NEW YORK, Feb. 9, 2022 /PRNewswire/ -- Golub Capital BDC,
Inc., a business development company (Nasdaq: GBDC), today
announced its financial results for its first fiscal quarter ended
December 31, 2021.
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,
2021
|
|
September 30,
2021
|
Investment portfolio,
at fair value
|
$
5,146,766
|
|
$
4,894,886
|
Total
assets
|
$
5,480,437
|
|
$
5,164,915
|
Net asset value per
share
|
$
15.26
|
|
$
15.19
|
|
|
|
|
|
Quarter
Ended
|
|
December 31,
2021
|
|
September 30,
2021
|
Net investment income
per share
|
$
0.27
|
|
$
0.27
|
Amortization of
purchase premium per share
|
$
0.04
|
|
0.03
|
Adjusted net
investment income per share1
|
$
0.31
|
|
$
0.30
|
|
|
|
|
Net
realized/unrealized gain/(loss) per share
|
$
0.10
|
|
$
0.15
|
Reversal of realized
/ unrealized loss resulting from the amortization of the purchase
premium per share
|
$
(0.04)
|
|
$
(0.03)
|
Adjusted net
realized/unrealized gain/(loss) per share1
|
$
0.06
|
|
$
0.12
|
|
|
|
|
Earnings/(loss) per
share
|
$
0.37
|
|
$
0.42
|
Adjusted
earnings/(loss) per share1
|
$
0.37
|
|
$
0.42
|
|
|
|
|
Net asset value per
share
|
$
15.26
|
|
$
15.19
|
Distributions paid
per share
|
$
0.30
|
|
$
0.29
|
|
|
|
|
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 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/(Loss)" and "Adjusted
Earnings/(Loss) 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 to the non-GAAP financial measures above,
the Company believes providing Adjusted Net Investment Income
before accrual for capital gain incentive fee per share, is a
useful non-GAAP financial measure as a portion of such accrual is
not contractually payable under the terms of the Company's
investment advisory agreement with GC Advisors. For the three
months ended December 31, 2021 the
accrual for capital gain incentive fee under GAAP per share was an
amount less than $0.01 per share.
First Fiscal Quarter 2022 Highlights
- Net investment income per share for the quarter ended
December 31, 2021 was $0.27 as compared to $0.27 for the quarter ended September 30, 2021. Excluding $0.04 per share in purchase premium amortization
from the GCIC acquisition, Adjusted Net Investment Income Per
Share1 for the quarter ended December 31, 2021 was $0.31. This compares to Adjusted Net Investment
Income Per Share1 of $0.30
for the quarter ended September 30,
2021 when excluding $0.03 per
share in purchase premium amortization from the GCIC
acquisition.
- Net realized and unrealized gain per share for the quarter
ended December 31, 2021 was
$0.10. Adjusted Net Realized and
Unrealized Gain Per Share1 was $0.06 when excluding the $0.04 per share reversal of net realized loss and
unrealized depreciation resulting from the amortization of the
purchase premium. The Adjusted Net Realized and Unrealized Gain Per
Share1 for the quarter ended December 31, 2021 primarily resulted from
realized gains on the sale of equity investments of our portfolio
companies. For additional analysis, please refer to the Quarter
Ended 12.31.21 Investor Presentation
available on the Investor Resources link on the homepage of the
Company's website (www.golubcapitalbdc.com) under
Events/Presentations. The Investor Presentation was also filed with
the Securities and Exchange Commission as an Exhibit to a Form 8-K.
These results compare to net realized and unrealized gain per share
of $0.15 during the quarter ended
September 30, 2021. Adjusted Net
Realized and Unrealized Gain Per Share1 for the quarter
ended September 30, 2021 was
$0.12 when excluding the $0.03 per share reversal of net realized loss and
unrealized loss resulting from the amortization of the purchase
premium.
- Earnings per share for the quarter ended December 31, 2021 was $0.37 as compared to $0.42 for the quarter ended September 30, 2021. Adjusted Earnings Per
Share1 for the quarter ended December 31, 2021 was $0.37 as compared to $0.42 for the quarter ended September 30, 2021.
- Net asset value per share increased to $15.26 at December 31,
2021 from $15.19 at
September 30, 2021.
- On December 30, 2021, we paid a
quarterly distribution of $0.30 per
share and on February 4, 2022, our
board of directors declared a quarterly distribution of
$0.30 per share, which is payable on
March 29, 2022 to stockholders of
record as of March 4, 2022.
Portfolio and Investment Activities
As of December 31, 2021, the Company had investments in 301
portfolio companies with a total fair value of $5,146.8 million. This compares to the
Company's portfolio as of September 30, 2021, as of which date
the Company had investments in 296 portfolio companies with a total
fair value of $4,894.9 million.
Investments in portfolio companies as of December 31, 2021 and
September 30, 2021 consisted of the following:
|
|
As of December 31,
2021
|
|
As of September
30, 2021
|
|
|
Investments
|
|
Percentage
of
|
|
Investments
|
|
Percentage
of
|
|
|
at Fair
Value
|
|
Total
|
|
at Fair
Value
|
|
Total
|
Investment
Type
|
|
(In
thousands)
|
|
Investments
|
|
(In
thousands)
|
|
Investments
|
Senior
secured
|
|
$
620,168
|
|
12.0%
|
|
$
784,805
|
|
16.0%
|
One stop
|
|
4,235,533
|
|
82.3
|
|
3,882,314
|
|
79.3
|
Junior
debt*
|
|
44,312
|
|
0.9
|
|
42,029
|
|
0.9
|
Equity
|
|
246,753
|
|
4.8
|
|
185,738
|
|
3.8
|
Total
|
|
$
5,146,766
|
|
100.0%
|
|
$
4,894,886
|
|
100.0%
|
|
|
|
|
|
|
|
|
|
*
|
Junior debt is
comprised of second lien and subordinated debt.
|
The following table shows the asset mix of our new investment
commitments for the three months ended December 31, 2021:
|
For the three
months ended December 31, 2021
|
|
New
Investment
|
|
|
|
Commitments
|
|
Percentage
of
|
|
(In
thousands)
|
|
Commitments
|
|
|
|
|
Senior
secured
|
$
37,039
|
|
4.3%
|
One stop
|
761,442
|
|
87.8
|
Junior
debt*
|
1,628
|
|
0.1
|
Equity
|
67,613
|
|
7.8
|
Total new investment
commitments
|
$
867,722
|
|
100.0%
|
|
|
|
|
*
|
Junior debt is
comprised of second lien and subordinated debt.
|
Total investments in portfolio companies at fair value were
$5,146.8 million at December 31,
2021. As of December 31, 2021, total assets were
$5,480.4 million, net assets were
$2,607.5 million and net asset value
per share was $15.26.
Consolidated Results of Operations
For the first fiscal quarter of 2022, the Company reported GAAP
net income and Adjusted Net Income1 of $63.1 or $0.37 per
share. GAAP net investment income was $44.8 million or $0.27 per share and Adjusted Net Investment
Income1 was $51.8 million
or $0.31 per share. GAAP net
realized and unrealized gain was $18.8
million or $0.10 per share and
Adjusted Realized and Unrealized Gain/(Loss)1 was
$11.5 million or $0.06 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, including as a result of the effects
of the COVID-19 pandemic. As a result, quarterly comparisons of net
income may not be meaningful.
1
See footnote 1 to 'Selected Financial
Highlights' above.
|
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), unsecured notes, 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, unsecured notes, 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, 2021, we had cash, cash equivalents and
foreign currencies of $182.7 million,
restricted cash, cash equivalents and foreign currencies of
$118.8 million and $2,852.8 million of debt outstanding. As of
December 31, 2021, subject to leverage and borrowing base
restrictions, we had approximately $809.4
million of remaining commitments and $809.4 million of availability, in the aggregate,
on our revolving credit facilities with various banks. In addition,
as of December 31, 2021, we had $100.0
million of remaining commitments and availability on our
unsecured line of credit with GC Advisors.
On October 13, 2021, we issued an
additional $200.0 million in
aggregate principal amount of our unsecured notes due 2026 (the
"2026 Unsecured Notes"), which bear a fixed interest rate of
2.500%, and the new 2026 Unsecured Notes have a yield to maturity
of 2.667%. The new 2026 Unsecured Notes have the same terms as the
original issuance of the 2026 Unsecured Notes. Upon issuance of the
new 2026 Unsecured Notes, the outstanding aggregate principal
amount of the 2026 Unsecured Notes is $600.0
million.
On October 15, 2021, we issued an
additional $100.0 million in
aggregate principal amount of our unsecured notes due 2024 (the
"2024 Unsecured Notes"), which bear a fixed interest rate of
3.375%, and the new 2024 Unsecured Notes have a yield to maturity
of 1.809%. The new 2024 Unsecured Notes have the same terms as the
original issuance of the 2024 Unsecured Notes. Upon issuance of the
new 2024 Unsecured Notes, the outstanding aggregate principal
amount of the 2024 Unsecured Notes is $500.0
million.
On November 19, 2021, we amended
our revolving credit facility with JP Morgan Chase Bank N.A.
("JPMorgan"), as administrative agent, to, among other things,
increase the accordion feature that allows us to increase the total
facility size to $1.5 billion from
$712.5 million. In addition, we
entered into a series of agreements, most recently on
December 17, 2021, to increase the
aggregate commitments outstanding under the JPMorgan facility to
$1.1875 billion from $475.0 million as of September 30, 2021.
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 could 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 could 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. For additional analysis on the
Company's internal performance ratings as of December 31, 2021
and the impact from COVID-19, please refer to the Quarter Ended
12.31.21 Investor Presentation
available on Investors Resources link on the homepage of the
Company's website (www.golubcapitalbdc.com) under
Events/Presentations.
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, 2021 and September 30, 2021:
|
|
December 31,
2021
|
|
September 30,
2021
|
|
Internal
|
|
Investments
|
|
Percentage
of
|
|
Investments
|
|
Percentage
of
|
|
Performance
|
|
at Fair
Value
|
|
Total
|
|
at Fair
Value
|
|
Total
|
|
Rating
|
|
(In
thousands)
|
|
Investments
|
|
(In
thousands)
|
|
Investments
|
|
5
|
|
$
349,616
|
|
6.8
|
%
|
$
499,241
|
|
10.2
|
%
|
4
|
|
4,406,567
|
|
85.6
|
|
3,951,870
|
|
80.7
|
|
3
|
|
341,026
|
|
6.6
|
|
395,208
|
|
8.1
|
|
2
|
|
49,317
|
|
1.0
|
|
47,836
|
|
1.0
|
|
1
|
|
240
|
|
0.0
|
*
|
731
|
|
0.0
|
*
|
Total
|
|
$
5,146,766
|
|
100.0
|
%
|
$
4,894,886
|
|
100.0
|
%
|
|
|
*
|
Represents an amount
less than 0.1%.
|
Conference Call
The Company will host an earnings conference call at
2:00 pm (Eastern Time) on Thursday,
February 10, 2022 to discuss the quarterly financial results.
All interested parties may participate in the conference call by
dialing (833) 900-2240 approximately 10-15 minutes prior to the
call; international callers should dial +1 (236) 714-2752.
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 12.31.21
Investor Presentation under Events/Presentations. An archived
replay of the call will be available shortly after the call until
11:59 p.m. (Eastern Time) on
February 24, 2022. To hear the replay, please dial (800)
585-8367. International dialers, please dial +1 (416) 621-4642. For
all replays, please reference program ID number 7763977.
Golub Capital BDC,
Inc. and Subsidiaries
|
|
|
|
Consolidated
Statements of Financial Condition
|
|
|
|
(In thousands,
except share and per share data)
|
|
|
|
|
December 31,
2021
|
|
September 30,
2021
|
Assets
|
(unaudited)
|
|
(audited)
|
Investments, at fair
value (cost of $5,143,591 and $4,895,397, respectively)
|
$
5,146,766
|
|
$
4,894,886
|
Cash and cash
equivalents
|
180,203
|
|
175,593
|
Unrestricted foreign
currencies (cost of $2,445 and $5,145, respectively)
|
2,480
|
|
5,497
|
Restricted cash and
cash equivalents
|
117,144
|
|
61,824
|
Restricted foreign
currencies (cost of $1,641 and $1,442, respectively)
|
1,650
|
|
1,429
|
Interest
receivable
|
21,268
|
|
18,261
|
Other
assets
|
10,926
|
|
7,425
|
Total
Assets
|
$
5,480,437
|
|
$
5,164,915
|
|
|
|
|
Liabilities
|
|
|
|
Debt
|
$
2,852,832
|
|
$
2,569,228
|
Less unamortized debt
issuance costs
|
22,404
|
|
17,850
|
Debt less unamortized
debt issuance costs
|
2,830,428
|
|
2,551,378
|
Interest
payable
|
16,184
|
|
12,516
|
Management and
incentive fees payable
|
20,799
|
|
12,247
|
Accounts payable and
accrued expenses
|
5,547
|
|
6,082
|
Total
Liabilities
|
2,872,958
|
|
2,582,223
|
|
|
|
|
Net
Assets
|
|
|
|
Preferred stock, par
value $0.001 per share, 1,000,000 shares authorized, zero shares
issued and outstanding as of December 31, 2021 and September 30,
2021, respectively.
|
—
|
|
—
|
Common stock, par
value $0.001 per share, 200,000,000 shares authorized, 170,865,742
and 170,028,584 issued and outstanding as of December 31, 2021 and
September 30, 2021, respectively.
|
171
|
|
170
|
Paid in capital in
excess of par
|
2,676,967
|
|
2,664,251
|
Distributable
earnings
|
(69,659)
|
|
(81,729)
|
Total Net
Assets
|
2,607,479
|
|
2,582,692
|
Total Liabilities
and Total Net Assets
|
$
5,480,437
|
|
$
5,164,915
|
|
|
|
|
Number of common
shares outstanding
|
170,865,742
|
|
170,028,584
|
Net asset value per
common share
|
$
15.26
|
|
$
15.19
|
Golub Capital BDC,
Inc. and Subsidiaries
|
|
|
|
|
Consolidated
Statements of Operations
|
|
|
|
|
(In thousands,
except share and per share data)
|
|
|
|
|
|
|
Three months
ended
|
|
|
December 31,
2021
|
|
September 30,
2021
|
|
|
(unaudited)
|
|
(unaudited)
|
Investment
income
|
|
|
Interest
income
|
|
$
92,336
|
|
$
83,600
|
GCIC acquisition
purchase price premium amortization
|
|
(7,095)
|
|
(5,405)
|
Dividend
income
|
|
317
|
|
1,440
|
Fee income
|
|
1,009
|
|
1,474
|
Total investment
income
|
|
86,567
|
|
81,109
|
|
|
|
|
|
Expenses
|
|
|
|
|
Interest and other
debt financing expenses
|
|
17,836
|
|
19,343
|
Base management
fee
|
|
17,501
|
|
12,254
|
Incentive
fee
|
|
3,381
|
|
268
|
Professional
fees
|
|
899
|
|
920
|
Administrative service
fee
|
|
1,818
|
|
1,769
|
General and
administrative expenses
|
|
342
|
|
263
|
Total
expenses
|
|
41,777
|
|
34,817
|
Net investment
income
|
|
44,790
|
|
46,292
|
|
|
|
|
|
Net gain (loss) on
investment transactions
|
|
|
|
|
Net realized gain
(loss) from:
|
|
|
|
|
Investments
|
|
14,573
|
|
7,762
|
Foreign currency
transactions
|
|
(25)
|
|
(3,126)
|
Net realized gain
(loss) in investment transactions
|
|
14,548
|
|
4,636
|
Net change in
unrealized appreciation (depreciation) from:
|
|
|
|
|
Investments
|
|
3,686
|
|
11,965
|
Translation of assets
and liabilities in foreign currencies
|
|
268
|
|
4,812
|
Forward currency
contracts
|
|
281
|
|
4,471
|
Net change in
unrealized appreciation (depreciation) on investment
transactions
|
|
4,235
|
|
21,248
|
Net gain (loss) on
investments
|
|
18,783
|
|
25,884
|
(Provision) for taxes
on unrealized appreciation on investments
|
|
(495)
|
|
(543)
|
Net increase
(decrease) in net assets resulting from operations
|
|
$
63,078
|
|
$
71,633
|
|
|
|
|
|
Per Common Share
Data
|
|
|
|
|
Basic and diluted
earnings (loss) per common share
|
|
$
0.37
|
|
$
0.42
|
Dividends and
distributions declared per common share
|
|
$
0.30
|
|
$
0.29
|
Basic and diluted
weighted average common shares outstanding
|
|
170,046,783
|
|
169,170,916
|
ABOUT GOLUB CAPITAL BDC, INC.
Golub Capital BDC, Inc. ("GBDC") 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. GBDC invests primarily in one stop
and other senior secured loans to middle market companies that are
often sponsored by private equity investors. GBDC's investment
activities are managed by its investment adviser, GC Advisors LLC,
an affiliate of the Golub Capital LLC group of companies ("Golub
Capital").
ABOUT GOLUB CAPITAL
Golub Capital is a market-leading, award-winning direct lender
and credit asset manager, with over $45
billion of capital under management. Golub Capital
specializes in delivering reliable, creative and compelling
financing solutions to companies backed by private equity sponsors.
The firm's sponsor finance expertise also forms the foundation of
its Late Stage Lending, Broadly Syndicated Loan and Credit
Opportunities investment programs. Across its activities, Golub
Capital nurtures long-term, win-win partnerships that inspire
repeat business from private equity sponsors and investors. Founded
over 25 years ago, Golub Capital today has over 600 employees and
lending offices in Chicago,
New York, San Francisco and London. 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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SOURCE Golub Capital BDC, Inc.