CHICAGO, Feb. 6, 2012 /PRNewswire/ -- Golub Capital BDC,
Inc., a business development company (NASDAQ: GBDC), today
announced its financial results for the first fiscal quarter ended
December 31, 2011.
Except where the context suggests otherwise, the terms
"we," "us," "our," and "Company" refer to Golub Capital BDC, Inc.
and its consolidated subsidiaries. "GC Advisors" refers to GC
Advisors LLC, our investment adviser.
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SELECTED FINANCIAL
HIGHLIGHTS
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(in thousands, expect per share
data)
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December 31,
2011
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September
30, 2011
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Investment portfolio
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$
562,046
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$
459,827
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Total assets
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$
634,031
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$
559,644
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NAV per share
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$
14.53
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$
14.56
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Quarter
Ended
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December 31,
2011
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September
30, 2011
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Investment income
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$
12,477
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$
10,831
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Net investment income
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$
6,342
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$
6,450
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Net (loss) gain on investments
and derivative instruments
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$
(151)
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$
(3,469)
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Net increase in net assets
resulting from operations
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$
6,191
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$
2,981
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Net investment income per
share
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$
0.29
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$
0.30
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Net (loss) gain on investments
and derivative instruments per share
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$
(0.01)
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$
(0.16)
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Net earnings per
share
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$
0.28
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$
0.14
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First Fiscal Quarter 2012 Highlights
- Net investment income for the quarter ended December 31, 2011 was $6.3
million, or $0.29 per share,
as compared to $6.5 million, or
$0.30 per share, for the quarter
ended September 30, 2011;
- Net gains (losses) on investments and derivative instruments
for the quarter ended December 31,
2011 were $(0.2) million, or
$(0.01) per share, as compared to
$(3.5) million, or $(0.16) per share, for the quarter ended
September 30, 2011;
- Net increase in net assets resulting from operations for the
quarter ended December 31, 2011 was
$6.2 million, or $0.28 per share, as compared to $3.0 million, or $0.14 per share, for the quarter ended
September 30, 2011;
- Our board of directors declared a quarterly distribution on
February 2, 2012 of $0.32 per share, payable on March 29, 2012 to stockholders of record as of
March 16, 2012; and
- We completed a public offering of 3,500,000 shares of our
common stock on February 3, 2012,
which resulted in proceeds, net of offering costs but before
expenses, of $52.3 million.
Portfolio and Investment Activities
At December 31, 2011, the Company
had investments in 105 portfolio companies with a total fair value
of $562.0 million. The
investments in these portfolio companies consisted of $207.3 million of senior secured loans,
$231.3 million of unitranche loans,
$38.3 million of second lien loans,
$71.0 million of subordinated debt
and $14.1 million of equity
investments. The Company also had derivative instruments
with a total fair value of $(0.6)
million. This compares to our portfolio as of September 30, 2011, at which we had investments
in 103 portfolio companies with a total fair value of $459.8 million. The investments in these
portfolio companies consisted of $203.8
million of senior secured loans, $177.9 million of unitranche loans, $21.9 million of second lien loans, $46.8 million of subordinated debt and
$9.4 million of equity investments.
The Company also had derivative instruments with a total
fair value of $(2.0) million at
September 30, 2011.
For the quarter ended December 31,
2011, the Company originated $164.1
million in new investment commitments, of which 37.9% were
in unitranche loans, 16.5% were subordinated debt investments,
12.6% were second lien investments, 30.0% were senior secured loans
and 3.0% were equity securities. Sales and repayments on
investments for the same period totaled $42.9 million.
For the quarter ended December 31,
2011, the weighted average annualized investment income
yield (which includes interest income and amortization of fees and
discounts) and the weighted average annualized interest income
yield (which excludes income resulting from amortization of fees
and discounts) on the fair value of earning investments in the
Company's portfolio was 10.2% and 9.3%, respectively.
Consolidated Results of Operations
Total investment income for the three months ended December 30, 2011 and September 30, 2011 was $12.5 million and $10.8
million, respectively. This $1.7 million increase was primarily attributable
to higher average invested assets and a higher yield during the
three months ended December 31,
2011.
Total expenses for the three months ended December 31, 2011 and September 30, 2011 were $6.1 million and $4.4
million, respectively. This $1.7 million increase was primarily due to an
increase in interest expense as a result of higher average debt
outstanding, increased incentive fees due to higher net investment
income and increased management fees due to higher average assets.
During the three months ended December
31, 2011 and September 30,
2011, the Company had $(1.9)
million and $40,000 of net
realized (losses) gains on investments and derivative instruments,
respectively. The realized loss for the quarter ended
December 31, 2011 was primarily
related to the sale of a non-earning investment. During the
three months ended December 31, 2011
and September 30, 2011, the Company
recorded net unrealized appreciation (depreciation) on investments
and derivative instruments of $1.7
million and $(3.5) million,
respectively. Unrealized appreciation during the three months
ended December 31, 2011 resulted from
an increase in fair value primarily due to the rise in market
prices and a reversal of prior period unrealized depreciation.
Unrealized depreciation during the quarter ended September 30, 2011 primarily resulted from
negative credit related adjustments which caused a reduction in
fair value.
Liquidity and Capital Resources
The Company's liquidity and capital resources are derived from
the Company's debt securitization, SBA debentures, revolving credit
facility and cash flow from operations. The Company's primary
use of funds from operations includes investment in portfolio
companies and payments of fees and other expenses that the Company
incurs. The Company has used, and expects to continue to use,
our debt securitization, SBA debentures, revolving credit facility,
proceeds from our investment portfolio and proceeds from public
offerings of our securities to finance our investment objectives.
As of December 31, 2011, the
Company had cash and cash equivalents of $25.4 million, restricted cash of $14.5 million and $311.9
million of total debt outstanding. As of December 31, 2011, the Company had $37.1 million available for additional borrowings
on our revolving credit facility, subject to leverage and borrowing
base restrictions.
On February 2, 2012, the Company's
board of directors declared a quarterly distribution of
$0.32 per share payable on
March 29, 2012 to holders of record
as of March 16, 2012.
On January 31, 2012, the Company
priced a public offering of 3,500,000 shares of our common stock at
a public offering price of $15.35 per
share, raising approximately $53.7
million in gross proceeds. The transaction
closed on February 3, 2012 and
resulted in proceeds, net of offering costs but before expenses, of
$52.3 million. The Company also
granted the underwriters an option to purchase up to an additional
525,000 shares of common stock to cover over-allotments, if any.
If the underwriters fully exercise the over-allotment option,
the Company estimates it will receive net proceeds of an additional
$7.8 million.
The Company intends to use the net proceeds from the offering to
invest in portfolio companies in accordance with its investment
objective and strategies and for general corporate purposes.
Portfolio and Asset Quality
GC Advisors regularly assesses the risk profile of each of the
Company's investments and rates each of them based on the following
categories:
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Risk Ratings
Definition
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Rating
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Definition
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5
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Involves the least amount of
risk in our portfolio. The borrower is performing above
expectations, and the trends and risk factors are generally
favorable.
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4
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Involves an acceptable level of
risk that is similar to the risk at the time of origination. The
borrower is generally performing as expected, and the risk factors
are neutral to favorable.
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3
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Involves a borrower performing
below expectations and indicates that the loan's risk has increased
somewhat since origination. The borrower may be out of compliance
with debt covenants; however, loan payments are generally not past
due.
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2
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Involves a borrower performing
materially below expectations and indicates that the loan's risk
has increased materially since origination. In addition to the
borrower being generally out of compliance with debt covenants,
loan payments may be past due (but generally not more than 180 days
past due).
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1
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Involves a borrower performing
substantially below expectations and indicates that the loan's risk
has substantially increased since origination. Most or all of the
debt covenants are out of compliance and payments are substantially
delinquent. Loans rated 1 are not anticipated to be repaid in full
and we will reduce the fair market value of the loan to the amount
we anticipate will be recovered.
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The following table shows the distribution of our investments on
the 1 to 5 investment performance rating scale at fair value as of
December 31, 2011 and September 30, 2011:
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December 31,
2011
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September
30, 2011
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Investment
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Investments
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Percentage
of
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Investments
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Percentage
of
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Performance
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at Fair
Value
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Total
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at Fair
Value
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Total
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Rating
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(In
thousands)(1)
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Investments
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(In
thousands)(1)
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Investments
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5
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$
80,299
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14.3%
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$
49,691
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10.8%
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4
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436,107
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77.6
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360,259
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78.7
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3
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39,808
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7.1
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45,141
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9.9
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2
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5,442
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1.0
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2,891
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0.6
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1
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-
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-
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-
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-
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Total
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$
561,656
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100.0%
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$
457,982
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100.0%
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(1) As of December 31,
2011 and September 30, 2011, the total return swap, or TRS, was
included in the above table with an investment performance rating
of 4. The fair value of the TRS as of December 31, 2011 and
September 30, 2011 was $(0.4) million and $(1.8) million,
respectively.
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Conference Call
The Company will host an earnings conference call at
11:30 a.m. (Eastern Time) on
Tuesday, February 7, 2012. All
interested parties may participate in the conference call by
dialing (800) 926-6309 approximately 10-15 minutes prior to the
call; international callers should dial (212) 231-2924.
Participants should reference Golub Capital BDC, Inc. when
prompted. For a slide presentation that we intend to refer to on
the earnings conference call, please visit the Events and
Presentations link on the homepage of our website
(www.golubcapitalbdc.com) and click on the Investor Presentations
link to find the December 31, 2011
Investor Presentation. An archived replay of the call will be
available shortly after the call until 1:30
p.m. (Eastern Time) on March 6,
2012. To hear the replay, please dial (800) 633-8284.
International dialers, please dial (402) 977-9140. For all replays,
please reference program ID number 21574165.
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Golub Capital BDC, Inc. and
Subsidiaries
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Consolidated Statements of
Financial Condition
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(In thousands, except share and
per share data)
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December 31,
2011
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September
30, 2011
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Assets
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Investments, at fair value (cost
of $563,903 and $462,961, respectively)
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$
562,046
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$
459,827
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Cash and cash
equivalents
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25,447
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46,350
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Restricted cash and cash
equivalents
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14,455
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23,416
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Interest receivable
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3,190
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3,063
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Cash collateral on deposit with
custodian
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21,040
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21,162
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Deferred financing
costs
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5,944
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5,345
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Open trade receivable
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1,449
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-
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Other assets
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460
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481
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Total Assets
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$
634,031
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$
559,644
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Liabilities
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Debt
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$
311,900
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$
237,683
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Interest payable
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1,789
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1,066
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Management and incentive fees
payable
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2,722
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1,608
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Unrealized depreciation on
derivative instruments
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629
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1,986
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Accounts payable and accrued
expenses
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831
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752
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Total Liabilities
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317,871
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243,095
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Net Assets
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Preferred stock, par value
$0.001 per share, 1,000,000 shares authorized,
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zero shares issued
and outstanding as of December 31, 2011 and
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September 30, 2011,
respectively
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-
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-
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Common stock, par value $0.001
per share, 100,000,000 shares authorized, 21,758,955
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and 21,733,903 shares
issued and outstanding as of December 31, 2011 and
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September 30, 2011,
respectively
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22
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22
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Paid in capital in excess of
par
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318,677
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318,302
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Capital distributions in excess
of net investment income
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(1,011)
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(398)
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Net unrealized appreciation
(depreciation) on investments and derivative instruments
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181
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(1,519)
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Net realized (loss) gain on
investments and derivative instruments
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(1,709)
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142
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Total Net Assets
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316,160
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316,549
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Total Liabilities and Total Net
Assets
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$
634,031
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$
559,644
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Number of common shares
outstanding
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21,758,955
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21,733,903
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Net asset value per common
share
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$
14.53
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$
14.56
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Golub Capital BDC, Inc. and
Subsidiaries
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Consolidated Statements of
Operations
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(In thousands, except share and
per share data)
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Three months
ended
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December 31,
2011
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September
30, 2011
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Investment income
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Interest income
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$
12,100
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$
10,831
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Dividend income
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377
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-
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Total
investment income
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12,477
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10,831
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Expenses
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Interest and other debt
financing expenses
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2,366
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1,869
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Base management
fee
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1,874
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1,667
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Incentive fee
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909
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(176)
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Professional
fees
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588
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646
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Administrative service
fee
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262
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226
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General and administrative
expenses
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136
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149
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Total
expenses
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6,135
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4,381
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Net
investment income
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6,342
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6,450
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Net gain (loss) on
investments
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Net realized (loss) gain
on investments
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(2,115)
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-
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Net realized gain (loss)
on derivative instruments
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264
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40
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Net change in unrealized
appreciation (depreciation) on investments
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343
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(1,784)
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Net change in unrealized
appreciation (depreciation) on derivative instruments
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1,357
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(1,725)
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Net (loss) gain on
investments
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(151)
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(3,469)
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Net increase
in net assets resulting from operations
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$
6,191
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$
2,981
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Per Common Share
Data
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Basic and diluted earnings
per common share
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$
0.28
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$
0.14
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Dividends and
distributions declared per common share
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$
0.32
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$
0.32
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Basic and diluted weighted
average common shares outstanding
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21,734,720
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21,733,903
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ABOUT GOLUB CAPITAL BDC, INC.
Golub Capital BDC, Inc. principally invests in senior secured,
unitranche, mezzanine and second lien loans of middle-market
companies that are, in most cases, sponsored by private equity
investors. Golub Capital BDC Inc.'s investment activities are
managed by its investment adviser, GC Advisors LLC, an affiliate of
the Golub Capital group of companies ("Golub Capital").
ABOUT GOLUB CAPITAL
Golub Capital, founded in 1994, is a leading lender to
middle-market companies. In 2010, Golub Capital was named "Middle
Market Lender of the Year" by Buyouts Magazine and "Debt Financing
Agent of the Year" by M&A Advisor. Golub Capital was ranked the #1 Traditional
Middle Market Bookrunner for 2011 by Thomson Reuters LPC for senior
secured loans of up to $100 million
for leveraged buyouts (based on number of deals completed). As of
December 31, 2011, Golub Capital
managed over $5.0 billion of capital,
with a team of investment professionals in New York and Chicago.
FORWARD-LOOKING STATEMENTS
This press release may contain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995. Statements other than statements of historical facts
included in this press release may constitute forward-looking
statements and are not guarantees of future performance or results
and involve a number of risks and uncertainties. Actual results may
differ materially from those expressed or implied in the
forward-looking statements as a result of a number of factors,
including those described from time to time in filings with the
Securities and Exchange Commission. Golub Capital BDC, Inc.
undertakes no duty to update any forward-looking statement made
herein. All forward-looking statements speak only as of the date of
this press release.
SOURCE Golub Capital BDC, Inc.