CHICAGO, Feb. 5, 2016 /PRNewswire/ -- Golub Capital
BDC, Inc., a business development company (NASDAQ: GBDC), today
announced its financial results for its first fiscal quarter ended
December 31, 2015.
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,
2015
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September 30,
2015
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Investment portfolio,
at fair value
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$
1,528,462
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$
1,529,784
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Total
assets
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$
1,640,847
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$
1,633,426
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(1)
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Net asset value per
share
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$
15.89
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$
15.80
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Quarter
Ended
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December 31,
2015
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September 30,
2015
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Investment
income
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$
30,500
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$
33,552
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Net investment
income
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$
14,999
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$
15,481
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Net gain on
investments and secured borrowings
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$
5,640
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$
3,989
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Net increase in net
assets resulting from operations
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$
20,639
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$
19,470
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Net earnings per
share
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$
0.40
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$
0.38
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Net gain on
investments and secured borrowings per share
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$
0.11
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$
0.08
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Net investment income
per share
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$
0.29
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$
0.30
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Accrual for capital
gain incentive fee per share
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$
0.03
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$
0.02
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Net investment income
before capital gain incentive fee accrual per share
(2)
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$
0.32
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$
0.32
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(1)
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On October 1, 2015,
we adopted Accounting Standards Update ("ASU") 2015-03 which
requires that debt issuance costs related to a
recognized debt liability to be
presented on the balance sheet as a direct deduction from the
carrying amount of the debt liability rather than as an asset.
Adoption of ASU 2015-03 requires the
changes to be applied
retrospectively.
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(2)
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As a supplement to
U.S. generally accepted accounting principles ("GAAP") financial
measures, the Company has provided this non-GAAP performance result. The Company believes
that this non-GAAP financial measure is useful as it excludes the
accrual of the capital gain
incentive fee, which is not contractually payable under the terms
of the investment advisory agreement with GC
Advisors.
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First Fiscal Quarter 2016 Highlights
- Net increase in net assets resulting from operations for the
quarter ended December 31, 2015 was
$20.6 million, or $0.40 per share, as compared to $19.5 million, or $0.38 per share, for the quarter ended
September 30, 2015;
- Net investment income for the quarter ended December 31, 2015 was $15.0 million, or $0.29 per share, as compared to $15.5 million, or $0.30 per share, for the quarter ended
September 30, 2015;
- Net investment income for the quarter ended December 31, 2015 excluding a $1.4 million accrual for the capital gain
incentive fee under GAAP was $16.4
million, or $0.32 per share,
as compared to $16.3 million, or
$0.32 per share, when excluding a
$0.8 million accrual for the capital
gain incentive fee under GAAP, for the quarter ended September 30, 2015;
- Net gain on investments and secured borrowings for the quarter
ended December 31, 2015 was
$5.6 million, or $0.11 per share, as compared to $4.0 million, or $0.08 per share, for the quarter ended
September 30, 2015; and
- Our board of directors declared a quarterly distribution on
February 2, 2016 of $0.32 per share, payable on March 30, 2016 to stockholders of record as of
March 7, 2016.
Portfolio and Investment Activities
As of December 31, 2015, the
Company had investments in 169 portfolio companies with a total
fair value of $1,416.5 million and
had investments in subordinated notes and limited liability company
("LLC") equity interests in Senior Loan Fund LLC ("SLF") with a
total fair value of $111.9 million.
This compares to the Company's portfolio as of September 30, 2015, as of which date the Company
had investments in 164 portfolio companies with a total fair value
of $1,430.9 million and had
investments in subordinated notes and LLC equity interests in SLF
with a total fair value of $98.9
million. Investments in portfolio companies as of
December 31, 2015 and September 30, 2015 consisted of the
following:
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As of December 31,
2015
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As of
September 30, 2015
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Investments
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Percentage
of
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Investments
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Percentage
of
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Investment
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at Fair
Value
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Total
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at Fair
Value
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Total
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Type
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(In
thousands)
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Investments
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(In
thousands)
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Investments
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Senior
secured
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$
178,284
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11.7
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%
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$
197,329
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12.9
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%
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One stop
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1,135,424
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74.3
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1,134,222
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74.1
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Second
lien
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39,588
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2.6
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39,774
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2.6
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Subordinated
debt
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1,721
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0.1
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1,715
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0.1
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Subordinated notes in
SLF(1)
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82,730
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5.4
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76,563
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5.0
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LLC equity interests
in SLF(1)
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29,199
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1.9
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22,373
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1.5
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Equity
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61,516
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4.0
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57,808
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3.8
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Total
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$
1,528,462
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100.0
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%
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$
1,529,784
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100.0
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%
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(1)
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SLF's proceeds from
the subordinated notes and LLC equity interests invested in SLF
were utilized by SLF to
invest in senior secured loans.
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The following table shows the asset mix of our new investment
commitments for the three months ended December 31, 2015:
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For the three
months ended December 31, 2015
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New
Investment
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Commitments
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Percentage
of
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(In
thousands)
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Commitments
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Senior
secured
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$
35,136
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21.2
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%
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One stop
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113,464
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68.6
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Subordinated notes in
SLF
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6,168
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3.7
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LLC equity interests
in SLF
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9,337
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5.7
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Equity
securities
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1,340
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0.8
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Total new investment
commitments
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$
165,445
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100.0
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%
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Overall, total investments at fair value decreased by
$1.3 million during the three months
ended December 31, 2015 after
factoring in debt repayments, sales of securities, net fundings on
revolvers and net change in unrealized gains (losses). Total
investments at fair value held by SLF increased by 11.6%, or
$36.8 million, after factoring in
debt repayments, sales of securities, net fundings on revolvers and
net change in unrealized gains (losses).
For the three months ended December 31,
2015, 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 income
producing investments in the Company's portfolio were 8.2% and
7.6%, respectively.
Consolidated Results of Operations
Total investment income for the quarters ended December 31, 2015 and September 30, 2015 was $30.5 million and $33.6
million, respectively. This $3.1
million decrease was primarily attributable to lower fee
income from prepayments, accretion of discounts resulting from
decreased payoffs, and lower interest income driven by a small
decline in average investments during the quarter ended
December 31, 2015.
Total expenses for the quarters ended December 31, 2015 and September 30, 2015 were $15.2 million and $18.1
million, respectively. This $2.9
million decrease was primarily attributable to a decrease in
the incentive fee due to lower investment income.
During the quarter ended December 31,
2015, the Company recorded net realized gains of
$5.0 million and recorded net
unrealized appreciation of $0.6
million. The net realized gains were primarily due to the
sale of, or capital gain distributions received from, three equity
investments which was partially offset by a realized loss on the
write-off of one non-accrual portfolio company investment.
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 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 securitizations, SBA
debentures, revolving credit facility, proceeds from its investment
portfolio and proceeds from offerings of its securities and its
dividend reinvestment plan to finance its investment
objectives.
As of December 31, 2015, the
Company had cash and cash equivalents of $6.9 million, restricted cash and cash
equivalents of $94.2 million and
$809.4 million of debt and secured
borrowings outstanding. As of December 31,
2015, the Company had $76.9
million of remaining commitments and $25.1 million available for additional borrowings
on its revolving credit facility, subject to leverage and borrowing
base restrictions.
On February 2, 2016, the Company's
board of directors declared a quarterly distribution of
$0.32 per share, payable on
March 30, 2016 to holders of record
as of March 7, 2016.
Related Party Stock Purchases
During calendar year 2015, the Golub Capital Employee Grant
Program Rabbi Trust (the "Trust") purchased approximately
$16.0 million, or 952,051 shares, of
the Company, for the purpose of awarding incentive compensation to
employees of GC Advisors LLC and its affiliates. During calendar
year 2014, the Trust purchased approximately $14.5 million, or 835,271 shares, of the Company,
for the purpose of awarding incentive compensation to employees of
GC Advisors LLC and its affiliates.
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 ratings:
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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, 2015 and
September 30, 2015:
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December 31,
2015
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September 30,
2015
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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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$
79,344
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5.2
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%
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$
134,142
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8.8
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%
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4
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|
1,342,163
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87.8
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|
1,298,558
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84.9
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3
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|
89,819
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5.9
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|
87,687
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5.7
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|
2
|
|
17,136
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1.1
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|
9,397
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0.6
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|
1
|
|
-
|
|
-
|
|
-
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|
-
|
|
Total
|
|
$
1,528,462
|
|
100.0
|
%
|
$
1,529,784
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Conference Call
The Company will host an earnings conference call at
4:00 p.m. (Eastern Time) on
Monday, February 8, 2016 to discuss
the quarterly financial results. All interested parties may
participate in the conference call by dialing (800) 616-5331
approximately 10-15 minutes prior to the call; international
callers should dial (303) 223-4385. 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
12.31.15 Investor Presentation under
Events/Presentations. An archived replay of the call will be
available shortly after the call until 6:00
p.m. (Eastern Time) on March 9,
2016. To hear the replay, please dial (800) 633-8284.
International dialers, please dial (402) 977-9140. For all replays,
please reference program ID number 21803035.
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,
2015
|
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September 30,
2015
|
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Assets
|
(unaudited)
|
|
(audited)
|
|
Investments, at fair
value (cost of $1,515,330 and $1,517,314, respectively)
|
$
1,528,462
|
|
$
1,529,784
|
|
Cash and cash
equivalents
|
6,871
|
|
5,468
|
|
Restricted cash and
cash equivalents
|
94,199
|
|
92,016
|
|
Interest
receivable
|
5,881
|
|
5,700
|
|
Receivable from
investments sold
|
5,079
|
|
-
|
|
Other
assets
|
355
|
|
458
|
|
Total
Assets
|
$
1,640,847
|
|
$
1,633,426
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Debt
|
$
809,050
|
|
$
813,250
|
|
Less
unamortized debt issuance costs
|
6,448
|
|
7,624
|
(1)
|
Debt less unamortized debt issuance costs
|
802,602
|
|
805,626
|
|
Secured borrowings,
at fair value (proceeds of $343 and $351, respectively)
|
346
|
|
355
|
|
Interest
payable
|
4,872
|
|
2,722
|
|
Management and
incentive fees payable
|
9,566
|
|
11,754
|
|
Payable for open
trades
|
4,677
|
|
-
|
|
Accounts payable and
accrued expenses
|
2,365
|
|
2,042
|
|
Accrued trustee
fees
|
59
|
|
57
|
|
Total
Liabilities
|
824,487
|
|
822,556
|
|
|
|
|
|
|
|
Net
Assets
|
|
|
|
|
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, 2015 and September 30,
2015
|
-
|
|
-
|
|
Common stock, par
value $0.001 per share, 100,000,000 shares authorized,
51,379,787
|
|
|
|
|
and 51,300,193 shares
issued and outstanding as of December 31, 2015 and September 30,
2015,
|
|
|
|
|
respectively
|
51
|
|
51
|
|
Paid in capital in
excess of par
|
791,980
|
|
790,713
|
|
Undistributed net
investment income
|
2,813
|
|
4,230
|
|
Net unrealized
appreciation (depreciation) on investments and secured
borrowings
|
15,796
|
|
15,134
|
|
Net realized gain
(loss) on investments and secured borrowings
|
5,720
|
|
742
|
|
Total Net
Assets
|
816,360
|
|
810,870
|
|
Total Liabilities
and Total Net Assets
|
$
1,640,847
|
|
$
1,633,426
|
|
|
|
|
|
|
|
Number of common
shares outstanding
|
51,379,787
|
|
51,300,193
|
|
Net asset value per
common share
|
$
15.89
|
|
$
15.80
|
|
|
|
|
(1)
|
On October 1,
2015, we adopted ASU 2015-03 which requires that debt issuance
costs related to a recognized debt liability to be presented on
the balance sheet as a direct deduction from the carrying
amount of the debt liability rather than as an asset.
Adoption of ASU 2015-03 requires the changes to be applied
retrospectively.
|
|
Golub Capital BDC,
Inc. and Subsidiaries
|
|
|
|
|
Consolidated
Statements of Operations
|
|
|
|
|
(In thousands,
except share and per share data)
|
|
|
|
|
|
|
Three months
ended
|
|
|
December 31,
2015
|
|
September 30,
2015
|
|
|
(unaudited)
|
|
(unaudited)
|
Investment
income
|
|
|
Interest
income
|
|
$
29,193
|
|
$
31,495
|
Dividend
income
|
|
1,007
|
|
675
|
Fee income
|
|
300
|
|
1,382
|
|
|
|
|
|
Total investment
income
|
|
30,500
|
|
33,552
|
|
|
|
|
|
Expenses
|
|
|
|
|
Interest and other
debt financing expenses
|
|
6,731
|
|
6,657
|
Base management
fee
|
|
5,314
|
|
5,428
|
Incentive
fee
|
|
1,771
|
|
4,514
|
Professional
fees
|
|
731
|
|
732
|
Administrative
service fee
|
|
503
|
|
605
|
General and
administrative expenses
|
|
149
|
|
135
|
|
|
|
|
|
Total
expenses
|
|
15,199
|
|
18,071
|
|
|
|
|
|
Net investment
income - before excise tax
|
|
15,301
|
|
15,481
|
|
|
|
|
|
Excise tax
|
|
302
|
|
-
|
|
|
|
|
|
Net investment
income - after excise tax
|
|
14,999
|
|
15,481
|
|
|
|
|
|
Net gain (loss) on
investments and secured borrowings
|
|
|
|
|
Net realized gain
(loss) on investments
|
|
4,978
|
|
4,851
|
Net change in
unrealized appreciation (depreciation) on investments
|
|
|
|
|
and secured
borrowings
|
|
662
|
|
(862)
|
|
|
|
|
|
Net gain (loss) on
investments and secured borrowings
|
|
5,640
|
|
3,989
|
|
|
|
|
|
Net increase in
net assets resulting from operations
|
|
$
20,639
|
|
$
19,470
|
|
|
|
|
|
Per Common Share
Data
|
|
|
|
|
Basic and diluted
earnings per common share
|
|
$
0.40
|
|
$
0.38
|
Dividends and
distributions declared per common share
|
|
$
0.32
|
|
$
0.32
|
Basic and diluted
weighted average common shares outstanding
|
|
51,302,788
|
|
51,260,320
|
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 $15 billion of capital
under management. The firm has an award-winning middle market
lending business. Golub Capital has three highly complementary
business lines led by experienced teams of credit professionals:
Middle Market Lending, Late Stage Lending and Broadly Syndicated
Loans. Golub Capital's lending offices are located in Chicago, New
York, San Francisco and
Charlotte. 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.
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SOURCE Golub Capital BDC, Inc.