Fidus Investment Corporation

Good morning, everyone, and welcome to the FIDUS second quarter 2025 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's remarks, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star then two. Please note that this event is being recorded. I would not like to turn the conference over to Jody Berfening. Please go ahead, ma'am.

Thank you, Cole, and good morning, everyone, and thank you for joining us for Finest Investment Corporation's second quarter 2025 earnings conference call. With me this morning are Ed Ross, Finest Investment Corporation's chairman and chief executive officer, and Shelby Sharon, chief financial officer. Finest Investment Corporation issued a press release yesterday afternoon with the details of the company's quarterly financial results. A copy of the press release is available on the investor relations page of the company's website at FDUS.com. I'd also like to call your attention to the customary safe harbor disclosure regarding forward-looking information included on today's call. The conference call today will contain forward-looking statements, including statements regarding the goals, strategies, beliefs, future potential, operating results, and cash flows of Finest Investment Corporations. Although management believes these statements are reasonable based on estimates, assumptions, and projections as of today, August 8, 2025, these statements are not guarantees of future performance. Time-sensitive information may no longer be accurate at the time of any telephonic or webcast replay. Actual results may differ materially as a result of risk, uncertainties, and other factors, including but not limited to the factors set forth in the company's filings with the Securities and Exchange Commission. Finance undertakes no obligation to update or revise any of these forward-looking statements. With that, I would now like to turn the call over to Ed. Good morning, Ed.

Good morning, Jody. And good morning, everyone. Welcome to our second quarter 2025 earnings conference call. On today's call, I'll start with a review of our second quarter performance and our portfolio at quarter end, and then share with you our outlook for the second half of 2025. Shelby will cover the second quarter financial results and our liquidity position. After we have completed our prepared remarks, we'll be happy to take your questions. At a high level, Vitus' second quarter results demonstrate the health of our portfolio from a credit quality perspective. the durability of our investment strategy of generating attractive risk-adjusted return and preserving capital over the long term, and the strength of our competitive positioning in the fragmented lower middle market. Although economic and tariff policy uncertainties dampened M&A activity during the quarter, we converted lending opportunities from our pipeline of both new investment opportunities and add-on investment. Relying on our longstanding relationships with deal sponsors, industry expertise, and investment experience in the lower middle market, we continue to carefully and purposefully select high-quality companies that possess, on the whole, sustainable competitive advantages and resilient business models that generate cash flow to service debt and support growth. Our debt portfolio continues to perform well, generating higher adjusted net investment income in a competitive environment. For the quarter, adjusted NII was $20 million, compared to $18.4 million for Q2 2024, with fee income accounting for about half of the $1.6 million increase. On a per-share basis, adjusted NII was 57 cents for both periods, which takes into account the increase in average shares outstanding resulting from the shares issued under our equity ATM program over the past 12 months. Adjusted NII continues to cover the base dividend with plenty of cushion. For the second quarter, dividends paid totaled 54 cents per share, consisting of the base dividend of 43 cents per share and a supplemental dividend of 11 cents per share. For the third quarter of 2025, the Board of Directors declared a total dividend of 57 cents per share, which consists of a base dividend of 43 cents per share and a supplemental dividend of 14 cents per share, equal to 100 percent of the surplus in adjusted NII over the base dividend from the prior quarter, which will be payable on September 25, 2025, to stockholders of record as of September 18, 2025. That asset value grew slightly to $692.3 million at quarter end, compared to $677.9 million as of March 31, 2025. On a per share basis, Net asset value was $19.57 as of June 30, 2025, compared to $19.39 as of March 31, 2025. During the quarter, we realized a net loss of $7.6 million, which consisted of a $14.4 million loss on the exit of our investment in quantum IR technologies that overshadowed $6.8 million in net realized gain, including a $6.1 million gain from the exit of Micronics Filtration. Originations, which totaled $94.5 million for the second quarter, were comprised of investments in four new portfolio companies, as well as add-on investments. All debt investments in the new portfolio companies were first lien debt securities. and we continue to structure our debt investment with a high degree of equity vision. Subsequent to quarter end, we invested $12.8 million in first lien debt in preferred equity in one new portfolio company, Sonia Toscano. In addition, we received $10.6 million of proceeds related to the repayment of our first lien investment in Choice Technology Solutions. We also recognized a net realized gain of approximately $0.4 million related to two equity distributions. Proceeds from repayments and realizations totaled $109.3 million for the second quarter, primarily resulting from refinancing coupled with an M&A-related exit. As expected, a portion of the proceeds this quarter came from prepayments which resulted in $1.3 million of prepayment fees. Our debt portfolio totaled $1 billion on a fair value basis as of June 30th, 2025, 81% of which consisted of first lien investments, and our equity portfolio stood at $138.8 million, or 12% of the total portfolio at quarter end for the total portfolio on a fair value basis of approximately $1.1 billion, equal to 101.8% of cost. Our portfolio remains well diversified and structured to produce both high levels of recurring income and the potential for capital gains from our equity investments. The portfolio also remains healthy from a credit quality perspective, with companies on non-accrual remaining under 1% of the total portfolio on a fair value basis and 2.9% of the total portfolio on a cost basis. Within our portfolio are some high performers and some companies facing challenges that are idiosyncratic in nature, but overall, our portfolio companies are well diversified by industry and they remain well positioned to service debt given their resilient business models and sound capital structures. In summary, our investment strategy has and continues to work for us. At the mid-year point, our portfolio overall remains healthy from a credit quality perspective and is constructed to generate attractive risk-adjusted returns over the long term. Our debt portfolio continues to perform well, generating high levels of current and recurring income, and our equity portfolio continues to offer opportunities for us to realize capital gains. Looking ahead to the second half of 2025 with M&A activity picking up, we have ample liquidity to build the portfolio through careful selection of high-caliber companies with both defensive characteristics and positive outlooks for growth. while staying focused on our goal of growing net asset value over time. Now I'll turn the call over to Shelby to provide some details on our financial and operating results. Shelby?