FDUS - Earnings call transcript Q3 2020 | Fidus Investment Corporation

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Fidus Third Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker for today, Mr. Burfening. Jody you. Thank ahead. Please go

Jody Burfening

on everyone Ross, Tommy, details Officer. the of joining Investor and XXXX the Thank you, fdus.com. results. press press afternoon financial of Shelby by release telephone are and company's Relations recorded. morning, conference Chief the company's call yesterday using Chairman Executive release available Officer; Investment good for the A copy Fidus Corporation page for earnings numbers and available release. Ed being morning conference press us this quarter I'd is of Chief replay like that With you quarterly Investment website Investment provided Corporation's is call. and Financial Thank ID is Sherard, the the me everyone. the A at Fidus Fidus Corporation's to earnings a today’s remind with third issued in

regarding webcast page the I'd on to In conference cash available call. your addition, also be company's regarding archived conclusion Safe this goals, the potential, Corporation. to on attention forward-looking information statements the replay The following call beliefs, call. call strategies, will flows and of disclosure contain Fidus statements operating including of today's an of results will today Relations customary like future forward-looking Investor Harbor the conference website included the Investment

as Ed. or today to of October Time-sensitive these webcast company's to telephonic Securities limited longer turn may factors, in statements update these the risks, over performance. believes including With or the accurate no factors Ed. time of XXXX, are reasonable with as call forward-looking morning, result based materially XX, results management Actual would be of any of assumptions, obligation are Fidus statements. but like that, and the Although, of uncertainties filings may differ the these now undertakes estimates, not forth on statements to Good replay. a no information I future to guarantees Commission. and revise any at other not set Exchange the projections

Ed Ross

Welcome staying earnings XXXX Good you, conference well. are everyone. I morning, morning, Jody healthy call. and our all good our shelter-in-place the began the friends on and hope earnings co-workers of of Since third portfolio to orders the focused your portfolio. call remarks and quarter first prepared when to our families, to companies on quarter pandemic our I operations. related weigh business my have state

Once the executing normal, of as with As the homestretch my cover done job the On assessment market and move in we'll dealer flexing to dynamics of once the current pandemic your to with to quarter. of new our the in with the business their we what our uncertainties have completed demand third a share I'm report companies M&A on towards on results the liquidity trends you still of have the overall can teams be to activity at end and position. management XXXX. States our plans I levels portfolio. take us first are happy businesses Shelby pandemic going the portfolio the great questions. United we our they again hit in middle prepared remarks, ensure financial Since a economy control. adapting continuity, focusing open in the associated morning's will status lower call, us. this quarter into also

business them accelerate growth while are focusing are openings Some advantage others of on competitive plans. operations, of taking to enhancing

continues to our improve. continue yet, the portfolio woods, the of companies pleased of overall hold health own. out not their to report that are I'm to we Although the portfolio

when portfolio risk quarter risk valuations since second to considered a XX% the the we has low company little than based risk the Our portfolio low first assessment To the operations the more about range. portfolio when and in to on and quarter, is of abated steadily range low was our be in medium XX% of risk that category. in about view medium the the XX% to of

back is range low XX% risk that with investment and the low effects million the been status. is has in the on value this quarter. of of view Trailers do down about $X.X the the medium the by in the Food XX% portfolio risk Service two to in roughly to pandemic. category. fair hit adverse company have investment thirds wrote by still our hard we Mirage on during Accent nonaccrual This Now debt is We accrual

the of This value million, nonaccrual of the we of represents the end quarter, debt when portfolio basis. our equal pick had X% write X.X% spite of appreciation a ended fair merited on and or companies we investments. per $XX.XX per improvement our an on from In performance and balance portfolio portfolio the As at quarter, on down at Foods, the in with the result, of of $XXX.X from a quarter first quarter Accent on portfolio one nonaccrual or improved share fair as three than a nonaccrual end the of outlets companies increase $XXX.X of X.X% the and of to less basis. to a the million, value of end $XX.X some second increased NAV a the our equity third the valuations $XX.XX million share at

outlooks. models of long selectively for see, withstand economic generate working strategy can and industries free Companies operate strong flows business investing cash resilient stresses us. you in As in and possess defensive well companies that with is we know can that positive with our term characteristics that

and was XX.X% quarter XXXX, terms We cost. of their our breakdown fair of September our of portfolio million was $XXX.X market XX as active of three September with portfolio ended In fair construction XX, companies as that of the portfolio, a On investment XX, as the have portfolio follows. sold and companies value basis the investment by underlying metrics, type operations. value equal to of the

XX.X%. equity second subordinated XX.X% lien debt debt and First XX.X%, XX.X% lien debt and investments

is strong to severe with believe stresses. to handle cushions equity structured continue economic well our We portfolio

Turning the excluding realized share, incentive or $X.XX share or quarter, of any XX, per income, we supplemental reported of XXXX, September XX, as for cash of and dividend per attributable year. also gain losses On per declared unrealized regular dividend On a net And Fidus report the October of of to eight Both payable share. supplemental a on to our XX, the stockholders years. Board X. share special dividend of results investment Directors stockholders dividends and consecutive of declared the last dividend to quarterly the quarterly to December as cash the I'm to gains income of $X.X regular period board September net a investment capital record which of to compared define pleased regular the for adjusted $X.XX extending million as share, $X.X XXXX December million, of we per paid $X.XX $X.XX same per paying XX. dividend $X.XX record Fidus quarterly record and fee be will XXXX

of we and net realized receive repayments $XX.X recognize million realizations, and In proceeds gains. $X.X of terms million in

and penalty we Research and a subordinated we million Hoonuit, penalty penalty a pandemic. in health of debt our of equity debt continued lien including debt improving the including of prepayment we $XX.X quality out market to pool We investment number equity well a a on adhering again view In We $X.X disciplines. receive second high of the opportunities receive our of million, prepayment [indiscernible]. in funding investment. on in our season receive participate investment are realized our activity We end, commitment. health the in million second we're caution, $XX approximately of been hitting Pugh invested we payment note The to meaningfully receiving M&A the million, fertile in approximately this quarter, and gain of our of and portfolio. underwriting LLC. our million, full in not supports seeing on impacted of in $X was million improvement $XX.X the middle in payment fair while of of pause in positioned lien is the companies to full have that distributor and path ground $X.X This we gain million in July realized payment our our partial million of strict debt second investment. payment debt on and lower last on by equity of on Associates second portfolio the million including our deal strength exited in on the full sheet, equipment sale among And began businesses microbiology for a in the are debt an investments on $X.X activity. we today. prepayment evaluating a first our Lubricants; the in There debt Based $X.X busy $X staying Subsequent button full regional of quarter terms leading market on And which the during After of lien of Inc. LLC lien deal abundance supplies. exited equity investment exits, a in balance

fairly the encouraging, an nevertheless generating operate year, the we the term, our risk business the the in to on caution attractive end While continuing preserving pipeline we are returns of having is shareholders. of adjusted for abundance with robust a capital of and long as managing and toward focused head interests

financial our Shelby operating call over and Shelby the turn details on results. some to I'll Now to provide

Shelby Sherard

in onetime $X.X income prior fair a the three including to income accrual offset income fee of third than for Total gains was expenses months X.X% to fee. million you related primarily XXXX. return from $X.X versus The XX, the XX. quarter Please XX% increase expenses approximately incentive our companies net capital. in months income decrease the was a million $X million comparative ended A September KX due will earnings and will several Thank commentary more investment liquidity higher fee Ed on XXXX. of with good quarter and everyone. year true ended Total increase prior be A million and comments ups I increase the income in profits of detail close the incentive by in approximately tax for waive due QX, income in million. review incentive primarily of million FIC in million to approximately XXXX our in $XX.X portfolio QX, we estimates increase tax due prior depreciation of note In million waiver interest as provision I to a the income percentage and was on the results capital for $XX.X quarter dividend QX. morning distributions and versus fee $X.X prior QX distributions September X.X for third to $X.X the three million as the providing reported were fee G&A position. elected was unrealized QX. higher value income quarter, $X.X

gains were Excluding in Tennessee, the in QX. expenses accrued in line capital total with QX $XX.X million

incur quarter a expenses in will will tax the As reminder, as fourth annual expense. excise estimated be higher we

XX weighted on was the $XXX.X debentures, September had $XXX.X average $XX X.X%. line million million $XXX As interest on public and of outstanding the SBA debt our rate million comprised of credit. of notes outstanding We million of of debt of outstanding

adjusted In X.Xx of $X.X investments microbiology the income X.Xx equity $X.XX QX attributable months our debt was Net per per million Our Murat and and ratio Associates. losses September $X.XX Research statutory investment or gains versus to depreciation which exit on and and QX. versus million share gains was the [ph] excludes or gain share realized per in accruals NII, from and the QX, for in any by or gains Tennessee of excluding $X.XX share approximately three to NII QX, reversals investment unrealized XX ended share capital leverage debentures. unrealized $X.XX was $XX.X driven exempt investments equity net unrealized SBA in was in on per

investment portfolio as million. value portfolio XX, to September statistics, fair a turning of of $XXX.X total our Now, had

process their Our a excludes company are $XX.X companies quarter, the million down. at cost third that basis of on average investments winding of in portfolio operations the which sold the in end was portfolio three

the yield The origination fully average We computed and investments accretion issue, investments on portfolio have weighted including was cost, on X%. debt and with discount our of weighted investments nonaccrual using of loan if for XX.X% rates is but effective of of as equity any. yield companies Weighted the ownership excluding interest XX. debt fees, diluted original effective average investments average September at equity approximately a XX.X%

into total our line XX Now resources discuss liquidity, available into I'd million, liquidity million September briefly like account to resulting of million. our liquidity have included $XX Taking liquidity of $XX.X $XXX.X we events, capital of availability approximately credit million. and subsequent as of of on of $XXX.X cash our approximately

SBA access FDIC license $XXX.X to SBA under regulatory and We also third to our subject have of additional requirements million approval. debentures

for Ed? call to turn will concluding Ed the I back Now, comments.

Ed Ross

Shelby. Thanks,

Fidus always, like Q&A. dedication and As the I continued their I'd their turn Jimmy and the of team and support. for now thank at shareholders board our work for directors to call to Jimmy? our for hard over will

Operator

[Operator Rowe Bryce Instructions] with from Our first National question comes Securities.

is now line open. Your

Bryce Rowe

morning, Good and Shelby. Ed

this talked already Firstly, it on income the it into wanted about perspective. quarter. the level $X I to We for future you’re the And problems last distributions. about year. be to with just And of from having per dividend going your of spillover year to continues than regular then apparently a distributions talk first end share requirements $X.XX more and earning you're the over distribution dividend this hits have that class

in at terms you carrying kind is thought process any for credit getting point? at and of the are spillover this there you're point of that you how curious about just this board of in amount the distributions that thinking creative So

Ed Ross

Sure. Bryce. Great question,

can lot you imagine, As this topic on board there meeting at week. this was of discussion the a

And a when you would know, do our right us mix. agree, uncertainty there's like still the election world the think from especially not and and making does You in lot decisions had all seem the to to moment. I perspective, today, of of quick at the thing you the that's,

the quite Fidus. performance overall with of frankly, thrilled our are We and outlook,

today, right world correlation we is be Nevertheless, US, with the You to uncertainty supplemental caution a overall know, a the here we of until to is in in a the operating as we're sit approach, thrilled bit more. distribution, also think performance. our making direct fair abates which in bit

closely our well, at dividends look next However, it we at supplemental dividend incremental or would and base include looking quarter to as distributions considering planning least. at the dividend or are making closely which

over think, today, like that? but to that's to fair a do with for think anything Shelby healthy spillover shareholders. So having positive think caution. a add hopefully, We like perspective, position. that's would like position given a you we from world operate spill trying of helpful. we the bit I our just continue we're today, I a to And, We

Shelby Sherard

that we sums and think pretty dividend I No, mean, spillover up on basis. monitoring actively it position I quarterly are about talking the the policy well. a

Bryce Rowe

Got it.

you yield your emergence that's been up follows Ed And could at now? you're unrelated. about you to that now, origination the right Maybe the least activity COVID. pricing so the one maybe compare with evaluating the then obviously, you're evaluating has right to talk pause reopened, And does kind deals portfolio the how current Okay. of pipeline on those speak. deals, within of

Ed Ross

in it's just the question. because and And on all worth Great they hand. touching I of well, market just Sure. think originations go hand as kind probably

perspective, talked took think months I our from And market, three we've call. the completely. this four that or off on about

there. at Things quarter. frankly, last some think to look quite I opportunity to started in up started July. we pick And

on were will You we your been winners. have that QX us were know, than others would deals aggressive were more tell some There the not to I you, ultimately and we point. pricing deals that proposed

August, I post You know, And you, tell know, was expected having very that, it busy. it was Labor Day, And said did. will you to very, get it busier. in

has a flow would pre very COVID. where is I above things say deal pricing So were little And been strong.

of days XX as the out that's ago. fair the time, So same same competition still But a there's bit at there.

we're this meaningfully out just feel a impacted the And it, an by in operating storm news that have of are, of or well, actually we fair abundance bit it's market very of know, we're good with about there's seeing them. good busy. lot there not caution. weathered a been those today. we You And companies the so if we're is And still

Bryce Rowe

and Great, else thank ask it. you. out And some let somebody I'll jump questions. Appreciate

Operator

you. Thank

Robert from comes question Raymond next with James. Our Dodd

open. is line Your

Robert Dodd

Morning, at that. Bryce’s pretty I'm just questions, going repeating the do risk of to much

of and back eight XX there's it scenarios, think the right you right, could of solution on as I COVID that On of QX, on nine, a XX things obviously said, you I now. mean ton dividend And base. uncertainty the front, still eight going you illustrated cover in

you base to under So keeping a and which formulaic what, other been the Shelby as but always supplemental, about say having with the mentioned, talked given periodically. when some where been has it BDC supplemental, it's what's quite consideration is, consideration popular

then So there. formulaic a if But deteriorate COVID of just that situation kind and the been than up does general given very up to that things stays you than quarter, that some rather taking right more economic coverable, now? still situations just material illustrated base was again, thought the just something the could Is onerous uncertain in board, leaving that pretty it having process? every even are weight maybe that the Is what's get base considered?

Ed Ross

the discussed Sure, this sure. as you would and discussed question. an pretty was tell option is on Great that that I and table quarter seriously.

world basis at prepared this are dividend. distributions it's there's considering things, distributes to comments, it remarks, some of performing I because we could obviously are we're formula, variety that or it be those take, or were back in election else, incremental so. makes looking the Or on to It well. just everything be that could some And a next think, sense base the in today be or putting and just for uncertainty could they're still the all a just, it and and in signal with quarter earnings, and funny the a we tried on we a a table. year I incremental quarterly to, our

again. just like on where this are but to are world, those the quarter, table we decision all so we this in And the given be going

to guess the report dividend even February. quarter, we I and we'll that, prior announce in fourth when know, You or

will does discussion they will for topics it, be all us. that So

that's process. have, thought we this. about can And excited we're talk that the So we

that, of there's said shareholders behave the having out know, that a at And moment. think manner the we're thing is right there. trying very a to look, responsible for You uncertainty in lot we

Robert Dodd

I appreciate that also, second basically a that one, color and up. follow if I can

evolved On since either is you're late Labor and the you the of you're market, in activity that type by and in know, to Day. that there of and said before you the type type your the that coming that year seriously have say or this industry those is how where seeing deals a leverage, deals seeing that materially last mean, now going metrics, kind it more deals of would the consider that been however, time kind of up in Is COVID? deals I you're of willing that change from

Ed Ross

the Great, question. larger, today those it say high And junior I'd we quality, about lien where are two ones COVID we're great in Sure. second even lower or environment. are investments that cushions, debt performance, great businesses the seeing quality call a of considering equity obviously, buckets there's basis. more recurring where their market and middle some feel we're revenue that seeing very high

So, number solutions, I we focused doing thankfully, We're or a ago, the revenue businesses, but are investments. more welcoming are on well. say four that than little year we and or clients bit just much same quite a those are providing good first but a solutions probably fit seeing years that four focus those it's lien there to recurring or more today. senior ago, similar three of And, unit three finding in we're still the but some our debt thing, is smaller. And doing were ago, a junior cases, capital, other as success, years different investments, And, type where rocks would of more ones those. those maybe a more

investments. be how lien majority that's will likely of today. that's for the say, market unitranche approaching would large more but kind doing hopefully, I most future So And what foreseeable the or we're helpful, we a be first will of

Robert Dodd

thing. given you closes, It the pricing out it follow by for on everywhere what's is environment bid I markets. that but going very, be essentially you're Not a the up mean, is much forward? risking closing is gone continuing beat us pricing I mentioned, of willing And I than essentially that that some with color? well. line aggressive, necessarily very go? that's deals? case, QX range got environment, Is to on mean, as on if in any aggressive Can in the and the a mean, give would deals, presume holding the willing kind to know, lending being meet you But because, else you to bad you you're Or to pricing you that market you is aggressive pricing. are not I more know,

Ed Ross

question. Great Sure.

that August we to the lenders couple know, market, today in market say markets wouldn't say instances, I the July there be were market. certain You was are meeting there period. than the more is out the I what say would that willing in were were in I the aggressive a would we time

line know, think think, You little COVID. above question, I answering pricing was I I mentioned, a Bryce's the know, you I or pre in as is was where

the to are we're now, repayments So asset a assets. outpace me I going getting to and And quite right we would right that busy we you very willing to quarter. tell degree at We're this there expect, this lot pace will this, originations pricing hold our frankly, without still small don't today. on. to is And But for point. right point, there's the a enhanced go back key the

a hopefully So deals. executing moment, we're busy of but close, number the at executing

Robert Dodd

I lot that One what I we right break you it. color. and but businesses things there that. now. a more rooms on I Accent touch really know companies, are like don't mean, if I it in it's Foods, of not not know obviously, like the I food, does. and to appreciate people mean, portfolio And office can, individual for

can on business? Given COVID it help. that for that us its the pre COVID. for the business? to can had obviously then on mean, about and say you working that and prospects give you before tell Asset vulnerable, from was home you anything Is recovery people Can doesn't obviously what us issues it So seems a I Troubled prospects

Ed Ross

great question. Yeah,

say, and it in hit you company home say I going industry, to that by the and I'd shelter work any what I'm the directives. frankly, this, say. has impacted place, quite but this in Here's operates been from would

of Management’s that's decline the our future. the the profile very business the great of reflects risk job and I doing investments of up sums as the today. I valuation job said matter. to ship think valuation that, we the fact a and for increased nice a the that's, think that pretty So navigating the here good. And sit positioning probably it Having

Robert Dodd

I appreciate you. that. Thank

Operator

Thank you.

question comes Oppenheimer. from Our Chris Kotowski with next

Your now is line open.

Chris Kotowski

make economics buyback it at point, Good to morning and thank it's of But to know the form NAV, in than you. the distributions mean, dividends? I fungible. just I that supplemental heard loud need trading and and dividends very that of in returning of is earning. just clear Because Sure. are I XX% what wondering, compelling. I'm fungible And does curious, repurchases it's share those gets be to returns or at sense some is accounting share ever via just I because extent but versus sense, the somehow, you consider capital an of just in rather your there said about guess very, cash cautious. the you're supplemental capital, distributions just not I'm capital stock out is

Ed Ross

question, Chris. Great

continue we are reaffirmed value $X program of may be always You back pandemic. know, portfolio at we investment in reason, week, March, you're I a that in ways buy value. this that to share we enhance that look reflected in aware, shares for beginning million place have did the was think price. fact And mindful as the stock of our we to repurchase for not shareholder the in And, our

times So we and done have well. that, done other as we've it

leverage got look want our my in at to have, we which to highlighting access maintain that, I said when having believe world, covenants, look liquidity need know, today's back you markets, whole have, mind, capital it's the In to we evaluating our stock, also at in think our worth have buying have ratios. all to a And capitalization, think picture. You but we those. I that is we to the

all as So we talked our equation we it clearly, past well. it's of repurchases, things part that as the share those look make done about something the at we've in and but

helpful. hopefully, So that's

Chris Kotowski

I anyway, talking wasn't thinking I was it that Alright, form. that's distributed that Thank you. me. Again, just was about consider capital for the incremental

Operator

Thank you.

from Our Ladenburg. Mickey Schleien next question with comes

now open. Your line is

Mickey Schleien

where including elevated And world in we're morning, in out Good sort you this you. the environment. you to to to capital, as access your that good deals there's good comment were already so want I sense where, My appreciate you. quarter performers with I is hopeful BDCs, haves and fairly comments are living respect mentioned have trend repayments they Shelby. circle asked. to that a across know have of been third But have of tons and Ed nots and far quarter. that questions of of capital there to chasing growth A the starting is, you're question net have lot My with see a back your portfolio good did market to we're

risk trying coming quarter things from the into this year? to the sector, is ability to meaningful, going portfolio of reconcile and prepayment hard, apart in next at two terms but your is maybe grow I'm the So, time software those underwriting same or how meet

Ed Ross

Sure.

with your I correct. all think, I'd think start I I guess are comments

because assets in high a word are lack quality create mature high are some for of I if demand think the recycle to they're realizations. better people looking or capital sponsors

do instance, if we or but in of there's processes that and don't know two think And the we so sale companies to a not, are that come that chance fruition for middle that's and real they'll they aware, have do. decent all are portfolio there's I

I least, very the in. quarter number the that businesses is of And think be highly excited guess. earlier, And mentioned think, would fair as I say Having new so side, they'll we're wins And we investment a that, to continue my is to incremental be realizations, this strong. and is, and including said I have deal repayments flow are that. busy on about were seeing interested this

And longer. are we perspective I do be continue this diligence to invest able think from our will environment. taking so to I processes in think,

in pricing, that today happening I day. more perspective, third activity. a we win because obviously You got know, the the from bit today, because quarter. of aggressive were here high welcome that's we there's a that's things, of for sit quality lot on fair nothing one there's activity on didn't beat some there's, as and our some But also, reason But and

Mickey Schleien

a lower you thinking change, got be where folks And rates election, may sitting believe group, small owned the the market, next have about family, or to week's middle today those year, to for your in think proprietor of tax by are depending next know, that I a here you flow companies portfolio outcome you on obviously, the potential start the election. a future, otherwise in and starting But that sole of the in into higher a essentially, longer? that go prospect quarter? I'm catalyzing to deal stuff have tax I'm can't into already is the about push what pipeline, taken talking deal asking the flow some would this process quarter potentially the now. that's capital Do rate fourth a that's gains

Ed Ross

part of equation short answer it's think in the equation. very and part Sure, I very that's a I do think manner, of the much

little the bit I but a know, think You a QX well degree. less it'll probably of a extend into as over to

for equation So, part sure. the yes, that's of

Mickey Schleien

know, any accrual? on at Mirage other appreciate portfolio to may there you we full you're and I that trend that that. be Trailer, you that, allow put something that aware should of was be back And companies seeing

Ed Ross

impacted was in make the way Nothing points I orders. two in company is a I meaningful shelter by the place guess, mean, I

and run get companies storm on lot were to definitely depends while. got businesses had back a said time up it that for activity of while a seeing a that's from orders, things, Mirage coming to are as of have that effectively the had you sector, you and would and as fits and to business what lot time some a we things category weathering Having that say in we've in portfolio that, the the and And so due But well. in shut a take hurt what manufacturing companies for fits think demand and in down that pretty a in are that fair of company, and as impacts our portfolio, And which perspective. to in levels bit when you nicely. out what really other have mold figure back I and well reasonable that out I that it of so handful have. figure we market we And of

Mickey Schleien

flip the look about next back [ph] terms something you but and going there in accrual next put as of understand headlands we into we should declined. previously, first quarter its think into general trends the side, the on half or on also valuation And and Is of year? there that

Ed Ross

shut is including them I'm were three they're three shut I mean, number. three up now profile running operator I gym of are the three but say weathering is and down, completely. to best in you them of storm All what our back of their ability, we would have All were that retailers, in all know, down that the valuation. situation risk that, and the of the and reflected three

would back highlighted. say success, what's And in And It's right. that's reflected so running but I then and to their it's, and profile degrees just varying risk is degrees the risk everyone's varying up the valuation. of at come

Mickey Schleien

XX a trailing is valuation we specific just that the of phenomenon? Or was about? something month know sort there there And should

Ed Ross

think that the valuation anywhere, do and we're gets that's all the is look look the quarter's when to have, those to there's we're attention forward things pay obviously current trying third a about LTM, how And and looking don't you to combination we can, we as board and parties looking, whole perspective. at everything at pay we're we the know, valuations, best using anything from so, obviously, picture, we at we're I doing we of we attention and well. specific there is

Mickey Schleien

accounted future drove dividend? and fiber more, from dividend the that we what the in the may, is And company them. dividends what Or I just couple a item? for Okay, the from a more Or materials? expect of maturing, is can if sort nonrecurring near

Ed Ross

want Shelby Sure, you do that? to take

Shelby Sherard

tax just kind And not it part drew that our and it, of was of we But in return, distribution a return would filed Sure, so characterized earnings going re-class I more in of we capital. here that previously had of as do turned and received with loss once that kind therefore, as as again, tax And just more of income, so because a that the XXXX. forward assume I'd probably one characterize was we to out, it up of profits, as access. KX XXXX to time. had

Mickey Schleien

think Shelby. average asked, sort and EBIT? Thanks, your borrower which I today I understand. is to question, average I of debt of And just give EBITDA my us last can the you most quarters, a portfolio's where sense

Ed Ross

get trying page Sure, the here. so to

the What million, XX.X the median the is million. I'm on mean your XX.X perspective, is sorry? So I mean, EBITDA and question? other was EBITDA

Mickey Schleien

Leverage portfolio.

Ed Ross

quarter. X.X Leverage times is this

we single that's at an growth, portfolio XXX. is overall there's in mid saw what in EBITDA growth, LTM to from improvement, the LTM XXX in So digit and

there's some with we saw there. so improvement associated obviously, well. And as flow that cash And

Mickey Schleien

are questions. your great. patience That's your all I and Thank Those appreciate my you. time.

Operator

next Our Securities. Smith comes Riley Instructions] question B. [Operator with from Mike

Your line is now open.

Mike Smith

And to of that performance? actual recovered but my far taking then appreciation. just and there question on as you've unrealized much is follow have What company I'm spread underlying tightening for comps, how equity any from been a thanks percentage losses you. that Everyone, was just up idea? the Most unrealized answer, of XQ? questions. wondering Thank market a operating driven compared so by to

Ed Ross

Sure.

higher of improvements from bit little level also equation on a the valuation came tightening majority answer give the of think evaluation well. I I I'll was part performance. as the piece, spread in that, So would the say improvements

Shelby, there. think augment if about answer it. to I I how that's don't you know, want my So

Shelby Sherard

expectations, and of Now, that equation. the a all but there above, the fair of I that's just or portfolio future right. underlying It's was part of think to amount performance due was

all wasn't due calibration any it really to means. by So

Ed Ross

the question, other the you And question have? Mike, other

Mike Smith

so what loss idea there of how any know, percentage upside, was, question from much the other you There's far here? you've unrealized The only more XQ? recovered could be

Ed Ross

Unrealized answer. loss, it's question a tough to

absent quarter appreciation. had overall, has this a us, drag $XX of so But over think million been the quarters. I for last Accent, Accent we alone, almost the this obviously, pulling several quarter

nicely And guess the to I I about performing or, on exclude that and $XX think said accent, in business is so XX you equation. we're whatnot. is towards haven't whole a NAV QX, accident making performance back If lower overall. a And closer dropped progress that I been than this, million so NAV that's drag by think higher portfolio They some driven has number.

Shelby Sherard

the just as but again, add Accent debt And given XX.X%, a value size QX, of those fair just that, percentage portfolio of was XX% in to larger to about cost. kind about numbers. impacts its now, It's

Mike Smith

helpful. my on for congrats and strong Thank you, quarter. taking a very questions That's

Operator

Securities. comes next with question Rowe our Bryce from And you. National Thank

is open. line Your now

Bryce Rowe

to sorry call here. guys, belabor Hey, the

included in Just one, talked process a in event couple Pugh was ups. or queue follow about that excluding Number include the a companies to sale Ed Lubricants you subsequent they to that currently in the theirs two potential exit? the

Ed Ross

the to Excluding, their incremental Pugh.

Bryce Rowe

SBIC know find maybe the evaluate recent in it's SBA the for over looks if second the some of cost pipeline, would just deals that been be the harder you I some like this Okay. prepaid curious then activity of the And quarter. curious I'm of some eligible. to eligible the you past, Shelby if pipeline know, you question in here deals higher SBA you newer as debentures

Shelby Sherard

start investment the start kind as use here And look repayments the fund down I in a that some forward, good million we maybe September the that get at So SBIC activity. expect have cash that ramping given second we to window. period as through prepay And us deploy were But up excess fund, Bryce, now. then over at cash to the to would you're to was fund. correct, on. timing we And our of from some your before second get the X to of third expect able we be long those would done about winding SBIC I of fund, just we do SBIC sitting QX to us We debentures X.X then time. did point,

have should SBIC fourth the quarter. some in we activity Okay,

Bryce Rowe

Okay, that's to It's great. hear. great

Operator

And from Our Schleien Mickey comes you. Ladenburg. Thank with next question

Your open. is line now

Mickey Schleien

Yeah, How Shelby fiscal for excise on many between we gap? given, the excise should differences capital this there tax on mentioned? accrual how are tax the a net tax just follow and you up think gains the that pieces moving about year

Shelby Sherard

quarterly to going model for taxable tough to estimates particularly in given Sure. that from frankly, a basis. fourth and income projections. happens impact will obviously you quarter on one quite honest, a be But To point the be a anything that's you know, view, of realizations we're guys

to bit in a than us than spillover past, assuming year we're is tax, kind of So at going would would the have get higher probably spillover little taking purposes, given I today. our into just for the excise we what higher the excise have of position kind just I past. And tax modeling a rest that expect in of the look of suggest kind our position,

barring or probably one that's other So any way or to and in the $X.XX realizations again of $X.XX tune the QX. material

Mickey Schleien

you that. Okay, that's helpful. Thank for

Operator

to [Operator remarks. this I'd Instructions] I'm no showing the At Ed like turn any to Ross, further in questions for clothes queue. the CEO back time, call

Ed Ross

you, joining XXXX. Thank quarter great late a everyone on great you speaking with weekend. fourth Have call us look morning. our in and Jimmy. to And for forward We day thank this February you a

Operator

participation disconnect. your now on might and for you conference. thank gentlemen, and Ladies today's program conclude you This does your

Fidus Investment (FDUS) 30 Oct 202020 Q3 Earnings call transcript