Declares Quarterly Distribution of $0.39 Per
Share, and a Fiscal Year 2024 Third Quarter Supplemental
Distribution of $0.05 Per Share; Closes Previously Announced
Transformative Merger with GBDC 3.
Golub Capital BDC, Inc., a business development company (Nasdaq:
GBDC), today announced its financial results for its third fiscal
quarter ended June 30, 2024.
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)
June 30, 2024
March 31, 2024
Investment portfolio, at fair value
$
7,867,514
$
5,394,737
Total assets
$
8,477,205
$
5,942,626
Net asset value per share
$
15.32
$
15.12
Quarter Ended
June 30, 2024
March 31, 2024
Net investment income per share
$
0.46
$
0.51
Amortization of purchase premium per
share
0.02
0.00 *
Adjusted net investment income per
share1
$
0.48
$
0.51
Net realized/unrealized gain/(loss)
excluding write-down of purchase premium per share
$
(0.15
)
$
0.04
Unrealized (loss) from the write-down of
the GBDC 3 purchase premium per share1
(0.26
)
—
Net realized/unrealized gain/(loss) per
share
$
(0.41
)
$
0.04
Reversal of unrealized (loss) resulting
from the write-down of the GBDC 3 purchase premium per share1
0.26
—
Reversal of realized/unrealized loss
resulting from the amortization of purchase premium per share1
(0.02
)
(0.00)*
Adjusted net realized/unrealized
gain/(loss) per share1
$
(0.17
)
$
0.04
Earnings/(loss) per share
$
0.05
$
0.55
Adjusted earnings/(loss) per share1
$
0.31
$
0.55
Net asset value per share
$
15.32
$
15.12
Distributions paid per share
$
0.50
$
0.46
* Represents an amount less than $0.01
1
On September 16, 2019 and June 3, 2024,
the Company completed its acquisition of Golub Capital Investment
Corporation (“GCIC”) and Golub Capital BDC 3, Inc. (“GBDC 3”),
respectively. Each acquisition 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 and GBDC 3’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 and GBDC 3 investments acquired
by the Company pro-rata based on their relative fair value.
Immediately following each acquisition, the Company recorded its
assets at their respective fair values and, as a result, the
purchase premium allocated to the cost basis of the 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 and GBDC 3 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 and GBDC 3 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 and GBDC 3 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 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;
- “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 acquisitions of GCIC and GBDC 3 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.
Third Fiscal Quarter 2024 Highlights
- Net investment income per share for the quarter ended June 30,
2024 was $0.46 as compared to $0.51 for the quarter ended March 31,
2024. Excluding $0.02 per share in purchase premium amortization
from the GCIC/GBDC 3 acquisitions, Adjusted Net Investment Income
Per Share1 for the quarter ended June 30, 2024 was $0.48. This
compares to Adjusted Net Investment Income Per Share1 of $0.51 for
the quarter ended March 31, 2024 when excluding an amount less than
$0.01 per share in purchase premium amortization from the GCIC
acquisition and no accrual or reversal for the capital gain
incentive fee under GAAP.
- Net realized and unrealized gain/(loss) per share for the
quarter ended June 30, 2024 was $(0.41). Adjusted Net Realized and
Unrealized Gain/(Loss) Per Share1 was $(0.17) when excluding $0.02
per share net reversal of unrealized depreciation and realized loss
resulting from the amortization of the purchase premium and $0.26
per share reversal of unrealized loss resulting from the one-time
write-down of the purchase premium allocated to the investments
acquired from Golub Capital BDC 3, Inc. (“GBDC 3”). The Adjusted
Net Realized and Unrealized Gain/(Loss) Per Share1 for the quarter
ended June 30, 2024 was primarily due to realized gains recognized
on the sale of three equity investments that were offset by a
realized loss recognized on the restructuring of debt and equity
investments of one portfolio company. For additional analysis,
please refer to the Quarter Ended 6.30.2024 Earnings Presentation
available on the Investor Resources link on the homepage of the
Company's website (www.golubcapitalbdc.com) under
Events/Presentations. The Earnings 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/(loss)
per share of $0.04 during the quarter ended March 31, 2024.
Adjusted Net Realized and Unrealized Gain/(Loss) Per Share1 for the
quarter ended March 31, 2024 was $0.04 when excluding an amount
less than $0.01 per share net reversal of unrealized depreciation
and realized loss resulting from the amortization of the purchase
premium.
- Earnings per share for the quarter ended June 30, 2024 was
$0.05 as compared to $0.55 for the quarter ended March 31, 2024.
Adjusted Earnings Per Share1 for the quarter ended June 30, 2024
was $0.31 as compared to $0.55 for the quarter ended March 31,
2024.
- Net asset value per share increased to $15.32 at June 30, 2024
from $15.12 at March 31, 2024.
- On June 2, 2024, our board of directors declared a series of
special distributions totaling $0.15 per share, to be distributed
in three consecutive quarterly payments of $0.05 per share per
quarter, based on the following schedule:
- Special distribution #1 of $0.05 per share, payable on June 27,
2024 to stockholders of record as of June 13, 2024.
- Special distribution #2 of $0.05 per share, payable on
September 13, 2024 to stockholders of record as of August 16,
2024.
- Special distribution #3 of $0.05 per share, payable on December
13, 2024 to stockholders of record as of November 29, 2024.
- On June 14, 2024 we paid a supplemental distribution of $0.06
per share, on June 21, 2024 we paid a quarterly distribution of
$0.39 per share and on June 27, 2024 we paid a special distribution
of $0.05 per share.
- On August 2, 2024, our board of directors declared a quarterly
distribution of $0.39 per share, which is payable on September 27,
2024, to stockholders of record as of August 30, 2024 and a
supplemental distribution of $0.05 per share, which is payable on
September 13, 2024 to stockholders of record as of August 16, 2024.
For additional details on the framework we intend to use for
determining the amount of supplemental distributions going forward,
please refer to the Quarter Ended 6.30.2024 Earnings Presentation
available on the Investor Resources link on the homepage of the
Company's website (www.golubcapitalbdc.com) under
Events/Presentations.
_________________________
1
See footnote 1 to “Selected Financial
Highlights” above.
Portfolio and Investment Activities
As of June 30, 2024, the Company had investments in 380
portfolio companies with a total fair value of $7,867.5 million.
This compares to the Company’s portfolio as of March 31, 2024, as
of which date the Company had investments in 366 portfolio
companies with a total fair value of $5,394.7 million. Investments
in portfolio companies as of June 30, 2024 and March 31, 2024
consisted of the following:
As of June 30, 2024
As of March 31, 2024
Investments
Percentage of
Investments
Percentage of
at Fair Value
Total
at Fair Value
Total
Investment Type
(In thousands)
Investments
(In thousands)
Investments
Senior secured
$
567,375
7.2
%
$
434,472
8.0
%
One stop
6,734,334
85.6
4,602,923
85.3
Junior debt*
40,270
0.5
34,510
0.7
Equity
525,535
6.7
322,832
6.0
Total
$
7,867,514
100.0
%
$
5,394,737
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 June 30, 2024:
New Investment
Commitments
Percentage of
(In thousands)
Commitments
Senior secured
$
36,494
8.4
%
One stop
388,075
89.2
Junior debt*
8,141
1.9
Equity
2,252
0.5
Total new investment commitments
$
434,962
100.0
%
*
Junior debt is comprised of second lien
and subordinated debt.
Total investments in portfolio companies at fair value were
$7,867.5 million at June 30, 2024. As of June 30, 2024, total
assets were $8,477.2 million, net assets were $4,053.6 million and
net asset value per share was $15.32.
Consolidated Results of Operations
For the third fiscal quarter of 2024, the Company reported GAAP
net income of $9.3 million or $0.05 per share and Adjusted Net
Income2 of $60.9 million or $0.31 per share. GAAP net investment
income was $92.7 million or $0.46 per share and Adjusted Net
Investment Income1 was $95.8 million or $0.48 per share. GAAP net
realized and unrealized gain/(loss) was ($83.7) million or ($0.41)
per share and Adjusted Realized and Unrealized Gain/(Loss)1 was
($35.1) million or ($0.17) 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.
_________________________
2
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 June 30, 2024, we had cash, cash equivalents and foreign
currencies of $147.5 million, restricted cash and cash equivalents
of $317.2 million, which included $202.1 million of restricted cash
retained for partial repayments on the notes of certain of our debt
securitizations that are past their reinvestment period term, and
$4,337.7 million of debt outstanding. As of June 30, 2024, subject
to leverage and borrowing base restrictions, we had approximately
$1,153.8 million of remaining availability, in the aggregate, on
our revolving credit facility with JPMorgan and approximately $23.9
million of availability on our revolving credit facility with
Deutsche Bank. In addition, as of June 30, 2024, we had $200.0
million of remaining commitments and availability on our unsecured
line of credit with GC Advisors.
On April 8, 2024, the Company redeemed $500.0 million in
aggregate principal amount of its 3.375% Notes due in 2024 (the
“2024 Notes”). The 2024 Notes were redeemed at 100% of their
principal amount, plus the accrued and unpaid interest thereon.
On April 11, 2024, we entered into an interest rate swap
agreement related to the second $225.0 million of the $450.0
million of 2028 Unsecured Notes (the “2028 Notes”) that we issued
on December 5, 2023. Under the agreement, we receive a fixed
interest rate of 7.310% and pay a floating interest rate of
one-month SOFR plus 2.835%.
The Company estimates that our GAAP debt-to-equity ratio
decreased to 1.09x as of June 30, 2024 and our GAAP debt-to-equity
ratio, net3 decreased to 1.05x as of June 30, 2024.
_______________________ 3
GAAP debt to equity, net is calculated as
(1) total debt reduced by available cash, cash equivalents, and
foreign currencies, divided by (2) total net assets.
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
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 June 30, 2024, please refer to
the Quarter Ended 6.30.2024 Earnings 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 June 30, 2024 and March 31, 2024:
June 30, 2024
March 31, 2024
Internal
Investments
Percentage of
Investments
Percentage of
Performance
at Fair Value
Total
at Fair Value
Total
Rating
(In thousands)
Investments
(In thousands)
Investments
5
$
126,286
1.6
%
$
125,443
2.3
%
4
6,893,398
87.6
4,576,979
84.9
3
795,362
10.1
664,560
12.3
2
52,468
0.7
27,755
0.5
1
—
—
—
—
Total
$
7,867,514
100.0
%
$
5,394,737
100.0
%
Conference Call
The Company will host an earnings conference call at 11:00 am
(Eastern Time) on Tuesday, August 6, 2024 to discuss the quarterly
financial results. All interested parties may participate in the
conference call by dialing (888) 596-4144 approximately 10-15
minutes prior to the call; international callers should dial +1
(646) 968-2525. 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 6.30.2024 Earnings 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 August 20, 2024. To hear
the replay, please dial (800) 770-2030. International dialers,
please dial +1 (609) 800-9909. For all replays, please reference
program ID number 5111111.
Golub Capital BDC, Inc. and
Subsidiaries
Consolidated Statements of Financial
Condition
(In thousands, except share and per share
data)
June 30, 2024
March 31, 2024
Assets
(unaudited)
(unaudited)
Investments, at fair value (cost of
$7,965,888 and $5,443,610, respectively)
$
7,867,514
$
5,394,737
Cash and cash equivalents
141,186
292,844
Unrestricted foreign currencies (cost of
$6,381 and $7,920, respectively)
6,327
7,904
Restricted cash and cash equivalents
316,484
159,600
Restricted foreign currencies (cost of
$717 and $0, respectively)
717
—
Interest receivable
81,884
62,081
Other assets
63,093
25,460
Total Assets
$
8,477,205
$
5,942,626
Liabilities
Debt
$
4,337,697
$
3,291,293
Less unamortized debt issuance costs
(22,232
)
(24,301
)
Debt less unamortized debt issuance
costs
4,315,465
3,266,992
Interest payable
61,170
36,589
Management and incentive fees payable
14,345
29,171
Accounts payable and accrued expenses
32,582
16,234
Total Liabilities
4,423,562
3,348,986
Net Assets
Preferred stock, par value $0.001 per
share, 1,000,000 shares authorized, zero shares issued and
outstanding as of June 30, 2024 and March 31, 2024,
respectively.
—
—
Common stock, par value $0.001 per share,
350,000,000 shares authorized, 264,609,056 issued and outstanding
as of June 30, 2024 and 171,517,307 issued and outstanding as of
March 31, 2024.
265
172
Paid in capital in excess of par
4,217,451
2,676,430
Distributable earnings
(164,073
)
(82,962
)
Total Net Assets
4,053,643
2,593,640
Total Liabilities and Total Net
Assets
$
8,477,205
$
5,942,626
Number of common shares outstanding
264,609,056
171,517,307
Net asset value per common share
$
15.32
$
15.12
Golub Capital BDC, Inc. and
Subsidiaries
Consolidated Statements of
Operations
(In thousands, except share and per share
data)
Three months ended
June 30, 2024
March 31, 2024
(unaudited)
(unaudited)
Investment income
Interest income
$
167,957
$
160,169
Acquisition purchase price premium
amortization
(3,086
)
(779
)
Dividend income
5,705
4,365
Fee income
695
475
Total investment income
171,271
164,230
Expenses
Interest and other debt financing
expenses
60,116
44,125
Base management fee
14,362
13,662
Incentive fee
14,400
20,626
Professional fees
1,486
1,342
Administrative service fee
2,090
2,145
General and administrative expenses
370
384
Total expenses
92,824
82,284
Incentive fee waived
(14,400
)
(5,157
)
Net expenses
78,424
77,127
Net investment income before
tax
92,847
87,103
Excise and Income tax
125
570
Net investment income after tax
92,722
86,533
Net gain (loss) on investment
transactions
Net realized gain (loss) from:
Investments
(32,137
)
(18,277
)
Foreign currency transactions
(6,206
)
4,459
Forward currency contracts
624
—
Net realized gain (loss) in investment
transactions
(37,719
)
(13,818
)
Net change in unrealized appreciation
(depreciation) from:
Investments
(52,622
)
26,317
Translation of assets and liabilities in
foreign currencies
3,709
(10,156
)
Forward currency contracts
2,972
4,332
Net change in unrealized appreciation
(depreciation) on investment transactions
(45,941
)
20,493
Net gain (loss) on investments
(83,660
)
6,675
Provision for taxes on unrealized
appreciation on investments
190
350
Net increase (decrease) in net assets
resulting from operations
$
9,252
$
93,558
Per Common Share Data
Basic and diluted earnings (loss) per
common share
$
0.05
$
0.55
Dividends and distributions declared per
common share
$
0.50
$
0.46
Basic and diluted weighted average common
shares outstanding
199,969,889
170,637,140
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 private credit manager. The firm specializes in
delivering reliable, creative and compelling financing solutions to
companies backed by private equity sponsors. Golub Capital’s
sponsor finance expertise also forms the foundation of its Broadly
Syndicated Loan and Credit Opportunities investment programs. Golub
Capital nurtures long-term, win-win partnerships that inspire
repeat business from private equity sponsors and investors.
As of April 1, 2024, Golub Capital had over 925 employees and
over $70 billion of capital under management, a gross measure of
invested capital including leverage. The firm has offices in North
America, Europe and Asia. 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240805685171/en/
Christopher Ericson 312-212-4036 cericson@golubcapital.com
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