Greetings, and welcome to the Gladstone Capital Corporation's Third 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. I will now turn the conference over to David Gladstone, Chairman. Thank you, David. You may begin. Well, thank you for bringing all these things together. Good morning to everyone out there. This is the earnings conference call for Gladstone Capital for the quarter ending June 30th, 2026. Thank you all for calling in. We are always happy to talk to our shareholders and analysts welcome the opportunity to provide some updates on our company that is doing very well. Before we get to the last quarter's results, Catherine Gerkis, Director of Investor Relations, will provide a brief disclosure about certain regulatory matters. Catherine, go ahead. Thanks, David. Good morning all. Today's call may include forward-looking statements which are based on management's estimates, assumptions, and projections. There are no guarantees of future performance, actual results may differ materially from those expressed or implied in these statements due to various uncertainties, including the risk factors set forth in our SEC filings, which you can find on the investors page of our website, gladstonecapital.com. We assume no obligation to update any of these statements unless required by law. Please visit our website for a copy of our Form 10-Q and earnings press release for more detailed information. You can also sign up for our email notification service and find information on how to contact our investor relations department. Now, I will turn the call over to Gladstone Capital CEO and President, Bob Marcotte. Good morning. I will cover the highlights for the quarter a few comments on the near-term outlook for the company. Beginning with last quarter's results, fundings last quarter totaled $82 million included four new investments totaling $67 million and $15 million advances to existing portfolio companies. Exits and repayments came in at $40 million, net originations were $42 million for the quarter. Interest income for the period rose 4.7% to $24.3 million on higher average assets as our weighted average debt yield of 11.8% was unchanged for the period. However, other income declined from the large prepayment fee received last quarter, total investment income declined $1.5 million to $24.5 million. Interest in financing costs rose $700,000 with increased borrowings, which included the $60 million December 2029 note issued in the period. Net management fees declined $1.1 million with the increased origination fee credits. Net investment income declined by $800,000, largely on lower one-time prepayment fees to $11 million or $0.49 per share for the period. Net portfolio appreciation came in at $3 million, driven by unrealized portfolio appreciation as our gainers outnumbered the decliners by a 2% to 1% margin. With respect to the portfolio, the investment portfolio composition is largely unchanged, with first lien debt and total debt investments at 71% and 91% of the portfolio at cost, respectively. We're pleased to report that the leverage and return profile of our new debt investments last quarter were all first lien and with weighted average leverage under 3x EBITDA and an average 7% spread over SOFR. Our healthcare and education sector concentration declined as we elected to exit Giving Home Healthcare and redeploy the capital to higher returning investments. As of the end of the quarter, our non-accrual debt investments increased to 5% with a cost basis of $46 million or $26.7 million or 3.1% of our debt investments at fair value. The credits added are Lone Star Circuits, a Texas-based printed circuit board contractor, and eegee's, an Arizona-based quick-serve sandwich chain. Both credits are Gladstone controlled investments and have recently undergone senior management changes and are in the process of developing additional revenues and expense reductions to return them to earning asset status. As far as the outlook is concerned, since the end of the quarter, received an anticipated prepayment of Imperative totaling $12 million, which will eliminate our exposure to the oil and gas sector. We anticipate a slightly larger prepayment this week, which should reduce our PIK interest income in coming quarters. Our committed investment pipeline is well more than the recent repayments and includes several attractive follow-on investments in existing portfolio companies which are continuing to scale. Between upsizing existing credits and new investment yields, we are not expecting our weighted average yield to be negatively impacted by these reinvestment activities. Our leverage position ticked up at the end of the quarter with net debt at a modest 100% of NAV, and we expect to continue to use our floating rate bank facility to support our near-term investment activities. Now I'll turn the call over to Nicole Schaltenbrand, our CFO, to provide details on the fund's financial results for the quarter. Nicole. Thanks, Bob. Good morning, everyone. During the June quarter, total interest income rose $1.1 million or 4.7% to $24.3 million as the average earning assets rose $28.4 million or 3.6%, while the weighted average yield on our interest-bearing portfolio was unchanged at 11.8% for the period. Total investment income was $24.5 million as dividends and prepayment fee income declined from the large one-time payment in the prior quarter. Total expenses declined $700,000 or 4.7% versus the prior quarter due to a decrease in net management fees of $1.1 million and higher closing fee credits. Other expenses also fell $300,000, mainly due to lower legal expenses. These factors were offset by a $700,000 increase in interest expense. Net investment income for the quarter fell to $11 million or $0.49 per share or 109% of cash distributions per common share. The net increase in net assets resulting from operations was $13.3 million or $0.59 per share for the quarter ended June 30th, as impacted by the unrealized valuation appreciation covered by Bob earlier. Moving over to the balance sheet. As of June 30th, total assets rose to $970 million, consisting of $953 million in investments at fair value and $17 million in cash and other assets. Liabilities rose $32 million since the prior quarter to $439 million, with a decrease in LOC borrowings funded by the new $60 million, 7% note issue due in December of 2029. The remaining balance of our liabilities consists primarily of the $149.5 million of 5.78 c onvertible debt, $50 million of 3.75 notes due May 2027, and $45 million of 6.25 perpetual preferred stock. As of June 30th, net assets rose $3.1 million to $485.7 million, and NAV per share rose from $21.36 to $21.50 as of June 30th. Our gross leverage as of June 30th rose to 100% of net assets. With respect to distributions, monthly distributions for August and September will be $0.15 per common share, which is an annual run rate of $1.80 per share. The board will meet again in October to determine the monthly distributions to common stockholders for the following quarter. At the distribution run rate for our common stock and with the common stock price at about $19.35 per share yesterday, the distribution run rate is now producing a yield of about 9.3%. Now I'll turn it back to David to conclude. Well, in summary again, it was just another solid quarter for Gladstone Capital. The team is doing an excellent job of sourcing attractive private equity-backed lower middle market investment opportunities. Again, Bob, you're on top of the world again. The team continues to deliver strong earnings performance driven by healthy increases in net interest margins and bolstered net investment income to more than cover the current shareholder dividends. That's 9.3% for a great little company. The company has a strong balance sheet, ample borrowing capacity to grow our investment portfolio and continue to support our shareholders with dividends. We love dividends here, and we love paying them out to our folks. I'm going to stop now and call on the operator to tell people how they can ask some questions, and we'll try to help you out there. 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 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 key. One moment please while I pull for questions. Thank you. Our first question comes from the line of Erik Zwick with Lucid Capital Markets. Please proceed. Thank you. Good morning, everyone. Bob, I think you may have touched on this a little bit in talking about the expectation for the portfolio yield to remain kind of relatively consistent, but just curious if maybe you could give a little bit more detail in terms of the investment pipeline today. One, in terms of the size of the pipeline relative to maybe three months ago, then also the spreads that you're seeing today and how they compare to the existing portfolio yield. Sure. Erik. The pipeline is pretty strong. Most of our investments are looking for acquisitions. In this marketplace, strategic add-ons to these small credits have huge equity appreciation opportunities. We are seeing, I don't know, anywhere half dozen plus or minus of additional add-ons to the portfolio. I would expect that to be a meaningful percentage of the pipeline on a go-forward basis as it was last quarter. In addition, I would say the opportunities are not slowing down. In fact, we're probably raising the bar given where we are in our leverage profile. The result is, ±$75 million a quarter in originations is a relatively easy mark. It's consistent with what we did last year. We're also seeing fewer repayments. The repayment velocity has slowed down a fair bit given what's gone in the marketplace. $35 million-$50 million of repayments and exits a quarter put us in a position where we could see fairly consistent net asset growth. Obviously, that's tempered by where we are in our leverage profile. I will say- We would expect to continue to grow modestly. In light of those competitive dynamics, leverage yields in and around the high 6%, low 7%, I think is where we would expect to continue to participate. As a result, we really wouldn't see an effective yield degradation to where we are today at 11.8% as the average. That's obviously excluding any increases in underlying rates for that to happen. I think it's pretty much the same as we experienced this quarter. I will say that the one thing that we continue to see is the lower middle market. There's a lot of deal opportunities. It's really finding the ones that fit our credit profile and the organic growth that we're looking for. I think some of our peers are continuing to see similar flow volume opportunities. It continues to be a strong market for us. No, that's great color. Thank you. The second question for me, just kind of bigger picture as you look across your portfolio, very diverse from an industry perspective and kind of end customer. There's a lot of talk about kind of a K-shaped growth in the economy and the lower-end consumer having some difficulty to some degree. I know you don't have a whole lot of exposure there, but just thinking maybe about eegee's and maybe other things. Are you guys seeing any kind of real signs that there's kind of this bifurcation or separation in the growth of the economy? If so, how are you managing that and thinking about the growth that you just mentioned going forward? Traditionally we have not done a ton of consumer-facing businesses. It doesn't provide the same revenue visibility that we typically look for to support the cash flow leverage that we put on these businesses. We do have a few. You mentioned eegee's. We have a couple of restaurants. Obviously, facing a variety of pressures. I don't think there's any doubt that consumer spend has softened. Tractions, check size, and costs are a challenge in a business like that. That's a very small snippet of our portfolio. I will say we have other consumer-facing businesses that we have gone through adjustments and are seeing strong momentum. Positive movement in some of the other restaurants that we're invested in. Positive movement in the apparel business that we have that's called Xcel, which is a wetsuit-type business. Structured appropriately, I think we are seeing decent momentum in some of the consumer sectors. That's a very small portion of our overall portfolio. Most of our businesses are industrial precision manufacturing suppliers to large-scale companies, including aerospace and defense-type businesses. The backlogs are strong and continuing to grow. The only thing that I would add in that category is in prior quarters, we talked about the ability to bring production back to the States. We are still seeing some of that. I would also add tariffs and commodity prices are disrupting some of that because to source it domestically, given some of the steel, copper, and other commodity prices, it's still extremely expensive. Domestic manufacturers are hesitating in moving as much production back to the U.S. in the face of very expensive commodity prices. We're still seeing a fairly robust demand, but it's tempered by some of the tariff-related impacts on some of the raw materials. I guess what I would say is the manufacturing businesses are strong. We are looking at, obviously, businesses where there's a high degree of automation to improve operating efficiencies and cost structure. Thank you for taking my questions. Certainly. Thank you for calling in. Next question. Thank you. Our next question comes to the line of Christopher Nolan with Ladenburg Thalmann. Please proceed. Hi, thanks for taking my question. On a follow-up to Erik's question, you mentioned leverage in the high 6%, low 7%, which seems to be a little bit above some of the other BDCs I cover. Is that really a function of their focus on long contracts so you have a better view in terms of what the cash flows are and so forth? To be clear, that was spread, not leverage. Our leverage portfolio last quarter, as I mentioned, was an average of 3x EBITDA. Our spreads are typically in the high 6%, low 7%. Okay. Thank you for the clarification. That was my misunderstanding. On your comments that you're seeing a lot of opportunity in the lower middle market, do you view it as more of a buyer's market? What does that say about where private equity is in terms of their growth phase? I think there are certain sectors that get hot, and it becomes a little bit more of a bidding war. If you've got 15 platforms that are doing roofing or doing HVAC or doing dental, and they're all looking to add contribution margin and scale their businesses, the ability to buy those businesses on attractive multiple gets bid up. It's purely a flow question. In other sectors where it's maybe not as active or there aren't as many buyers chasing the business, we're continuing to see reasonable margins. I think if you go back to some of the detailed stats that are available, I'll give them a plug, GF Data does a lot of research and disclosures around sub-$100 million transactions. The leverage multiple for those transactions has been remarkably consistent at roughly 7x-7.5x EBITDA. On average, it's still attractive multiples. There are certain sectors where high-quality companies or hot sectors can get bid up. For the most part, there's still plenty of opportunities. Frankly, we're seeing both the lower middle market buyers and also some of the pledge funds or independent sponsors playing in the marketplace. It's a fairly wide swath of opportunities in this segment because most of the capital and competition has come at the top of the market, not where we particularly play. Great. Nicole, what was the spillover income for the quarter, if you have that? The accumulated spillover is a little over $6 million right now. Great. Thank you for taking my questions. You're welcome. Next question, please. Thank you. Our next question comes from the line of Heli Sheth with Raymond James. Please proceed. Morning. Thanks for the question. Going back to sort of M&A and the activity you're seeing in the market. Obviously, this quarter saw more originations than last. Are you seeing that activity build throughout the rest of the year? Are there any more catalysts down the line that will drive more activity? Then a quick second part on that. Are you seeing any bifurcation between the lower middle market versus the larger market? Is there anything specific that you're seeing in the lower middle market? Seasonally or catalyst-wise, we typically see a smaller quarter, a lighter quarter in the first quarter of the year as we experienced this year. People putting their numbers together and getting things sorted out. Over the balance of the year, we tend to see fairly consistent flow of opportunities as we did last quarter. There does tend to be a bump as we get to the end of the year. Fourth quarter tends to be stronger. Over the course of the year, based on last fiscal year's experience, the originations were roughly $350 million. If you look at the pacing, that's pretty much where I would expect us to tend to head towards this year. As far as catalysts are concerned, I think the only question that might damper that, quite frankly, is what the rate outlook is going to be. If rates were to move up, I think that does cause some repricing, that does cause some valuation adjustments that are required. That might slow down some of the activity pending those reset expectations. In terms of other catalysts or expectations. Most of the businesses that we are focused on, the companies are modestly leveraged and are generating reasonable growth. Their choice is to deleverage and repay us or continue to make acquisitions to, as I said, scale into their infrastructure and their management capabilities. I think the appreciation opportunity of continuing to buy businesses that are reasonable multiples in seven plus or minus range, combined with the scale benefit that they get once they get EBITDA over $10 million or $20 million, and the multiple expansion comes about. That's a pretty compelling opportunity for them to generate additional equity gains. I would expect there's a natural continuation that will come, adding to some of the smaller credits in the sectors where we're currently exposed. To me, even if some of the new investment volume slows, I think the consistency and the opportunity for equity appreciation on the existing portfolio assets is particularly attractive and continues to be so. I think we just need to make sure that we stay out of the sectors where there's a lot of competition and their prices are getting bid up because the natural consequence. There will be asks for higher level of leverage when those companies trade at higher multiples, and that increases our credit risk significantly. It also diminishes our control and competitive dynamic. The larger the transaction, the less capable we are to be able to write the entire ticket. Two, the larger the transaction, the more likely some of the larger funds or the more aggressive banks might want to weigh in, and that's obviously going to be compression of the underlying spread. From our perspective, it's using our incumbency in those lower situations to continue to grow those credits, and I would expect that to be a meaningful contributor over the course of the balance of the year, regardless of the economic environment that we're facing. Thanks. Got it. Appreciate the color. If I can just sneak another quick one in. On eegee's, obviously redefaulted this past quarter. Is that just the overall macro or were there any new big potholes with the assets? I would say the challenge, we have mentioned this in prior quarter calls. The market for consumers in the heavily Hispanic communities, particularly as it relates to southern Arizona, has been a fairly difficult operating environment for the better part of the last year. That consumer and population profile has been negatively affected. The cumulative element of that has certainly been taxing. There were several initiatives to try to scale the revenues that were less successful than we expected. We are retooling that in order to manage it going forward. Some of the expenses will come out as a result of some of that change strategic direction. It's not anything in particular. It's the cumulative effect of a tough consumer market, some actions as it related to trying to improve the business, and a retooling in some of the strategies that we're using based on what we've been able to experience over the last year that is causing us to recognize there's additional investment probably required to be able to reposition that business successfully. Got it. Thank you. Any further questions? Yes. Our next question comes to the line of Sean -Paul Adams with B. Riley Securities. Please proceed. Hey, good morning. You guys talked a little bit about the juice kind of not being worth the squeeze with some of these high interest industries, HVAC, dental, physician practices, roofing. Moderating around that, does that have any noticeable impact on your pass rate for the next few quarters on deals screened? The broader focus will just be the preexisting held position expansions? I don't think it changes. Obviously, we're always looking for the next growth sector, the expansion opportunities, things that have momentum that is not necessarily coming through in the multiple or coming through in the financing expectations. I use an example of dental. Last quarter, we did fund an add-on to an existing dental platform. That business is now approaching ±$20 million of EBITDA, which is a pretty significant level that makes that company very attractive from an add-on and consolidation to some of the larger operators in the business. I just wouldn't start a new one at that level. I think the fact is that is significantly larger than where we typically enter, and it's probably at the tail end of the existing sponsor's hold period. We're mindful of where those credits are maturing, and we probably aren't going to get on the merry-go-round for another small one in light of some of the market challenges of that business. There are obviously other businesses, as you mentioned, that we are less enthralled with because of some of the traditional competitive dynamics. Some of the businesses, like a roofing type business or maybe a landscaping type business, the barriers to entry are very low. It's a marketing-oriented type of business, labor challenges, competitive dynamics. Those are very difficult businesses to see forward and consistency of the cash flow. We've traditionally steered away from those businesses. It's not going to change our flow. We've never really participated in a lot of those businesses, so it's not going to change the opportunities on a go-forward basis. I think the broad stroke is we'll look at 100-125 deals a quarter, and we'll do four or five. That's the nature of our business. When you add in the continuing demand from some of our existing portfolio companies, the combination gets us to the originations and scale momentum that we've consistently been able to deliver. Got it. Really appreciate the color. Yeah, of course. Thank you. Any more questions? Nope. I'll pass it back on to you, David. Okay. Thank you very much. Folks, we're not getting enough questions in these calls. You need to make some notes to yourself and ask us questions because we get to you through the questions you ask. Anyway, we had a great quarter. Everybody's happy here, and we're going to go out and produce another good quarter. See you next quarter. Thank you. That's the end of this call. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.