NEW YORK, Feb. 7, 2018
/PRNewswire/ -- Golub Capital BDC, Inc., a business development
company (NASDAQ: GBDC), today announced its financial results for
its first fiscal quarter ended December 31, 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)
|
|
|
|
|
December 31,
2017
|
|
September 30,
2017
|
Investment portfolio,
at fair value
|
$
|
1,723,372
|
|
|
$
|
1,685,015
|
|
Total
assets
|
$
|
1,807,327
|
|
|
$
|
1,754,176
|
|
Net asset value per
share
|
$
|
16.04
|
|
|
$
|
16.08
|
|
|
|
|
|
|
Quarter
Ended
|
|
December 31,
2017
|
|
September 30,
2017
|
Investment
income
|
$
|
36,450
|
|
|
$
|
34,950
|
|
Net investment
income
|
$
|
18,511
|
|
|
$
|
18,238
|
|
Net gain (loss) on
investments
|
$
|
2,804
|
|
|
$
|
4,215
|
|
Net increase in net
assets resulting from operations
|
$
|
21,315
|
|
|
$
|
22,453
|
|
|
|
|
|
Earnings per
share
|
$
|
0.36
|
|
|
$
|
0.38
|
|
Net gain (loss) on
investments per share
|
$
|
0.05
|
|
|
$
|
0.07
|
|
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, including the portion of such accrual
that is not contractually payable under the terms of the Company's
investment advisory agreement with GC Advisors. (the "Investment
Advisory Agreement"). As of December 31, 2017, the cumulative
capital gain incentive fee accrued by the Company in accordance
with GAAP is $7.6 million, of which $1.2 million was payable as a
capital gain incentive fee payable pursuant to the Investment
Advisory Agreement as of December 31, 2017. The Company did not pay
any capital gain incentive fees under the Investment Advisory
Agreement for any period ended prior to December 31, 2017. Although
this non-GAAP financial measure is intended to enhance investors'
understanding of the Company's business and performance, this
non-GAAP financial measure should not be considered an alternative
to GAAP.
|
First Fiscal Quarter 2018 Highlights
- Net increase in net assets resulting from operations for the
quarter ended December 31, 2017 was
$21.3 million, or $0.36 per share, as compared to $22.5 million, or $0.38 per share, for the quarter ended
September 30, 2017;
- Net investment income for the quarter ended December 31, 2017 was $18.5 million, or $0.31 per share, as compared to $18.3 million, or $0.31 per share, for the quarter ended
September 30, 2017;
- Net investment income for the quarter ended December 31, 2017 excluding a $0.7 million accrual for the capital gain
incentive fee under GAAP was $19.2
million, or $0.32 per share,
as compared to $19.1 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, 2017;
- Net gain on investments for the quarter ended December 31, 2017 was $2.8
million, or $0.05 per share,
as compared to a net gain of $4.2
million, or $0.07 per share,
for the quarter ended September 30,
2017; and
- Our board of directors declared on February 6, 2018 a quarterly distribution of
$0.32 per share payable on
March 30, 2018 to stockholders of
record as of March 8, 2018.
Portfolio and Investment Activities
As of December 31, 2017, the Company had investments in 190
portfolio companies with a total fair value of $1,631.8 million and had investments in Senior
Loan Fund LLC ("SLF") with a total fair value of $91.6 million. This compares to the Company's
portfolio as of September 30, 2017, as of which date the
Company had investments in 185 portfolio companies with a total
fair value of $1,590.0 million and
investments in SLF with a total fair value of $95.0 million. Investments in portfolio companies
as of December 31, 2017 and September 30, 2017 consisted
of the following:
|
|
As of December 31,
2017
|
|
As of September
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
|
|
$
|
193,459
|
|
|
11.2
|
%
|
|
$
|
195,029
|
|
|
11.6
|
%
|
One stop
|
|
1,380,000
|
|
|
80.1
|
|
|
1,334,084
|
|
|
79.2
|
|
Second
lien
|
|
9,435
|
|
|
0.6
|
|
|
9,434
|
|
|
0.6
|
|
Subordinated
debt
|
|
60
|
|
|
0.0*
|
|
|
59
|
|
|
0.0*
|
|
LLC equity interests
in SLF
|
|
91,591
|
|
|
5.3
|
|
|
95,015
|
|
|
5.6
|
|
Equity
|
|
48,827
|
|
|
2.8
|
|
|
51,394
|
|
|
3.0
|
|
Total
|
|
$
|
1,723,372
|
|
|
100.0
|
%
|
|
$
|
1,685,015
|
|
|
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 December 31, 2017:
|
For the three
months ended December 31, 2017
|
|
New
Investment
|
|
|
|
Commitments
|
|
Percentage
of
|
|
(In
thousands)
|
|
Commitments
|
|
|
|
|
Senior
secured
|
$
|
38,498
|
|
|
27.1
|
%
|
One stop
|
102,634
|
|
|
72.1
|
|
Equity
securities
|
1,114
|
|
|
0.8
|
|
Total new investment
commitments
|
$
|
142,246
|
|
|
100.0
|
%
|
|
|
|
|
Overall, total investments at fair value increased by 2.3%, or
$38.4 million, during the three
months ended December 31, 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 7.2%, or $21.7
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 December 31, 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 7.9%,
respectively.
Consolidated Results of Operations
Total investment income for the quarters ended December 31,
2017 and September 30, 2017 was $36.5
million and $35.0 million,
respectively. This $1.5 million
increase was primarily attributable to increased income from our
investment in SLF that was attributable to a rise in the credit
performance of SLF's portfolio.
Total expenses for the quarters ended December 31, 2017 and
September 30, 2017 were $17.9
million and $16.7 million,
respectively. This $1.2 million
increase was primarily attributable to an increase in the incentive
fee due to higher investment income. In addition, as of
December 31, 2017, the Company
incurred a capital gain incentive fee payable pursuant to the
Investment Advisory Agreement of $1.2
million.
During the quarter ended December 31, 2017, the Company
recorded a net realized gain of $0.5
million and recorded net unrealized appreciation of
$2.3 million. The net realized gain
was primarily due to the sale of six equity investments which was
partially offset by the write off of one non-accrual portfolio
company investment. The net unrealized appreciation was due to the
reversal of unrealized depreciation associated with the write off
of the portfolio company investment coupled with 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 December 31, 2017, the Company had cash and cash
equivalents of $5.8 million,
restricted cash and cash equivalents of $71.4 million and $828.3
million of debt outstanding. As of December 31, 2017,
the Company had $59.7 million of
remaining commitments and $59.7
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 December 31,
2017, through our licensees, we had $58.0
million of SBA debenture commitments, of which $13.0 million was available to be drawn, subject
to customary SBA regulatory requirements.
On February 6, 2018, the Company's Board of Directors
declared a quarterly distribution of $0.32 per share, payable on March 30, 2018
to holders of record as of March 8, 2018.
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 December 31, 2017 and September 30, 2017:
|
|
|
|
|
|
|
|
|
|
|
December 31,
2017
|
|
September 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
|
|
$
|
137,146
|
|
|
8.0
|
%
|
|
$
|
91,525
|
|
|
5.5
|
%
|
4
|
|
1,411,330
|
|
|
81.9
|
|
|
1,378,316
|
|
|
81.8
|
|
3
|
|
170,010
|
|
|
9.9
|
|
|
212,629
|
|
|
12.6
|
|
2
|
|
3,720
|
|
|
0.2
|
|
|
249
|
|
|
0.0*
|
|
1
|
|
1,166
|
|
|
0.0*
|
|
|
2,296
|
|
|
0.1
|
|
Total
|
|
$
|
1,723,372
|
|
|
100.0
|
%
|
|
$
|
1,685,015
|
|
|
100.0
|
%
|
*
|
Represents an amount
less than 0.1%.
|
Conference Call
The Company will host an earnings conference call at
2:00 p.m. (Eastern Time) on Thursday,
February 8, 2018 to discuss the quarterly financial results. All
interested parties may participate in the conference call by
dialing (800) 954-0687 approximately 10-15 minutes prior to the
call; international callers should dial (212) 271-4615.
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 12.31.17
Investor Presentation under Events/Presentations. An archived
replay of the call will be available shortly after the call until
4:00 p.m. (Eastern Time) on
March 10, 2018. To hear the replay,
please dial (800) 633-8284. International dialers, please dial
(402) 977-9140. For all replays, please reference program ID number
21879527.
Golub Capital BDC,
Inc. and Subsidiaries
|
|
|
|
Consolidated
Statements of Financial Condition
|
|
|
|
(In thousands,
except share and per share data)
|
|
|
|
|
|
|
|
|
December 31,
2017
|
|
September 30,
2017
|
Assets
|
(unaudited)
|
|
(audited)
|
Investments, at fair
value (cost of $1,707,273 and $1,671,239, respectively)
|
$
|
1,723,372
|
|
|
$
|
1,685,015
|
|
Cash and cash
equivalents
|
5,750
|
|
|
3,988
|
|
Restricted cash and
cash equivalents
|
71,380
|
|
|
58,570
|
|
Interest
receivable
|
6,536
|
|
|
6,271
|
|
Other
assets
|
289
|
|
|
332
|
|
Total
Assets
|
$
|
1,807,327
|
|
|
$
|
1,754,176
|
|
|
|
|
|
Liabilities
|
|
|
|
Debt
|
$
|
828,300
|
|
|
$
|
781,100
|
|
Less unamortized debt
issuance costs
|
3,514
|
|
|
4,273
|
|
Debt less unamortized
debt issuance costs
|
824,786
|
|
|
776,827
|
|
Interest
payable
|
6,132
|
|
|
3,800
|
|
Management and
incentive fees payable
|
15,506
|
|
|
13,215
|
|
Accounts payable and
accrued expenses
|
1,973
|
|
|
2,312
|
|
Payable for open
trades
|
550
|
|
|
—
|
|
Accrued trustee
fees
|
78
|
|
|
76
|
|
Total
Liabilities
|
849,025
|
|
|
796,230
|
|
|
|
|
|
Net
Assets
|
|
|
|
Preferred stock, par
value $0.001 per share, 1,000,000 shares authorized, zero shares
issued
and outstanding as of December 31,
2017 and September 30, 2017
|
—
|
|
|
—
|
|
Common stock, par
value $0.001 per share, 100,000,000 shares authorized, 59,741,248
and
59,577,293 shares issued and
outstanding as of December 31, 2017 and September 30,
2017, respectively
|
60
|
|
|
60
|
|
Paid in capital in
excess of par
|
942,179
|
|
|
939,269
|
|
Undistributed net
investment income
|
(387)
|
|
|
3,074
|
|
Net unrealized
appreciation (depreciation) on investments
|
18,767
|
|
|
16,444
|
|
Net realized gain
(loss) on investments
|
(2,317)
|
|
|
(901)
|
|
Total Net
Assets
|
958,302
|
|
|
957,946
|
|
Total Liabilities
and Total Net Assets
|
$
|
1,807,327
|
|
|
$
|
1,754,176
|
|
|
|
|
|
Number of common
shares outstanding
|
59,741,248
|
|
|
59,577,293
|
|
Net asset value per
common share
|
$
|
16.04
|
|
|
$
|
16.08
|
|
|
|
|
|
|
|
|
|
Golub Capital BDC,
Inc. and Subsidiaries
|
|
|
|
|
Consolidated
Statements of Operations
|
|
|
|
|
(In thousands,
except share and per share data)
|
|
|
|
|
|
|
Three months
ended
|
|
|
December 31,
2017
|
|
September 30,
2017
|
|
|
(unaudited)
|
|
(unaudited)
|
Investment
income
|
|
|
Interest
income
|
|
$
|
33,354
|
|
|
$
|
33,549
|
|
Dividend
income
|
|
2,562
|
|
|
1,066
|
|
Fee income
|
|
534
|
|
|
335
|
|
|
|
|
|
|
Total investment
income
|
|
36,450
|
|
|
34,950
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
Interest and other
debt financing expenses
|
|
7,714
|
|
|
8,155
|
|
Base management
fee
|
|
5,930
|
|
|
6,072
|
|
Incentive
fee
|
|
2,871
|
|
|
1,285
|
|
Professional
fees
|
|
688
|
|
|
461
|
|
Administrative
service fee
|
|
618
|
|
|
620
|
|
General and
administrative expenses
|
|
118
|
|
|
119
|
|
|
|
|
|
|
Total
expenses
|
|
17,939
|
|
|
16,712
|
|
|
|
|
|
|
Net investment
income - before excise tax
|
|
18,511
|
|
|
18,238
|
|
Excise tax
|
|
—
|
|
|
—
|
|
Net investment
income - after excise tax
|
|
18,511
|
|
|
18,238
|
|
Net gain (loss) on
investments
|
|
|
|
|
Net realized gain
(loss) on investments
|
|
481
|
|
|
11,018
|
|
Net change in
unrealized appreciation (depreciation) on investments
|
|
2,323
|
|
|
(6,803)
|
|
|
|
|
|
|
Net gain (loss) on
investments
|
|
2,804
|
|
|
4,215
|
|
|
|
|
|
|
Net increase in
net assets resulting from operations
|
|
$
|
21,315
|
|
|
$
|
22,453
|
|
|
|
|
|
|
Per Common Share
Data
|
|
|
|
|
Basic and diluted
earnings per common share
|
|
$
|
0.36
|
|
|
$
|
0.38
|
|
Dividends and
distributions declared per common share
|
|
$
|
0.40
|
|
|
$
|
0.32
|
|
Basic and diluted
weighted average common shares outstanding
|
|
59,584,421
|
|
|
59,448,470
|
|
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