Goldman Sachs BDC, Inc. (“GS BDC” or the “Company”) (NYSE:GSBD)
today announced its financial results for the second quarter ended
June 30, 2017 and filed its Form 10-Q with the U.S. Securities and
Exchange Commission.
QUARTERLY HIGHLIGHTS
- Net investment income for the quarter
ended June 30, 2017 was $0.64 per share, as compared to $0.49 per
share for the quarter ended March 31, 2017;
- The Company announced a third quarter
dividend of $0.45 per share payable to shareholders of record as of
September 29, 2017, equating to an annualized dividend yield of
9.9% on quarter end net asset value per share;1
- Net asset value per share for the
quarter ended June 30, 2017 was stable at $18.23, as compared to
$18.26 for the quarter ended March 31, 2017;
- New investment commitments and fundings
were $124.0 million and $120.3 million, respectively, while sales
and repayments totaled $160.4 million; the yield on new investment
commitments was 10.1%, while the yield on investments repaid was
9.1%;2,3
- The Senior Credit Fund (“SCF”) produced
a 14.2% return on investment to the Company; the Company’s
investment in the SCF grew by approximately 4% during the quarter
and continues to represent the Company’s largest investment at 8.5%
of total investments at fair value;2,3,4
- Investments on non-accrual represented
0.2% and 0.7% of the total investments at fair value and amortized
cost, respectively;2
- In May, the Company completed an
offering of 3,737,500 shares of common stock at a public offering
price of $22.50 per share. Total net proceeds were $80.3
million.
SELECTED FINANCIAL HIGHLIGHTS
(in $ millions,
except per share data)
As of
June 30, 2017
As of
March 31, 2017
Investment portfolio, at fair value2 $1,111.8 $1,164.0 Total
debt outstanding5 412.3 506.0 Net assets 730.7 663.6 Net asset
value per share $18.23 $18.26
Three Months Ended
June 30, 2017
Three Months Ended
March 31, 2017
Total investment income $36.0 $32.2 Net investment income
after taxes 24.1 18.0 Net increase in net assets resulting from
operations 4.6 14.6 Net investment income per share (basic
and diluted) 0.64 0.49 Earnings per share (basic and diluted) 0.12
0.40 Regular distribution per share 0.45
0.45
INVESTMENT ACTIVITY2
During the three months ended June 30, 2017, new investment
commitments and fundings were $124.0 million and $120.3 million,
respectively, which includes net fundings of $2.1 million of
previously unfunded commitments. The new investment commitments
were across six new portfolio companies and three existing
portfolio companies. The Company had sales and repayments of $160.4
million, primarily resulting from the full repayment of investments
in three portfolio companies. During the quarter, the weighted
average yield on new debt investment commitments and the Company’s
additional investment in the SCF was 10.1%, while the weighted
average yield on debt investments sold or repaid was 9.1%.3
Summary of Investment Activity for the Three Months Ended June
30, 2017:
New Investment Commitments Sales and
Repayments Investment Type $
Millions % of Total $
Millions % of Total 1st Lien/Senior
Secured Debt $53.5 43.1%
$81.6 50.9% 1st Lien/Last-Out Unitranche 17.5 14.1%
26.2 16.3% 2nd Lien/Senior Secured Debt 48.3 39.0% 52.6 32.8%
Unsecured Debt - -% - -% Preferred Stock - -% - -% Common Stock 1.3
1.1% - -% Investment Funds & Vehicles (SCF) 3.4
2.7% - -%
Total
$124.0 100.0%
$160.4 100.0%
During the three months ended June 30, 2017, the SCF made new
investment commitments and fundings of $65.0 million and $61.0
million, respectively. The new investment commitments were across
three new portfolio companies and two existing portfolio companies.
The SCF also had sales and repayments of $79.4 million, resulting
in net funded portfolio change of $(18.4) million during the
quarter. As of June 30, 2017, the SCF’s investment portfolio at
fair value was $502.4 million, a decrease of 3.8% quarter over
quarter. During the six months ended June 30, 2017, the weighted
average yield on new investment commitments was 7.1% while the
yield on investments repaid was 6.5%.3 The weighted average yield
on the total investment portfolio at amortized cost increased from
6.9% to 7.2% since year-end. The Company increased its investment
at cost in the SCF from $91.0 million to $94.3 million during the
quarter. The SCF represents the Company’s largest investment at
both cost and fair value.
PORTFOLIO SUMMARY2
As of June 30, 2017, the Company’s investment portfolio had an
aggregate fair value of $1,111.8 million, comprised of investments
in 45 portfolio companies operating across 27 different industries.
The investment portfolio on a fair value basis was comprised of
88.8% secured debt investments (60.3% in first lien debt (including
27.6% in first lien/last-out unitranche debt) and 28.5% in second
lien debt), 0.3% in unsecured debt, 1.0% in preferred stock, 1.4%
in common stock, and 8.5% in the SCF.
Summary of Investment Portfolio as of June 30, 2017:
Investments at
Fair Value Investment Type $
Millions % of Total 1st Lien/Senior
Secured Debt $363.8 32.7% 1st
Lien/Last-Out Unitranche 306.5 27.6% 2nd Lien/Senior Secured Debt
317.2 28.5% Unsecured Debt 3.3 0.3% Preferred Stock 11.2 1.0%
Common Stock 15.0 1.4% Senior Credit Fund (contains 97.3% 1st lien
debt; 2.7% second lien debt) 94.8 8.5%
Total $1,111.8
100.0%
As of June 30, 2017, the weighted average yield of the Company’s
total investment portfolio at amortized cost and fair value was
10.8% and 12.5%, respectively, as compared to 10.5% and 11.8%,
respectively, as of March 31, 2017.
On a fair value basis, the percentage of the Company’s debt
investments bearing interest at a floating rate was 95.9%.6
As of June 30, 2017, the weighted average net debt/EBITDA of the
companies in the Company’s investment portfolio was 5.0x versus
4.6x as of March 31, 2017. The weighted average interest coverage
of interest-bearing companies in the investment portfolio was 2.6x
versus 2.7x from the previous quarter. The median EBITDA of the
portfolio companies was $26.6 million.7
As of June 30, 2017, investments on non-accrual status
represented 0.2% and 0.7% of the total investment portfolio at fair
value and amortized cost, respectively.
The Company’s investment in the SCF returned 14.2% and 14.0% at
amortized cost and fair value, respectively, over the trailing four
quarters ended June 30, 2017. The SCF’s investment portfolio had an
aggregate fair value of $502.4 million, comprised of investments in
35 portfolio companies operating across 20 different industries.
The SCF’s investment portfolio on a fair value basis was comprised
of 100.0% secured debt investments (95.4% in first lien debt, 1.9%
in a first-out portion of a unitranche loan and 2.7% in second lien
debt). All of the investments in the SCF were invested in debt
bearing a floating interest rate with an interest rate floor.
As of June 30, 2017, the weighted average net debt/EBITDA and
interest coverage of the companies in the SCF investment portfolio
were 4.1x and 3.1x, respectively. The median EBITDA of the SCF’s
portfolio companies was $44.0 million. None of the SCF’s
investments were on non-accrual status as of June 30, 2017.
RESULTS OF OPERATIONS
Total investment income for the three months ended June 30, 2017
and March 31, 2017 was $36.0 million and $32.2 million,
respectively. The increase in investment income over the
quarter was primarily driven by higher interest income, including
higher prepayment related income and other income. The $36.0
million of total investment income was comprised of $31.1 million
from interest income, original issue discount accretion and
dividend income, $1.0 million from other income and $3.9 million
from prepayment related income.8
Total expenses before taxes for the three months ended June 30,
2017 and March 31, 2017 were $11.6 million and $13.9 million,
respectively. The $2.3 million decrease in expenses was
primarily driven by a decrease in incentive fees, partially offset
by an increase in interest and credit facility expenses. The $11.6
million of total expenses were comprised of $4.8 million of
interest and credit facility expenses, $5.6 million of management
and incentive fees, and $1.2 million of other operating
expenses.
Net investment income after taxes for the three months ended
June 30, 2017 was $24.1 million, or $0.64 per share, compared with
$18.0 million, or $0.49 per share for the three months ended March
31, 2017.
During the three months ended June 30, 2017, the Company had net
realized and unrealized depreciation of $(19.5) million.
Net increase in net assets resulting from operations for the
three months ended June 30, 2017 was $4.6 million, or $0.12 per
share.
LIQUIDITY AND CAPITAL RESOURCES
In May 2017, the Company completed a public offering of
3,737,500 shares of common stock at a public offering price of
$22.50 per share. Net proceeds were $80.3 million after offering
and underwriting costs.
As of June 30, 2017, the Company had $412.3 million of total
principal amount of debt outstanding, comprised of $297.3 million
of outstanding borrowings under its revolving credit facility and
$115.0 million of convertible notes. The combined weighted average
interest rate on debt outstanding was 3.33% for the six months
ended June 30, 2017. As of June 30, 2017, the Company had $307.8
million of availability under its revolving credit facility and
$39.6 million in cash and cash equivalents.
The Company’s average and ending debt to equity leverage ratio
was 0.70x and 0.56x, respectively, for the three months ended June
30, 2017, as compared with 0.70x and 0.76x, respectively, for the
three months ended March 31, 2017.9
CONFERENCE CALL
The Company will host an earnings conference call on Friday,
August 4, 2017 at 10:00 am Eastern Time. All interested parties are
invited to participate in the conference call by dialing (866)
884-8289; international callers should dial +1 (631) 485-4531;
conference ID 49411973. All participants are asked to dial in
approximately 10-15 minutes prior to the call, and reference
“Goldman Sachs BDC, Inc.” when prompted. For a slide presentation
that the Company may refer to on the earnings conference call,
please visit the Investor Resources section of the Company’s
website at www.goldmansachsbdc.com. The conference call will be
webcast simultaneously on the Company’s website. An archived replay
of the call will be available from approximately 1:00 pm Eastern
Time on August 4 through September 4. To hear the replay,
participants should dial (855) 859-2056; international callers
should dial +1 (404) 537-3406; conference ID 49411973. An archived
replay will also be available on the Company’s webcast link located
on the Investor Resources section of the Company’s website. Please
direct any questions regarding obtaining access to the conference
call to Goldman Sachs BDC, Inc. Investor Relations, via e-mail, at
gsbdc-investor-relations@gs.com.
ENDNOTES
1 The $0.45 per share dividend is payable on October 16, 2017 to
holders of record as of September 29, 2017.
2 The discussion of the investment portfolio of both the Company
and the SCF excludes the investment in a money market fund managed
by an affiliate of The Goldman Sachs Group, Inc.
3 Computed based on the (a) annual stated interest rate or yield
earned plus amortization of fees and discounts on the performing
debt and other income producing investments, divided by (b) the
total performing debt and other income producing investments
(excluding investments on non-accrual) at amortized cost. The yield
on the SCF has been computed based on the net investment income
earned from the SCF for the trailing twelve months ended June 30,
2017, which may include dividend income and loan origination and
structuring fees, divided by GS BDC’s average member’s equity at
cost and fair value, adjusted for equity contributions.
4 The SCF’s return to the Company was measured at amortized cost
over the trailing four quarters.
5 Total debt outstanding excluding netting of debt issuance
costs of $4.2 million and $4.4 million, respectively, for the
quarter ended June 30, 2017 and March 31, 2017.
6 The fixed versus floating composition has been calculated as a
percentage of performing debt investments, including income
producing stock investments.
7 For a particular portfolio company, EBITDA typically
represents net income before net interest expense, income tax
expense, depreciation and amortization. The net debt to EBITDA
represents the ratio of a portfolio company’s total debt (net of
cash) and excluding debt subordinated to the Company’s investment
in a portfolio company, to a portfolio company’s EBITDA. The
interest coverage ratio represents the ratio of a portfolio
company’s EBITDA as a multiple of a portfolio company’s interest
expense. Weighted average net debt to EBITDA is weighted based on
the fair value of the Company’s debt investments, including the
Company’s exposure to underlying debt investments in the SCF and
excluding investments where net debt to EBITDA may not be the
appropriate measure of credit risk, such as cash collateralized
loans and investments that are underwritten and covenanted based on
recurring revenue. Weighted average interest coverage is weighted
based on the fair value of the Company’s performing debt
investments, including the Company’s exposure to underlying debt
investments in the SCF and excluding investments where EBITDA may
not be the appropriate measure of credit risk, such as cash
collateralized loans and investments that are underwritten and
covenanted based on recurring revenue. Median EBITDA is based on
the Company’s debt investments, including the Company’s exposure to
underlying debt investments in the SCF and excluding investments
where EBITDA may not be the appropriate measure of credit risk,
such as cash collateralized loans and investments that are
underwritten and covenanted based on recurring revenue. As of June
30, 2017, investments where EBITDA may not be the appropriate
measure of credit risk represented 6.7% of total debt investments,
including the Company’s investment in the SCF, at fair value.
Portfolio company statistics are derived from the most recently
available financial statements of each portfolio company as of the
respective reported end date. Portfolio company statistics have not
been independently verified by us and may reflect a normalized or
adjusted amount.
8 Interest income excludes accelerated accretion/amortization of
$3.4 million. Prepayment related income includes prepayment
premiums and accelerated accretion of upfront loan origination fees
and unamortized discounts.
9 The average debt to equity leverage ratio has been calculated
using the average daily borrowings during the quarter divided by
average net assets, adjusted for equity contributions. The ending
and average debt to equity leverage ratio excludes unfunded
commitments.
Goldman Sachs BDC, Inc.
Consolidated Statements of Assets and
Liabilities
(in thousands, except share and per
share amounts)
June 30, 2017(Unaudited)
December 31, 2016
Assets Investments, at fair value
Non-controlled/non-affiliated investments (cost of $951,462 and
$1,055,203, respectively) $ 926,267 $ 1,004,793 Non-controlled
affiliated investments (cost of $105,884 and $89,715, respectively)
90,756 84,103 Controlled affiliated investments (cost of $94,342
and $77,592, respectively) 94,823 78,394 Investments in affiliated
money market fund (cost of $2,123 and $1, respectively)
2,123 1 Total investments, at fair value (cost
of $1,153,811 and $1,222,511, respectively) 1,113,969 1,167,291
Cash 37,493 4,565 Interest and dividends receivable from
non-controlled/affiliated investments and
non-controlled/non-affiliated investments 6,769 7,841 Dividend
receivable from controlled affiliated investments 2,450 1,925 Other
income receivable from controlled affiliated investments 746 2,212
Deferred financing costs 5,418 6,018 Deferred offering costs — 605
Other assets 178 76
Total assets
$ 1,167,023 $ 1,190,533
Liabilities
Debt (net of debt issuance costs of $4,165 and $4,598,
respectively) $ 408,085 $ 498,152 Interest and other debt expenses
payable 2,067 1,569 Management fees payable 4,351 4,406 Incentive
fees payable 1,238 1,474 Distribution payable 18,041 16,349 Accrued
offering costs 490 518 Directors’ fees payable 176 8 Accrued
expenses and other liabilities 1,877 2,920
Total liabilities $ 436,325 $ 525,396
Commitments and Contingencies Net
Assets Preferred stock, par value $0.001 per share (1,000,000
shares authorized, no shares issued and outstanding) $ — $ — Common
stock, par value $0.001 per share (200,000,000 shares authorized,
40,091,488 and 36,331,662 shares issued and outstanding at June 30,
2017 and December 31, 2016, respectively) 40 36 Paid-in capital in
excess of par 800,649 719,847 Accumulated net realized gain (loss)
(62,005 ) (23,729 ) Accumulated undistributed net investment income
33,277 25,624 Net unrealized appreciation (depreciation) on
investments (39,842 ) (55,220 ) Allocated income tax expense
(1,421 ) (1,421 )
TOTAL NET ASSETS $ 730,698 $
665,137
TOTAL LIABILITIES AND NET ASSETS $ 1,167,023
$ 1,190,533 Net asset value per share $ 18.23
$ 18.31
Goldman Sachs BDC, Inc.
Consolidated Statements of
Operations
(in thousands, except share and per
share amounts)
(Unaudited)
For the three months endedJune
30,
For the six months ended June
30,
2017 2016 2017
2016 Investment Income: From
non-controlled/non-affiliated investments: Interest income $ 30,213
$ 26,489 $ 57,179 $ 55,620 Dividend income — 630 — 1,257
Other income 300 204 835
397 Total investment income from
non-controlled/non-affiliated investments 30,513 27,323 58,014
57,274 From non-controlled affiliated investments: Interest income
2,282 — 4,494 — Dividend income 20 11 43 22 Other income 6
— 12 — Total
investment income from non-controlled affiliated investments 2,308
11 4,549 22 From controlled affiliated investments: Dividend income
2,450 1,550 4,900 2,825 Other income 746 437
746 544 Total investment income
from controlled affiliated investments 3,196
1,987 5,646 3,369
Total
investment income $ 36,017 $ 29,321 $ 68,209
$ 60,665
Expenses: Interest and other
debt expenses $ 4,839 $ 3,246 $ 9,351 $ 6,281 Management fees 4,351
4,188 8,812 8,314 Incentive fees 1,238 2,085 4,971 3,489
Professional fees 473 585 934 1,181 Administration, custodian and
transfer agent fees 195 215 389 441 Directors’ fees 175 256 348 480
Other expenses 285 327 623
635
Total expenses $ 11,556 $
10,902 $ 25,428 $ 20,821
NET INVESTMENT
INCOME (LOSS) BEFORE TAXES $ 24,461 $ 18,419 $
42,781 $ 39,844 Excise tax expense $ 368 $ 221
$ 733 $ 434
NET INVESTMENT INCOME (LOSS)
AFTER TAXES $ 24,093 $ 18,198 $ 42,048 $
39,410
Net realized and unrealized gains (losses)
on investment transactions: Net realized gain (loss) from:
Non-controlled/non-affiliated investments $ (38,108 ) $ — $ (38,276
) $ — Net change in unrealized appreciation (depreciation) from:
Non controlled/non-affiliated investments 26,002 (12,400 ) 25,215
(27,715 ) Non controlled affiliated investments (6,652 ) (94 )
(9,516 ) (489 ) Controlled affiliated investments (750 )
1,296 (321 ) 1,195
Net
realized and unrealized gains (losses) $ (19,508 ) $ (11,198 )
$ (22,898 ) $ (27,009 )
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 4,585 $ 7,000 $ 19,150 $
12,401 Net investment income (loss) per share (basic
and diluted) $ 0.64 $ 0.50 $ 1.13 $ 1.09 Earnings per share (basic
and diluted) $ 0.12 $ 0.19 $ 0.52 $ 0.34 Weighted average shares
outstanding 37,902,018 36,311,582 37,125,726 36,309,232
Distributions declared per share $ 0.45 $ 0.45 $ 0.90 $ 0.90
ABOUT GOLDMAN SACHS BDC, INC.
Goldman Sachs BDC, Inc. is a specialty finance company that has
elected to be regulated as a business development company under the
Investment Company Act of 1940. GS BDC was formed by The Goldman
Sachs Group, Inc. (“Goldman Sachs”) to invest primarily in
middle-market companies in the United States, and is externally
managed by Goldman Sachs Asset Management, L.P., an SEC-registered
investment adviser and a wholly-owned subsidiary of Goldman Sachs.
GS BDC seeks to generate current income and, to a lesser extent,
capital appreciation primarily through direct originations of
secured debt, including first lien, first lien/last-out unitranche
and second lien debt, and unsecured debt, including mezzanine debt,
as well as through select equity investments. For more information,
visit www.goldmansachsbdc.com. Information on the website is not
incorporated by reference into this press release and is provided
merely for convenience.
FORWARD-LOOKING STATEMENTS
This press release may contain forward-looking statements that
involve substantial risks and uncertainties. You can identify these
statements by the use of forward-looking terminology such as “may,”
“will,” “should,” “expect,” “anticipate,” “project,” “target,”
“estimate,” “intend,” “continue,” or “believe” or the negatives
thereof or other variations thereon or comparable terminology. You
should read statements that contain these words carefully because
they discuss our plans, strategies, prospects and expectations
concerning our business, operating results, financial condition and
other similar matters. These statements represent the Company’s
belief regarding future events that, by their nature, are uncertain
and outside of the Company’s control. We believe that it is
important to communicate our future expectations to our investors.
There are likely to be events in the future, however, that we are
not able to predict accurately or control. Any forward-looking
statement made by us in this press release speaks only as of the
date on which we make it. Factors or events that could cause our
actual results to differ, possibly materially from our
expectations, include, but are not limited to, the risks,
uncertainties and other factors we identify in the sections
entitled “Risk Factors” and “Cautionary Statement Regarding
Forward-Looking Statements” in filings we make with the Securities
and Exchange Commission, and it is not possible for us to predict
or identify all of them. We undertake no obligation to update or
revise publicly any forward-looking statements, whether as a result
of new information, future events or otherwise, except as required
by law.
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Goldman Sachs BDC, Inc.Investors:Katherine Schneider,
212-902-3122orMedia:Andrew Williams, 212-902-5400
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