your floors are higher than what's typical in the middle market. My last question is just your view on balance sheet leverage or, you know, what sort of level of debt to equity are you comfortable with in the current market environment? You know, right now we're at about 250%, and I think that's a level that we are comfortable with. We're currently at about $20 million out on our line of credit. You know, I think we have a lot of room there. You know, we look at it holistically at our business and our capital structure. You know, we were conservative in our leverage metrics, and I don't think we're looking to change that. Yeah. Obviously, as we look forward and start, you know, hopefully we'll be making some new acquisitions this year. We have the capacity. That's the good news, as Rachael's pointing out. In terms of where we would start to be a little nervous, call it around the leverage ratio, I would say if we start to get in the kind of 180% sort of range is probably where we start to look at it. As you know, we put in an ATM program earlier this year in common stock, and we were raising, you know, not aggressively, but we were raising until, of course, prices started moving down for everybody. We're clearly slowly back to about NAV. We're a little bit below NAV, so we're certainly not gonna raise any common, you know, certainly at this level. As we go forward and as prices hopefully would start, you know, stock prices move back up, we'll, you know, gradually add some equity to the balance sheet as we look forward and sort of match it with new acquisitions that we're making. You know, right now, as Rachael said, to reinforce that, we're in really good shape right now, and we think as we look forward, even with some pretty good new acquisitions, we'll be in decent shape both from a leverage perspective and from a capital perspective, probably, you know, up through halfway of next year thereabout. That would be my thinking. Okay. That's it for me this morning. I appreciate your time as always. Thank you. Thanks, Mickey. Thank you. Next question. Once again, to ask a question, please press star one. Our next question comes from Kyle Joseph with Jefferies. Please proceed. Hey, good morning, guys, and thanks for taking my questions. Just curious on your commentary regarding, you know, things remaining competitive in the middle market in terms of buyouts. You know, what would be the outlook for you know, if rates continue to rise? Do you ultimately see some competitive disruptions there? In terms of, you know, capital allocation priorities, you know, are add-on acquisitions kind of the near term focus for you guys? Yeah. Hey, Kyle, good to talk to you. So add-ons, yes. We've been making some of those. As we mentioned this past quarter, we added on to one of our portfolio companies, and we're continuing to grow that business. We're aggressively looking for add-ons. That's a good way for us to do it. As I mentioned, recapitalizations with some of the companies that are sensible, that's another good way for us to do it. In terms of the competitiveness, though, what we're starting to see is as rates rise, where the impact there clearly is around for the traditional private equity funds, meaning our competition, the leverage that they're being made available for them is certainly declining a little bit, we think. In other words, it's getting tougher for them to get leverage, forget the rate even. That should thereby mean that we're more competitive because we, you know, right? We bring our own leverage with us, and it's a total package. We're seeing some of that, but having said that, what we're also seeing is private equity firms, frankly, just being more aggressive on the equity. In other words, they're using less leverage, putting more equity in the deal and, you know, presumably thinking that down the road, they'll be able to pay it off in some regard. The short answer would be it's still a struggle, it's still competitive. You know, we're not gonna pay some of the multiples that we're seeing because it really doesn't work for our model, and it's not the right way to go. We'll keep being patient, and I think we'll do a good job this year, but it's gonna, again, take us, you know, take us a while to make the kind of acquisitions we'd like to make. Got it. Very helpful. Thanks for answering my question. Next question, please. There are no further questions in queue at this time, Mr. Gladstone, so if you have any closing comments for the group. Well, that's sad. We like good questions, so we're missing out on this one. We'll have to wait till next quarter in order to hear some really strong questions, hopefully next time. That's the end of this. Thank you all for tuning in. Thank you. This does conclude today's teleconference webcast. You may disconnect your lines at this time, and have a great day.