CHICAGO, Nov. 18, 2014 /PRNewswire/ -- Golub Capital
BDC, Inc., a business development company (NASDAQ: GBDC), today
announced its financial results for the fourth fiscal quarter ended
September 30, 2014.
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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|
|
|
|
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September 30,
2014
|
|
June 30,
2014
|
|
Investment portfolio,
at fair value
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$
1,347,612
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|
$
1,324,890
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|
Total
assets
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$
1,443,388
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$
1,462,113
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Net asset value per
share
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$
15.55
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$
15.44
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|
|
|
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Quarter
Ended
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September 30,
2014
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June 30,
2014
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Investment
income
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$
30,658
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$
28,029
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Net investment
income
|
$
14,850
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|
$
15,073
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Net gain on
investments and secured borrowings
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$
5,332
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$
1,207
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Net increase in net
assets resulting from operations
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$
20,182
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$
16,280
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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 and secured borrowings per share
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$
0.11
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$
0.03
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Net earnings per
share
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$
0.43
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$
0.35
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Fourth Fiscal Quarter 2014 Highlights
- Net investment income for the quarter ended September 30, 2014 was $14.9 million, or $0.32 per share, as compared to $15.1 million, or $0.32 per share, for the quarter ended
June 30, 2014;
- Net gain on investments and secured borrowings for the quarter
ended September 30, 2014 was
$5.3 million, or $0.11 per share, as compared to $1.2 million, or $0.03 per share, for the quarter ended
June 30, 2014;
- Net increase in net assets resulting from operations for the
quarter ended September 30, 2014 was
$20.2 million, or $0.43 per share, as compared to $16.3 million, or $0.35 per share, for the quarter ended
June 30, 2014; and
- Our board of directors declared a quarterly distribution on
November 17, 2014 of $0.32 per share, payable on December 29, 2014 to stockholders of record as of
December 18, 2014.
Portfolio and Investment Activities
As of September 30, 2014, the
Company had investments in 145 portfolio companies with a total
fair value of $1,312.8 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 $34.8 million. This
compares to the Company's portfolio as of June 30, 2014, as of which date the Company had
investments in 146 portfolio companies with a total fair value of
$1,290.5 million and had investments
in subordinated notes and LLC interests in SLF with a total fair
value of $34.4 million.
Investments in portfolio companies, excluding SLF, as of
September 30, 2014 and June 30, 2014 consisted of the following:
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Investments at
Fair Value
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(In
thousands)
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Investment
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As
of
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As
of
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Type
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September 30,
2014
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June 30,
2014
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Senior
secured
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$
262,859
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$
289,390
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One stop
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940,729
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866,413
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Second
lien
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59,964
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86,784
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Subordinated
debt
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3,710
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4,164
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Equity
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45,519
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43,742
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Total
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$
1,312,781
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$
1,290,493
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For the quarter ended September 30,
2014, the Company originated $331.5
million in new middle-market investment commitments and made
a net investment of $1.1 million in
SLF, making total new investment commitments $332.6 million for the quarter.
Approximately 11% of the new total investment commitments were
senior secured loans, 81% were one stop loans, 6% were second lien,
2% were equity securities and less than 1% were investments in
SLF. Overall, total investments at fair value increased by
$22.7 million during the quarter
ended September 30, 2014 after
factoring in debt repayments, sales of securities, net fundings on
revolvers and net change in unrealized gains (losses).
For the quarter ended September 30,
2014, the weighted average annualized investment income
yield (which includes interest and fee income and amortization of
capitalized fees and discounts) and the weighted average annualized
income yield (which excludes income resulting from amortization of
capitalized fees and discounts) on the fair value of earning
investments in the Company's portfolio were 9.3% and 8.2%,
respectively.
Consolidated Results of Operations
Total investment income for the quarters ended September 30, 2014 and June 30, 2014 was $30.7
million and $28.0 million,
respectively. This $2.7 million
increase was primarily attributable to an increase in the average
earning investment balance, higher fee income from prepayments and
accretion of discounts resulting from increased payoffs in the
quarter ended September 30,
2014.
Total expenses for the quarters ended September 30, 2014 and June 30, 2014 were $15.8
million and $13.0 million,
respectively. This $2.8 million
increase was primarily due to 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 September 30,
2014, the Company recorded a net realized gain of
$10.3 million and recorded net
unrealized depreciation of $5.0
million. The net realized gain was the result of the
sale of five equity investments during the quarter. The net
unrealized depreciation was primarily related to a reversal of net
unrealized appreciation on the equity investments sold during the
quarter which was partially offset by net unrealized appreciation
on several middle-market debt and equity investments.
Liquidity and Capital Resources
The Company's liquidity and capital resources are derived from
the Company's debt securitizations, 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
securitizations, SBA debentures, revolving credit facilities,
proceeds from its investment portfolio and proceeds from offerings
of its securities to finance its investment
objectives.
As of September 30, 2014, the
Company had cash and cash equivalents of $5.1 million, restricted cash and cash
equivalents of $74.8 million and
$697.5 million of debt and secured
borrowings outstanding. As of September 30, 2014, the Company had $137.6 million of commitments and $71.2 million available for additional borrowings
on its revolving credit facilities, subject to leverage and
borrowing base restrictions. As of September 30, 2014, the Company had $16.2 million of additional SBA debentures
available, subject to customary SBA regulatory requirements.
On November 17, 2014, the
Company's board of directors declared a quarterly distribution of
$0.32 per share, payable on
December 29, 2014 to holders of
record as of December 18, 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 September 30, 2014 and
June 30, 2014:
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September 30,
2014
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June 30,
2014
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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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$
129,806
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9.7
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%
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$
305,316
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23.0
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%
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4
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1,144,232
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84.9
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949,643
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71.7
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3
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68,944
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5.1
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65,257
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4.9
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2
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4,625
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0.3
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4,459
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0.4
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1
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5
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0.0
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*
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215
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0.0
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*
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Total
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$
1,347,612
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100.0
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%
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$
1,324,890
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100.0
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%
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* Represents an
amount less than 0.1%.
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Conference Call
The Company will host an earnings conference call at
9:30 a.m. (Eastern Time) on
Wednesday, November 19, 2014 to
discuss the quarterly and annual financial results. All
interested parties may participate in the conference call by
dialing (877) 593-4291 approximately 10-15 minutes prior to the
call; international callers should dial (513) 299-0703.
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
09.30.14 Investor Presentation under
Events/Presentations. An archived replay of the call will be
available shortly after the call until 12:30
p.m. (Eastern Time) on December 20,
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 21737262.
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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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September 30,
2014
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June 30,
2014
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Assets
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(audited)
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(unaudited)
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Investments, at fair
value (cost of $1,337,580 and $1,309,706, respectively)
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$
1,347,612
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$
1,324,890
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Cash and cash
equivalents
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5,135
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11,392
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Restricted cash and
cash equivalents
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74,808
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109,818
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Interest
receivable
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5,791
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5,222
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Deferred financing
costs
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9,515
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10,514
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Other
assets
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527
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|
277
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Total
Assets
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$
1,443,388
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$
1,462,113
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Liabilities
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Debt
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$
697,150
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$
703,300
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Secured borrowings,
at fair value (proceeds of $384 and $20,064,
respectively)
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389
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20,264
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Interest
payable
|
3,196
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3,689
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Management and
incentive fees payable
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8,451
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5,897
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Accounts payable and
accrued expenses
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1,397
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2,140
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Accrued trustee
fees
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66
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|
49
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Total
Liabilities
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710,649
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735,339
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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 September 30, 2014 and June 30,
2014.
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-
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-
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Common stock, par
value $0.001 per share, 100,000,000 shares authorized,
47,119,498
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and 47,065,030 shares
issued and outstanding as of September 30, 2014 and June 30,
2014,
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respectively
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47
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47
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Paid in capital in
excess of par
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720,479
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718,760
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Undistributed net
investment income
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3,627
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|
1,647
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Net unrealized
appreciation (depreciation) on investments, derivative
instruments
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and secured
borrowings
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12,694
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17,652
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Net realized gain
(loss) on investments and derivative instruments
|
(4,108)
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|
(11,332)
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Total Net
Assets
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732,739
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|
726,774
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Total Liabilities
and Total Net Assets
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$
1,443,388
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$
1,462,113
|
|
|
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Number of common
shares outstanding
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47,119,498
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|
47,065,030
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Net asset value per
common share
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$
15.55
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$
15.44
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Golub Capital BDC,
Inc. and Subsidiaries
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Consolidated
Statements of Operations
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(In thousands,
except share and per share data)
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Three months
ended
|
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September 30,
2014
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June 30,
2014
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(unaudited)
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Investment
income
|
|
|
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Interest
income
|
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$
28,840
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$
26,035
|
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Dividend
income
|
|
536
|
|
952
|
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Fee income
|
|
1,282
|
|
1,042
|
|
|
|
|
|
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Total investment
income
|
|
30,658
|
|
28,029
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
Interest and other
debt financing expenses
|
|
5,987
|
|
5,609
|
|
Base management
fee
|
|
4,650
|
|
4,394
|
|
Incentive
fee
|
|
3,833
|
|
1,607
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|
Professional
fees
|
|
574
|
|
578
|
|
Administrative
service fee
|
|
548
|
|
655
|
|
General and
administrative expenses
|
|
216
|
|
113
|
|
|
|
|
|
|
Total
expenses
|
|
15,808
|
|
12,956
|
|
|
|
|
|
|
Net investment
income
|
|
14,850
|
|
15,073
|
|
|
|
|
|
|
Net gain (loss) on
investments
|
|
|
|
|
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Net realized gain
(loss) on investments
|
|
10,290
|
|
1
|
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Net change in
unrealized appreciation (depreciation) on investments
|
|
|
|
|
|
and secured
borrowings
|
|
(4,958)
|
|
1,206
|
|
|
|
|
|
|
Net gain (loss) on
investments and secured borrowings
|
|
5,332
|
|
1,207
|
|
|
|
|
|
|
Net increase in
net assets resulting from operations
|
|
$
20,182
|
|
$
16,280
|
|
|
|
|
|
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Per Common Share
Data
|
|
|
|
|
|
Basic and diluted
earnings per common share
|
|
$
0.43
|
|
$
0.35
|
|
Dividends and
distributions declared per common share
|
|
$
0.32
|
|
$
0.32
|
|
Basic and diluted
weighted average common shares outstanding
|
|
47,067,990
|
|
46,985,908
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ABOUT GOLUB CAPITAL BDC, INC.
Golub Capital BDC, Inc. ("Golub Capital BDC") is an
externally-managed, non-diversified closed-end management
investment company that has elected to be treated as a business
development company under the Investment Company Act of 1940.
Golub Capital BDC invests primarily in senior secured, one stop,
second lien and subordinated loans of middle-market companies that
are often sponsored by private equity investors. Golub Capital
BDC'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 is a nationally recognized credit asset manager
with over $10 billion of capital
under management. Golub Capital has three highly complementary
business lines: Middle Market Lending, Broadly Syndicated Loans and
Opportunistic Credit. Golub Capital's lending offices are located
in Chicago, New York and San
Francisco. 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.