NEW
YORK, May 10, 2022 /PRNewswire/ -- Golub Capital
BDC, Inc., a business development company (Nasdaq: GBDC), today
announced its financial results for its second fiscal quarter ended
March 31, 2022.
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
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(in thousands, expect
per share data)
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March 31, 2022
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December 31, 2021
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Investment portfolio,
at fair value
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$
5,426,159
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5,146,766
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Total assets
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$
5,624,964
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5,480,437
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Net asset value per
share
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$
15.35
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15.26
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Quarter Ended
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March 31, 2022
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December 31, 2021
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Net investment income
per share
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$
0.25
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$
0.27
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Amortization of
purchase premium per share
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0.02
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0.04
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Adjusted net investment
income per share1
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$
0.27
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$
0.31
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Accrual for capital
gain incentive fee per share
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0.03
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0.00
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*
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Adjusted net investment
income before accrual for capital gain incentive fee per
share1
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$
0.30
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$
0.31
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Net realized/unrealized
gain/(loss) per share
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$
0.14
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$
0.10
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Reversal of realized /
unrealized loss resulting from the purchase premium per
share
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(0.02)
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(0.04)
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Adjusted net
realized/unrealized gain/(loss) per share1
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$
0.12
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$
0.06
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Earnings/(loss) per
share
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$
0.39
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$
0.37
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Adjusted
earnings/(loss) per share1
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$
0.39
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$
0.37
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Net asset value per
share
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$
15.35
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$
15.26
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Distributions paid per
share
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$
0.30
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$
0.30
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*
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Represents an amount
less than $0.01 per share
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1
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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.
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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:
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- "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.
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- "Adjusted Net
Investment Income Before Accrual for Capital Gain Incentive
Fee" - Adjusted Net Investment Income excluding the accrual or
reversal for the capital gain incentive fee required under
GAAP;
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- "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.
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- "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).
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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 under GAAP is useful as a portion of such accrual is
not contractually payable under the terms of the Company's
investment advisory agreement with GC Advisors.
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Second Fiscal Quarter 2022
Highlights
- Net investment income per share for the quarter ended
March 31, 2022 was $0.25 as compared to $0.27 for the quarter ended December 31, 2021. Excluding $0.02 per share in purchase premium amortization
from the GCIC acquisition and $0.03
per share in the accrual for the capital gain incentive fee under
GAAP, Adjusted Net Investment Income Before Accrual for Capital
Gain Incentive Fee1 for the quarter ended March 31, 2022 was $0.30. This compares to Adjusted Net Investment
Income Before Accrual for Capital Gain Incentive Fee1 of
$0.31 for the quarter ended
December 31, 2021 when excluding
$0.04 per share in purchase premium
amortization from the GCIC acquisition and less than $0.01 per share in the accrual for the capital
gain incentive fee under GAAP.
- Net realized and unrealized gain per share for the quarter
ended March 31, 2022 was $0.14. Adjusted Net Realized and Unrealized Gain
Per Share1 was $0.12 when
excluding the $0.02 per share
reversal of net realized loss and unrealized depreciation resulting
from the the amortization of the purchase premium. The Adjusted Net
Realized and Unrealized Gain Per Share1 for the quarter
ended March 31, 2022 primarily
resulted from unrealized gains on our portfolio of investments. For
additional analysis, please refer to the Quarter Ended 3.31.2022 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 $0.10 during the quarter ended December 31, 2021. Adjusted Net Realized and
Unrealized Gain Per Share1 for the quarter ended
December 31, 2021 was $0.06 when excluding the $0.04 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 March 31, 2022 was $0.39 as compared to $0.37 for the quarter ended December 31, 2021. Adjusted Earnings Per
Share1 for the quarter ended March 31, 2022 was $0.39 as compared to $0.37 for the quarter ended December 31, 2021.
- Net asset value per share increased to $15.35 at March 31,
2022 from $15.26 at
December 31, 2021.
- On March 29, 2022, we paid a
quarterly distribution of $0.30 per
share and on May 6, 2022, our board
of directors declared a quarterly distribution of $0.30 per share, which is payable on June 29, 2022 to stockholders of record as of
June 3, 2022.
Portfolio and Investment
Activities
As of March 31, 2022, the Company
had investments in 310 portfolio companies with a total fair value
of $5,426.2 million. This
compares to the Company's portfolio as of December 31, 2021, as of which date the Company
had investments in 301 portfolio companies with a total fair value
of $5,146.8 million. Investments in
portfolio companies as of March 31,
2022 and December 31, 2021
consisted of the following:
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As of March 31, 2022
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As of December 31, 2021
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Investments
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Percentage of
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Investments
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Percentage of
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at Fair Value
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Total
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at Fair Value
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Total
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Investment Type
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(In thousands)
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Investments
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(In thousands)
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Investments
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Senior
secured
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$
605,007
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11.1 %
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$
620,168
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12.0 %
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One stop
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4,508,470
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83.1
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4,235,533
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82.3
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Junior
debt*
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46,356
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0.9
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44,312
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0.9
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Equity
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266,326
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4.9
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246,753
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4.8
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Total
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$
5,426,159
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100.0 %
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$
5,146,766
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100.0 %
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*
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Junior debt is
comprised of second lien and subordinated debt.
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The following table shows the asset mix of our new investment
commitments for the three months ended March
31, 2022:
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For the three months ended March 31,
2022
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New Investment
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Commitments
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Percentage of
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(In thousands)
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Commitments
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Senior
secured
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$
5,940
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1.8 %
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One stop
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304,844
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94.4
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Junior
debt*
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—
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—
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Equity
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12,399
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3.8
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Total new investment
commitments
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$
323,183
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100.0 %
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|
|
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|
*
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Junior debt is
comprised of second lien and subordinated debt.
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Total investments in portfolio companies at fair value were
$5,426.2 million at March 31, 2022. As of March 31, 2022, total assets were $5,625.0 million, net assets were $2,623.5 million and net asset value per share
was $15.35.
Consolidated Results of
Operations
For the second fiscal quarter of 2022, the Company reported GAAP
net income and Adjusted Net Income1 of $66.9 million or $0.39 per share. GAAP net investment income was
$43.4 million or $0.25 per share and Adjusted Net Investment
Income Before Accrual for Capital Gain Incentive Fee1
was $50.7 million or
$0.30 per share. GAAP net
realized and unrealized gain was $23.5
million or $0.14 per share and
Adjusted Realized and Unrealized Gain/(Loss)1 was
$20.6 million or $0.12 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. 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 March 31, 2022, we had cash,
cash equivalents and foreign currencies of $136.2 million, restricted cash, cash
equivalents and foreign currencies of $38.2 million and $2,981.0 million of debt outstanding. As of
March 31, 2022, subject to leverage
and borrowing base restrictions, we had approximately $681.7 million of remaining commitments and
availability, in the aggregate, on our revolving credit facilities
with various banks. In addition, as of March
31, 2022, we had $100.0 million of remaining commitments and
availability on our unsecured line of credit with GC Advisors.
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:
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Internal Performance
Ratings
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Rating
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Definition
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5
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Involves the least
amount of risk in our portfolio. The borrower is performing above
expectations, and the trends and risk factors are generally
favorable.
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4
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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.
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3
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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.
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2
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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).
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1
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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.
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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 March 31, 2022, please refer to the Quarter Ended
3.31.2022 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 March 31, 2022 and
December 31, 2021:
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March 31,
2022
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December 31,
2021
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Internal
|
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Investments
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Percentage
of
|
|
Investments
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|
Percentage
of
|
|
Performance
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at Fair
Value
|
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Total
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at Fair
Value
|
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Total
|
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Rating
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(In
thousands)
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Investments
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(In
thousands)
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Investments
|
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5
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$
337,368
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6.2
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%
|
$
349,616
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|
6.8
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%
|
4
|
|
4,670,103
|
|
86.1
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|
4,406,567
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|
85.6
|
|
3
|
|
367,590
|
|
6.8
|
|
341,026
|
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6.6
|
|
2
|
|
50,810
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|
0.9
|
|
49,317
|
|
1.0
|
|
1
|
|
288
|
|
0.0
|
*
|
240
|
|
0.0
|
*
|
Total
|
|
$
5,426,159
|
|
100.0
|
%
|
$
5,146,766
|
|
100.0
|
%
|
*
|
Represents an amount
less than 0.1%.
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Conference Call
The Company will host an earnings conference call at
3:00 pm (Eastern Time) on Wednesday,
May 11, 2022 to discuss the quarterly financial results. All
interested parties may participate in the conference call by
dialing (888) 330-3529 approximately 10-15 minutes prior to the
call; international callers should dial +1 (646) 960-0656.
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 3.31.2022
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
May 25, 2022. To hear the replay,
please dial (800) 770-2030. International dialers, please dial +1
(647) 362-9199. For all replays, please reference program ID number
5111111.
Golub Capital BDC,
Inc. and Subsidiaries
|
|
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Consolidated
Statements of Financial Condition
|
|
|
|
(In thousands,
except share and per share data)
|
|
|
|
|
March 31,
2022
|
|
December 31,
2021
|
Assets
|
(unaudited)
|
|
(unaudited)
|
Investments, at fair
value (cost of $5,405,019 and $5,143,591, respectively)
|
$
5,426,159
|
|
$
5,146,766
|
Cash and cash
equivalents
|
130,453
|
|
180,203
|
Unrestricted foreign
currencies (cost of $5,587 and $2,445, respectively)
|
5,716
|
|
2,480
|
Restricted cash and
cash equivalents
|
35,749
|
|
117,144
|
Restricted foreign
currencies (cost of $2,412 and $1,641, respectively)
|
2,414
|
|
1,650
|
Interest
receivable
|
21,251
|
|
21,268
|
Other assets
|
3,222
|
|
10,926
|
Total
Assets
|
$
5,624,964
|
|
$
5,480,437
|
|
|
|
|
Liabilities
|
|
|
|
Debt
|
$
2,980,962
|
|
$
2,852,832
|
Less unamortized debt issuance costs
|
20,786
|
|
22,404
|
Debt less unamortized debt
issuance costs
|
2,960,176
|
|
2,830,428
|
Interest
payable
|
15,643
|
|
16,184
|
Management and
incentive fees payable
|
20,929
|
|
20,799
|
Accounts payable and
accrued expenses
|
4,667
|
|
5,547
|
Total
Liabilities
|
3,001,415
|
|
2,872,958
|
|
|
|
|
Net
Assets
|
|
|
|
Preferred stock, par
value $0.001 per share, 1,000,000 shares authorized, zero shares
issued and outstanding as of March 31, 2022 and December 31, 2021,
respectively.
|
—
|
|
—
|
Common stock, par value
$0.001 per share, 350,000,000 shares authorized, 170,895,670 issued
and outstanding as of March 31, 2022; 200,000,000 shares
authorized, 170,865,742 issued and outstanding as of December 31,
2021
|
171
|
|
171
|
Paid in capital in
excess of par
|
2,677,424
|
|
2,676,967
|
Distributable
earnings
|
(54,046)
|
|
(69,659)
|
Total Net
Assets
|
2,623,549
|
|
2,607,479
|
Total Liabilities
and Total Net Assets
|
$
5,624,964
|
|
$
5,480,437
|
|
|
|
|
Number of common shares
outstanding
|
170,895,670
|
|
170,865,742
|
Net asset value per
common share
|
$
15.35
|
|
$
15.26
|
Golub Capital BDC, Inc. and
Subsidiaries
|
|
|
|
|
Consolidated Statements of
Operations
|
|
|
|
|
(In thousands, except share and per share
data)
|
|
|
|
|
|
|
Three months ended
|
|
|
March 31, 2022
|
|
December 31, 2021
|
|
|
(unaudited)
|
|
(unaudited)
|
Investment income
|
|
|
Interest income
|
|
$
88,679
|
|
$
92,336
|
GCIC acquisition purchase price premium
amortization
|
|
(2,940)
|
|
(7,095)
|
Dividend income
|
|
3
|
|
317
|
Fee
income
|
|
219
|
|
1,009
|
Total investment
income
|
|
85,961
|
|
86,567
|
|
|
|
|
|
Expenses
|
|
|
|
|
Interest and other debt financing expenses
|
|
19,275
|
|
17,836
|
Base management fee, net of waiver
|
|
16,115
|
|
17,501
|
Incentive fee
|
|
4,362
|
|
3,381
|
Professional fees
|
|
729
|
|
899
|
Administrative service fee
|
|
1,640
|
|
1,818
|
General and administrative expenses
|
|
400
|
|
342
|
Total net
expenses
|
|
42,521
|
|
41,777
|
Net investment income
|
|
43,440
|
|
44,790
|
|
|
|
|
|
Net gain (loss) on investment
transactions
|
|
|
|
|
Net
realized gain (loss) from:
|
|
|
|
|
Investments
|
|
321
|
|
14,573
|
Foreign currency
transactions
|
|
51
|
|
(25)
|
Net
realized gain (loss) in investment transactions
|
|
372
|
|
14,548
|
Net
change in unrealized appreciation (depreciation) from:
|
|
|
|
|
Investments
|
|
17,965
|
|
3,686
|
Translation of assets and
liabilities in foreign currencies
|
|
3,337
|
|
268
|
Forward currency
contracts
|
|
1,856
|
|
281
|
Net
change in unrealized appreciation (depreciation) on investment
transactions
|
|
23,158
|
|
4,235
|
Net gain (loss) on investments
|
|
23,530
|
|
18,783
|
Provision for taxes on unrealized appreciation on
investments
|
|
(97)
|
|
(495)
|
Net increase (decrease) in net assets resulting from
operations
|
|
$
66,873
|
|
$
63,078
|
|
|
|
|
|
Per Common Share Data
|
|
|
|
|
Basic and diluted earnings (loss) per common share
|
|
$
0.39
|
|
$
0.37
|
Dividends and distributions declared per common
share
|
|
$
0.30
|
|
$
0.30
|
Basic and diluted weighted average common shares
outstanding
|
|
170,866,740
|
|
170,046,783
|
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 experienced 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.