CHICAGO, Aug. 8, 2013 /PRNewswire/ -- Golub Capital
BDC, Inc., a business development company (NASDAQ: GBDC), today
announced its financial results for the third fiscal quarter ended
June 30, 2013.
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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(in thousands, expect
per share data)
|
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|
|
|
|
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June 30,
2013
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March 31,
2013
|
Investment
portfolio
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$
967,792
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$
788,442
|
Total
assets
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$
1,015,757
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$
893,178
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Net asset value per
share
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$
15.12
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$
14.80
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|
|
Quarter
Ended
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June 30,
2013
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March 31,
2013
|
Investment
income
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$
22,268
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|
$
20,096
|
Net investment
income
|
$
12,000
|
|
$
10,394
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Net gain on
investments
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$
657
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|
$
1,857
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Net increase in net
assets resulting from operations
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$
12,657
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$
12,251
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Net investment income
per share
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$
0.32
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$
0.32
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Net gain on
investments
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$
0.02
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$
0.06
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Net earnings per
share
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$
0.34
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$
0.38
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Third Fiscal Quarter 2013 Highlights
- Net investment income for the quarter ended June 30, 2013 was $12.0
million, or $0.32 per share,
as compared to $10.4 million, or
$0.32 per share, for the quarter
ended March 31, 2013;
- Net gain on investments for the quarter ended June 30, 2013 was $0.7
million, or $0.02 per share,
as compared to $1.9 million, or
$0.06 per share, for the quarter
ended March 31, 2013;
- Net increase in net assets resulting from operations for the
quarter ended June 30, 2013 was
$12.7 million, or $0.34 per share, as compared to $12.3 million, or $0.38 per share, for the quarter ended
March 31, 2013; and
- Our board of directors declared a quarterly distribution on
August 6, 2013 of $0.32 per share, payable on September 27, 2013 to stockholders of record as
of September 13,
2013.
Portfolio and Investment Activities
As of June 30, 2013, the Company
had investments in 135 portfolio companies with a total fair value
of $967.8 million. The
investments in portfolio companies as of June 30, 2013 consisted of $315.5 million of senior secured loans,
$487.1 million of one stop loans,
$100.0 million of second lien loans,
$34.0 million of subordinated debt
and $31.2 million of equity
investments. This compares to the Company's portfolio as of
March 31, 2013, as of which date the
Company had investments in 135 portfolio companies with a total
fair value of $788.4 million.
The investments in portfolio companies as of March 31, 2013 consisted of $261.8 million of senior secured loans,
$382.2 million of one stop loans,
$76.6 million of second lien loans,
$41.8 million of subordinated debt
and $26.0 million of equity
investments.
For the quarter ended June 30,
2013, the Company originated $288.4
million in new middle-market investment commitments.
Approximately 20% of the new middle-market investment commitments
were senior secured loans, 62% were one stop loans, 16% were second
lien loans and 2% were equity securities. Overall, total
investments in portfolio companies at fair value increased by
$179.4 million during the three
months ended June 30, 2013 after
factoring in debt repayments and sales of securities.
For the quarter ended June 30,
2013, 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 were 9.9% and 9.2%, respectively.
Consolidated Results of Operations
Total investment income for the quarter ended June 30, 2013 and March
31, 2013 was $22.3 million and
$20.1 million, respectively.
This $2.2 million increase was
primarily attributable to higher average invested assets and
dividend income partially offset by lower amortization and fee
income from prepayments during the quarter ended June 30, 2013.
Total expenses for the quarter ended June
30, 2013 and March 31, 2013
were $10.3 million and $9.7 million, respectively. This
$0.6 million increase was primarily
due to increased incentive fees due to higher net investment income
and increased management fees due to higher average assets.
During the quarter ended June 30,
2013, the Company recorded net unrealized appreciation on
investments of $0.7 million.
The unrealized appreciation for the three months ended June 30, 2013 primarily resulted from an increase
in fair value primarily due to the rise in market prices and a
reversal of prior period unrealized depreciation.
Liquidity and Capital Resources
The Company's liquidity and capital resources are derived from
the Company's debt securitization, U.S. Small Business
Administration ("SBA") debentures, revolving credit facility and
cash flow from operations. The Company's primary uses of
funds from operations include investment in portfolio companies and
payment 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 offerings of its
securities to finance its investment objectives.
As of June 30, 2013, the Company
had cash and cash equivalents of $12.9
million, restricted cash of $21.7
million and $403.8 million of
total debt outstanding. As of June 30, 2013, the Company had $63.2 million available for additional borrowings
on its revolving credit facility, subject to leverage and borrowing
base restrictions. As of June 30,
2013, the Company's wholly owned subsidiaries, GC SBIC IV,
L.P. had $146.3 million of
outstanding SBA-guaranteed debentures and GC SBIC V, L.P. had
$17.8 million of outstanding
SBA-guaranteed debentures, leaving incremental borrowing capacity
of $3.7 million and $57.2 million for GC SBIC IV, L.P. and GC SBIC V,
L.P., respectively, under present small business investment company
("SBIC") regulations.
On May 7, 2013, the Company priced
a public offering of 6,000,000 shares of its common stock at a
public offering price of $17.47 per
share, raising approximately $104.8
million in gross proceeds. On May 10,
2013, the transaction closed, the shares were issued, and
proceeds, net of offering costs but before expenses, of
$101.6 million were received.
On August 6, 2013, the Company's
board of directors declared a quarterly distribution of
$0.32 per share payable on
September 27, 2013 to holders of
record as of September 13,
2013.
Senior Loan Fund
Effective May 31, 2013, the
Company has agreed to co-invest with United Insurance Company of
America ("United Insurance") through Senior Loan Fund LLC ("Senior
Loan Fund"), an unconsolidated Delaware limited liability company, primarily
in senior secured loans of middle market companies. Senior Loan
Fund is governed by an investment committee with equal
representation from the Company and United Insurance. All
material portfolio company decisions and other decisions must be
approved by the investment committee. Senior Loan Fund will
be capitalized with subordinated notes and equity capital
contributions from United Insurance and the Company as transactions
are completed. United Insurance has committed $12.5 million of subordinated notes to Senior
Loan Fund and the Company has committed $87.5 million of subordinated notes to Senior
Loan Fund, none of which were funded at June
30, 2013. Senior Loan Fund may seek to raise senior
debt from a third party when Senior Loan Fund has a sufficiently
large and diversified pool of investments. At June 30, 2013 our investment in Senior Loan Fund
totaled zero at cost and at fair value.
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:
Internal
Performance Rating
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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 the Company's 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
scored 1 are not anticipated to be repaid in full and the Company
will reduce the fair
market value of the loan to the amount the Company anticipates will
be recovered.
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The following table shows the distribution of the Company's
investments on the 1 to 5 internal performance rating scale at fair
value as of June 30, 2013 and
March 31, 2013:
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June 30,
2013
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March 31,
2013
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Internal
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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)
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Investments
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(In
thousands)
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Investments
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5
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$
140,332
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14.4%
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$
136,918
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17.4%
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4
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760,955
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78.6
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614,776
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78.0
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3
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57,614
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6.0
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30,145
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3.8
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2
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6,321
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0.7
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5,681
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0.7
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1
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2,570
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0.3
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922
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0.1
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Total
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$
967,792
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100%
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$
788,442
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|
100%
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|
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|
|
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Conference Call
The Company will host an earnings conference call at
1:00 p.m. (Eastern Time) on
Thursday, August 8, 2013 to discuss
the quarterly financial results. All interested parties may
participate in the conference call by dialing (800) 915-4217
approximately 10-15 minutes prior to the call; international
callers should dial (212) 271-4651. 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 Quarter Ended
6.30.13 Investor Presentation under
Events and Presentations. An archived replay of the call will
be available shortly after the call until 3:00 p.m. (Eastern Time) on September 7, 2013. To hear the replay, please
dial (800) 633-8284. International dialers, please dial (402)
977-9140. For all replays, please reference program ID number
21667941.
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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June 30,
2013
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March 31,
2013
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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 $962,485 and $783,868,
respectively)
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$
967,792
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$
788,442
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Cash and cash
equivalents
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12,936
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|
8,950
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Restricted cash and
cash equivalents
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21,689
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84,214
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Interest
receivable
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5,520
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4,278
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Deferred financing
costs
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7,372
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7,029
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Other
assets
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448
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|
265
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Total
Assets
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$
1,015,757
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$
893,178
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|
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Liabilities
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Debt
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$
403,800
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$
385,700
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Interest
payable
|
2,426
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|
1,304
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Management and
incentive fees payable
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5,808
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5,069
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Accounts payable and
accrued expenses
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2,225
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|
1,452
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Total
Liabilities
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414,259
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393,525
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Net
Assets
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Preferred stock, par
value $0.001 per share, 1,000,000 shares
|
|
|
|
authorized. zero shares issued and
outstanding as of
June 30,
2013 and March 31, 2013
|
-
|
|
-
|
Common stock, par
value $0.001 per share, 100,000,000 shares
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|
|
|
authorized, 39,791,805 and 33,754,512
shares issued and
|
|
|
|
outstanding as of June 30, 2013 and
March 31, 2013, respectively
|
40
|
|
34
|
Paid in capital in
excess of par
|
600,352
|
|
498,448
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Capital distributions
in excess of net investment income
|
(343)
|
|
379
|
Net unrealized
appreciation on investments and derivative instruments
|
7,975
|
|
7,242
|
Net realized loss on
investments and derivative instruments
|
(6,526)
|
|
(6,450)
|
Total Net
Assets
|
601,498
|
|
499,653
|
Total Liabilities
and Total Net Assets
|
$
1,015,757
|
|
$
893,178
|
|
|
|
|
Number of common
shares outstanding
|
39,791,805
|
|
33,754,512
|
Net asset value per
common share
|
$
15.12
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|
$
14.80
|
|
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)
|
|
|
|
|
|
|
Three months
ended
|
|
|
June 30,
2013
|
|
March 31,
2013
|
|
|
(unaudited)
|
Investment
income
|
|
|
Interest
income
|
|
$
21,187
|
|
$
19,617
|
Dividend
income
|
|
1,081
|
|
479
|
|
|
|
|
|
Total
investment income
|
|
22,268
|
|
20,096
|
|
|
|
|
|
Expenses
|
|
|
|
|
Interest and
other debt financing expenses
|
|
2,967
|
|
3,292
|
Base
management fee
|
|
3,114
|
|
2,686
|
Incentive
fee
|
|
2,785
|
|
2,468
|
Professional
fees
|
|
534
|
|
512
|
Administrative
service fee
|
|
715
|
|
610
|
General and
administrative expenses
|
|
153
|
|
134
|
|
|
|
|
|
Total
expenses
|
|
10,268
|
|
9,702
|
|
|
|
|
|
Net
investment income
|
|
12,000
|
|
10,394
|
|
|
|
|
|
Net gain on
investments
|
|
|
|
|
Net realized
loss on investments
|
|
(77)
|
|
-
|
Net change in
unrealized appreciation on investments
|
|
734
|
|
1,857
|
|
|
|
|
|
Net gain on
investments
|
|
657
|
|
1,857
|
|
|
|
|
|
Net increase in net assets
resulting from operations
|
|
$
12,657
|
|
$
12,251
|
|
|
|
|
|
Per Common Share
Data
|
|
|
|
|
Basic and
diluted earnings per common share
|
|
$
0.34
|
|
$
0.38
|
Dividends and
distributions declared per common share
|
|
$
0.32
|
|
$
0.32
|
Basic and
diluted weighted average common shares outstanding
|
|
37,118,379
|
|
32,532,794
|
|
|
|
|
|
|
|
|
|
|
ABOUT GOLUB CAPITAL BDC, INC.
Golub Capital BDC, Inc. principally invests in senior secured,
one stop, subordinated 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 $8 billion of capital
under management, Golub Capital is a leading provider of financing
solutions for the middle market, including one-loan financings
(through the firm's proprietary MiniGOLD, GOLD, and MegaGOLD
facilities), senior, second lien, and subordinated debt, preferred
stock and co-investment equity. The firm underwrites and syndicates
senior credit facilities up to $300
million. Golub Capital's hold sizes range up to $250 million per transaction.
Golub Capital has been a top 3 Traditional Middle Market
Bookrunner each year from 2008 through 1Q 2013 for senior secured
loans of up to $100 million for
leveraged buyouts (according to Thomson Reuters LPC and internal
data; based on number of deals). In 2012, Golub Capital was awarded
the ACG New York Champion's Award for "Senior Lender Firm of the
Year" and "Lender Firm of the Year" by M&A Advisor.
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.