CHICAGO, Feb. 6, 2014 /PRNewswire/ -- Golub Capital BDC,
Inc., a business development company (NASDAQ: GBDC), today
announced its financial results for the first fiscal quarter ended
December 31, 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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December 31,
2013
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September 30,
2013
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Investment portfolio,
at fair value
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$
1,179,919
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$
1,024,645
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Total
assets
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$
1,264,827
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$
1,091,656
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Net asset value per
share
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$
15.23
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$
15.21
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Quarter
Ended
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December 31,
2013
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September 30,
2013
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Investment
income
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$
25,579
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$
22,816
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Net investment
income
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$
13,260
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$
12,424
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Net gain / (loss) on
investments and secured borrowings
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$
1,577
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$
(130)
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Net increase in net
assets resulting from operations
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$
14,837
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$
12,294
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Net investment income
per share
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$
0.31
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$
0.31
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Net gain on
investments and secured borrowings per share
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$
0.03
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$
-
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Net earnings per
share
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$
0.34
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$
0.31
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First Fiscal Quarter 2014 Highlights
- Net investment income for the quarter ended December 31, 2013 was $13.3 million, or $0.31 per share, as compared to $12.4 million, or $0.31 per share, for the quarter ended
September 30, 2013;
- Net gain on investments and secured borrowings for the quarter
ended December 31, 2013 was
$1.6 million, or $0.03 per share, as compared to $(0.1) million, or $0.00 per share, for the quarter ended
September 30, 2013;
- Net increase in net assets resulting from operations for the
quarter ended December 31, 2013 was
$14.8 million, or $0.34 per share, as compared to $12.3 million, or $0.31 per share, for the quarter ended
September 30, 2013; and
- Our board of directors declared a quarterly distribution on
February 4, 2014 of $0.32 per share, payable on March 28, 2014 to stockholders of record as of
March 17, 2014.
Portfolio and Investment Activities
As of December 31, 2013, the
Company had investments in 139 portfolio companies with a total
fair value of $1,147.2 million and
had investments in subordinated notes and limited liability company
("LLC") interests in Senior Loan Fund LLC ("SLF") with a total fair
value of $32.7 million. The
investments in portfolio companies as of December 31, 2013 consisted of $290.6 million of senior secured loans,
$702.0 million of one stop loans,
$111.0 million of second lien loans,
$5.9 million of subordinated debt and
$37.7 million of equity investments.
This compares to the Company's portfolio as of September 30, 2013, as of which date the Company
had investments in 135 portfolio companies with a total fair value
of $1,019.8 million and had
investments in subordinated notes and LLC interests in SLF with a
total fair value of $4.8
million. The investments in portfolio companies as of
September 30, 2013 consisted of
$296.2 million of senior secured
loans, $554.5 million of one stop
loans, $112.9 million of second lien
loans, $22.6 million of subordinated
debt and $33.7 million of equity
investments.
For the quarter ended December 31,
2013, the Company originated $261.1
million in new middle-market investment commitments and
invested $25.6 million in SLF, making
total new investment commitments $286.7
million. Approximately 12% of the new total investment
commitments were senior secured loans, 71% were one stop loans, 7%
were second lien loans, 1% were equity securities and 9% were
investments in SLF. Overall, total investments at fair value
increased by $155.3 million during
the three months ended December 31,
2013 after factoring in debt repayments, sales of
securities, net fundings on revolvers and net change in unrealized
gains (losses).
For the quarter ended December 31,
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 9.3% and 8.6%, respectively.
Consolidated Results of Operations
Total investment income for the quarter ended December 31, 2013 and September 30, 2013 was $25.6 million and $22.8
million, respectively. This $2.8 million increase was primarily attributable
to an increase in the average earning investment balance and higher
fee income and accelerated discount amortization from prepayments,
which were partially offset by lower dividend income during the
quarter ended December 31,
2013.
Total expenses for the quarter ended December 31, 2013 and September 30, 2013 were $12.3 million and $10.4
million, respectively. This $1.9 million increase was primarily due to a
$0.9 million increase in interest
expense due to the increased leverage as well as increases to
management and incentive fees due to higher average assets and
average investment earning balances and related net investment
income.
During the quarter ended December 31,
2013, the Company recorded a net realized loss of
$(5.0) million and recorded net
unrealized appreciation of $6.6
million. The net realized loss was primarily
attributable to the sale of one under-performing investment and the
write off of two non-accrual investments, all at values close to
their September 30, 2013
valuations. The net unrealized appreciation was primarily
related to net unrealized appreciation on several middle market
debt and equity investments as well as the reversal of the
unrealized depreciation on the under-performing and non-accrual
investments.
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 facilities 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 facilities,
proceeds from its investment portfolio and proceeds from offerings
of its securities to finance its investment objectives.
As of December 31, 2013, the
Company had cash and cash equivalents of $31.9 million, restricted cash of $39.8 million and $591.6
million of debt and secured borrowings outstanding.
As of December 31, 2013,
the Company had $99.1 million
available for additional borrowings on its revolving credit
facilities, subject to leverage and borrowing base
restrictions. As of December 31,
2013, the Company had $28.7
million of additional SBA debentures available, subject to
customary SBA regulatory requirements.
On February 4, 2014, the Company's
board of directors declared a quarterly distribution of
$0.32 per share, payable on
March 28, 2014 to holders of record
as of March 17, 2014.
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 an internal
system developed by Golub Capital and its affiliates. This
system is not generally accepted in our industry or used by our
competitors. It is based on the following categories, which
we refer to as GC Advisors' internal performance rating:
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Internal
Performance Ratings
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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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Our internal performance ratings do not constitute any rating of
investments by a nationally recognized statistical rating
organization or represent or reflect any third-party assessment of
any of our investments.
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 December 31, 2013 and
September 30, 2013:
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December 31,
2013
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September 30,
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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$
161,868
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13.7
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%
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$
178,993
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17.5
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%
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4
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946,309
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80.2
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750,611
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73.3
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3
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68,726
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5.8
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88,458
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8.6
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2
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2,414
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0.2
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6,521
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0.6
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1
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602
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0.1
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62
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0.0
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Total
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$
1,179,919
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100.0
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%
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$
1,024,645
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100.0
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%
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Conference Call
The Company will host an earnings conference call at
2:00 p.m. (Eastern Time) on
Thursday, February 6, 2014 to discuss
the quarterly financial results. All interested parties may
participate in the conference call by dialing (800) 950-1454
approximately 10-15 minutes prior to the call; international
callers should dial (212) 231-2929. 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 Investor Relations link on the homepage of
our website (www.golubcapitalbdc.com) and click on the Quarter
Ended 12.31.13 Investor Presentation
under Events and Presentations. An archived replay of the
call will be available shortly after the call until 1:00 p.m. (Eastern Time) on March 8, 2014. To hear the replay, please
dial (800) 633-8284. International dialers, please dial (402)
977-9140. For all replays, please reference program ID number
21704014.
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,
2013
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September 30,
2013
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Assets
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(unaudited)
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(audited)
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Investments, at fair
value (cost of $1,166,589 and $1,017,961, respectively)
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$
1,179,919
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$
1,024,645
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Cash and cash
equivalents
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31,891
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16,309
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Restricted cash and
cash equivalents
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39,792
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38,408
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Interest
receivable
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4,178
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4,316
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Deferred financing
costs
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8,884
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7,742
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Other
assets
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163
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236
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Total
Assets
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$
1,264,827
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$
1,091,656
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Liabilities
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Debt
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$
577,200
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$
412,100
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Secured borrowings,
at fair value (proceeds of $14,164 and $8,683,
respectively)
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14,366
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8,809
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Interest
payable
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3,159
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1,277
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Management and
incentive fees payable
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6,751
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5,579
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Payable for open
trades
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1,657
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3,677
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Accounts payable and
accrued expenses
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1,713
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1,978
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Total
Liabilities
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604,846
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433,420
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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, 2013 and September 30,
2013
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-
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-
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Common stock, par
value $0.001 per share, 100,000,000 shares authorized,
43,325,575
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and 43,282,932
shares issued and outstanding as of December 31, 2013 and September
30, 2013,
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respectively
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43
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43
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Paid in capital in
excess of par
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653,427
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652,669
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Undistributed net
investment income
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2,135
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|
2,725
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Net unrealized
appreciation on investments, derivative instruments and secured
borrowings
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15,796
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9,225
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Net realized loss on
investments and derivative instruments
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(11,420)
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(6,426)
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Total Net
Assets
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659,981
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|
658,236
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Total Liabilities
and Total Net Assets
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$
1,264,827
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$
1,091,656
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Number of common
shares outstanding
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43,325,575
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43,282,932
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Net asset value per
common share
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$
15.23
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$
15.21
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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,
2013
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September 30,
2013
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(unaudited)
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Investment
income
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Interest
income
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$
25,563
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$
22,446
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Dividend
income
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16
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|
370
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Total investment
income
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25,579
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|
22,816
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Expenses
|
|
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Interest and other
debt financing expenses
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4,092
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3,174
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Base management
fee
|
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3,824
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|
3,480
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Incentive
fee
|
|
3,032
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|
2,196
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Professional
fees
|
|
658
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|
660
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Administrative
service fee
|
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582
|
|
752
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General and
administrative expenses
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131
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|
130
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Total
expenses
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12,319
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|
10,392
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Net investment
income
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13,260
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|
12,424
|
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Net gain (loss) on
investments
|
|
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Net realized loss on
investments
|
|
(4,994)
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|
(1,380)
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Net change in
unrealized appreciation on investments and secured
borrowings
|
|
6,571
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|
1,250
|
|
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Net gain (loss) on
investments and secured borrowings
|
|
1,577
|
|
(130)
|
|
|
|
|
|
Net increase in
net assets resulting from operations
|
|
$
14,837
|
|
$
12,294
|
|
|
|
|
|
Per Common Share
Data
|
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|
|
Basic and diluted
earnings per common share
|
|
$
0.34
|
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$
0.31
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Dividends and
distributions declared per common share
|
|
$
0.32
|
|
$
0.32
|
Basic and diluted
weighted average common shares outstanding
|
|
43,285,250
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|
40,269,680
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ABOUT GOLUB CAPITAL BDC, INC.
Golub Capital BDC, Inc. principally invests in senior secured,
one stop, second lien, and subordinated 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 3Q 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 2013, Golub Capital was awarded
Finance Monthly's Global Awards 2013 "Credit Asset Manager of the
Year," and DealMakers M&A Awards 2013 "Middle Market Lender of
the Year." In 2012, Golub Capital was awarded ACG New York
Champion's Award for "Senior Lender Firm of the Year" and the
M&A Advisor award for "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.