CHICAGO, Aug. 6, 2012 /PRNewswire/ -- Golub Capital
BDC, Inc., a business development company (NASDAQ: GBDC), today
announced its financial results for the third fiscal quarter ended
June 30, 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.
SELECTED FINANCIAL HIGHLIGHTS
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|
|
|
|
|
|
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(in
thousands, expect per share data)
|
|
|
|
|
|
|
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|
June 30,
2012
|
|
March 31,
2012
|
Investment
portfolio
|
$
636,632
|
|
$
613,797
|
Total
assets
|
$
711,522
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|
$
719,279
|
NAV per
share
|
$
14.58
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|
$
14.69
|
|
|
|
|
|
Quarter Ended
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June 30,
2012
|
|
March 31,
2012
|
Investment
income
|
$
14,811
|
|
$
14,352
|
Net
investment income
|
$
6,678
|
|
$
7,065
|
Net (loss)
gain on investments and derivative instruments
|
$
(1,285)
|
|
$
4,366
|
Net
increase in net assets resulting from operations
|
$
5,393
|
|
$
11,431
|
|
|
|
|
Net
investment income per share
|
$
0.26
|
|
$
0.29
|
Net (loss)
gain on investments and derivative instruments per share
|
$
(0.05)
|
|
$
0.19
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Net
earnings per share
|
$
0.21
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|
$
0.48
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Third Fiscal Quarter 2012 Highlights
- Net investment income for the quarter ended June 30, 2012 was $6.7
million, or $0.26 per share,
as compared to $7.1 million, or
$0.29 per share, for the quarter
ended March 31, 2012;
- Net (loss) gain on investments and derivative instruments for
the quarter ended June 30, 2012 was
$(1.3) million, or $(0.05) per share, as compared to $4.4 million, or $0.19 per share, for the quarter ended
March 31, 2012;
- Net increase in net assets resulting from operations for the
quarter ended June 30, 2012 was
$5.4 million, or $0.21 per share, as compared to $11.4 million, or $0.48 per share, for the quarter ended
March 31, 2012;
- Our board of directors declared a quarterly distribution on
August 2, 2012 of $0.32 per share, payable on September 27, 2012 to stockholders of record as
of September 13, 2012; and
- On April 11, 2012, we terminated
the total return swap ("TRS") that we had entered into with
Citibank, N.A. ("Citibank"). Realized gains on the TRS for the
three months ended June 30, 2012 were
$2.2 million, which consisted of
spread interest income of $1.0
million and a realized gain of $1.2
million on the referenced loans of the TRS. Upon
termination, cash collateral of $19.9
million that had secured the obligations to Citibank under
the TRS was returned to the Company and is being used to fund new
middle-market debt and equity investments.
Portfolio and Investment Activities
At June 30, 2012, the Company had
investments in 116 portfolio companies with a total fair value of
$636.6 million. The investments
in these portfolio companies consisted of $258.8 million of senior secured loans,
$236.8 million of one stop loans,
$48.4 million of second lien loans,
$74.6 million of subordinated debt
and $18.0 million of equity
investments. The Company also had derivative instruments with
a total fair value of $0.1 million.
This compares to the Company's portfolio as of March 31, 2012, at which 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 as of March 31,
2012.
For the quarter ended June 30,
2012, the Company originated $25.6
million in new middle-market investment commitments and
$26.8 million in broadly syndicated
loans held for short term investment purposes. Approximately 10% of
the new middle-market investment commitments were one stop loans,
6% were subordinated debt/second lien investments, 83% were senior
secured loans and 1% were equity securities. Sales and repayments
on investments for the same period totaled $34.1 million.
For the quarter ended June 30,
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 10.0% and 9.3%, respectively.
Consolidated Results of Operations
Total investment income for the three months ended June 30, 2012 and March
31, 2012 was $14.8 million and
$14.4 million, respectively.
This $0.4 million increase was
primarily attributable to higher average invested assets during the
three months ended June 30,
2012.
Total expenses for the three months ended June 30, 2012 and March
31, 2012 were $8.1 million and
$7.3 million, respectively.
This $0.8 million increase was
primarily due to an increase in interest expense as a result of
higher average debt outstanding and a higher effective yield,
increased incentive fees due to higher net investment income and
increased management fees due to higher average
assets.
During the three months ended June 30,
2012 and March 31, 2012, the
Company had $1.2 million and
$(2.1) million of net realized gains
(losses) on investments and derivative instruments,
respectively. The realized gain for the quarter ended
June 30, 2012 was primarily related
to gains on the quarterly settlement of the TRS, partially offset
by losses on the ten-year U.S. Treasury futures contracts.
During the three months ended June 30,
2012 and March 31, 2012, the
Company recorded net unrealized (depreciation) appreciation on
investments and derivative instruments of $(2.4) million and $6.5
million, respectively. Unrealized depreciation on
derivative instruments during the three months ended June 30, 2012 was due to the reversal of
unrealized gains upon termination of the TRS as well as a decrease
in the ten-year U.S. Treasury rate resulting in depreciation on the
Company's ten-year U.S. Treasury futures contracts.
Unrealized depreciation on investments was primarily a result of a
write-down on one new non-earning asset.
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 June 30, 2012, the Company
had cash and cash equivalents of $18.1
million, restricted cash of $45.1
million and $329.8 million of
total debt outstanding. As of June 30, 2012, the Company had $42.7 million available for additional borrowings
on its revolving credit facility, subject to leverage and borrowing
base restrictions.
On February 2, 2012, we received a
"Green Light" letter from the SBA allowing us to proceed with an
application for a second SBIC license and we submitted such an
application to the SBA on April
19, 2012. On May 18,
2012, we received an "Acceptance Letter" from the SBA
notifying us that the application had been accepted by the SBA for
further processing. The application process is anticipated to
take six to twelve months. If approved, the additional
license will provide us with an incremental source of attractive
long-term capital.
On July 26, 2012, GC SBIC IV, L.P.
received a $20 million debenture
capital commitment from the SBA. The commitment may be drawn upon
subject to customary SBA procedures.
On August 6, 2012, we announced an
At the Market ("ATM") program to sell up to $50 million of shares of our common stock over a
one year time period. An ATM offering is a registered
offering by a publicly traded issuer of its listed equity
securities selling shares directly into the market at market
prices. We engaged Wells Fargo Securities and UBS Investment
Bank as our placement agents under the ATM program. ATM
programs are more cost-effective than traditional follow-on
offerings and enable us to obtain "just-in-time" capital, which
will reduce potential drag from undeployed capital.
On August 2, 2012, the Company's
board of directors declared a quarterly distribution of
$0.32 per share payable on
September 27, 2012 to holders of
record as of September 13,
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:
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 June 30, 2012 and
March 31, 2012:
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June
30, 2012
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March
31, 2012
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Investment
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|
Investments
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Percentage of
|
|
Investments
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|
Percentage of
|
Performance
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at Fair
Value
|
|
Total
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|
at Fair
Value
|
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Total
|
Rating
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(In
thousands)
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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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$
138,479
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21.7%
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|
$
94,481
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15.3%
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4
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437,319
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68.7
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|
463,855
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75.4
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3
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56,168
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|
8.8
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|
54,140
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8.8
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2
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|
341
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0.1
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|
-
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|
-
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1
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4,325
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|
0.7
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|
2,801
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|
0.50
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Total
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$
636,632
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|
100.0%
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|
$
615,277
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|
100.0%
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(1) As of March 31, 2012, 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
was $1.5 million.
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Conference Call
The Company will host an earnings conference call at
1:00 p.m. (Eastern Time) on
Monday, August 6, 2012 to discuss the
quarterly financial results. All interested parties may
participate in the conference call by dialing (800) 272-9104
approximately 10-15 minutes prior to the call; international
callers should dial (303) 223-2688. 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 6.30.12 Investor Presentation. An archived
replay of the call will be available shortly after the call until
3:00 p.m. (Eastern Time) on
August 31, 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
21598929.
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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|
|
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June
30, 2012
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March
31, 2012
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Assets
|
(unaudited)
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|
(unaudited)
|
Investments, at fair value (cost of $635,252 and
$611,622, respectively)
|
$
636,632
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|
$
613,797
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Cash and
cash equivalents
|
18,070
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|
30,121
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Restricted
cash and cash equivalents
|
45,059
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|
42,525
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Interest
receivable
|
3,893
|
|
3,716
|
Unrealized
appreciation on derivative instruments
|
149
|
|
1,798
|
Cash
collateral on deposit with custodian
|
1,287
|
|
20,809
|
Deferred
financing costs
|
6,082
|
|
6,457
|
Receivable
for investments sold
|
-
|
|
-
|
Other
assets
|
350
|
|
56
|
Total
Assets
|
$
711,522
|
|
$
719,279
|
|
|
|
|
Liabilities
|
|
|
|
Debt
|
$
329,800
|
|
$
331,700
|
Interest
payable
|
2,269
|
|
1,310
|
Management
and incentive fees payable
|
4,070
|
|
3,464
|
Payable
for investments purchased
|
-
|
|
5,010
|
Accounts
payable and accrued expenses
|
1,172
|
|
1,070
|
Total
Liabilities
|
337,311
|
|
342,554
|
|
|
|
|
Net
Assets
|
|
|
|
Preferred
stock, par value $0.001 per share, 1,000,000 shares
authorized,
|
|
|
|
zero shares issued and outstanding
as of June 30, 2012 and
|
|
|
|
March 31, 2012
|
-
|
|
-
|
Common
stock, par value $0.001 per share, 100,000,000 shares authorized,
25,663,009
|
|
|
|
and
25,639,371 shares issued and outstanding as of June 30, 2012
and
|
|
|
|
March 31, 2012,
respectively
|
26
|
|
26
|
Paid in
capital in excess of par
|
376,292
|
|
375,994
|
Capital
distributions in excess of net investment income
|
(3,660)
|
|
(2,133)
|
Net
unrealized appreciation (depreciation) on investments and
derivative instruments
|
4,197
|
|
6,640
|
Net
realized (loss) gain on investments and derivative
instruments
|
(2,644)
|
|
(3,802)
|
Total
Net Assets
|
374,211
|
|
376,725
|
Total
Liabilities and Total Net Assets
|
$
711,522
|
|
$
719,279
|
|
|
|
|
Number of
common shares outstanding
|
25,663,009
|
|
25,639,371
|
Net asset
value per common share
|
$
14.58
|
|
$
14.69
|
Golub
Capital BDC, Inc. and Subsidiaries
|
|
|
|
|
Consolidated Statements of Operations
(unaudited)
|
|
|
|
|
(In
thousands, except share and per share data)
|
|
|
|
|
|
|
Three
months ended
|
|
|
June
30, 2012
|
|
March
31, 2012
|
Investment income
|
|
|
|
|
Interest
income
|
|
$
14,811
|
|
$
14,352
|
Dividend
income
|
|
-
|
|
-
|
|
|
|
|
|
Total
investment income
|
|
14,811
|
|
14,352
|
|
|
|
|
|
Expenses
|
|
|
|
|
Interest
and other debt financing expenses
|
|
2,865
|
|
2,580
|
Base
management fee
|
|
2,220
|
|
2,093
|
Incentive
fee
|
|
1,917
|
|
1,434
|
Professional fees
|
|
538
|
|
559
|
Administrative service fee
|
|
489
|
|
455
|
General
and administrative expenses
|
|
104
|
|
166
|
|
|
|
|
|
Total
expenses
|
|
8,133
|
|
7,287
|
|
|
|
|
|
Net
investment income
|
|
6,678
|
|
7,065
|
|
|
|
|
|
Net
gain (loss) on investments
|
|
|
|
|
Net
realized loss on investments
|
|
(70)
|
|
(2,817)
|
Net
realized gain on derivative instruments
|
|
1,228
|
|
724
|
Net change
in unrealized appreciation on investments
|
|
(795)
|
|
4,032
|
Net change
in unrealized appreciation on derivative instruments
|
|
(1,648)
|
|
2,427
|
|
|
|
|
|
Net
gain (loss) on investments
|
|
(1,285)
|
|
4,366
|
|
|
|
|
|
Net
increase in net assets resulting from operations
|
|
$
5,393
|
|
$
11,431
|
|
|
|
|
|
Per
Common Share Data
|
|
|
|
|
Basic and
diluted earnings per common share
|
|
$
0.21
|
|
$
0.48
|
Dividends
and distributions declared per common share
|
|
$
0.32
|
|
$
0.32
|
Basic and
diluted weighted average common shares outstanding
|
|
25,639,680
|
|
24,059,623
|
|
|
|
|
|
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
With over $6 billion in capital
under management, Golub Capital is a leading provider of financing
solutions for the middle market, including one-loan financings,
senior, second lien and subordinated debt, preferred stock and
co-investment equity. The firm underwrites and syndicates senior
credit facilities up to $250 million
and offers hold positions up to $150
million per transaction. Golub Capital has been ranked a
"Top 3" Traditional Middle Market Bookrunner every year from 2008
through the first quarter of 2012 by Thomson Reuters LPC for senior
secured loans of up to $100 million
for leveraged buyouts (based on number of deals completed). In
2012, Golub Capital was awarded the ACG New York Champion's Award
for "Senior Lender Firm of the Year." Golub Capital is a national
firm with principal offices in Chicago and New
York. For more information, please visit the firm's website
at www.golubcapital.com.
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.