Greetings. Welcome to the Gladstone Investment Third Quarter Earnings Call. At this time, all participants are in a listen-only mode. The 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 call over to Chief Executive Officer, David Gladstone. Thank you. You may begin. Well, thank you very much. Thank you and welcome to all of you coming into this call. This is a good call coming up, so hope you stay tuned through the whole thing. This is the third quarter report for fiscal year 2023 that this quarter ended December 31st, so we're a little bit further away from that. Earnings and conference call for shareholders and analysts of Gladstone Investment listed on NASDAQ, trading symbol GAIN for the common stock. We have two registered notes, one under GAINN and GAINZ. Thank you all for calling in. We're always happy to provide an update to our shareholders and the analysts who call in, provide a new point of entry in terms of information about the company. Two goals for this call. First, help you understand anything that's happened in the past through December and give you a current view for the future. We'll start out, not with our general counsel this time, but with his right-hand man, and Eric is gonna do the Michael LiCalsi's call. Go ahead, Eric. Good morning everyone. Today's call may include forward-looking statements under the Securities Act of 1933 and 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 are 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. This is Form 10-Q, Form 10-K, and other documents we file with the SEC from time to time. These can all be found on the investors page of our website, www.gladstoneinvestment.com, or the SEC's website, 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 past performance or market information is not a guarantee of future results. Please take the opportunity to visit our website, www.gladstoneinvestment.com, sign up for our email notification service. You can also find us on Twitter, @GladstoneComms, and on Facebook, keywords Gladstone Companies. Today's call is simply an overview of our results through December 31st, 2022. We ask you to review our press release and Form 10-Q, both issued yesterday for more detailed information. Now I'll turn it over to David Dullum, President of Gladstone Investment. Thanks Eric. To everyone out there listening in, we appreciate you being here. We are pleased to report that GAIN did indeed have another good quarter for the fiscal year 2023 quarter end 12/31, including in this very challenging period, obviously, of rising interest rates and inflationary costs. Our portfolio companies are meeting these challenges, and we must remain vigilant and cautious, not only with our portfolio management of these companies, but also with our new acquisition activity. We ended the fiscal third quarter, 12/31/2022, with adjusted NII of $0.30 per share, which is slightly up from $0.29 per share in the prior quarter. You'll hear more about this detail from our CFO, Rachael Easton, shortly. This is good because we're also continuing the progress to our expectations for a strong fiscal year ending 3/31/2023 and beyond that with future earnings. Total investments at fair value at 12/31/2022 increased to $760 million from $738 million at the 9/30 quarter end. This was primarily due to successful deal activity in the quarter. We did invest $15.5 million in a dividend recapitalization, as we call it, of one of our existing portfolio companies. In connection with this investment, we received dividend income of $4.5 million and recognized a realized gain of $13.4 million and increased our debt investment in that company at the same time, up to $14.5 million. It accomplishes a few things, increasing our investment in a really good company, but also able to harvest income and also capital gains. These opportunities may present themselves from time to time, and we will pursue them, because they do allow us, as I mentioned, to increase our investment in a company where we know the management team, we know the business, and we have a strong belief in its future. With the buyout market still pretty frothy, this is a good way if the opportunities present themselves to create value with the portfolio and also at the same time, obviously reward our shareholders. During the quarter, we also invested an additional $8.4 million to fund an add-on acquisition to one of our portfolio companies. This actually is also good opportunity for us with a number of our portfolio companies as we grow them and build them, and we will continue to fund add-on acquisitions. We did exit one investment with our debt investment being repaid, and we received success fee income of $1.1 million on that particular investment. Previously announced, during the quarter, we did increase our monthly dividend by 6.7% to $0.08 per share, which is up from $0.075 per share for a new annual run rate of $0.96 per share. We also paid a supplemental distribution of $0.12 per share in December of 2022. Subsequent to the quarter end, we declared a supplemental distribution of $0.24 per share, which will be paid in March of 2023. We currently anticipate being able to continue funding these supplemental distributions, they come from the recognition of realized capital gains on the equity portion and of the future exits to come from other recapitalizations. Our buyout focus strategy continues to successfully generate both income from monthly distributions to shareholders and our capital gains on equity, which allows us to make these supplemental distributions. This is our game plan. Now we did experience a very small decline in valuations in the aggregate across our portfolio. This was primarily a result of declining valuation multiples, even though there were increases in the actual EBITDA at many of our portfolio companies. Our balance sheet continues to be strong, low leverage, very positive liquidity position with significant availability in our credit facility. This will allow 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 allowing us to grow our assets. Looking forward, even though there does seem to be some decline in the multiples being used to determine the values of buyouts, the market is still very competitive, deal flow being strong and there's significant liquidity in the buyout funds who we compete with. We'll remain selective while aggressively seeking new acquisitions, and we will be patient in our diligence and our review process. Briefly, in summing up the quarter and looking forward, we believe the state of our portfolio is very good from a credit perspective. We have a strong liquid balance sheet. We have an active level of buyout activity and continued prospect of good earnings and distributions over the next year. With that, I'm gonna turn it over to our CFO, Rachael Easton, to go into some more detail. Rachael. Thanks Dave. I'll start with a summary of the fund's operating performance for the quarter ended December 31st, 2022. In the fiscal third quarter of FY 2023, we generated adjusted net investment income of $10 million or $0.30 per share, up from $9.7 million or $0.29 per share in the prior quarter. We continue to believe that adjusted net investment income, which is investment income exclusive of any capital gains based incentive fees, is a useful and representative indicator of our ongoing operations. In the fiscal third quarter of FY 2023, we generated total investment income of $21.6 million, an increase compared to $20.8 million in the prior quarter. The $0.8 million increase in total investment income during the quarter was primarily due to an increase in overall yields on our debt investments, driven by an increase in LIBOR as well as in-interest income on additional debt investments made during the current quarter. The increase in total investment income was offset by an increase in net expenses to $13 million from $9.4 million in the prior quarter, primarily due to a $3.1 million increase in accrued capital gains-based incentive fees due to the net impact of realized and unrealized gains and losses as required under U.S. GAAP. As a result, net investment income for the quarter ended December 31st, 2022, declined to $8.6 million or $0.26 per share from $11.4 million or $0.34 per share in the prior quarter. During the quarter, one portfolio company was moved to non-accrual status. We believe it will be back to paying interest in the next couple quarters. We now have three portfolio companies that are on non-accrual status. We will continue working with these companies to get them back on accrual status when possible. We believe that maintaining liquidity and flexibility to support and grow our portfolio are key elements of our success. We have long-term capital in place. At December 31st, 2022, had over $150 million available on our $180 million credit facility. Additionally, we raised approximately $3 million in net proceeds under our common stock ATM program. Overall, our leverage is low with an asset coverage ratio at 12/31/2022 of 250.5%. Our NAV per share increased during the quarter to $13.43 per share at 12/31/2022. This is compared to $13.31 per share at 9/30/2022. The increase here was primarily driven by $8.6 million of net investment income, $3.8 million of net realized gains on investments, $3.4 million of net unrealized appreciation on investments, and $3 million of proceeds under our ATM program. These amounts were partially offset by $12 million of distributions that we paid to common shareholders. Consistent with prior quarters, distributable book earnings to shareholders remained strong. During the quarter, we increased our monthly distribution to $0.08 per share for a new annual run rate of $0.96 per share, and we paid a $0.12 per share supplemental distribution in December 2022. In January, we declared a $0.24 per share supplemental distribution to be paid next month in March 2023. Using the monthly distribution run rate of $0.96 per share per year and $0.48 per share in supplemental distributions that have been paid or declared for the fiscal year. Our aggregate fiscal year distributions would total $1.44 per common share or yield about 10.5% using yesterday's closing price of $13.78. This covers my part of today's call. Back to you, David. Oh, thank you very much. That's very nice, Rachael, and nice that Dave and Eric both provided more information to our shareholders. This call plus the 10-Q filed at the SEC yesterday, and you'll also find it on our website. Surely brings everybody up to date. The team again has reported solid results for the quarter. Believe the team that is in a great position to continue success through the remainder of our fiscal year, which ends in March 31st, 2023. Gladstone Investment is an attractive investment for investors seeking continuous monthly distributions and supplemental distributions from capital gains. The team hopes to continue to show strong returns for the investment of the fund. Folks, you're now getting $0.96 per year. That's a 7%, nice 7% yield. Then if they can pay supplementals, brought it up to 10.5% for this year. Great performance. Back up the truck. Buy a lot of shares because I think we're strong. You've been paying dividends for how long, Dave? About two hundred and. 227 consecutive. 227. 227. That's just fantastic. I think all of you know the team here has presented to you a plan for going forward and paying dividends to shareholders. now let's have some questions from our analysts and shareholders. Operator, if you'll come on and give them the signal of how to do that. Thank you. We will now 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 your question. Our first question has come from the line of Mickey Schleien with Ladenburg. Please proceed with your questions. Yes. Good morning everyone. Dave, I understand that you said in the prepared remarks that the market for buyouts remains frothy, but are you seeing any improvement in opportunities available to you, given all the risks that, you know, and headwinds that we're seeing in the market currently? Hey Mickey. Good morning. The short answer is we are seeing opportunities. There are still good companies out there. I'd say that we have seen, even though I say frothy being defined really as from a competitive perspective, still a lot of money out there to be put to work. As a result of that, the companies that are coming to market, represented by, you know, good quality investment bankers, we're still seeing fairly aggressive, I would call it, multiples from a valuation standpoint. I would also say though that to some degree, the volume actually overall has come down slightly. There seems to be a little bit of a holding pattern right now. Some companies that perhaps, you know, might be coming to market, they're kind of holding just to be sure, as you just sort of reflected on, seeing how their earnings are going to look for the rest of the year, so to speak. Instead of getting into a conversation about a reduced valuation, it's maybe better to hold, and just wait and see how the year evolves. All of that said, there still are good companies. We're in the process right now of, with a number of what we call indications of interest on some pretty decent sized businesses for us, as well as actually moving into a couple of, letters of intent, which means the process starts for the intents due diligence, obviously, that we do. You know, I, if I hope and expect that we'll do a couple of pretty decent deals this year, I think that's highly likely, you know, but again, you know, as you well know, we're gonna be very careful with our valuation metrics because, you know, we do the debt and the equity, and we've got to be careful about that. Yeah, I agree, and I appreciate that. Dave, I have a few questions about portfolio credit quality, given, you know, the difficult outlook for the economy, bear with me here. When did you place Edge on non-accrual, and did you reverse any previously accrued interest income on Edge? Rachael, you wanna answer? Yes, we placed Edge on non-accrual at the beginning of the quarter, so as of October 1st. Okay. We reversed one month. Oh, you reversed a month. Okay. Dave, I mean, broadly speaking, what are the issues that Edge is confronting? You know, clearly the previous valuation was already stressed, and now it's on non-accrual, you know. You mentioned that you're hoping for a positive outcome in a couple of quarters. What insight can you give us into that company? Well, interestingly enough, Mickey, some cases we have, and this is one of those, where actually the company's generating has cash, is generating cash. We might have another lender in there, and there's some constraints as a result of the, you know, the fixed-charge coverage metrics that, say, the lender would be looking at. While the company indeed. Okay. Might be in a position to pay our interest. From time to time, we may have to do that. Fundamentally, I would say that the company actually is performing quite well, going into the beginning of this year. I, as Rachael pointed out, I would hope and expect that we indeed, somewhere in the next few quarters, would be able to bring that back on accrual status. Understand. I see that you recapitalized, Mountain, which has been on non-accrual for a while. Right. It's still on non-accrual. Can you give us any insight into the outlook for that company? Yeah. I don't think that will come back on accrual, frankly, for a while. What we did was we essentially, as you well know, that has been effectively from a valuation perspective, been written down for quite a while. Yes. What we did was essentially restructured the debt at a slightly different valuation, and it allowed us to therefore, quote, "write off," for all purposes, including tax purposes, you know, some of the debt. That's how we managed that one. I would not honestly anticipate that coming back on accrual for some time. Is that, I mean, their end user is consumers? Is it just weakness in the consumer at The Mountain? Is that something you're seeing elsewhere in the portfolio? On their particular products, we have seen a little bit of softness in the December timeframe, interestingly enough, January, which is generally a slow month, by the way, for them as well. That's not necessarily unusual. Looking forward, we're seeing a slight, we think a slight uptick in February. You know, the customer base that they have are generally these specialty stores, also places like the zoos, the institutions like Smithsonian and what have you. There clearly has been, you know, some dropoff in activity, you know, at those levels. The company is kind of holding its own, honestly. I think I've reflected on this over the years. We've had probably more issues around management with that particular company than we've had with some others. That's as much frankly a part of it, but we're very intensively working on it and doing the things that we need to do to get it the best outcome as possible. I appreciate that. Dave, you mentioned in your prepared remarks that on a net basis, the decline in, or the unrealized depreciation in the portfolio outside of Old World and The Mountain was driven mostly by multiples. Is that the case at Horizon Facilities, which was marked down, you know, relatively meaningfully? Or are there company performance issues there as well? Horizon specifically was both a decline in multiples and a decline in EBITDA. Okay. That's it for me this morning. I appreciate your time. Thank you. Just one last thing on Horizon, though. That company is very solid, very strong. Even though we have a slight decline in EBITDA and multiple, you get a kind of a double whammy. That company is a really good company, very well managed, and one that we feel very good about, just to be clear. Thank you. Thank you. Our next question has come from the line of Kyle Joseph with Jefferies. Please proceed with your question. Hey, good morning guys. Thanks for, thanks for taking my questions. Just on the credit side of things, can you give a sense for, you know, how your companies have been able to adjust to the higher rate environment and the higher debt servicing costs, and kind of how that's impacted the overall leverage of your portfolio? Kyle, I think other than the ones that we sort of specifically talked about, as Mickey was asking, we're not seeing any stress. Obviously, there are some of the companies, as you well know, most of our debt has a floor. Not most, in fact, all of our debt has a floor. Where we've been at LIBOR plus, you know, the way we structure our deals, LIBOR really has to start moving up pretty dramatically before you start getting above the floors on the actual loans that we have to our portfolio companies. We've seen it obviously a bit in a few, and as Rachael mentioned, we've seen some of the increase in net investment income as a function of having slightly higher, you know, interest coming in. Overall, we've not seen stress on the leverage of the individual portfolio companies, you know, that is necessarily putting any of them in any real concerns at this point. Got it. Helpful. Just one quick follow-up on the, on the Old World Christmas recap. Just, you know, give us a sense for the timing, the rationale, and how that impacts the overall capital structure of that company. This is the second time we've recapped Old World Christmas, actually. The timing of that, we did it right near the end of the year, in, you know, December. That's an extremely strong company with its EBITDA. Its leverage was very low, and so it was an opportunity. It's a great it's a great company. The management's very good. It was an opportunity, frankly, to be able to, you know, for us to put some more money to work, take some, as I mentioned, you know, we get some fees obviously, from that, and also it happened to lend itself to a capital gain perspective. The good news about that company as well to some extent, you have a pretty good idea where the year is gonna look early in the calendar year, in part because of the nature of its business. Again, I don't know what else, Kyle, I can tell you on that other than, you know, it was a great opportunity for us to be able to do another, quote, "dividend recap." It allowed some of the management who have a ownership position in it as well to get a bit of a reward. In turn, likewise, we can make a distribution to shareholders also. No, that's very helpful. Thanks a lot for answering my questions. Next question. Thank you. Our next question has come from the line of Bryce Rowe with B. Riley Securities. Please proceed with your questions. Thanks. Good morning everyone. Maybe wanted to just start with kind of a simple question around the portfolio yield. I'm just curious when, maybe when the, you know, when the floating rate loans reset from a, you know, from a base rate perspective. Did they reset after the end of the year in early January? Do you expect kind of continued yield expansion out of that floating rate debt portfolio? Yeah. Bryce Rowe, I'll try to give an answer and then Rachael can add to this. It sort of automatically, I'll say happens. I don't, yo u know, rates are starting to now it looks like maybe if not go down, certainly stabilize. I'm not sure we're gonna see a lot more, you know, expansion in that regard above kinda where we are now with those that have gone above our floor. Rachael, you have something you wanna add to that? Yeah. You know, we went over that floor, late last year. Most of our, as Dave mentioned, portfolio has a floor set in place, most around generally 2%. Really in this quarter, we did see, that increase in LIBOR lift our overall yield. I think. And I think. Rachael, just from a. Go ahead, David. I'm sorry. No, I was just gonna say, you know, the weighted average yield, at least the way we're counting through, you know, through the quarter-end went up, right, about 1.3%. That's obviously. Mm-hmm. somewhat reflected, as a result of that. Again, as I say, I don't know that we're gonna start seeing much more necessarily increase in that just because of somewhat stabilization, I think, you know, in LIBOR. Sorry, I didn't mean to cut you off. Yeah, go ahead. Maybe I didn't. No, you're fine, Dave. Maybe I didn't ask it the right way, but, you know, just kind of trying to understand whether the move that we have seen in rates, is it fully reflected in that, you know, 13.4% weighted average yield? Yeah. Will you get some kind of carry-through, here in the March quarter? Yes, Rachael. Yeah. It is fully reflected in that 13.4%. Okay. Okay. That's helpful. Let's see, for me, and maybe to follow up on some of Mickey's questions around portfolio valuation. You know, you Dave, you mentioned, you know, an overall net decline in, in portfolio valuation outside of Old World Christmas. There were some notable increases from a, from an appreciation perspective. Can you talk about kind of what's going on, you know, within several of those companies? Is it, you know, higher EBITDA, higher multiples? Just kind of curious how you're, how you're getting to the some of those higher valuations. I think if you look at, i f I was to go through each one of these, I won't honestly do that. But just to give you a general sense, companies such as, I don't wanna call them all out necessarily, like a Brunswick Bowling, Mason West, Dema, which is one of our more recent investments, Nth Degree, which we still now have an interesting investment in. Schylling, which is consumer somewhat related, PSI Molded Plastics. All of those had increases fundamentally as a result of EBITDA appreciation, while there was a slight decline on multiples, you know, which of course we don't create those, that's given to us, net-net in those companies, as an example, we saw, you know, an ability as a result of the EBITDA increases to offset any sort of multiple decline, so to speak. Yeah. When you look at some of the others, you know, Horizon, we mentioned. That had a bit of a, you know, slight EBITDA decline and a multiple decline as well. Some of the others, Educators Resource, which is a very good company, had a similar dynamic, D&T acquisition, similar dynamic. Overall, I would say if you know, the obvious question is, you know, we have 25 companies in our portfolio, excuse me, which is down from 26 because of the, y ou know, we exited one company, as I mentioned, that we'd had in the portfolio for some time. Overall, I think the balance in the portfolio is very solid with the nature of the companies we have and the various industries that we're in. You know, as I look forward, obviously, hopefully we'll start seeing, y ou know, I suspect we'll see generally EBITDA, for argument's sake, just kind of continuing on a trailing 12 basis, which is obviously how we do our valuations, will probably stay relatively stable, I would expect. We might see a few increases, but nothing on a negative side necessarily. Multiples, who knows what that's gonna look like, as we go through the end of this quarter. I would anticipate multiples would be probably, again, relatively stable, maybe slightly down. Okay. Okay. That's helpful. last one for me, you know, around the dividend and the supplemental. Sounds like you have an intention of continuing the supplemental dividends as appropriate. just curious kind of where maybe where the estimated UTI balance is at this point. How do you feel about, you know, that $0.48, you know, annualized level from a supplemental perspective? I guess, how much visibility do you have into that? Yeah. Well, I think, Bryce, we may have talked about this, and I certainly mentioned this, I think, when on all most of these calls, as we know. You know, the model that we drive here at Gladstone Investment as a, quote, "buyout fund," right? Being a little bit unique in the, in the BDC space, where we have a large percentage, relatively speaking, of our investments in the equities of the companies, right? We're not just getting. Yep. As you well know, we're not just getting a sort of a equity kicker. We actually are the dominant equity source, and that's our strategy and our plan. Having said that-We're also, at the same time, though, want to be sure that we are very cognizant of the need to continue paying, you know, very stable monthly distributions to shareholders. We've been able to, as David Gladstone mentioned, done that for a long, long time. We will continue doing that, and we will continue to increase those as we did roughly, I think, 6.7%, this period, because we are earning it, on a monthly basis. That's our focus. Therefore, the supplementals, if you will, a little bit of, I don't wanna say good news, bad news. The good news is our strategy and our plan is to be able to continue as we harvest companies by exit, whether in the case of a supplemental coming from, say, the Old World. Which again, is not going to happen all that frequently, these dividend recaps, frankly. When we exit a business, and we'll probably have a couple of exits this year, that's our plan. We want to be able to do that so we can provide the supplementals. Having said that, we're not really in a position to tell you or tell anyone that we have a plan that we're going to be able to make a distribution from supplementals in June, as an example. That's just not the nature of the beast. It is gonna be a, as we can manage the portfolio, manage to exit, and therefore have the ability to make supplementals. That clearly is our plan, but it is gonna be a little bit less certain in that regard, than certainly what we expect on our monthly distributions. Okay. Yeah. That makes a lot of sense. I appreciate you taking the time this morning. Bryce, just so you know, sometimes you see analysts out there writing information about the number of deals we have that are on non-accrual. That's a comparison with all of these BDCs that are just income oriented. They don't have any capital gains or any upside. When you compare us to the regular BDCs, you're getting a 7% yield plus the opportunity for these increases in capital gains that go through as an extra dividend. It shouldn't be compared. We shouldn't be compared in this company with the world of BDCs simply because, they're just lending money. We're doing both. Yeah. I think that should be taken into account. Do we have any more questions? I appreciate that. Any more questions? We do not. There are no further questions. I'd like to hand the call back over to you, Mr. Gladstone. Thank you very much. It was very nice to have such a wonderful quarter to report. Dave and Rachael did a great job of cleaning up the place and putting money out. It's really nice. If there are any other questions, your last chance is now. Hit the button. We'll see you again next quarter. That's the end of this call. Thank you. That does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.