NEW YORK, Feb. 10, 2020 /PRNewswire/ -- Golub Capital BDC,
Inc., a business development company (Nasdaq: GBDC), today
announced its financial results for its first fiscal quarter ended
December 31, 2019.
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,
2019
|
|
September 30,
2019
|
Investment portfolio,
at fair value
|
$
|
4,448,316
|
|
|
$
|
4,292,932
|
|
Total
assets
|
$
|
4,597,469
|
|
|
$
|
4,394,863
|
|
Net asset value per
share
|
$
|
16.66
|
|
|
$
|
16.76
|
|
|
|
|
|
|
Quarter
Ended
|
|
December 31,
2019
|
|
September 30,
2019
|
Net investment income
per share
|
$
|
0.24
|
|
|
$
|
0.37
|
|
Amortization of
purchase premium per share
|
0.09
|
|
|
0.02
|
|
Accrual for (reversal
of) capital gain incentive fee per share
|
—
|
|
|
(0.06)
|
|
Adjusted net
investment income per share1
|
$
|
0.33
|
|
|
$
|
0.33
|
|
|
|
|
|
Net
realized/unrealized gain (loss) per share
|
$
|
0.11
|
|
|
$
|
(1.39)
|
|
Unrealized loss
resulting from the write down of the purchase premium per
share
|
$
|
—
|
|
|
$
|
1.43
|
|
Reversal of
unrealized loss resulting from the amortization of the purchase
premium per
share
|
$
|
(0.09)
|
|
|
$
|
(0.02)
|
|
Adjusted net
realized/unrealized gain (loss) per share1
|
$
|
0.02
|
|
|
$
|
0.02
|
|
|
|
|
|
Earnings per
share
|
$
|
0.35
|
|
|
$
|
(1.02)
|
|
Adjusted earnings per
share1
|
$
|
0.35
|
|
|
$
|
0.35
|
|
|
|
|
|
Net asset value per
share
|
$
|
16.66
|
|
|
$
|
16.76
|
|
Distributions paid
per share2
|
$
|
0.46
|
|
|
$
|
0.32
|
|
|
1
On September 16, 2019, the Company completed its
acquisition of Golub Capital Investment Corporation ("GCIC"). The
merger was accounted for under the asset acquisition method of
accounting in accordance with Accounting Standards Codification
805-50, Business Combinations — Related Issues. Under asset
acquisition accounting, where the consideration paid to GCIC's
stockholders exceeded the relative fair values of the assets
acquired, the premium paid by the Company was allocated to the cost
of the GCIC assets acquired by the Company pro-rata based on their
relative fair value. Immediately following the acquisition of GCIC,
the Company recorded its assets at their respective fair values
and, as a result, the purchase premium allocated to the cost basis
of the GCIC assets acquired was immediately recognized as
unrealized depreciation on the Company's Consolidated Statement of
Operations. The purchase premium allocated to investments in loan
securities acquired from GCIC will amortize over the life of the
loans through interest income with a corresponding reversal of the
unrealized depreciation on such loans acquired through their
ultimate disposition. The purchase premium allocated to investments
in equity securities will not amortize over the life of the equity
securities through interest income and, assuming no subsequent
change to the fair value of the GCIC equity securities acquired and
disposition of such equity securities at fair value, the Company
will recognize a realized loss with a corresponding reversal of the
unrealized depreciation upon disposition of the GCIC equity
securities acquired.
As a supplement to
U.S. generally accepted accounting principles ("GAAP") financial
measures, the Company is providing the following non-GAAP financial
measures that it believes are useful for the reasons described
below:
- "Adjusted Net
Investment Income" and "Adjusted Net Investment Income Per
Share" – excludes the amortization of the purchase premium and
the accrual for the capital gain incentive fee required under GAAP
(including the portion of such accrual that is not payable under
the Company's investment advisory agreement) from net investment
income calculated in accordance with GAAP.
- "Adjusted Net
Realized and Unrealized Gain/(Loss)" and "Adjusted Net
Realized and Unrealized Gain/(Loss) Per Share" – excludes the
unrealized loss resulting from the purchase premium write-down and
the corresponding reversal of the unrealized loss from the
amortization of the premium from the determination of realized and
unrealized gain/(loss) in accordance with GAAP.
- "Adjusted Net
Income" and "Adjusted Earnings Per Share" – calculates
net income and earnings per share based on Adjusted Net Investment
Income and Adjusted Net Realized and Unrealized
Gain/(Loss).
The Company believes
that excluding the financial impact of the purchase premium write
down in the above non-GAAP financial measures is useful for
investors as it is a non-cash expense/loss resulting from the
acquisition of GCIC and is one method the Company uses to measure
its financial condition and results of operations. In addition, the
Company believes excluding the accrual of the capital gain
incentive fee in the above non-GAAP financial measures is useful as
it includes the portion of such accrual that is not contractually
payable under the terms of the Company's investment advisory
agreement with GC Advisors.
2
Distributions paid per share during the three months ended December
31, 2019 includes a special distribution of $0.13 per
share.
|
First Fiscal Quarter 2020 Highlights
- Net investment income per share for the quarter ended
December 31, 2019 was $0.24 as compared to $0.37 for the quarter ended September 30, 2019. Excluding $0.09 per share in purchase premium amortization
from the GCIC acquisition, Adjusted Net Investment Income Per
Share1 for the quarter ended December 31, 2019 was $0.33. This compares to Adjusted Net Investment
Income Per Share1 of $0.33
for the quarter ended September 30,
2019 when excluding $0.02 per
share in purchase premium amortization from the GCIC acquisition
and a ($0.06) per share reversal in
the accrual for the capital gain incentive fee.
- Net realized and unrealized gain per share for the quarter
ended December 31, 2019 was
$0.11 that was comprised of (i)
$0.02 per share of net realized and
unrealized gain on investments and foreign currency and (ii) a
$0.09 per share reversal of
unrealized depreciation resulting from the amortization of the
purchase premium. Adjusted Net Realized and Unrealized Gain Per
Share1 was $0.02 when
excluding the $0.09 per share
reversal of unrealized depreciation resulting from the amortization
of purchase premium. This compares to net realized and unrealized
loss per share of ($1.39) during the
quarter ended September 30, 2019 that
was comprised of (i) $0.02 per share
of net realized and unrealized gain on investments and foreign
currency, (ii) a ($1.43) per share
loss of net unrealized depreciation resulting from the one-time
write-down of the unamortized purchase premium allocated to the
GCIC assets acquired and (iii) a $0.02 per share reversal of unrealized loss
resulting from the amortization of the purchase premium. Adjusted
Net Realized and Unrealized Gain Per Share1 for the
quarter ended September 30, 2019 was
$0.02 when excluding the ($1.43) per share loss of net unrealized
depreciation resulting from the write-down of the GCIC acquisition
purchase premium and the $0.02 per
share reversal of unrealized loss resulting from the amortization
of purchase premium.
- Earnings per share for the quarter ended December 31, 2019 was $0.35 as compared to a loss of ($1.02) per share for the quarter ended
September 30, 2019. Adjusted Earnings
Per Share1 for each of the quarters ended December 31, 2019 and September 30, 2019 were $0.35, which is calculated as the sum of Adjusted
Net Investment Income Per Share and Adjusted Net Realized and
Unrealized Gain/(Loss) Per Share.
- On December 30, 2019, we paid a
quarterly distribution of $0.33 per
share, an increase of $0.01 per share
from before the GCIC acquisition. In addition, we also paid a
special distribution of $0.13 per
share, our fourth consecutive calendar year in which we have paid a
special distribution. Primarily as a result of this special
distribution, our net asset value per share declined to
$16.66 as of December 31, 2019 from $16.76 as of September 30,
2019.
- On February 4, 2020, our board of
directors declared a quarterly distribution of $0.33 per share, which is payable on March 27, 2020 to stockholders of record as of
March 6, 2020.
Portfolio and Investment Activities
As of December 31, 2019, the Company had investments in 250
portfolio companies with a total fair value of $4,329.2 million and had investments in Senior
Loan Fund LLC ("SLF") and GCIC SLF LLC ("GCIC SLF") with a total
aggregate fair value of $119.1
million. This compares to the Company's portfolio as of
September 30, 2019, as of which date the Company had
investments in 241 portfolio companies with a total fair value of
$4,169.3 million and investments in
SLF and GCIC SLF with a total fair value of $123.6 million. Investments in portfolio
companies as of December 31, 2019 and September 30, 2019
consisted of the following:
|
|
As of December 31,
2019
|
|
As of September
30, 2019
|
|
|
Investments
|
|
Percentage
of
|
|
Investments
|
|
Percentage
of
|
Investment
|
|
at Fair
Value
|
|
Total
|
|
at Fair
Value
|
|
Total
|
Type
|
|
(In
thousands)
|
|
Investments
|
|
(In
thousands)
|
|
Investments
|
Senior
secured
|
|
$
|
545,176
|
|
|
12.2
|
%
|
|
$
|
589,340
|
|
|
13.7
|
%
|
One stop
|
|
3,676,789
|
|
|
82.7
|
%
|
|
3,474,116
|
|
|
80.9
|
|
Junior
debt*
|
|
20,291
|
|
|
0.4
|
%
|
|
19,842
|
|
|
0.5
|
|
LLC equity interests
in SLF and GCIC SLF
|
|
119,078
|
|
|
2.7
|
%
|
|
123,644
|
|
|
2.9
|
|
Equity
|
|
86,982
|
|
|
2.0
|
%
|
|
85,990
|
|
|
2.0
|
|
Total
|
|
$
|
4,448,316
|
|
|
100.0
|
%
|
|
$
|
4,292,932
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
*
|
Junior debt is
comprised of subordinated debt and second lien loans.
|
The following table shows the asset mix of our new investment
commitments for the three months ended December 31, 2019:
|
For the three
months ended December 31, 2019
|
|
New
Investment
|
|
|
|
Commitments
|
|
Percentage
of
|
|
(In
thousands)
|
|
Commitments
|
|
|
|
|
Senior
secured
|
$
|
11,610
|
|
|
4.3
|
%
|
One stop
|
257,329
|
|
|
94.9
|
|
Junior
debt*
|
138
|
|
|
0.1
|
|
Equity
|
2,015
|
|
|
0.7
|
|
Total new investment
commitments
|
$
|
271,092
|
|
|
100.0
|
%
|
|
|
|
|
*
|
Junior debt is
comprised of subordinated debt and second lien loans.
|
Total investments in portfolio companies at fair value were
$4,448.3 million at December 31, 2019. As of December 31, 2019, total assets were $4,597.5 million, net assets were $2,229.1 million and net asset value per share
was $16.66.
Consolidated Results of Operations
For the first fiscal quarter of 2020, the Company reported GAAP
net income of $47.0 million or
$0.35 per share and Adjusted Net
Income1 of $47.0 million
or $0.35 per share. GAAP net
investment income was $32.7 million
or $0.24 per share and Adjusted Net
Investment Income1 was $44.5
million or $0.33 per
share. GAAP net realized and unrealized gains1 was
$14.3 million or $0.11 per share and Adjusted Realized and
Unrealized Gains was $2.5 million or
$0.02 per share.
Net income can vary substantially from period to period due to
various factors, including the level of new investment commitments,
the recognition of realized gains and losses and unrealized
appreciation and depreciation and as a result of the acquisition of
GCIC. As a result, quarterly comparisons of net income may not be
meaningful.
Liquidity and Capital Resources
The Company's liquidity and capital resources are derived from
the Company's debt securitizations (also known as collateralized
loan obligations, or CLOs), 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, 2019, the Company had cash, cash
equivalents and foreign currencies of $19.4
million, restricted cash, cash equivalents and foreign
currencies of $113.8 million and
$2,264.8 million of debt outstanding.
As of December 31, 2019, subject to
leverage and borrowing base restrictions, we had approximately
$159.4 million of remaining
commitments and $26.5 million of
availability, in the aggregate, on our revolving credit facilities
with various banks.
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, 2019 and September 30, 2019:
|
|
December 31,
2019
|
|
September 30,
2019
|
Internal
|
|
Investments
|
|
Percentage
of
|
|
Investments
|
|
Percentage
of
|
Performance
|
|
at Fair
Value
|
|
Total
|
|
at Fair
Value
|
|
Total
|
Rating
|
|
(In
thousands)
|
|
Investments
|
|
(In
thousands)
|
|
Investments
|
5
|
|
$
|
176,411
|
|
|
4.0
|
%
|
|
$
|
115,318
|
|
|
2.7
|
%
|
4
|
|
3,861,016
|
|
|
86.8
|
|
|
3,787,809
|
|
|
88.2
|
|
3
|
|
322,177
|
|
|
7.2
|
|
|
337,358
|
|
|
7.9
|
|
2
|
|
88,676
|
|
|
2.0
|
|
|
52,434
|
|
|
1.2
|
|
1
|
|
36
|
|
|
0.0
|
*
|
|
13
|
|
|
0.0
|
*
|
Total
|
|
$
|
4,448,316
|
|
|
100.0
|
%
|
|
$
|
4,292,932
|
|
|
100.0
|
%
|
*
|
Represents an amount
less than 0.1%.
|
1
See footnote 1 to 'Selected Financial
Highlights' above.
|
Conference Call
The Company will host an earnings conference call at
10:30 a.m. (Eastern Time) on Tuesday,
February 11, 2020 to discuss the quarterly financial results. All
interested parties may participate in the conference call by
dialing (800) 698-0339 approximately 10-15 minutes prior to the
call; international callers should dial (312) 281-2958.
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 12.31.19
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
March 12, 2020. To hear the replay,
please dial (800) 633-8284. International dialers, please dial
(402) 977-9140. For all replays, please reference program ID number
21950992.
Golub Capital BDC,
Inc. and Subsidiaries
|
|
|
|
Consolidated
Statements of Financial Condition
|
|
|
|
(In thousands,
except share and per share data)
|
|
|
|
|
December 31,
2019
|
|
September 30,
2019
|
Assets
|
(unaudited)
|
|
(audited)
|
Investments, at fair
value (cost of $4,530,938 and $4,391,770, respectively)
|
$
|
4,448,316
|
|
|
$
|
4,292,932
|
|
Cash and cash
equivalents
|
18,914
|
|
|
6,463
|
|
Unrestricted foreign
currencies (cost of $512 and $54, respectively)
|
512
|
|
|
54
|
|
Restricted cash and
cash equivalents
|
112,353
|
|
|
76,370
|
|
Restricted foreign
currencies (cost of $1,444 and $1,321, respectively)
|
1,444
|
|
|
1,321
|
|
Interest
receivable
|
14,507
|
|
|
16,790
|
|
Other
assets
|
1,423
|
|
|
933
|
|
Total
Assets
|
$
|
4,597,469
|
|
|
$
|
4,394,863
|
|
|
|
|
|
Liabilities
|
|
|
|
Debt
|
$
|
2,264,823
|
|
|
$
|
2,124,392
|
|
Less unamortized debt
issuance costs
|
5,430
|
|
|
4,939
|
|
Debt less unamortized
debt issuance costs
|
2,259,393
|
|
|
2,119,453
|
|
Other short-term
borrowings (proceeds of $0 and $3,605, respectively)
|
65,833
|
|
|
—
|
|
Unrealized
depreciation on forward currency contracts
|
1,365
|
|
|
115
|
|
Interest
payable
|
17,324
|
|
|
13,380
|
|
Management and
incentive fees payable
|
20,896
|
|
|
12,884
|
|
Accounts payable and
accrued expenses
|
3,561
|
|
|
25,970
|
|
Accrued trustee
fees
|
15
|
|
|
207
|
|
Total
Liabilities
|
2,368,387
|
|
|
2,172,009
|
|
|
|
|
|
Net
Assets
|
|
|
|
Preferred stock, par
value $0.001 per share, 1,000,000 shares authorized, zero
shares issued and outstanding as of December 31, 2019 and September
30,
2019.
|
—
|
|
|
—
|
|
Common stock, par
value $0.001 per share, 200,000,000 shares authorized,
133,805,764 issued and outstanding as of December 31, 2019;
200,000,000
shares authorized, 132,658,200 issued and outstanding as of
September 30,
2019.
|
134
|
|
|
133
|
|
Paid in capital in
excess of par
|
2,330,806
|
|
|
2,310,610
|
|
Distributable
earnings
|
(101,858)
|
|
|
(87,889)
|
|
Total Net
Assets
|
2,229,082
|
|
|
2,222,854
|
|
Total Liabilities
and Total Net Assets
|
$
|
4,597,469
|
|
|
$
|
4,394,863
|
|
|
|
|
|
Number of common
shares outstanding
|
133,805,764
|
|
|
132,658,200
|
|
Net asset value per
common share
|
$
|
16.66
|
|
|
$
|
16.76
|
|
Golub Capital BDC,
Inc. and Subsidiaries
|
|
|
|
|
Consolidated
Statements of Operations
|
|
|
|
|
(In thousands,
except share and per share data)
|
|
|
|
|
|
|
Three months
ended
|
|
|
December 31,
2019
|
|
September 30,
2019
|
|
|
(unaudited)
|
|
(unaudited)
|
Investment
income
|
|
|
Interest
income
|
|
$
|
88,290
|
|
|
$
|
48,788
|
|
GCIC acquisition
purchase price premium amortization
|
|
(11,837)
|
|
|
(1,381)
|
|
Dividend
income
|
|
1,939
|
|
|
1,451
|
|
Fee income
|
|
215
|
|
|
119
|
|
Total investment
income
|
|
78,607
|
|
|
48,977
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
Interest and other
debt financing expenses
|
|
22,278
|
|
|
12,262
|
|
Base management
fee
|
|
15,206
|
|
|
8,164
|
|
Incentive
fee
|
|
5,904
|
|
|
324
|
|
Professional
fees
|
|
939
|
|
|
655
|
|
Administrative
service fee
|
|
1,402
|
|
|
639
|
|
General and
administrative expenses
|
|
147
|
|
|
140
|
|
Total
expenses
|
|
45,876
|
|
|
22,184
|
|
Net investment
income
|
|
32,731
|
|
|
26,793
|
|
|
|
|
|
|
Net gain (loss) on
investment transactions
|
|
|
|
|
Net realized gain
(loss) from:
|
|
|
|
|
Investments
|
|
2,656
|
|
|
(99)
|
|
Foreign currency
transactions
|
|
(155)
|
|
|
195
|
|
Net realized gain
(loss) in investment transactions
|
|
2,501
|
|
|
96
|
|
Net change in
unrealized appreciation (depreciation) from:
|
|
|
|
|
Investments
|
|
16,216
|
|
|
(101,816)
|
|
Translation of assets
and liabilities in foreign currencies
|
|
(3,150)
|
|
|
788
|
|
Forward currency
contracts
|
|
(1,250)
|
|
|
133
|
|
Net change in
unrealized appreciation (depreciation) on investment
transactions
|
|
11,816
|
—
|
|
(100,895)
|
|
Net gain (loss) on
investments
|
|
14,317
|
|
|
(100,799)
|
|
|
|
|
|
|
Net increase in
net assets resulting from operations
|
|
$
|
47,048
|
|
|
$
|
(74,006)
|
|
|
|
|
|
|
Per Common Share
Data
|
|
|
|
|
Basic and diluted
earnings per common share
|
|
$
|
0.35
|
|
|
$
|
(1.02)
|
|
Dividends and
distributions declared per common share
|
|
$
|
0.46
|
|
|
$
|
0.32
|
|
Basic and diluted
weighted average common shares outstanding
|
|
132,683,147
|
|
|
72,426,221
|
|
|
|
|
|
|
|
|
|
|
|
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 one-stop and other senior secured
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 market-leading, award-winning direct lender
and credit asset manager, with over $30
billion of capital under management. Golub Capital
specializes in delivering reliable, creative and compelling
financing solutions to U.S. middle market companies backed by
private equity sponsors. The firm's credit expertise also forms the
foundation of its Late Stage Lending business and its Broadly
Syndicated Loan investment program. Across its activities, Golub
Capital nurtures long-term, win-win partnerships that inspire
repeat business from its private equity sponsor clients and
investors. Founded over 25 years ago, Golub Capital today has over
450 employees and lending offices in Chicago, New
York and San Francisco. For
more information, please visit 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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content:http://www.prnewswire.com/news-releases/golub-capital-bdc-inc-declares-fiscal-year-2020-second-quarter-distribution-of-0-33-per-share-and-announces-fiscal-year-2020-first-quarter-financial-results-301001269.html
SOURCE Golub Capital BDC, Inc.