Declares Quarterly Distribution of
$0.37 Per Share, and a Fiscal Year
2023 Fourth Quarter Supplemental Distribution of $0.07 Per Share
NEW
YORK, Nov. 20, 2023 /PRNewswire/ -- Golub
Capital BDC, Inc., a business development company (Nasdaq: GBDC),
today announced its financial results for its fourth fiscal quarter
ended September 30, 2023.
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)
|
|
|
|
|
September 30,
2023
|
|
June 30,
2023
|
Investment portfolio,
at fair value
|
$
5,516,613
|
|
$
5,525,009
|
Total assets
|
$
5,733,472
|
|
$
5,736,835
|
Net asset value per
share
|
$
15.02
|
|
$
14.83
|
|
|
|
|
|
Quarter
Ended
|
|
September 30,
2023
|
|
June 30,
2023
|
Net investment income
per share
|
$
0.49
|
|
$
0.43
|
Amortization of
purchase premium per share
|
0.01
|
|
0.01
|
Adjusted net investment
income per share1
|
$
0.50
|
|
$
0.44
|
Accrual (reversal) for
capital gain incentive fee per share
|
—
|
|
—
|
Adjusted net investment
income before accrual for capital gain incentive fee per
share1
|
$
0.50
|
|
$
0.44
|
|
|
|
|
Net realized/unrealized
gain/(loss) per share
|
$
0.11
|
|
$
0.00
*
|
Reversal of realized /
unrealized loss resulting from the purchase premium per
share
|
(0.01)
|
|
(0.01)
|
Adjusted net
realized/unrealized gain/(loss) per share1
|
$
0.10
|
|
$
(0.01)
|
|
|
|
|
Earnings/(loss) per
share
|
$
0.60
|
|
$
0.43
|
Adjusted
earnings/(loss) per share1
|
$
0.60
|
|
$
0.43
|
|
|
|
|
Net asset value per
share
|
$
15.02
|
|
$
14.83
|
Distributions paid per
share
|
$
0.41
|
|
$
0.33
|
|
|
|
|
*
|
Represents an amount
less than $0.01
|
1
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.
|
|
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
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.
|
Fourth Fiscal Quarter 2023 Highlights
- Net investment income per share for the quarter ended
September 30, 2023 was $0.49 as compared to $0.43 for the quarter ended June 30, 2023. Excluding $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, Adjusted Net Investment
Income Before Accrual for Capital Gain Incentive Fee1
for the quarter ended September 30,
2023 was $0.50. This compares
to Adjusted Net Investment Income Before Accrual for Capital Gain
Incentive Fee1 of $0.44
for the quarter ended June 30, 2023
when excluding $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 per share for the quarter
ended September 30, 2023 was
$0.11. Adjusted Net Realized and
Unrealized Gain Per Share1 was $0.10 when excluding the $0.01 per share net reversal of unrealized
depreciation and realized loss resulting from the amortization of
the purchase premium. The Adjusted Net Realized and Unrealized Gain
Per Share1 for the quarter ended September 30, 2023 was primarily due to the
reversal of previously recognized unrealized depreciation on
investments. For additional analysis, please refer to the Quarter
Ended 9.30.2023 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 loss per share
of an amount less than $0.01 during
the quarter ended June 30, 2023.
Adjusted Net Realized and Unrealized Loss Per Share1 for
the quarter ended June 30, 2023 was
$0.01 when excluding the $0.01 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 September 30, 2023 was $0.60 as compared to $0.43 for the quarter ended June 30, 2023. Adjusted Earnings Per
Share1 for the quarter ended September 30, 2023 was $0.60 as compared to $0.43 for the quarter ended June 30, 2023.
- Net asset value per share increased to $15.02 at September 30,
2023 from $14.83 at
June 30, 2023.
- On September 15, 2023 we paid a
supplemental distribution of $0.04
and on September 29, 2023 we paid a
quarterly distribution of $0.37 per
share. On November 17, 2023, our
board of directors declared a quarterly distribution of
$0.37 per share, which is payable on
December 29, 2023 to stockholders of
record as of December 8, 2023 and a
supplemental distribution of $0.07
per share, which is payable on December 15,
2023 to stockholders of record as of December 1, 2023. 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 9.30.2023 Earnings
Presentation available on the Investor Resources link on the
homepage of the Company's website (www.golubcapitalbdc.com) under
Events/Presentations.
- During the three months ended September
30, 2023, GBDC repurchased approximately $0.1 million, or 5,250 shares, of our common
stock pursuant to the Company's previously disclosed share
repurchase program. During the year ended September 30, 2023, GBDC repurchased
approximately $16.9 million, or
1,300,928 shares, of our common stock pursuant to the Company's
previously disclosed share repurchase program.
- During the three months ended September
30, 2023, the Golub Capital Employee Grant Program Rabbi
Trust (the "Trust") purchased approximately $4.7 million, or 331,104 shares, of our common
stock for the purpose of awarding incentive compensation to
employees of Golub Capital. Through the first three calendar
quarters of 2023, the Trust purchased $15.2
million, or 1,115,308 shares, of our common stock.
Portfolio and Investment Activities
As of September 30, 2023, the
Company had investments in 342 portfolio companies with a total
fair value of $5,516.6 million. This
compares to the Company's portfolio as of June 30, 2023, as of which date the Company had
investments in 333 portfolio companies with a total fair value of
$5,525.0 million. Investments in
portfolio companies as of September 30,
2023 and June 30, 2023
consisted of the following:
|
|
As of September 30,
2023
|
|
As of June 30,
2023
|
|
|
Investments
|
|
Percentage
of
|
|
Investments
|
|
Percentage
of
|
|
|
at Fair
Value
|
|
Total
|
|
at Fair
Value
|
|
Total
|
Investment
Type
|
|
(In
thousands)
|
|
Investments
|
|
(In
thousands)
|
|
Investments
|
Senior
secured
|
|
$
503,985
|
|
9.1 %
|
|
$
488,475
|
|
8.8 %
|
One stop
|
|
4,678,099
|
|
84.8
|
|
4,719,262
|
|
85.4
|
Junior
debt*
|
|
37,099
|
|
0.7
|
|
33,109
|
|
0.7
|
Equity
|
|
297,430
|
|
5.4
|
|
284,163
|
|
5.1
|
Total
|
|
$
5,516,613
|
|
100.0 %
|
|
$
5,525,009
|
|
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 September 30, 2023:
|
For the three months
ended September 30, 2023
|
|
New
Investment
|
|
|
|
Commitments
|
|
Percentage
of
|
|
(In
thousands)
|
|
Commitments
|
|
|
|
|
Senior
secured
|
$
12,452
|
|
9.6 %
|
One stop
|
104,187
|
|
80.4
|
Junior
debt*
|
9,774
|
|
7.6
|
Equity
|
3,137
|
|
2.4
|
Total new investment
commitments
|
$
129,550
|
|
100.0 %
|
|
|
|
|
*
|
Junior debt is
comprised of second lien and subordinated debt.
|
Total investments in portfolio companies at fair value were
$5,516.6 million at September 30, 2023. As of September 30, 2023, total assets were
$5,733.5 million, net assets were
$2,547.9 million and net asset value
per share was $15.02.
Consolidated Results of Operations
For the fourth fiscal quarter of 2023, the Company reported GAAP
net income and Adjusted Net Income1 of $101.6 million or $0.60 per share. GAAP net investment income
was $83.4 million or
$0.49 per share and Adjusted Net
Investment Income Before Accrual for Capital Gain Incentive
Fee1 was $85.2 million or $0.50 per share. GAAP net realized and unrealized
gain/(loss) was $18.4 million or
$0.11 per share and Adjusted Realized
and Unrealized Gain/(Loss)1 was $16.7 million or $0.10 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 September 30, 2023, we had
cash, cash equivalents and foreign currencies of $69.8 million, restricted cash and cash
equivalents of $70.4 million and
$3,133.3 million of debt
outstanding. As of September 30,
2023, subject to leverage and borrowing base restrictions,
we had approximately $703.1 million of remaining availability, in
the aggregate, on our revolving credit facility with JPMorgan. In
addition, as of September 30, 2023,
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 September
30, 2023, please refer to the Quarter Ended 9.30.2023 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 September 30, 2023 and
June 30, 2023:
|
|
September 30,
2023
|
|
June 30,
2023
|
|
Internal
|
|
Investments
|
|
Percentage
of
|
|
Investments
|
|
Percentage
of
|
|
Performance
|
|
at Fair
Value
|
|
Total
|
|
at Fair
Value
|
|
Total
|
|
Rating
|
|
(In
thousands)
|
|
Investments
|
|
(In
thousands)
|
|
Investments
|
|
5
|
|
$
50,279
|
|
0.9 %
|
|
$
86,581
|
|
1.6 %
|
|
4
|
|
4,647,644
|
|
84.2
|
|
4,663,766
|
|
84.4
|
|
3
|
|
803,724
|
|
14.6
|
|
759,337
|
|
13.7
|
|
2
|
|
14,966
|
|
0.3
|
|
15,325
|
|
0.3
|
|
1
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Total
|
|
$
5,516,613
|
|
100.0 %
|
|
$
5,525,009
|
|
100.0 %
|
|
Conference Call
The Company will host an earnings conference call at
11:00 am (Eastern Time) on Tuesday,
November 21, 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 9.30.2023
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
December 5, 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)
|
|
|
|
|
September 30,
2023
|
|
June 30,
2023
|
Assets
|
(audited)
|
|
(unaudited)
|
Investments, at fair
value (cost of $5,593,836 and $5,605,521, respectively)
|
$
5,516,613
|
|
$
5,525,009
|
Cash and cash
equivalents
|
65,617
|
|
85,096
|
Unrestricted foreign
currencies (cost of $4,540 and $6,679, respectively)
|
4,208
|
|
6,628
|
Restricted cash and
cash equivalents
|
70,381
|
|
79,314
|
Interest
receivable
|
58,054
|
|
29,933
|
Other assets
|
18,599
|
|
10,855
|
Total
Assets
|
$
5,733,472
|
|
$
5,736,835
|
|
|
|
|
Liabilities
|
|
|
|
Debt
|
$
3,133,332
|
|
$
3,168,906
|
Less
unamortized debt issuance costs
|
(15,613)
|
|
(17,217)
|
Debt less unamortized debt issuance costs
|
3,117,719
|
|
3,151,689
|
Interest
payable
|
24,749
|
|
26,175
|
Management and
incentive fees payable
|
35,277
|
|
37,854
|
Accounts payable and
accrued expenses
|
7,849
|
|
5,199
|
Total
Liabilities
|
3,185,594
|
|
3,220,917
|
|
|
|
|
Net
Assets
|
|
|
|
Preferred stock, par
value $0.001 per share, 1,000,000 shares authorized, zero
shares issued and outstanding as of September
30, 2023 and June 30, 2023,
respectively.
|
—
|
|
—
|
Common stock, par value
$0.001 per share, 350,000,000 shares authorized,
169,594,742 issued and outstanding as of
September 30, 2023 and
169,599,992 issued and outstanding as of June
30, 2023.
|
170
|
|
170
|
Paid in capital in
excess of par
|
2,646,912
|
|
2,659,884
|
Distributable
earnings
|
(99,204)
|
|
(144,136)
|
Total Net
Assets
|
2,547,878
|
|
2,515,918
|
Total Liabilities
and Total Net Assets
|
$
5,733,472
|
|
$
5,736,835
|
Number of common shares
outstanding
|
169,594,742
|
|
169,599,992
|
Net asset value per
common share
|
$
15.02
|
|
$
14.83
|
Golub Capital BDC,
Inc. and Subsidiaries
|
|
|
|
|
Consolidated
Statements of Operations
|
|
|
|
|
(In thousands,
except share and per share data)
|
|
|
|
|
|
|
Three months
ended
|
|
|
September 30,
2023
|
|
June 30,
2023
|
|
|
(unaudited)
|
|
(unaudited)
|
Investment
income
|
|
|
Interest
income
|
|
$
161,757
|
|
$
151,937
|
GCIC acquisition
purchase price premium amortization
|
|
(1,716)
|
|
(1,570)
|
Dividend
income
|
|
4,144
|
|
4,058
|
Fee income
|
|
355
|
|
295
|
Total investment
income
|
|
164,540
|
|
154,720
|
|
|
|
|
|
Expenses
|
|
|
|
|
Interest and other
debt financing expenses
|
|
40,622
|
|
39,487
|
Base management
fee
|
|
14,055
|
|
18,997
|
Incentive
fee
|
|
21,222
|
|
18,857
|
Professional
fees
|
|
1,288
|
|
1,225
|
Administrative service
fee
|
|
2,118
|
|
2,049
|
General and
administrative expenses
|
|
544
|
|
327
|
Total
expenses
|
|
79,849
|
|
80,942
|
Net investment
income before tax
|
|
84,691
|
|
73,778
|
Excise tax
|
|
1,250
|
|
—
|
Net investment
income after tax
|
|
83,441
|
|
73,778
|
|
|
|
|
|
Net gain (loss) on
investment transactions
|
|
|
|
|
Net realized gain
(loss) from:
|
|
|
|
|
Investments
|
|
59
|
|
(45,085)
|
Foreign currency
transactions
|
|
(300)
|
|
1,141
|
Forward currency
contracts
|
|
(481)
|
|
2,021
|
Net realized gain
(loss) in investment transactions
|
|
(722)
|
|
(41,923)
|
Net change in
unrealized appreciation (depreciation) from:
|
|
|
|
|
Investments
|
|
19,356
|
|
43,082
|
Translation of assets
and liabilities in foreign currencies
|
|
(5,177)
|
|
3,399
|
Forward currency
contracts
|
|
4,934
|
|
(5,431)
|
Net change in
unrealized appreciation (depreciation) on investment
transactions
|
|
19,113
|
|
41,050
|
Net gain (loss) on
investments
|
|
18,391
|
|
(873)
|
Provision for taxes on
unrealized appreciation on investments
|
|
(268)
|
|
78
|
Net increase
(decrease) in net assets resulting from operations
|
|
$
101,564
|
|
$
72,983
|
|
|
|
|
|
Per Common Share
Data
|
|
|
|
|
Basic and diluted
earnings (loss) per common share
|
|
$
0.60
|
|
$
0.43
|
Dividends and
distributions declared per common share
|
|
$
0.41
|
|
$
0.33
|
Basic and diluted
weighted average common shares outstanding
|
|
169,595,256
|
|
169,980,131
|
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, 2023, Golub
Capital had over 850 employees and over $60
billion of capital under management, a gross measure of
invested capital including leverage. The firm has lending offices
in New York, Chicago, Miami, 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.