The Golub Capital Altman Index can provide
early insight into financial performance of public companies and
GDP in advance of earnings season.
NEW
YORK, Oct. 12, 2023 /PRNewswire/ -- Middle
market private companies in the Golub Capital Altman Index grew
earnings by 13% during the first two months of the third quarter of
2023, the highest year-over-year earnings growth since Q3 of 2021.
Revenue grew 8% during the same period.
Lawrence E. Golub, CEO of Golub
Capital, said, "Growth exceeded our expectations in the third
quarter of 2023. Middle market companies in general continued to
demonstrate resilience and adaptability to the challenging
environment. The strong results of the Consumer sector are
encouraging. Consumer sector revenue growth outpaced inflation and
profitability held up well, despite the pressure consumers have
faced from higher gas prices, higher interest payments on debt and
dwindling pandemic-era savings. These are real headwinds, but we
did not see their impact in Q3 results. Instead, we saw continued
economic momentum."
Dr. Edward I. Altman said,
"Middle market cash flow growth year-over-year was quite remarkable
in Q3 2023 despite the reduction in inflation during the period.
This suggests the companies tracked by the Index likely made cost
reductions which helped boost earnings growth. Technology stood out
once again as the sector posted revenue and earnings growth nearly
twice as high as the Index in aggregate. It is not surprising to
see continue the trend we highlighted in prior quarters:
mission-critical providers of enterprise software are the
beneficiaries of the pressure on businesses to increase
productivity. Solid growth in the Healthcare and Industrials
sectors rounds out the picture of economic resilience from our
vantage point."
The Golub Capital Altman Index ("GCAI"), which is produced by
Golub Capital in collaboration with credit expert Dr. Edward I. Altman, is the first and
longest-running index based on actual revenue and earnings (defined
as earnings before interest, taxes, depreciation and amortization,
or "EBITDA") for middle market companies. It measures the median
revenue and earnings growth of approximately 110–150 private U.S.
companies in the loan portfolio of Golub Capital, a leading middle
market lender. Reported shortly before public company quarterly
earnings season, the GCAI has served as a reliable indicator of the
overall growth rates in revenue and earnings of public companies in
market indexes such as the S&P 500 and S&P SmallCap 600
("S&P 600"), as well as quarterly Gross Domestic Product
("GDP"), according to statistical back-testing dating back to 2012,
when data began to be tracked.
The size and diversity of the Golub Capital loan portfolio
ensure that the confidentiality of all company-specific information
used in the index is maintained in both the aggregate and industry
segment data.
We believe the results (1) are representative of the general
performance of middle market companies, which are a major
contributor to U.S. private sector employment; (2) can be easily
compared to the performance of the public companies that make up
major stock indexes; (3) are relevant to the aggregate economic
performance of the U.S. economy and (4) provide timely information
for the investment community.
The companies in the GCAI operate in a wide range of industries.
Results are provided for the total universe of GCAI constituents
and by industry segment. Given the index's limited exposure to
Financials, Utilities, Energy and Materials, comparisons are made
to the S&P 500 and S&P 600 as well as to "adjusted"
versions of those indexes that exclude the aforementioned
sectors.
About the Golub Capital Middle Market Report
The Golub Capital Middle Market Report analyzes the results of
the Golub Capital Altman Index ("GCAI"), which measures the median
revenue and earnings growth of approximately 110–150 privately
owned companies in the Golub Capital loan portfolio for the first
two months of each calendar quarter. It compares these results to
the financial performance of well-known market indexes, including
the S&P 500 and S&P SmallCap 600. The GCAI is produced by
Golub Capital in collaboration with credit expert Dr. Edward I. Altman. Effective Q2 2022, the Golub
Capital Altman Index (GCAI) excludes Golub Capital portfolio
companies that have recurring revenue-based credit facilities. The
data referenced herein may not reflect all companies in the loan
portfolio of Golub Capital during the time periods indicated.
About Golub Capital
Golub Capital is a market-leading, award-winning direct lender
and experienced credit asset manager. We specialize in delivering
reliable, creative and compelling financing solutions to companies
backed by private equity sponsors. Our sponsor finance expertise
also forms the foundation of our Broadly Syndicated Loan and Credit
Opportunities investment programs. We nurture long-term, win-win
partnerships that inspire repeat business from private equity
sponsors and investors.
As of July 1, 2023, Golub Capital
had over 825 employees and over $60
billion of capital under management, a gross measure of
invested capital including leverage. The firm has lending offices
in Chicago, New York, San
Francisco and London. For
more information, please visit golubcapital.com.
About Dr. Edward I.
Altman
A leading expert on credit markets, Dr. Edward I. Altman is the Max L. Heine Professor
of Finance, Emeritus at the NYU Stern School of Business, and
Director of Research in Credit and Debt Markets at the NYU Salomon
Center for the Study of Financial Institutions. He is currently an
advisor to several foreign central banks. Professor Altman has
published or edited two-dozen books and over 150 articles in
scholarly finance, accounting and economic journals. He has been
inducted into the Fixed Income Analysts Society Hall of Fame,
served as President of the Financial Management Association, was an
FMA Fellow, and was amongst the inaugural inductees into the
Turnaround Management Association Hall of Fame. He received his MBA
and Ph.D. in Finance from the University of
California, Los Angeles.
Important Disclosure
The Golub Capital Altman Index is provided as an indicator only
and does not constitute investment advice or the offer to sell or a
solicitation to buy any security. Some of these statements
constitute forward-looking statements, which may be predictions
about future events, future performance, or future financial
conditions. Some of these statements reflect opinions based upon
the data presented in the Index, and these opinions may be
incorrect. Actual results could vary materially from those implied
or expressed in such forward-looking statements for any reason. The
Golub Capital Altman Index has been created on the basis of
information provided by third-party sources that are believed to be
reliable, but the information has not been verified independently
by Golub Capital. Golub Capital makes no warranty or representation
as to the accuracy or completeness of such third-party
information.
Media Contact
press@golubcapital.com
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SOURCE Golub Capital