NEW YORK, Nov. 20, 2017 /PRNewswire/ -- Golub Capital
BDC, Inc., a business development company (NASDAQ: GBDC), today
announced its financial results for its fourth fiscal quarter ended
September 30, 2017.
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
|
|
|
|
|
|
|
|
(in thousands, expect
per share data)
|
|
|
|
|
September 30,
2017
|
|
June 30,
2017
|
Investment portfolio,
at fair value
|
$
|
1,685,015
|
|
|
$
|
1,801,808
|
|
Total
assets
|
$
|
1,754,176
|
|
|
$
|
1,855,039
|
|
Net asset value per
share
|
$
|
16.08
|
|
|
$
|
16.01
|
|
|
|
|
|
|
Quarter
Ended
|
|
September 30,
2017
|
|
June 30,
2017
|
Investment
income
|
$
|
34,950
|
|
|
$
|
35,408
|
|
Net investment
income
|
$
|
18,238
|
|
|
$
|
17,808
|
|
Net gain (loss) on
investments and secured borrowings
|
$
|
4,215
|
|
|
$
|
2,303
|
|
Net increase in net
assets resulting from operations
|
$
|
22,453
|
|
|
$
|
20,111
|
|
|
|
|
|
Earnings per
share
|
$
|
0.38
|
|
|
$
|
0.35
|
|
Net gain (loss) on
investments and secured borrowings per share
|
$
|
0.07
|
|
|
$
|
0.04
|
|
Net investment income
per share
|
$
|
0.31
|
|
|
$
|
0.31
|
|
Accrual for capital
gain incentive fee per share
|
$
|
0.01
|
|
|
$
|
0.01
|
|
Net investment income
before capital gain incentive fee accrual per share
(1)
|
$
|
0.32
|
|
|
$
|
0.32
|
|
|
|
|
|
(1) As a
supplement to U.S. generally accepted accounting principles
("GAAP") financial measures, the Company has provided this non-GAAP
financial
measure. 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 Company's investment
advisory agreement with GC Advisors.
|
Fourth Fiscal Quarter 2017 Highlights
- Net increase in net assets resulting from operations for the
quarter ended September 30, 2017 was
$22.5 million, or $0.38 per share, as compared to $20.1 million, or $0.35 per share, for the quarter ended
June 30, 2017;
- Net investment income for the quarter ended September 30, 2017, was $18.3 million, or $0.31 per share, as compared to $17.8 million, or $0.31 per share, for the quarter ended
June 30, 2017;
- Net investment income for the quarter ended September 30, 2017, excluding a $0.8 million accrual for the capital gain
incentive fee under GAAP, was $19.1
million, or $0.32 per share,
as compared to $18.4 million, or
$0.32 per share, excluding a
$0.6 million accrual for the capital
gain incentive fee under GAAP, for the quarter ended June 30, 2017;
- Net gain on investments and secured borrowings for the quarter
ended September 30, 2017 was
$4.2 million, or $0.07 per share, as compared to a net gain of
$2.3 million, or $0.04 per share, for the quarter ended
June 30, 2017; and
- Our board of directors declared on November 17, 2017 a quarterly distribution of
$0.32 per share and a special
distribution of $0.08 per share both
of which are payable on December 28,
2017 to stockholders of record as of December 12, 2017.
Portfolio and Investment Activities
As of September 30, 2017, the Company had investments in
185 portfolio companies with a total fair value of $1,590.0 million and had investments in Senior
Loan Fund LLC ("SLF") with a total fair value of $95.0 million. This compares to the Company's
portfolio as of June 30, 2017, as of which date the Company
had investments in 188 portfolio companies with a total fair value
of $1,692.9 million and investments
in SLF with a total fair value of $108.9
million. Investments in portfolio companies as of
September 30, 2017 and June 30, 2017 consisted of the
following:
|
|
As of September
30, 2017
|
|
As of June 30,
2017
|
|
|
Investments
|
|
Percentage
of
|
|
Investments
|
|
Percentage
of
|
Investment
|
|
at Fair
Value
|
|
Total
|
|
at Fair
Value
|
|
Total
|
Type
|
|
(In
thousands)
|
|
Investments
|
|
(In
thousands)
|
|
Investments
|
Senior
secured
|
|
$
|
195,029
|
|
|
11.6
|
%
|
|
$
|
192,123
|
|
|
10.7
|
%
|
One stop
|
|
1,334,084
|
|
|
79.2
|
|
|
1,429,917
|
|
|
79.4
|
|
Second
lien
|
|
9,434
|
|
|
0.6
|
|
|
9,434
|
|
|
0.5
|
|
Subordinated
debt
|
|
59
|
|
|
0.0
|
*
|
|
58
|
|
|
0.0
|
*
|
LLC equity interests
in SLF
|
|
95,015
|
|
|
5.6
|
|
|
108,879
|
|
|
6.0
|
|
Equity
|
|
51,394
|
|
|
3.0
|
|
|
61,397
|
|
|
3.4
|
|
Total
|
|
$
|
1,685,015
|
|
|
100.0
|
%
|
|
$
|
1,801,808
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
Represents an amount less than 0.1%.
|
The following table shows the asset mix of our new investment
commitments for the three months ended September 30, 2017:
|
For the three
months ended September 30, 2017
|
|
New
Investment
|
|
|
|
Commitments
|
|
Percentage
of
|
|
(In
thousands)
|
|
Commitments
|
|
|
|
|
Senior
secured
|
$
|
18,120
|
|
|
14.0
|
%
|
One stop
|
109,234
|
|
|
84.8
|
|
Equity
securities
|
1,514
|
|
|
1.2
|
|
Total new investment
commitments
|
$
|
128,868
|
|
|
100.0
|
%
|
|
|
|
|
Overall, total investments at fair value decreased by 6.5%, or
$116.8 million, during the three
months ended September 30, 2017 after factoring in debt
repayments, sales of securities, net fundings on revolvers and net
change in unrealized gain (loss). Total investments at fair value
held by SLF decreased by 6.6%, or $21.3
million, after factoring in debt repayments, sales of
securities, net fundings on revolvers and net change in unrealized
gain (loss).
For the three months ended September 30, 2017, 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 portfolio company
investments in the Company's portfolio were 8.5% and 7.8%,
respectively.
Consolidated Results of Operations
Total investment income for the quarters ended
September 30, 2017 and June 30, 2017 was $35.0 million and $35.4
million, respectively. This $0.4
million decrease was primarily attributable to lower fee
income from prepayments during the quarter ended September 30,
2017.
Total expenses for the quarters ended September 30, 2017
and June 30, 2017 were $16.7
million and $17.6 million,
respectively. This $0.9 million
decrease was primarily attributable to a decrease in the incentive
fee due to lower investment income.
During the quarter ended September 30, 2017, the Company
recorded a net realized gain of $11.0
million and recorded net unrealized depreciation of
$6.8 million. The net realized gain
was primarily due to the sale of nine equity investments and the
sale of portfolio company investments to SLF. The net unrealized
depreciation was due to the reversal of unrealized appreciation
associated with the sale of the portfolio company investments
driving the realized gain partially offset by the rise in market
prices 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 investments 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
and its dividend reinvestment plan to finance its investment
objectives.
As of September 30, 2017, the Company had cash and cash
equivalents of $4.0 million,
restricted cash and cash equivalents of $58.6 million and $781.1
million of debt and secured borrowings outstanding. As of
September 30, 2017, the Company had $161.9 million of remaining commitments and
$95.0 million available for
additional borrowings on its senior secured revolving credit
facility with Wells Fargo Bank, N.A., as lender and administrative
agent ("Credit Facility"), subject to leverage and borrowing base
restrictions. As of September 30, 2017, through our SBIC
licensees, we had $58.0 million of
debenture commitments, of which $30.0
million was available to be drawn, subject to customary SBA
regulatory requirements.
On September 28, 2017, Golub
Capital BDC Funding LLC, a wholly owned subsidiary of the Company
("Funding"), entered into an amendment to the Credit Facility which
amendment, was effective as of September 28,
2017 and, among other things, (a) extended the expiration of
the reinvestment period from September 27,
2017 to September 27, 2018,
during which period Funding, subject to certain conditions, may
make borrowings under the facility and (b) extended the stated
maturity date from September 28, 2020
to September 28, 2022. The other
material terms of the Credit Facility were unchanged.
On November 17, 2017, the Board
declared a quarterly distribution of $0.32 per share and a special distribution of
$0.08 per share both of which are
payable on December 28, 2017 to
holders of record as of December 12,
2017.
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:
|
|
|
Internal
Performance Ratings
|
Rating
|
|
Definition
|
5
|
|
Involves the least
amount of risk in our portfolio. The borrower is performing above
expectations, and
the trends and risk factors are generally favorable.
|
|
|
|
4
|
|
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.
|
|
|
|
3
|
|
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.
|
|
|
|
2
|
|
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).
|
|
|
|
1
|
|
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.
|
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, 2017 and June 30, 2017:
|
|
|
|
|
|
|
|
|
|
|
September 30,
2017
|
|
June 30,
2017
|
Internal
|
|
Investments
|
|
Percentage
of
|
|
Investments
|
|
Percentage
of
|
Performance
|
|
at Fair
Value
|
|
Total
|
|
at Fair
Value
|
|
Total
|
Rating
|
|
(In
thousands)
|
|
Investments
|
|
(In
thousands)
|
|
Investments
|
5
|
|
$
|
91,525
|
|
|
5.5
|
%
|
|
$
|
212,063
|
|
|
11.8
|
%
|
4
|
|
1,378,316
|
|
|
81.8
|
|
|
1,377,526
|
|
|
76.5
|
|
3
|
|
212,629
|
|
|
12.6
|
|
|
209,231
|
|
|
11.6
|
|
2
|
|
249
|
|
|
0.0
|
*
|
|
240
|
|
|
0.0
|
*
|
1
|
|
2,296
|
|
|
0.1
|
|
|
2,748
|
|
|
0.1
|
|
Total
|
|
$
|
1,685,015
|
|
|
100.0
|
%
|
|
$
|
1,801,808
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
Represents an amount less than 0.1%.
|
Conference Call
The Company will host an earnings conference call at
11:00 a.m. (Eastern Time) on
Tuesday, November 21, 2017 to discuss
the quarterly financial results. All interested parties may
participate in the conference call by dialing (800) 410-4983
approximately 10-15 minutes prior to the call; international
callers should dial (303) 223-4360. 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 Resources link on the homepage of our website
(www.golubcapitalbdc.com) and click on the Quarter Ended
9.30.17 Investor Presentation under
Events/Presentations. An archived replay of the call will be
available shortly after the call until 1:00
p.m. (Eastern Time) on December 21,
2017. To hear the replay, please dial (800) 633-8284.
International dialers, please dial (402) 977-9140. For all replays,
please reference program ID number 21859906.
Golub Capital BDC,
Inc. and Subsidiaries
|
|
|
|
Consolidated
Statements of Financial Condition
|
|
|
|
(In thousands,
except share and per share data)
|
|
|
|
|
|
|
|
|
September 30,
2017
|
|
June 30,
2017
|
Assets
|
(audited)
|
|
(unaudited)
|
Investments, at fair
value (cost of $1,671,239 and $1,781,227, respectively)
|
$
|
1,685,015
|
|
|
$
|
1,801,808
|
|
Cash and cash
equivalents
|
3,988
|
|
|
12,827
|
|
Restricted cash and
cash equivalents
|
58,570
|
|
|
33,042
|
|
Interest
receivable
|
6,271
|
|
|
5,871
|
|
Receivable from
investments sold
|
—
|
|
|
1,317
|
|
Other
assets
|
332
|
|
|
174
|
|
Total
Assets
|
$
|
1,754,176
|
|
|
$
|
1,855,039
|
|
|
|
|
|
Liabilities
|
|
|
|
Debt
|
$
|
781,100
|
|
|
$
|
883,400
|
|
Less unamortized debt
issuance costs
|
4,273
|
|
|
4,284
|
|
Debt less unamortized
debt issuance costs
|
776,827
|
|
|
879,116
|
|
Secured borrowings,
at fair value (proceeds of $0 and $403, respectively)
|
—
|
|
|
406
|
|
Interest
payable
|
3,800
|
|
|
6,274
|
|
Management and
incentive fees payable
|
13,215
|
|
|
13,404
|
|
Accounts payable and
accrued expenses
|
2,312
|
|
|
2,264
|
|
Payable for open
trades
|
—
|
|
|
5,294
|
|
Accrued trustee
fees
|
76
|
|
|
62
|
|
Total
Liabilities
|
796,230
|
|
|
906,820
|
|
|
|
|
|
Net
Assets
|
|
|
|
Preferred stock, par
value $0.001 per share, 1,000,000 shares authorized, zero shares
issued
and outstanding as of September 30,
2017 and June 30, 2017
|
—
|
|
|
—
|
|
Common stock, par
value $0.001 per share, 100,000,000 shares authorized, 59,577,293
and
59,235,174 shares issued and
outstanding as of September 30, 2017 and June 30, 2017,
respectively
|
60
|
|
|
59
|
|
Paid in capital in
excess of par
|
939,269
|
|
|
932,970
|
|
Undistributed net
investment income
|
3,074
|
|
|
3,862
|
|
Net unrealized
appreciation (depreciation) on investments and secured
borrowings
|
16,444
|
|
|
23,247
|
|
Net realized gain
(loss) on investments
|
(901)
|
|
|
(11,919)
|
|
Total Net
Assets
|
957,946
|
|
|
948,219
|
|
Total Liabilities
and Total Net Assets
|
$
|
1,754,176
|
|
|
$
|
1,855,039
|
|
|
|
|
|
Number of common
shares outstanding
|
59,577,293
|
|
|
59,235,174
|
|
Net asset value per
common share
|
$
|
16.08
|
|
|
$
|
16.01
|
|
|
|
|
|
|
|
|
|
Golub Capital BDC,
Inc. and Subsidiaries
|
|
|
|
|
Consolidated
Statements of Operations
|
|
|
|
|
(In thousands,
except share and per share data)
|
|
|
|
|
|
|
Three months
ended
|
|
|
September 30,
2017
|
|
June 30,
2017
|
|
|
(unaudited)
|
|
(unaudited)
|
Investment
income
|
|
|
Interest
income
|
|
$
|
33,549
|
|
|
$
|
33,249
|
|
Dividend
income
|
|
1,066
|
|
|
1,169
|
|
Fee income
|
|
335
|
|
|
990
|
|
|
|
|
|
|
Total investment
income
|
|
34,950
|
|
|
35,408
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
Interest and other
debt financing expenses
|
|
8,155
|
|
|
8,099
|
|
Base management
fee
|
|
6,072
|
|
|
6,059
|
|
Incentive
fee
|
|
1,285
|
|
|
2,073
|
|
Professional
fees
|
|
461
|
|
|
638
|
|
Administrative
service fee
|
|
620
|
|
|
595
|
|
General and
administrative expenses
|
|
119
|
|
|
136
|
|
|
|
|
|
|
Total
expenses
|
|
16,712
|
|
|
17,600
|
|
|
|
|
|
|
Net investment
income
|
|
18,238
|
|
|
17,808
|
|
|
|
|
|
|
Net gain (loss) on
investments and secured borrowings
|
|
|
|
|
Net realized gain
(loss) on investments
|
|
11,018
|
|
|
(3,209)
|
|
Net change in
unrealized appreciation (depreciation) on investments
and secured borrowings
|
|
(6,803)
|
|
|
5,512
|
|
|
|
|
|
|
Net gain (loss) on
investments and secured borrowings
|
|
4,215
|
|
|
2,303
|
|
|
|
|
|
|
Net increase in
net assets resulting from operations
|
|
$
|
22,453
|
|
|
$
|
20,111
|
|
|
|
|
|
|
Per Common Share
Data
|
|
|
|
|
Basic and diluted
earnings per common share
|
|
$
|
0.38
|
|
|
$
|
0.35
|
|
Dividends and
distributions declared per common share
|
|
$
|
0.32
|
|
|
$
|
0.32
|
|
Basic and diluted
weighted average common shares outstanding
|
|
59,448,470
|
|
|
57,719,505
|
|
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 and one stop loans
of U.S. 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 $20 billion of capital
under management. For over 20 years, the firm has provided credit
to help medium-sized U.S. businesses grow. The firm's award-winning
middle market lending business helps provide financing for middle
market companies and their private equity sponsors. Golub Capital's
credit expertise also forms the foundation of its Late Stage
Lending and Broadly Syndicated Loan businesses. Golub Capital has
worked hard to build a reputation as a fast, reliable provider of
compelling financing solutions, and we believe this has inspired
repeat clients and investors. Today, the firm has over 300
employees with lending offices in Chicago, New
York and San Francisco. For
more information, please visit 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.