Good day, ladies and gentlemen, and welcome to the Gladstone Investment Corporation Fourth Quarter and Year Ended March 31, 2018, Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to David Gladstone. Please begin.

Well, thank you, Latoria. And hello, and good morning to all of you. This is David Gladstone, Chairman of Gladstone Investment. This is the quarterly and year-end earnings conference call for shareholders and analysts of Gladstone Investment's common stock on NASDAQ at GAIN. And we have 3 preferred stocks. They all start with GAIN, and then you have an "M" and an "N" and an "O", so you can go buy a lot of different stocks that we have out there. First of all, thank you all for calling in. We are always happy to talk to shareholders, potential shareholders and analysts. We'd like to give you an update on our company and its investments and provide our view of the current business environment. I wish we could do this more often, but we only do it once a quarter. Also, there is an invitation out to all of you. If you come by McLean, Virginia, where we're located just outside Washington D.C., please stop by and say hello. You see a few people here. A lot of people are always on the road, going places. So now we will hear from our General Counsel and Secretary, Michael LiCalsi. Michael is also the President of Gladstone Administration, which serves as the administrator for all the Gladstone public funds and related companies. He'll make a few regarding -- few statements regarding forward-looking statements. Michael?

Thanks, David, and good morning. 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 are based on our current plans, which we believe to be reasonable. And many factors may cause our actual results to be materially different from any future results expressed or implied by these forward-looking statements, including all risk factors listed in our forms 10-K, 10-Q and other documents that we filed with the SEC. These all can be found on our website, www.gladstoneinvestment.com, specifically the Investor Relations page, or on the SEC's website at www.sec.gov. Now 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. And please also note that past performance or market information is not a guarantee of any future results. Now we ask you to take the opportunity to visit our website, once again, gladstoneinvestment.com, sign up for our e-mail notification service. You can also find us on Twitter @GladstoneComps. And on Facebook, keyword there is The Gladstone Companies. And today's call is simply an overview of our results through March 31, 2018. So we ask that you review our press release and Form 10-K, both issued yesterday, for more detailed information. Again, those can be found on the Investor Relations page of our website. Now I'll turn the presentation back over to Gladstone Investment's President, David Dullum. Dave?

Hey Mike, thanks very much. And welcome to all the participants. I'm very pleased actually today to report that Gladstone Investment had another strong fiscal quarter and a very good year into 3/31/18. We were able to increase our net asset value, which is our book value, from $10.37 a share in the third quarter to $10.85 a share in the fiscal year-end, and for the 12 months from 3/31/17 to 3/31/18 by $0.90 per share or from $9.95 to $10.85 per share. We also experienced a 10.8% growth in our adjusted net investment income year-over-year from $0.74 per share to $0.82 per share. And I'm very happy with these results as year-over-year is a good indicator of the achievement of our plans and growth as we think of our business on an annual basis as we can experience reasonably significant swings quarter-to-quarter. So the year results are important. And based on these results, in April, we were able to announce an over 3% increase in our annual distribution rate to common stockholders from $0.78 to $0.80 a share. We also were able to announce continuation of our semiannual supplemental distributions program with a payment of $0.06 per common share to be made in June of 2018. We fully expect that a significant portion of these supplemental distributions will be made from capital gains. In addition to that, we've seen our stock price increase year-over-year, such that the total 1-year return on investment was around 22%, and this includes the reinvestment of dividends, which has significantly outperformed the Wells Fargo BDC Index, which was actually minus 9%. Now the increased stock price is encouraging as I do believe the market is beginning to recognize not only the growth in the income and distribution that we've been having, but also the…

Thank you, Dave, and good morning, everyone. Starting with the balance sheet. As of March 31, we had almost $611 million in assets at fair value and -- which included $599 million of investments at fair value. Our liabilities at the end of the year consisted primarily of $107 million in borrowings outstanding under our credit facility and about $139 million in term preferred stock at liquidation value. Our net assets totaled $354 million or $10.85 per share as of March 31, which was up $0.47 from December, primarily as a result of net unrealized appreciation of over $18 million this quarter. Moving over to the income statement for the March quarter. Total investment income was $15.4 million versus $16.2 million in the prior quarter. Total expenses, net of credits, were $12.2 million versus $8.7 million in the prior quarter, leaving net investment income of $3.2 million compared to $7.5 million in the prior quarter. As I'll address in a moment, this decline was principally the result of the required accrual under GAAP of $3.6 million of capital gains-based incentive fees this quarter. Interest income decreased slightly as the prior quarter included recovery of $1.4 million from one of our portfolio companies that was previously on an accrual. Other income was 14% of total investment income in the current quarter compared to 16% in the prior quarter, in line with our expectations. Other income such as dividend and success fee income is a meaningful component of total income, but as Dave addressed earlier, can be variable from quarter-to-quarter. And therefore, we look at those items over the term of the full year. Net expenses increased by $3.5 million in the current quarter, which was primarily driven by the $3.6 million accrual of capital gains-based incentive fees, which was accrued under…

Thank you, Julia. Good report. Dave Dullum, good report. Michael, thanks for your report. Team was able to report some great accomplishments this quarter and for the full year. The addition of 2 new buyout investments during the fiscal year and 1 subsequent to year-end in April 2018 closed. Increased the regular monthly distribution for a current annual rate of $0.80 per share. Payment of 2 supplemental distributions as well as a declaration of another supplemental distribution to be paid in June 2018. Continued strong performance of the companies that we invest in, resulting in an increase in net asset value per share of $0.47 per share. That was just for the quarter. It was a total of $0.90 for the year. And with 32.5 million shares outstanding, now you're talking about real money. So it's getting very strong. We believe we can continue this success going into the fiscal year or March 31, 2019. Look forward to giving you a great new report next year this time. I believe the economy is getting stronger. The reduction in regulations, the tax cuts and the general support of the federal government for businesses in the United States has brought on a very positive outlook for many of the businesses that we invest in and many that we see virtually every day. This company is, and the stockholders are, benefiting from this strong economy. But there's still one obstacle to maintaining a strong economy and that is a reduction of government spending. The government is still printing money to cover the government spending. It's at a unsustainable rate. Excess spending has been the downfall of many economies from Germany after World War I to Zimbabwe and Venezuela today, where, in Venezuela, now they are printing VEF 1 billion notes, which are worth…

[Operator Instructions] The first question is from Kyle Joseph of Jefferies.

Just 2 questions from me. I think you guys did a good job covering everything that went on in the quarter. But first, just the yields have been a little volatile just particularly from the second to the third to the fourth quarter. And I know you covered this on the last call, but remind us why the portfolio yield ticked up so much in the third quarter?

Kyle, we had a large recovery from one of our investments that was previously a nonaccrual, so those recoveries were recorded in the third quarter.

Got it. And so ex that, it looks like yields have been fairly stable, is that accurate?

That is accurate.

All right. And then given the environment and all the talk we have about rising rates, can you remind us the impacts on your buyout business, specifically in terms of asset pricing and competition? And lastly, as a follow-up, are you seeing any of those impacts yet?

Kyle, Dave here. So I don't -- not really, other than what I mentioned before, we are impacted more, I would say, by the valuation of the companies, remembering that we are bringing the sort of our own leverage and as a result of that we have the ability relative to your earlier question to sort of establish our own yield on our debt securities, if you will. So for us, the challenge is really more around the multiples being paid for portfolio companies. Now having said that, clearly, if interest rates were to rise dramatically and therefore the cost of leverage to our competition, which is primarily sort of lower and middle market private equity funds, then theoretically, that might help to moderate, perhaps, values that folks are willing to pay, but that would be -- my response around that as opposed to an immediate effect I see impacting us on rate increases.

[Operator Instructions] There are no further questions. I'll turn the call back over to David for closing remarks.

All right. Latoria, thanks a lot for helping us out here, and thanks to all of you for listening, and we'll see you next quarter. That's the end of this call.

Thank you. Ladies and gentlemen, this concludes today's conference. You may now disconnect. Everyone, have a great day.