NEW YORK, Feb. 8, 2017 /PRNewswire/ -- Golub Capital BDC, Inc., a business development company (NASDAQ: GBDC), today announced its financial results for its first fiscal quarter ended December 31, 2016.

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.

First Fiscal Quarter 2017 Highlights

• Net increase in net assets resulting from operations for the quarter ended December 31, 2016 was $19.0 million, or $0.34 per share, as compared to $16.1 million, or $0.30 per share, for the quarter ended September 30, 2016;
• Net investment income for the quarter ended December 31, 2016 was $16.9 million, or $0.31 per share, as compared to $17.2 million, or $0.32 per share, for the quarter ended September 30, 2016;
• Net investment income for the quarter ended December 31, 2016 excluding a $0.5 million accrual for the capital gain incentive fee under GAAP was $17.4 million, or $0.32 per share, as compared to $17.1 million, or $0.32 per share, when excluding a $0.1 million reversal in the accrual for the capital gain incentive fee under GAAP for the quarter ended September 30, 2016;
• Net gain on investments and secured borrowings for the quarter ended December 31, 2016 was $2.0 million, or $0.03 per share, as compared to a net loss of $1.1 million, or $0.02 per share, for the quarter ended September 30, 2016; and
• Our board of directors declared on February 7, 2017 a quarterly distribution of $0.32 per share payable on March 30, 2017 to stockholders of record as of March 7, 2017.

Portfolio and Investment Activities

As of December 31, 2016, the Company had investments in 182 portfolio companies with a total fair value of $1,587.5 million and had investments in Senior Loan Fund LLC ("SLF") with a total fair value of $108.8 million. This compares to the Company's portfolio as of September 30, 2016, as of which date the Company had investments in 183 portfolio companies with a total fair value of $1,556.4 million and investments in SLF with a total fair value of $104.2 million. Investments in portfolio companies as of December 31, 2016 and September 30, 2016 consisted of the following:

⁽¹⁾       On December 30, 2016, SLF issued a capital call in an aggregate amount of $89.9 million the proceeds of which were used to redeem in full the outstanding balance on the subordinated notes previously issued by SLF and terminate all remaining subordinated note commitments.

⁽²⁾       SLF's proceeds from the subordinated notes and LLC equity interests invested in SLF were utilized by SLF to invest in senior secured loans.

The following table shows the asset mix of our new investment commitments for the three months ended December 31, 2016:

Overall, total investments at fair value increased by 2.1%, or $35.7 million, during the three months ended December 31, 2016 after factoring in debt repayments, sales of securities, net fundings on revolvers and net change in unrealized gain (loss). Total investments at fair value held by SLF increased by 3.0%, or $9.8 million, after factoring in debt repayments, sales of securities, net fundings on revolvers and net change in unrealized gain (loss).

For the three months ended December 31, 2016, the weighted average annualized investment income yield (which includes interest and fee income and amortization of capitalized fees and discounts) and the weighted average annualized income yield (which excludes income resulting from amortization of capitalized fees and discounts) on the fair value of income producing investments in the Company's portfolio were 8.1% and 7.7%, respectively.

Consolidated Results of Operations

Total investment income for the quarters ended December 31, 2016 and September 30, 2016 was $33.8 million and $34.5 million, respectively. This $0.7 million decrease was primarily attributable to a decrease in accretion of discounts resulting from decreased payoffs during the quarter ended December 31, 2016.

Total expenses for the quarters ended December 31, 2016 and September 30, 2016 were $16.9 million and $17.3 million, respectively. This $0.4 million decrease was primarily attributable to a decrease in the incentive fee due to lower investment income.

During the quarter ended December 31, 2016, the Company recorded a net realized gain of $0.9 million and recorded net unrealized appreciation of $1.1 million. The net realized gain was primarily due to the net realized gains on the sale of portfolio company investments to SLF and the sale of two equity investments. The net unrealized appreciation was due to net unrealized appreciation on several middle market debt and equity securities.

Liquidity and Capital Resources

The Company's liquidity and capital resources are derived from the Company's debt securitizations, U.S. Small Business Administration ("SBA") debentures, 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, SBA debentures, 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, 2016, the Company had cash and cash equivalents of $5.7 million, restricted cash and cash equivalents of $66.0 million and $890.0 million of debt and secured borrowings outstanding. As of December 31, 2016, the Company had $44.5 million of remaining commitments and $10.5 million available for additional borrowings on its revolving credit facility, subject to leverage and borrowing base restrictions. As of December 31, 2016, the Company had $17.0 million of additional SBA debentures available, subject to customary SBA regulatory requirements.

On January 12, 2017, the Company received approval for its third SBIC license which will allow the Company to issue an additional $50.0 million of debentures.

On February 7, 2017, the Company's Board of Directors declared a quarterly distribution of $0.32 per share, payable on March 30, 2017 to holders of record as of March 7, 2017.

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:

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.

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, 2016 and September 30, 2016:

⁽¹⁾       The negative fair value is the result of an unfunded commitment being valued below par.

Conference Call

The Company will host an earnings conference call at 2:30 p.m. (Eastern Time) on Thursday, February 9, 2017 to discuss the quarterly financial results. All interested parties may participate in the conference call by dialing (888) 225-2917 approximately 10-15 minutes prior to the call; international callers should dial (303) 223-2692. 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 12.31.16 Investor Presentation under Events/Presentations. An archived replay of the call will be available shortly after the call until 4:30 p.m. (Eastern Time) on March 11, 2017. To hear the replay, please dial (800) 633-8284. International dialers, please dial (402) 977-9140. For all replays, please reference program ID number 21842175.

ABOUT GOLUB CAPITAL BDC, INC.

Golub Capital BDC, Inc. ("Golub Capital BDC") 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. Golub Capital BDC invests primarily in senior secured and one stop loans of U.S. middle-market companies that are often sponsored by private equity investors. Golub Capital BDC's investment activities are managed by its investment adviser, GC Advisors LLC, an affiliate of the Golub Capital group of companies ("Golub Capital").

ABOUT GOLUB CAPITAL

Golub Capital is a nationally recognized credit asset manager with over $20 billion of capital under management. For over 20 years, the firm has provided credit to help medium-sized U.S. businesses grow. The firm's award-winning middle market lending business helps provide financing for middle market companies and their private equity sponsors. Golub Capital's credit expertise also forms the foundation of its Late Stage Lending and Broadly Syndicated Loan businesses. Golub Capital has worked hard to build a reputation as a fast, reliable provider of compelling financing solutions, and we believe this has inspired repeat clients and investors. Today, the firm has over 300 employees with lending offices in Chicago, New York and San Francisco. For more information, please visit www.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.