Greetings. Welcome to Gladstone Capital Corporation's second-quarter earnings 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, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Mr. David Gladstone, Chief Executive Officer. Thank you, sir. You may begin. Thank you, Sherry. This is David Gladstone, Chairman, and this is the earnings conference call for Gladstone Capital with a quarter ending March 31, 2025. Thank you for calling in. We're always happy to talk to our shareholders and analysts who follow us and welcome the opportunity to provide an update on our company and maybe give a little information about where we're going. Now we'll start out with Erich Hellmold. He's standing in for Michael LiCalsi on the general counsel side, and he's going to give us some information about forward-looking statements. Erich. Thank you, David, and good morning. Today's report is forward-looking statements under the Securities Act of 1933, Securities Exchange Act of 1934, including those regarding our future performance. These forward-looking statements involve certain risks and uncertainties that are based upon 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 in our Forms 10-K and other documents that we file with the SEC. Those can be found on the investor relations page of our website, www.gladstonecapital.com, where you can also sign up for our email notification service or on the SEC's website at 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. Today's call is an overview of our results, so we ask you to review our press release and Form 10-Q issued yesterday for more detailed information. Again, those can be found on the investors' page of our website. Now I'll turn the call over to Gladstone Capital's President, Bob Marcotte. Thank you, Erich. Good morning, and thank you all for dialing in this morning. I'll cover the highlights for the quarter ended March 31 and a few subsequent events before concluding with some comments on our near-term outlook for the company. Beginning with last quarter's results, fundings totaled $46 million, including two new private equity-sponsored investments in the semiconductor infrastructure and foods product sectors. Exits and repayments remained elevated at $81 million as we exited two investments as anticipated, so net originations were - $35 million. However, excluding the equity investment proceeds in the period, our yielding debt investments declined by $20 million compared to the prior quarter end. Interest income for the period was unchanged at $21.3 million as the 6.3% increase in the average earning assets was offset by the decline in the weighted average portfolio yield, which fell to 12.6% for the quarter due primarily to the 36 basis point decline in the average SOFR rates for the period. Interest and financing costs rose 5.4% with higher average line borrowings. Net management fees declined slightly and included a $1.4 million incentive fee credit, and lower professional fees and other expenses declined by $500,000, leading to net investment income of $11.2 million for the period. Net realized gains came in at $7.7 million for the quarter with the equity investment exits, and net realized and unrealized depreciation on the balance of the portfolio was $2.2 million, bringing our ROE to 18.6% for the TTM period. With respect to the portfolio, the portfolio turnover for the period did not have a material impact on our investment mix, as our senior debt portfolio represented 71% of the fair value of the portfolio, and total debt holdings were just over 90% of the portfolio at fair value. As of the end of the quarter, our non-earning asset investments were unchanged at four companies totaling $53.7 million at cost or $29.8 million, or 4.3% of assets at fair value. The bulk of the realized depreciation for the quarter was led by a $4.7 million gain on our equity co-investment in Sokol, which was sold to a strategic buyer shortly after the end of the quarter. The net unrealized depreciation for the period was concentrated in three investments in the lab testing, circuit board manufacturing, and precision metal product sectors, which experienced softer Q4 results. However, following these situations closely, we expect each to see improving results over the balance of 2025. Following the end of the quarter, we exited a large senior debt investment of $42 million in SpaceCo, otherwise known as Karman Aerospace, following the company's IPO and debt recapitalization. Also, as expected, we completed the restructuring of our investment in EG&S, and most of our exposure has been restored to an earning asset status. In reflecting on our outlook for the next quarter or two, I'd like to leave you a couple of comments. We've absorbed much of the anticipated surge in portfolio liquidity events, which, if you're keeping a tally, has totaled $289 million since 9/30, roughly 36% of the portfolio that's been exited. That said, our current pipeline of expected fundings is very healthy and should easily outpace anticipated repayments to put us back on track to grow our portfolio. Given some of the recent market volatility, we expect the certainty of a private credit solution approach to the market to continue to resonate with the private equity community as it did in 2022 and 2023, and in fact, we're in the process of closing several deals with new sponsors. In addition to recycling the wave of investment exits of the last couple of quarters, we expect to continue to benefit from our incumbent position as the originator, lead lender, and in some case, equity co-investor in the newer vintage growth-oriented business closed recently as they look to grow through acquisition or expansion and support the depreciation of their equity position. We ended the quarter with a conservative leverage position with debt at 62.5% of NAV, and the bulk of our bank credit facility available to support the growth of our earning assets and shareholder distributions in the coming year. I would like to turn the call over to Nicole Schaltenbrand, Gladstone Capital's CFO, to provide some of the details on the results for the quarter. Thanks, Bob. Good morning. During the March quarter, total interest income was unchanged at $21.3 million as the weighted average yield on our interest-bearing portfolio declined from 13.1% to 12.6%, mainly with the 36 basis point decline in the average SOFR rate from last quarter, which was offset by a 6.3% increase in average earning assets for the period. Total investment income was $21.6 million, which was down $400,000, or 1.8% from last quarter, with reduced levels of fees and other income for the quarter. Total expenses declined $400,000 quarter-over-quarter due to lower professional fees, other expenses, and net management fees. This was slightly offset by a $300,000 increase in interest expenses with higher average bank borrowings. Net investment income for the quarter was unchanged at $11.2 million, or $0.50 per share. Net increase in net assets resulting from operations was $8.8 million, or $0.39 per share for the quarter ended March 31, as impacted by the realized and unrealized valuation depreciation covered by Bob earlier. Moving over to the balance sheet. As of March 31, total assets declined to $777 million, consisting of $763 million in investments at fair value and $14 million in cash and other assets. Liabilities declined $37 million to $299 million as of March 31 and consisted primarily of $255 million of senior notes and, as of the end of the quarter, advances under our $294 million line of credit of $25.1 million. As of March 31, net assets declined $2.3 million, or to $478 million, from the prior quarter end with the unrealized depreciation, and NAV per share fell $0.10 from $21.51 to $21.41 as of March 31. Our leverage as of the end of the quarter declined to 62.5% of net assets with the reduced bank borrowings. After the end of the quarter, we received $42 million from the payoff of our debt investment in SpaceCo, as covered by Bob. With respect to distributions, monthly distributions for May and June will be $0.165 per common share, which is an annual run rate of $1.98 per share. The board will meet in July to determine the monthly distribution to common stockholders for the following quarter. At the current distribution rate for our common stock and with the common stock price at about $25.26 per share yesterday, the distribution run rate is now producing a yield of about 7.8%. Now I'll turn it back to David to conclude. Thank you, Nicole, Bob, and Erich, and Nicole. You all did a great job informing our stockholders and the analysts that follow us. How are we doing? In summary, I think it was another solid quarter for Gladstone Capital. This team maintains their whole portfolio, as well as putting new deals on the books, also managing leverage as well as pricing disciplines on each thing that we close. A couple of good deals, that $46 million that Bob mentioned, I think those are going to be great performance for us and a good backlog as well. The company has a very, very strong balance sheet when compared with others in the industry, a healthy backlog of deals. We think we know how to price, and we're doing a good job. In summary, we're going to keep up the good work and keep going. The company continues to stick with its strategy of investing in growth-oriented, lower middle market businesses with good management. That's the key to the future of this company. Many of these investments are in support of mid-sized private equity funds that are doing buyouts or just needing to grow an existing portfolio company that they have. They're looking for experienced partners to support the acquisitions and growth in the future. We follow along and have some really good people that we work with. This gives us an opportunity to make attractive interest-paying loans and small equity investments along the way and support the ongoing commitment to pay cash distributions to our stockholders. That's first and foremost in our mind of keeping those dividends going out to shareholders. Now, operator, if you'll come on and tell our callers how they can ask some questions about the company. Yes, of course. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your light 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 while we poll for questions. Our first question is from Mickey Schleien with Ladenburg Thalmann. Please proceed. Yes, good morning, everyone. Bob, I want to start by asking you, how do you see the portfolio and NAV performing with both the broadly syndicated loan and private credit spreads widening in April? Half that question's easy, Mickey. We don't really have any syndicated loans anymore, so that's not really relevant for us. In terms of the portfolio, most of the widening has happened at the more competitive edge of the market. The upper middle market portfolio spreads had really compressed, frankly, beyond what I think the returns would support as indications of deals clearing in the low fives or high fours spreads over SOFR. Given that the capital market spreads had backed up somewhere between 60 and 100 basis points, that just didn't work anymore. It's that end of the market that I think is backed up more. From our perspective, just to give you additional color, the deals we closed last quarter averaged north of seven over, so we were a couple hundred basis points wide of the market to begin with, and average leverage continues to be well under three turns. We are not expecting much of a degradation in value given the spreads that we currently have or the leverage profile of our portfolio. Frankly, more broadly speaking, with the exception of a couple names that I cited, we are still looking at an average yield that is well north of most of our BDC peers and an average level that is significantly lower. I do not think we are going to see quite the same degradation or marks on a value perspective that I think you are expecting from some of the other larger participants in the market. That's good to hear, Bob. I appreciate that. A couple of questions on tariffs. How do you see Sea Link and RPM Freight performing as tariffs are starting to impact shipping volumes? Good question and very insightful targets. Generally speaking, we've been obviously concerned about what this is going to mean. It's actually turned out to be somewhat different than we expected. With respect to RPM Freight and Sea Link, what we're seeing is smaller companies that we invest in, domestically focused companies for the most part. There are major changes happening in the supply chains for most of the big players in the market. If you're in the auto market, the whole market is now being thrown open. Our domestically focused business, which have very customer-centric focuses, very responsive and able to change and evolve their operations, frankly, are almost advantaged in this marketplace. In the case of somebody like in RPM Freight, their business is actually up because cars and shipping and asset-heavy businesses are not able to change and morph with the change in flows of the business as quickly. The same thing is happening at Sea Link, where they are able to morph their operations, grow their domestic capacity, and take on things that they might have been producing in China that they now can produce here, and the customers are willing to accept a higher price as a result. What we are finding is the large platforms that have a difficulty managing are looking for responsive domestic service providers that can help them deal with the shift. We are seeing, even in some of our other auto-related businesses, there is one other of note, we are seeing big guys call us and say, "Can you help us? Can you take on this business?" It's actually an advantage right now for some of these businesses because they have capacity and they're focused, and the big guys have a hard time adjusting to the changes as quickly as the market's shifting. That's really welcome news and a little surprising. How about within the manufacturing segment of the portfolio? Could you give us a sense of how much direct exposure there is there to tariffs? I'll use two examples. One, we closed a dental labs business last year, a very well-run company, a number of manufacturing facilities in the U.S. It was a business that was building up their domestic manufacturing capacity in an industry that traditionally has outsourced some of that production to China. Because this company had manufacturing capacity, was focused on domestic, was growing their business, and is proportionally greater, more advantage in scale to domestic manufacturing, that business is actually doing very well and the margins are widening. They are going to add some additional capacity and are going to face some tariff issues on some of their imports, but comparatively are doing pretty well. From a manufacturing perspective, given the fact that we predominantly focus on domestic operations and we are very supportive of adding capacity because of the accreted benefits and margin that that generates, that business is doing very well and will likely acquire other operators to continue to scale. In terms of other manufacturing businesses, again, it is the same kind of situation. Everyone is trying to find ways to manufacture things domestically to grow their business. Our plants and our backing of some of these capabilities are going to add additional customers as part of the process. It is going to be a lift. I think the only challenge we see on the tariff side is if we are importing finished goods. Finished goods are going to get expensive if they are coming from offshore. In those cases, we are most focused on areas where we are hopefully equally exposed to that. If all of the industry is importing offshore, using an example not relative to our portfolio, but if everybody's importing sneakers, everybody's going to have the same issue with respect to pricing. The bigger question's going to be, how much is the market going to contract when the pricing of those products has to change? For the most part, that's not really our issue. It tends to also depend on the overall margin. A high-margin product is a relatively small COGS component. The tariff is not going to make as meaningful a difference in the purchase price for that product. Focused on domestic, focused on high margin, it's not going to be as dramatic as it gets to the retail price and the impact for the underlying market. What that means relative to recession, what that means relative to overall, not clear, but we're feeling at the moment in a relatively safe spot on the whole tariff question. That's excellent. One last question for me, just a housekeeping question. Is the EG's restructuring going to generate a realized loss for you? It may generate a very small loss. As you will note, our markdowns on that one last quarter were fairly meaningful, and we anticipated where it was likely going to go. The business is performing pretty well, so it is going to be a very small loss. We will have a significant equity investment on a go-forward basis, but very minor on the loss. I think you said the debt's going back on accrual, if I heard correctly? Yes. Okay. I appreciate it. That's it for me this morning. Thank you very much. Thanks, Mickey. Okay. Next question. Our next question is from Erik Zwick with Lucid Capital Markets. Please proceed. Thanks, and good morning, everyone. I wanted to start with a question. I guess maybe if you could provide an update on the pipeline as it stands today, and kind of particularly interested in the size today relative to maybe three months ago. Curious if the volatility and uncertainties in the markets have impacted that. Also curious about the mix between new and add-on opportunities. Thanks for calling in. In terms of the backlog, we're probably as healthy in the backlog as we've been in quite some time. I would ballpark somewhere between 8 and 10 deals that are advanced stages of discussions. Probably half of those have been approved on our due diligence or documentation. Order of magnitude, that could be $100 million-$150 million of total aggregate volume. If you look back at what we've been closing on a quarterly basis, the last couple of quarters, I think Q4 is always a big quarter, and that's part of the December surge. Q1 is always a light quarter, which is obviously why the numbers were down a bit. When we think about $50 million-$75 million of originations in a healthy quarter, I think we're in pretty good stead to hit that kind of benchmark this quarter. Most of the traffic today is new. With the proportional of exits that we've had, the organic growth of the existing portfolio is a little bit more modest. There are a couple of add-ons that we are currently tracking, but I would probably say right now it's probably 80% new and 20% add-ons. I would expect that add-ons to grow over time, but it always takes a little while before they get past the first burn-in period of the first year and the new management team and the reporting regimen and start to search out the next stage in their growth opportunity. Some of the new vintage assets are probably still a little early before they're going to take on some of the expansion opportunities. Does that help? Yes, that was great. Thank you. Next, switching gears a little bit, you've addressed kind of tariffs quite a bit. I'm curious if you have any portfolio companies that have exposure to government contracts, just with regard to DoD cuts, reduction in the size and employees of some government agencies. Do you have any exposure there? If so, what actions do you take to mitigate or kind of work through those? Let me quickly run through it. I don't believe we don't, I mean, the areas where things are getting hurt most would be services or staffing-oriented contractor business. And we really don't play in that sector. It's always been a bit challenged. It's more of a body shop with a finite margin. That's not, and it tends to be a relatively low-leverage situation. We don't have many of those. The government contracts that we would see would probably come through some of the defense-oriented supplier businesses. Defense continues to be a pretty solid marketplace. We have exposure to that and a couple of our precision manufacturing businesses that are still seeing good order flows and processing volumes. So really not seeing anything on that side. The last piece that I would say is we do have some exposure in the healthcare world. Medicare and CMS are still a big player in the overall healthcare field. At this point, no read on what that's likely to mean or whether there's any fundamental changes. Obviously, most of our healthcare-related businesses are modest in their margins. At this point, we haven't seen much coming out of those contract or terminations. That's helpful. Thank you. Last one for me, you mentioned the unrealized gains in the quarter were primarily driven by three investments, but you expect improvements in their operating results over the rest of the year. Just curious kind of what you're seeing if it's company-specific for each of those three, just given I think there's some concern that the economy's weakening. Curious what drives your confidence in the improving results there. A lot of hard work and focus on what's going on. I would say oftentimes these smaller businesses face a couple of key issues. One is they have customer concentrations. If they lose a customer, it will take some time to replace the customer. They obviously have production capacity. They have efficiencies. They have capabilities. Replacing a customer can be fairly meaningful. That was probably a big piece of a couple of those deals. Secondly, in terms of capacity investments and bottom-line performance, there's also occasionally management turnovers. We have to bring in new blood, whether it be on the operating side or whether it be on the sales side. Oftentimes, adding sales resources is part of the equation to continue to get past the J curve in the investment in some of these businesses. There are some management turnover changes and supplements happening in a couple of those portfolio companies. Then we look at investments, us as well as others coming in to continue to invest in growth of business. Most of the business that we focus on have a long-term growth opportunity. They just may not have had a very good quarter relative to that long-term growth opportunity. Based upon the trend lines of the three businesses, we feel very good that they are attacking those three issues. The outlook is positive. They are currently servicing all of their debts, and there is a reason for their being and their growth opportunities on the horizon. Those are the three factors that I would focus on, and I do not see in any of those three cases tariffs or near-term economic factors fundamentally changing them. I mean, when you think about precision manufacturing, my earlier comments I think hold. When you think about circuit board manufacturing, it is all coming back from Asia, and they are currently looking at a number of additional programs to add. In terms of lab testing, there are still stresses that come from the market and drug treatment facilities. That is not going away either. Those three facets, I think, have an underpinning to the long-term growth profile. I appreciate that commentary there. That's very helpful. Thanks for taking my questions. Thank you for calling in. Okay. Next question. Our next question is from Heli Sheth with Raymond James. Please proceed. Good morning. Thanks for the question. You talked about some tariff exposure in some industries you've invested in: shipping, automotive, healthcare. With that, has there been any shift to your investment strategy going forward as a result of these tariff implications? I wish I could say there's been a fundamental shift. I think we have to look at where the market is evolving and where the opportunities are. I mean, I think we've always had some healthcare. I think we've always had precision manufacturing because of the customer relationships and the revenue visibility. I don't think that there's really been a fundamental change. I think more recently we've probably done a little bit more in the way of services. I think that's a more active marketplace. We are also seeing shifts in the marketplace. Not that we're necessarily focused on them, but there's an awful lot of contractor industrial services type of businesses that are being sold or invested in that I think may reflect kind of the change that you're referring to. At this point, that's not a primary focus for us. We are looking for revenue visibility and long-term sustainability. Some of those contracting businesses can be short-cycle type businesses where you may not have that long-term view, and the competitive barriers may be more limited. I think we are seeing some of that change, but it is not affecting our portfolio, nor has it affected our strategy at this current time. Understood. Thanks. And then just one more quick one from me. Where do you see leverage going for the rest of the year? Do you still expect to move the leverage up in the last two quarters of this year, despite the levels of repayment activity thus far? We're working as hard as we can to get it back up again. We really feel like we've gotten past the wave of prepayments and really feel like we need to increase the leverage. Ultimately, the company needs to get towards a billion dollars of total assets under management for a variety of reasons. I think we have the equity base to support it. We just don't, at this point, have the assets and the leverage profile that are going to get us there. We're going to work as hard as we can to get to those without sacrificing our yield and our leverage disciplines. It's hard to make it up in Q1. That's not a big quarter for us. We think over the balance of the year that we can do that. Obviously, the gulf between where we are today and 90%-110%, which was our target, has gotten further and further away. If we could find $150 million-$200 million of net originations and get our leverage up to 90%-100%, I'd love to do it, but it's probably going to be two or three quarters before we get up to that range. Just looking at it from what the government's doing too is that onshoring, which was announced at least two years ago, we started to move away in all of our business from things that were manufactured in China and other places. We had one shoe company I remember was a very nice company, but they were making all their shoes in Vietnam. I turned that one down because I did not want to be against what's going on in the marketplace. That is, all this onshoring as they're going through now fits right into what we were thinking then as well. I think we'll make a meaningful increase over the next six months. It is a big change in that regard because we now do not look at Asia or other places that are not onshore. That is a change in our business strategy. That's the only big change going on. That makes sense. Thank you. Appreciate the call. Thank you. There are no further questions. I would like to hand the conference back over to Mr. Gladstone for closing remarks. We had another good quarter, and we appreciate all of you calling in. We will see you next quarter. That is the end of this message. Thank you. We will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.