PR Newswire
NEW YORK, Feb. 8, 2023
NEW YORK, Feb. 8, 2023 /PRNewswire/ -- Golub Capital BDC, Inc., a business development company (Nasdaq: GBDC), today announced its financial results for its first fiscal quarter ended December 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 | |||
(in thousands, expect per share data) | |||
December 31, 2022 | September 30, 2022 | ||
Investment portfolio, at fair value | $ 5,451,946 | $ 5,446,356 | |
Total assets | $ 5,665,751 | $ 5,681,224 | |
Net asset value per share | $ 14.71 | $ 14.89 | |
Quarter Ended | |||
December 31, 2022 | September 30, 2022 | ||
Net investment income per share | $ 0.36 | $ 0.32 | |
Amortization of purchase premium per share | 0.01 | 0.01 | |
Adjusted net investment income per share1 | $ 0.37 | $ 0.33 | |
Accrual (reversal) for capital gain incentive fee per share | — | — | |
Adjusted net investment income before accrual for capital gain incentive fee per share1 | $ 0.37 | $ 0.33 | |
Net realized/unrealized gain/(loss) per share | $ (0.21) | $ (0.27) | |
Reversal of realized / unrealized loss resulting from the purchase premium per share | (0.01) | (0.01) | |
Adjusted net realized/unrealized gain/(loss) per share1 | $ (0.22) | $ (0.28) | |
Earnings/(loss) per share | $ 0.15 | $ 0.05 | |
Adjusted earnings/(loss) per share1 | $ 0.15 | $ 0.05 | |
Net asset value per share | $ 14.71 | $ 14.89 | |
Distributions paid per share | $ 0.33 | $ 0.30 | |
1 | On September 16, 2019, the Company completed its acquisition of Golub Capital Investment Corporation ("GCIC"). The merger was |
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:
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.
First Fiscal Quarter 2023 Highlights
Portfolio and Investment Activities
As of December 31, 2022, the Company had investments in 332 portfolio companies with a total fair value of $5,451.9 million. This compares to the Company's portfolio as of September 30, 2022, as of which date the Company had investments in 331 portfolio companies with a total fair value of $5,446.4 million. Investments in portfolio companies as of December 31, 2022 and September 30, 2022 consisted of the following:
As of December 31, 2022 | As of September 30, 2022 | |||||||
Investments | Percentage of | Investments | Percentage of | |||||
at Fair Value | Total | at Fair Value | Total | |||||
Investment Type | (In thousands) | Investments | (In thousands) | Investments | ||||
Senior secured | $ 491,529 | 9.0 % | $ 472,873 | 8.7 % | ||||
One stop | 4,658,030 | 85.4 | 4,668,609 | 85.7 | ||||
Junior debt* | 28,123 | 0.6 | 27,055 | 0.5 | ||||
Equity | 274,264 | 5.0 | 277,819 | 5.1 | ||||
Total | $ 5,451,946 | 100.0 % | $ 5,446,356 | 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 December 31, 2022:
For the three months ended December 31, 2022 | |||
New Investment | |||
Commitments | Percentage of | ||
(In thousands) | Commitments | ||
Senior secured | $ 7,059 | 2.9 % | |
One stop | 229,161 | 92.8 | |
Junior debt* | 50 | 0.0 ^ | |
Equity | 10,697 | 4.3 | |
Total new investment commitments | $ 246,967 | 100.0 % | |
* | Junior debt is comprised of second lien and subordinated debt. |
^ | Represents an amount less than 0.1%. |
Total investments in portfolio companies at fair value were $5,451.9 million at December 31, 2022. As of December 31, 2022, total assets were $5,665.8 million, net assets were $2,513.7 million and net asset value per share was $14.71.
Consolidated Results of Operations
For the first fiscal quarter of 2023, the Company reported GAAP net income and Adjusted Net Income1 of $25.6 million or $0.15 per share. GAAP net investment income was $61.7 million or $0.36 per share and Adjusted Net Investment Income Before Accrual for Capital Gain Incentive Fee 1 was $63.8 million or $0.37 per share. GAAP net realized and unrealized gain/(loss) was $(36.3) million or $(0.21) per share and Adjusted Realized and Unrealized Gain/(Loss)1 was $(38.5) million or $(0.22) 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 December 31, 2022, we had cash, cash equivalents and foreign currencies of $103.2 million, restricted cash and cash equivalents of $62.8 million and $3,100.1 million of debt outstanding. As of December 31, 2022, subject to leverage and borrowing base restrictions, we had approximately $538.9 million of remaining commitments and availability, in the aggregate, on our revolving credit facility with JPMorgan. In addition, as of December 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:
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 could 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 December 31, 2022, please refer to the Quarter Ended 12.31.2022 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 December 31, 2022 and September 30, 2022:
December 31, 2022 | September 30, 2022 | ||||||||
Internal | Investments | Percentage of | Investments | Percentage of | |||||
Performance | at Fair Value | Total | at Fair Value | Total | |||||
Rating | (In thousands) | Investments | (In thousands) | Investments | |||||
5 | $ 151,153 | 2.8 % | $ 252,572 | 4.6 % | |||||
4 | 4,716,163 | 86.5 | 4,725,988 | 86.8 | |||||
3 | 515,514 | 9.4 | 398,625 | 7.3 | |||||
2 | 68,888 | 1.3 | 69,171 | 1.3 | |||||
1 | 228 | 0.0 * | — | — | |||||
Total | $ 5,451,946 | 100.0 % | $ 5,446,356 | 100.0 % |
* | Represents an amount less than 0.1%. |
Conference Call
The Company will host an earnings conference call at 1:00 pm (Eastern Time) on Thursday, February 9, 2023 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 12.31.2022 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 February 23, 2023. 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 | |||
Consolidated Statements of Financial Condition | |||
(In thousands, except share and per share data) | |||
December 31, 2022 | September 30, 2022 | ||
Assets | (unaudited) | (audited) | |
Investments, at fair value (cost of $5,583,415 and $5,569,604, respectively) | $ 5,451,946 | $ 5,446,356 | |
Cash and cash equivalents | 96,422 | 117,290 | |
Unrestricted foreign currencies (cost of $6,566 and $7,021, respectively) | 6,785 | 6,847 | |
Restricted cash and cash equivalents | 62,826 | 56,416 | |
Interest receivable | 28,334 | 20,794 | |
Other assets | 19,438 | 33,521 | |
Total Assets | $ 5,665,751 | $ 5,681,224 | |
Liabilities | |||
Debt | $ 3,100,057 | $ 3,093,603 | |
Less unamortized debt issuance costs | (15,641) | (17,211) | |
Debt less unamortized debt issuance costs | 3,084,416 | 3,076,392 | |
Interest payable | 24,942 | 20,384 | |
Management and incentive fees payable | 35,081 | 33,430 | |
Accounts payable and accrued expenses | 7,627 | 6,518 | |
Total Liabilities | 3,152,066 | 3,136,724 | |
Net Assets | |||
Preferred stock, par value $0.001 per share, 1,000,000 shares authorized, zero | — | — | |
Common stock, par value $0.001 per share, 350,000,000 shares authorized, | 171 | 171 | |
Paid in capital in excess of par | 2,676,674 | 2,676,674 | |
Distributable earnings | (163,160) | (132,345) | |
Total Net Assets | 2,513,685 | 2,544,500 | |
Total Liabilities and Total Net Assets | $ 5,665,751 | $ 5,681,224 | |
Number of common shares outstanding | 170,895,670 | 170,895,670 | |
Net asset value per common share | $ 14.71 | $ 14.89 |
Golub Capital BDC, Inc. and Subsidiaries | ||||
Consolidated Statements of Operations | ||||
(In thousands, except share and per share data) | ||||
Three months ended | ||||
December 31, 2022 | September 30, 2022 | |||
(unaudited) | (unaudited) | |||
Investment income | ||||
Interest income | $ 134,350 | $ 119,925 | ||
GCIC acquisition purchase price premium amortization | (2,135) | (2,561) | ||
Dividend income | 4,133 | 312 | ||
Fee income | 529 | 1,972 | ||
Total investment income | 136,877 | 119,648 | ||
Expenses | ||||
Interest and other debt financing expenses | 34,245 | 28,989 | ||
Base management fee | 19,062 | 19,321 | ||
Incentive fee | 16,011 | 14,109 | ||
Professional fees | 1,208 | 940 | ||
Administrative service fee | 2,175 | 1,750 | ||
General and administrative expenses | 313 | 506 | ||
Total expenses | 73,014 | 65,615 | ||
Net investment income before tax | 63,863 | 54,033 | ||
Income and excise taxes | 2,200 | 72 | ||
Net investment income after tax | 61,663 | 53,961 | ||
Net gain (loss) on investment transactions | ||||
Net realized gain (loss) from: | ||||
Investments | 2,775 | 3,101 | ||
Foreign currency transactions | 56 | (156) | ||
Forward currency contracts | 463 | — | ||
Net realized gain (loss) in investment transactions | 3,294 | 2,945 | ||
Net change in unrealized appreciation (depreciation) from: | ||||
Investments | (41,071) | (48,528) | ||
Translation of assets and liabilities in foreign currencies | 15,897 | (18,392) | ||
Forward currency contracts | (14,448) | 18,184 | ||
Net change in unrealized appreciation (depreciation) on investment transactions | (39,622) | (48,736) | ||
Net gain (loss) on investments | (36,328) | (45,791) | ||
Provision for taxes on realized gains on investments | (207) | (302) | ||
Provision for taxes on unrealized appreciation on investments | 453 | 215 | ||
Net increase (decrease) in net assets resulting from operations | $ 25,581 | $ 8,083 | ||
Per Common Share Data | ||||
Basic and diluted earnings (loss) per common share | $ 0.15 | $ 0.05 | ||
Dividends and distributions declared per common share | $ 0.33 | $ 0.30 | ||
Basic and diluted weighted average common shares outstanding | 170,895,670 | 170,895,670 |
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. 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 October 1, 2022, Golub Capital had over 725 employees and over $55 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.
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.
SOURCE Golub Capital BDC, Inc.
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