Dave Dullum: Yes. So Hobbs first, I think, and you’ve benefited by being at our meeting last September. I think you got to see some of the management teams and we really have a very good management team at Hobbs. They actually, without going into detail, are on a positive performance track right now, which is a function of a couple of things. One of the things that really affected them somewhat is they grew so rapidly with new business and new contracts and, frankly, the pricing of those contracts was perhaps not as good as they should have been, so when certain, someone were fixed price contracts and these are percentage of completion basically, so over time, they were actually were losing money on someone’s contract. So we’ve been able, we believe, to wash most, if not all of those out and right now we’ve actually reduced the volume, so the top line number and revenue is lower than it was, say, a year ago, but having said that, the margin and therefore the EBITDA, if you will, is now positive and headed in the right direction.
So, and again, the team is a really good team. We’ve got good folks on the board, so we’ll just keep working on that one and with any, hopefully, by a year or so or maybe less, we might be back frankly on accrual with that one. Edge has a couple of components to it; some things are going on with that right now not negative. We made some changes there recently with one aspect of that business and I don’t feel I can comment any more detail on that other than to say that we’re working with it, and again with any luck we might see some positive effect there but that’s where those two are.
Mickey Schleien: Thanks for that Dave and congratulations to you and your team on the end of a very good fiscal year for Gladstone.
Dave Dullum: Thank you, sir. I hope you’re feeling better by the way and hope we get to see you soon. More questions?
Operator: We do have a question just came in from Bryce Rowe with B. Riley.
Bryce Rowe: Thanks. Good morning. Busy BDC morning for all of us down here so glad to have an opportunity to ask a question. David, just wanted to ask about a comment you made in your prepared remarks. It sounded like maybe opportunities, the volume of opportunities was up and in a good spot but maybe the quality of those opportunities was a little more spotty, if you will. Just any thoughts around kind of where that comment came from and what in particular, you’re seeing with deals that maybe makes them a little less attractive than you’d like them to be?
Dave Dullum: Right. So thanks Bryce and by the way I’m happy you’re able to get on we were going to miss you. I would say, look, from the investment banking side, we definitely are, I think, companies that were being put on the holding near the end of last year are now starting to flow back into the backlog. And there’s this, I feel like, a fair number of new deals that are coming, and we are seeing them. And obviously, we have to be very selective in where we spend our time as we look at new deals. So the ones that we spend our time on are generally companies that we believe we’re going to be able to, frankly, buy for our own anywhere from six to maybe seven, seven and a half times EBITDA. And while we’ve been clearly in some processes where when we feel like that’s a good value, we’re not even getting to go to a management meeting because there are other people out there that are eight to nine times.
And so that’s part of my comment, frankly. And honestly, while those companies look good on the surface, I’m sure they are, we don’t understand how one so to speak really pays that kind of multiple. So it’s really more around a bit of our how our model works with what we’re seeing and as you use the word it’s kind of spotty, the quality, it’s a little bit [inaudible] their companies that look on the surface but they’re smaller, the EBITDA are less consistent the model, the general positions in the marketplace it’s not clear they have much of a differentiator so to speak, but they’re fundamentally decent businesses but not something that we feel we could get our arms around. And as you know, if we’re doing three or four even five new deals a year that’s pretty good for us.
So we have to be really, really selective, but the activity level, the main part is the activity level is up and we are able to actually make some conscientious decisions on how we spend our time to try to get new deals on the books over the next say nine months or so.
