CHICAGO, May 2, 2012 /PRNewswire/ -- Golub Capital
BDC, Inc., a business development company (NASDAQ: GBDC), today
announced its financial results for the second fiscal quarter ended
March 31, 2012.
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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March 31,
2012
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December
31, 2011
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Investment
portfolio
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$
613,797
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$
562,046
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Total
assets
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$
719,279
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$
634,031
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NAV per
share
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$
14.69
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$
14.53
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Quarter
Ended
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March 31,
2012
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December
31, 2011
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Investment
income
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$
14,352
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$
12,477
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Net
investment income
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$
7,065
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$
6,342
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Net gain
(loss) on investments and derivative instruments
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$
4,366
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$
(151)
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Net
increase in net assets resulting from operations
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$
11,431
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$
6,191
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Net
investment income per share
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$
0.29
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$
0.29
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Net gain
(loss) on investments and derivative instruments per
share
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$
0.19
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$
(0.01)
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Net
earnings per share
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$
0.48
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$
0.28
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Second Fiscal Quarter 2012 Highlights
- Net investment income for the quarter ended March 31, 2012 was $7.1
million, or $0.29 per share,
as compared to $6.3 million, or
$0.29 per share, for the quarter
ended December 31, 2011;
- Net gain (loss) on investments and derivative instruments for
the quarter ended March 31, 2012 was
$4.4 million, or $0.19 per share, as compared to $(0.2) million, or $(0.01) per share, for the quarter ended
December 31, 2011;
- Net increase in net assets resulting from operations for the
quarter ended March 31, 2012 was
$11.4 million, or $0.48 per share, as compared to $6.2 million, or $0.28 per share, for the quarter ended
December 31, 2011;
- Our board of directors declared a quarterly distribution on
May 1, 2012 of $0.32 per share, payable on June 29, 2012 to stockholders of record as of
June 15, 2012; and
- On April 11, 2012, we terminated
the total return swap ("TRS") that we had entered into with
Citibank, N.A. ("Citibank"). Upon termination of the TRS, we
recorded a realized gain of $2.3
million, which consisted of spread interest income of
$1.1 million and a realized gain of
$1.2 million on the referenced
loans. We received $19.9
million of cash collateral that had secured the obligations
to Citibank under the TRS, and we will receive the cash proceeds
from the gain recognized on the sale of loans and spread interest
income in June 2012. We intend to use
the proceeds from the termination of the TRS to fund new
middle-market debt and equity investments.
Portfolio and Investment Activities
At March 31, 2012, the Company had
investments in 109 portfolio companies with a total fair value of
$613.8 million. The investments
in these portfolio companies consisted of $225.9 million of senior secured loans,
$251.1 million of one stop loans,
$45.7 million of second lien loans,
$73.3 million of subordinated debt
and $17.8 million of equity
investments. The Company also had derivative
instruments with a total fair value of $1.8
million. This compares to the Company's portfolio as of
December 31, 2011, at which 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 one stop
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 at December
31, 2011.
For the quarter ended March 31,
2012, the Company originated $98.4
million in new investment commitments, of which 39.5% were
senior secured loans, 35.9% were one stop loans, 12.1% were second
lien investments, 8.9% were subordinated debt investments and 3.6%
were equity securities. Sales and repayments on investments for the
same period totaled $43.6
million.
For the quarter ended March 31,
2012, 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 10.5% and 9.6%, respectively.
Consolidated Results of Operations
Total investment income for the three months ended March 31, 2012 and December 31, 2011 was $14.4 million and $12.5
million, respectively. This $1.9 million increase was primarily attributable
to higher average invested assets and a higher yield during the
three months ended March 31,
2012.
Total expenses for the three months ended March 31, 2012 and December 31, 2011 were $7.3 million and $6.1
million, respectively. This $1.2 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 March 31,
2012 and December 31, 2011,
the Company had $(2.1) million and
$(1.9) million of net realized losses
on investments and derivative instruments, respectively. The
realized loss for the quarter ended March
31, 2012 was primarily related to the disposal of a
non-earning investment, partially offset by the gains on the
quarterly settlement of the TRS. During the three months
ended March 31, 2012 and December 31, 2011, the Company recorded net
unrealized appreciation on investments and derivative instruments
of $6.5 million and $1.7 million, respectively. Unrealized
appreciation on investments during the three months ended
March 31, 2012 resulted from an
increase in fair value primarily due to the rise in market prices
and a reversal of prior period unrealized depreciation.
Unrealized appreciation on derivative instruments was primarily a
result of improved market pricing on the referenced broadly
syndicated loans in the TRS as well as unrealized appreciation from
the Company's ten-year U.S. Treasury futures contracts as a result
of an increase in the ten-year U.S. Treasury rate at the end of
March.
Liquidity and Capital Resources
The Company's liquidity and capital resources are derived from
the Company's debt securitization, Small Business Administration
("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, its debt
securitization, SBA debentures, revolving credit facility, proceeds
from its investment portfolio and proceeds from public offerings of
its securities to finance its investment objectives.
As of March 31, 2012, the Company
had cash and cash equivalents of $30.1
million, restricted cash of $42.5
million and $331.7 million of
total debt outstanding. As of March 31, 2012, the Company had $40.8 million available for additional borrowings
on its revolving credit facility, subject to leverage and borrowing
base restrictions.
On February 2, 2012, the Company
received a "Green Light" letter from the SBA allowing it to proceed
with an application for a second small business investment company
license and it submitted such an application to the SBA on
April 19, 2012. The application
process is anticipated to take six to twelve months. If
approved, the additional license will provide the Company with an
incremental source of attractive long-term capital.
On May 1, 2012, the Company's
board of directors declared a quarterly distribution of
$0.32 per share payable on
June 29, 2012 to holders of record as
of June 15, 2012.
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 the Company's
investments on the 1 to 5 investment performance rating scale at
fair value as of March 31, 2012 and
December 31, 2011:
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March
31, 2012
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December 31, 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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$
94,481
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15.3
%
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$
80,299
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14.3%
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4
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463,855
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75.4
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436,107
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77.6
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3
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54,140
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8.8
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39,808
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7.1
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2
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-
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-
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5,442
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1.0
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1
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2,801
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0.5
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-
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-
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Total
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$
615,277
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100.0%
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$
561,656
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100.0%
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(1) As of
March 31, 2012 and December 31, 2011, the TRS was included in the
above table with an investment performance rating of 4. The fair value of the TRS as of March
31, 2012 and December 31, 2011 was $1.5 million and $(0.4) million,
respectively.
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Conference Call
The Company will host an earnings conference call at
2:00 p.m. (Eastern Time) on
Thursday, May 3, 2012 to discuss the
quarterly financial results. All interested parties may
participate in the conference call by dialing (888) 612-1053
approximately 10-15 minutes prior to the call; international
callers should dial (303) 223-4399. 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 scroll down to the Investor
Presentations section to find the Quarter Ended 3.31.12 Investor Presentation. An archived
replay of the call will be available shortly after the call until
4:00 p.m. (Eastern Time) on
June 4, 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
21588010.
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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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March
31, 2012
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December 31, 2011
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Assets
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(unaudited)
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(unaudited)
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Investments, at fair value (cost of $611,622 and
$563,903, respectively)
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$
613,797
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$
562,046
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Cash and
cash equivalents
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30,121
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25,447
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Restricted
cash and cash equivalents
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42,525
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14,455
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Interest
receivable
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3,716
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3,190
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Unrealized
appreciation on derivative instruments
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1,798
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-
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Cash
collateral on deposit with custodian
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20,809
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21,040
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Deferred
financing costs
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6,457
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5,944
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Receivable
for investments sold
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-
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1,449
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Other
assets
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56
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460
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Total
Assets
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$
719,279
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$
634,031
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Liabilities
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Debt
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$
331,700
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$
311,900
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Interest
payable
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1,310
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1,789
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Management
and incentive fees payable
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3,464
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2,722
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Unrealized
depreciation on derivative instruments
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-
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629
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Payable
for investments purchased
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5,010
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-
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Accounts
payable and accrued expenses
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1,070
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831
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Total
Liabilities
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342,554
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317,871
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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 March 31, 2012 and
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December 31, 2011,
respectively
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-
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-
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Common
stock, par value $0.001 per share, 100,000,000 shares authorized,
25,639,371
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and
21,758,955 shares issued and outstanding as of March 31, 2012
and
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December 31, 2011,
respectively
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26
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22
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Paid in
capital in excess of par
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375,994
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318,677
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Capital
distributions in excess of net investment income
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(2,133)
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(1,011)
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Net
unrealized appreciation (depreciation) on investments and
derivative instruments
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6,640
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181
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Net
realized (loss) gain on investments and derivative
instruments
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(3,802)
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|
(1,709)
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Total
Net Assets
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376,725
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|
316,160
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Total
Liabilities and Total Net Assets
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$
719,279
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$
634,031
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Number of
common shares outstanding
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25,639,371
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21,758,955
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Net asset
value per common share
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$
14.69
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$
14.53
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Golub
Capital BDC, Inc. and Subsidiaries
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Consolidated Statements of Operations
(unaudited)
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(In
thousands, except share and per share data)
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|
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Three
months ended
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March
31, 2012
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December 31, 2011
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Investment income
|
|
|
|
|
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Interest
income
|
|
$
14,352
|
|
$
12,100
|
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Dividend
income
|
|
-
|
|
377
|
|
|
|
|
|
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Total
investment income
|
|
14,352
|
|
12,477
|
|
|
|
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Expenses
|
|
|
|
|
|
Interest
and other debt financing expenses
|
|
2,580
|
|
2,366
|
|
Base
management fee
|
|
2,093
|
|
1,874
|
|
Incentive
fee
|
|
1,434
|
|
909
|
|
Professional fees
|
|
559
|
|
588
|
|
Administrative service fee
|
|
455
|
|
262
|
|
General
and administrative expenses
|
|
166
|
|
136
|
|
|
|
|
|
|
Total
expenses
|
|
7,287
|
|
6,135
|
|
|
|
|
|
|
Net
investment income
|
|
7,065
|
|
6,342
|
|
|
|
|
|
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Net
gain (loss) on investments
|
|
|
|
|
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Net
realized loss on investments
|
|
(2,817)
|
|
(2,115)
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Net
realized gain on derivative instruments
|
|
724
|
|
264
|
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Net change
in unrealized appreciation on investments
|
|
4,032
|
|
343
|
|
Net change
in unrealized appreciation on derivative instruments
|
|
2,427
|
|
1,357
|
|
|
|
|
|
|
Net
gain (loss) on investments
|
|
4,366
|
|
(151)
|
|
|
|
|
|
|
Net
increase in net assets resulting from operations
|
|
$
11,431
|
|
$
6,191
|
|
|
|
|
|
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Per
Common Share Data
|
|
|
|
|
|
Basic and
diluted earnings per common share
|
|
$
0.48
|
|
$
0.28
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|
Dividends
and distributions declared per common share
|
|
$
0.32
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|
$
0.32
|
|
Basic and
diluted weighted average common shares outstanding
|
|
24,059,623
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|
21,734,720
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ABOUT GOLUB CAPITAL BDC, INC.
Golub Capital BDC, Inc. principally invests in senior secured,
one stop, 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
calendar year 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 March 31, 2012, Golub Capital had over
$5 billion in capital under
management, 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.