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| 8-K - GOLUB CAPITAL BDC, Inc. | v205016_8k.htm |
FOR
IMMEDIATE RELEASE:
Golub
Capital BDC, Inc. Declares Fourth Fiscal Quarter Dividend of $0.31 Per Share and
Announces Quarter and Fiscal Year Ended September 30, 2010 Financial
Results
CHICAGO, IL, December 13, 2010
– Golub Capital BDC, Inc., a business development company (NASDAQ: GBDC),
today announced its financial results for the fourth quarter and fiscal year
ended September 30, 2010.
Except
where the context suggests otherwise, the terms "we," "us," "our," and
"Company," refer to Golub Capital BDC, Inc. and its Subsidiaries. “GC
Advisors” refers to GC Advisors, LLC, our investment advisor.
SELECTED FINANCIAL
HIGHLIGHTS
(in millions, expect per share
data)
|
September 30,
2010
|
||||
|
Investment
portfolio
|
$ | 344,869 | ||
|
Total
assets
|
$ | 442,763 | ||
|
NAV per
share
|
$ | 14.71 | ||
|
Quarter Ended September 30,
2010
|
Year Ended September 30,
2010
|
|||||||
|
Investment
income
|
$ | 7,431 | $ | 33,150 | ||||
|
Net investment
income
|
$ | 4,351 | $ | 23,367 | ||||
|
Net realized and unrealized
gain
|
$ | 1,896 | $ | 26,248 | ||||
|
Net income
|
$ | 6,247 | $ | 26,248 | ||||
|
Net income per
share
|
$ | 0.35 | N/A |
(1)
|
||||
|
Net investment income per
share
|
$ | 0.25 | N/A |
(1)
|
||||
(1) - For historical periods that include
financial results prior to April 1, 2010, the Company did not
have common shares outstanding or an
equivalent and therefore earnings per share for periods that include financial results prior to
April 1, 2010 are not provided.
Portfolio
and Investment Activities
At
September 30, 2010, the Company had investments in 94 portfolio companies, with
a total fair value of $344.9 million. The portfolio consisted of
$227.1 million of senior secured loans, $90.4 million of unitranche loans, $11.4
million of second lien loans, $13.4 million of subordinated debt and $2.6
million of common equity investments. For the three months
ended September 30, 2010, the Company originated $83.7 million in new investment
commitments. Of the
$83.7 million in new investment commitments, 59% were senior secured loans, 27%
were unitranche loans, 11% were subordinated loans and 3% were equity
securities. Sales and repayments on investments for the same period
totaled $13.5 million. The Company expects to continue to invest in a mix of
mezzanine and senior secured loans to obtain a high level of current income and
to preserve capital.
1
For the
quarter ended September 30, 2010, the weighted average annualized interest
income yield (which excludes income resulting from amortization of fees and
discounts) and weighted average annualized investment income yield (which
includes interest income and amortization of fees and discounts) on the fair
value of investments in the Company’s portfolio was 8.1% and 9.8%,
respectively. As of September 30, 2010, 59.2% of the Company’s
portfolio at fair value had interest rate floors that limit minimum interest
rates on such loans.
Consolidated
Results of Operations
Total
investment income for the three months ended September 30, 2010 and June 30,
2010 was $7.4 million and $7.2 million, respectively. Investment
income increased by $0.2 million, or 2.8%, for the three months ended September
30, 2010 as compared to the three months ended June 30, 2010. This increase was
primarily attributable to higher average invested assets during the three months
ended September 30, 2010.
Total
expenses for the three months ended September 30, 2010 and June 30, 2010 were
$3.1 million and $2.4 million, respectively. Total expenses increased
by $0.7 million, or 29.2%, for the three months ended September 30, 2010 as
compared to the three months ended June 30, 2010. This increase was primarily
due to an increase in interest expense as a result of higher debt outstanding
and higher interest rates on our outstanding debt.
Total
expenses for the year ended September 30, 2010 and September 30, 2009 were $9.8
million and $7.9 million, respectively. Total expenses increased by
$1.9 million, or 24.5%, for the year ended September 30, 2010 as compared to the
year ended September 30, 2009. This increase was primarily due to
non-recurring organizational costs associated with our initial public offering,
as well as an increase in professional fees, management fees, and administrative
service fees. These increases were partially offset by a decrease in
interest and other credit facility expenses.
During
the three months ended September 30, 2010 and June 30, 2010, the Company had
$(40,000) and $0 of net realized losses on investments,
respectively. During the three months ended September 30, 2010 and
June 30, 2010, the Company recorded net unrealized appreciation of $1.9 million
and net unrealized depreciation of $(0.1) million,
respectively.
During
the years ended September 30, 2010 and September 30, 2009, the Company had
$(40,000) and $(4.0) million of net realized losses on investments,
respectively. During the years ended September 30, 2010 and September
30, 2009, the Company recorded net unrealized appreciation of $2.9 million and
net unrealized depreciation of $(1.5) million, respectively.
“I am
pleased to report that we had a solid 9/30/2010 quarter and that we continue to
see strong momentum in new originations. Based on new deals already completed
and our current pipeline, we expect new originated investments for the
12/31/2010 quarter will be higher than the 9/30/2010 quarter,” said Golub
Capital BDC, Inc. CEO David Golub.
2
Liquidity
and Capital Resources
As of
September 30, 2010, the Company had cash and cash equivalents of $61.2 million,
restricted cash of $31.8 million and $174.0 million of total debt
outstanding.
Through
our wholly owned subsidiary, GC SBIC IV, L.P., the Company may obtain leverage
by issuing SBA-guaranteed debentures, subject to issuance of a capital
commitment by the SBA and customary procedures. See recent developments below
for information pertaining to commitments available under the SBA debenture
program.
On
December 8, 2010, the Company’s board of directors declared a quarterly dividend
of $0.31 per share payable on December 30, 2010 to holders of record as of
December 20, 2010.
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 the following
categories:
|
Risk
Ratings Definition
|
||
|
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 may be past due (but generally not more than 180 days past due).
For loans graded 2, we will implement a plan to increase monitoring of the
borrower.
|
|
|
1
|
Indicates
that the borrower is performing substantially below expectations and the
loan risk has substantially increased since origination. Most or all of
the debt covenants are out of compliance and payments are substantially
delinquent. Loans graded 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.
|
|
3
The
following table shows the distribution of our investments on the 1 to 5
investment performance rating scale at fair value as of September 30, 2010 and
June 30, 2010:
|
September
30, 2010
|
June
30, 2010
|
||||||||||||||||
|
Investment
|
Investments
|
Percentage
of
|
Investments
|
Percentage
of
|
|||||||||||||
|
Performance
|
at
Fair Value
|
Total
|
at
Fair Value
|
Total
|
|||||||||||||
|
Rating
|
(In
thousands)
|
Investments
|
(In
thousands)
|
Investments
|
|||||||||||||
|
5
|
$ | 98,307 | 28.5 | % | $ | 91,915 | 33.1 | % | |||||||||
|
4
|
199,876 | 58.0 | % | 128,874 | 46.4 | % | |||||||||||
|
3
|
41,948 | 12.2 | % | 54,769 | 19.7 | % | |||||||||||
|
2
|
4,738 | 1.4 | % | 2,052 | 0.7 | % | |||||||||||
|
1
|
- | 0.0 | % | - | 0.0 | % | |||||||||||
|
Total
|
$ | 344,869 | 100.0 | % | $ | 277,610 | 100.0 | % | |||||||||
Recent
Developments
On
October 8, 2010, GC SBIC IV, L.P. received a $22 million debt commitment from
the SBA. The commitment may be drawn upon subject to customary SBA
procedures. Through
December 10, 2010, the Company had drawn $10 million of the
commitment.
The
company also announced today the promotion of Ross A. Teune as Chief Financial
Officer. Mr. Teune joined an affiliate of our investment advisor in
November 2007 and, prior to being elected our Chief Financial Officer, served as
Senior Vice President of Finance for an affiliate of our investment advisor,
where he had responsibility for the financial reporting for its private managed
debt funds. Prior thereto, Mr. Teune was Vice President of Finance at
Antares Capital Corporation, where he was responsible for overseeing operations
and financial reporting. Mr. Teune also served as the primary liaison
to the tax, treasury, external reporting and market risk departments of
Massachusetts Life Insurance Company, Antares Capital’s parent
company. Mr. Teune also worked at Heller Financial Corporation and
KPMG LLP.
4
Sean K.
Coleman, who is stepping down as Chief Financial Officer, will continue as a
Managing Director of our investment advisor, focusing on origination and
underwriting of new investments. Golub Capital BDC, Inc. CEO David
Golub said, “We are excited to bring Ross A. Teune’s enormous talents to the
Company. We thank Sean for his extraordinary efforts in connection with the
initial public offering and the Company’s early success.”
Conference
Call
The
Company will host an earnings conference call at 1:00 p.m. (Eastern Time) on
Monday, December 13, 2010. All interested parties may participate in
the conference call by dialing (800) 891-3448 approximately 15 minutes prior to
the call; international callers should dial (212) 231-2921. 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 Events
and Presentations link on the homepage of our website (www.golubcapitalbdc.com)
and click on the Investor Presentations link to find the 9/30/10 Investor
Presentation. An archived replay of the call will be available shortly after the
call until 3:00 p.m. (Eastern Time) on December 27, 2010. To hear the replay,
please dial (800) 633-8284. International dialers, please dial (402) 977-9140.
For all replays, please reference program ID number 21489419.
5
Golub
Capital BDC, Inc. and Subsidiaries
Consolidated
Statements of Financial Condition
(In
thousands, except share and per share data)
|
September
30,
2010
|
June
30,
2010
|
September
30,
2009
|
||||||||||
|
(unaudited)
|
||||||||||||
|
Assets
|
||||||||||||
|
Investments,
at fair value (cost of $345,536, $280,214, and $387,293
respectively)
|
$ | 344,869 | $ | 277,610 | $ | 376,294 | ||||||
|
Cash
and cash equivalents
|
61,219 | 71,380 | - | |||||||||
|
Restricted
cash and cash equivalents
|
31,771 | 32,728 | 30,614 | |||||||||
|
Interest
receivable
|
1,956 | 1,746 | 2,198 | |||||||||
|
Other
assets
|
2,948 | 296 | 16 | |||||||||
|
Total
Assets
|
$ | 442,763 | $ | 383,760 | $ | 409,122 | ||||||
|
Liabilities
|
||||||||||||
|
Debt
|
$ | 174,000 | $ | 121,764 | $ | 315,306 | ||||||
|
Payable
for investments purchased
|
5,328 | 885 | - | |||||||||
|
Accounts
payable and accrued expenses
|
719 | 647 | 685 | |||||||||
|
Management
and incentive fee payable
|
1,008 | 593 | 249 | |||||||||
|
Interest
payable
|
1,167 | 86 | 130 | |||||||||
|
Total
Liabilities
|
182,222 | 123,975 | 316,370 | |||||||||
|
Net
Assets
|
||||||||||||
|
Members'
equity
|
$ | - | $ | - | 92,752 | |||||||
|
Preferred
stock, par value $0.001 per share, 1,000,000 shares
authorized,
|
||||||||||||
|
zero
shares issued and outstanding as of September 30, 2010
|
- | - | - | |||||||||
|
Common
stock, par value $0.001 per share, 100,000,000 shares
authorized,
|
||||||||||||
|
17,712,444
shares issued and outstanding as of September 30, 2010
|
18 | 18 | - | |||||||||
|
Paid
in capital in excess of par
|
259,690 | 259,690 | - | |||||||||
|
Undistributed
net investment income
|
(1,122 | ) | 19 | - | ||||||||
|
Net
unrealized appreciation on investments
|
1,995 | 58 | - | |||||||||
|
Net
realized losses on investments
|
(40 | ) | - | - | ||||||||
|
Total
Net Assets
|
260,541 | 259,785 | 92,752 | |||||||||
|
Total
Liabilities and Total Net Assets
|
$ | 442,763 | $ | 383,760 | $ | 409,122 | ||||||
|
Number
of shares outstanding
|
17,712,444 | 17,712,444 | N/A | |||||||||
|
Net
Asset Value Per Share
|
$ | 14.71 | $ | 14.67 | N/A | |||||||
6
Consolidated
Statements of Operations
(In
thousands, except share and per share data)
|
Three
months ended
|
Years
ended September 30,
|
|||||||||||||||
|
September
30,
2010
|
June
30,
2010
|
2010
|
2009
|
|||||||||||||
|
(Unaudited)
|
||||||||||||||||
|
Investment
income
|
||||||||||||||||
|
Interest
|
$ | 7,431 | $ | 7,230 | $ | 33,150 | $ | 33,338 | ||||||||
|
Total
investment income
|
7,431 | 7,230 | 33,150 | 33,338 | ||||||||||||
|
Expenses
|
||||||||||||||||
|
Interest
and other debt financing expenses
|
1,381 | 591 | 3,525 | 4,547 | ||||||||||||
|
Base
management fee
|
1,091 | 903 | 3,328 | 2,849 | ||||||||||||
|
Incentive
fee
|
- | 55 | 55 | - | ||||||||||||
|
Professional
fees relating to registration statement
|
- | 188 | 788 | - | ||||||||||||
|
Professional
fees
|
315 | 363 | 1,050 | 131 | ||||||||||||
|
Administrative
service fee
|
141 | 144 | 583 | - | ||||||||||||
|
General
and administrative expenses
|
152 | 171 | 454 | 333 | ||||||||||||
|
Total
expenses
|
3,080 | 2,415 | 9,783 | 7,860 | ||||||||||||
|
Net
investment income
|
4,351 | 4,815 | 23,367 | 25,478 | ||||||||||||
|
Net
gain (loss) on investments
|
||||||||||||||||
|
Net
realized loss on investments
|
(40 | ) | - | (40 | ) | (3,972 | ) | |||||||||
|
Net
change in unrealized appreciation (depreciation) on
investments
|
1,936 | (100 | ) | 2,921 | (1,489 | ) | ||||||||||
|
Net
gain (loss) on investments
|
1,896 | (100 | ) | 2,881 | (5,461 | ) | ||||||||||
|
Net
increase in net assets resulting from operations
|
$ | 6,247 | $ | 4,715 | $ | 26,248 | $ | 20,017 | ||||||||
|
Basic
and diluted earnings per share1
|
$ | 0.35 | $ | 0.29 | N/A | N/A | ||||||||||
|
Basic
and diluted weighted average shares outstanding
|
17,712,444 | 16,255,783 | N/A | N/A | ||||||||||||
___________________
1 - For
historical periods that include financial results prior to April 1, 2010, the
Company did not have common shares outstanding or an equivalent and therefore
earnings
per share and weighted average shares outstanding information for periods that
include financial results prior to April 1, 2010 are not provided.
7
ABOUT
GOLUB CAPITAL BDC, INC.
Golub
Capital BDC, Inc., (NASDAQ: GBDC, www.golubcapitalbdc.com), a business
development company, principally invests in senior secured, unitranche,
mezzanine and second lien loans of middle-market companies that are, in most
cases, sponsored by private equity investors. Golub Capital BDC, Inc.’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, founded in 1994, is a leading lender to middle-market companies. In
2009, Golub Capital was named “Middle Market Lender of the Year” by Buyouts
Magazine and “Debt Financing Agent of the Year” and “Mezzanine Financing Agent
of the Year” by M&A Advisor. As of September 30, 2010, Golub
Capital managed over $4.0 billion of capital, with a team of investment
professionals in New York, Chicago and Atlanta.
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 in the forward-looking statements as a result of a
number of factors, including those described from time to time in the Company’s
filings with the Securities and Exchange Commission. The Company 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.
Contact:
Ross
Teune
312-284-0111
rteune@golubcapital.com
8