GBDC Results Driven by Highest-Ever
Adjusted Net Investment Income Per Share, Net Realized and
Unrealized Gains, and Reduced Management Fee Rate
NEW
YORK, Oct. 17, 2023 /PRNewswire/ -- Golub
Capital BDC, Inc., a business development company (Nasdaq: GBDC),
today announced estimated financial results for its fourth fiscal
quarter ended September 30, 2023. The
Company has elected to provide these preliminary estimated results
in connection with the previously announced reduction of the base
management fee from 1.375% to 1.0% of average adjusted gross
assets.
"GBDC's strong preliminary results for the quarter validate our
confidence in the Company's earnings power. GBDC's Adjusted Net
Investment Income per share was its highest ever, in part due to
the previously announced permanent reduction in the base management
fee rate. Credit quality remained strong, resulting in a net
realized and unrealized gain on investments for the quarter and an
improvement in non-accrual ratios. GBDC's increased profitability,
coupled with strong credit results, allowed NAV to increase even as
distributions to shareholders also increased. We believe GBDC is
well-positioned to continue to thrive in the coming period," said
Chief Executive Officer David
Golub.
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.
Set forth in the table below are certain preliminary estimates
of our financial condition and results of operations for the three
months ended September 30, 2023.
These estimates are subject to the completion of financial closing
procedures and are not a comprehensive statement of the Company's
financial results for the three months ended September 30, 2023. Actual results may differ
materially from these estimates as a result of the completion of
our financial closing procedures, final adjustments and other
developments arising between now and the time that financial
quarterly results for the three months ended September 30, 2023 are finalized. These
preliminary estimates have been prepared by, and are the
responsibility of, management. Our independent registered public
accounting firm has not audited, reviewed, compiled or performed
any procedures with respect to such preliminary estimates, and,
accordingly, does not express an opinion or any other form of
assurance with respect thereto.
PRELIMINARY
ESTIMATES OF CERTAIN FINANCIAL RESULTS
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(In thousands, expect
per share data)
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Estimated Ranges for
the three months
ended September 30, 2023
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Net Investment
Income Per Share
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Net investment income
per share
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$
0.48
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$
0.50
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Amortization of
purchase premium per share1
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0.01
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0.01
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Adjusted net investment
income per share1
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0.49
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0.51
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Accrual (reversal) for
capital gain incentive fee per share
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—
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—
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Adjusted net investment
income before accrual for capital gain incentive fee per
share1
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0.49
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0.51
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Net
realized/unrealized gain/(loss) per share
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Net realized/unrealized
gain/(loss) per share
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0.10
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0.12
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Reversal of unrealized
loss resulting from the purchase premium per
share1
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(0.01)
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(0.01)
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Adjusted net
realized/unrealized gain/(loss) per share1
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0.09
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0.11
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Earnings/(loss) per
share
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Earnings per
share
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0.58
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0.62
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Adjusted
earnings/(loss) per share1
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0.58
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0.62
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Return on
Equity
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Adjusted net investment
income return on equity2
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13.1 %
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13.6 %
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Adjusted return on
equity3
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15.5 %
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16.5 %
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Based on the estimated range of earnings per share in the table
above, the Company is estimating a net asset value per share
between $15.00 and $15.04 as of September 30,
2023, as shown below:
Net Asset Value Per
Share
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Actual net asset value
per share, June 30, 2023
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$
14.83
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$
14.83
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Estimated Earnings per
share for the three months ended September 30, 2023
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0.58
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0.62
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Supplemental
Distribution paid on September 15, 2023
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(0.04)
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(0.04)
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Quarterly Distribution
paid on September 29, 2023
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(0.37)
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(0.37)
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Estimated net asset
value per share, September 30, 2023
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$
15.00
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$
15.04
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Other Fourth Fiscal Quarter 2023 Preliminary
Estimates
- During the three months ended September
30, 2023, the Company originated $129.6 million in new middle-market investment
commitments. Approximately 80% of the new middle-market investment
commitments were one stop loans, 10% were senior secured loans, 8%
were second lien loans, and 2% were equity securities. Of the new
middle-market investment commitments, $71.5
million funded at close. Total investments at fair value are
estimated to have decreased by approximately $8.4 million during the three months ended
September 30, 2023 after factoring in
debt repayments, sales of securities, net fundings on revolvers,
and net change in unrealized gains (losses).
- The Company estimates that the number of non-accrual
investments remained at nine investments as of September 30, 2023, as the return to accrual
status of one portfolio company was offset by the addition of one
portfolio company investment. Additionally, as of September 30, 2023, the Company estimates that
non-accrual investments as a percentage of total investments at
fair value were less than 1.5% and that non-accrual investments as
a percentage of total investments at cost were less than 1.8%.
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1
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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.
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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:
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"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.
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"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;
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"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.
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"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).
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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.
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2
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Adjusted net investment
income return on equity is calculated as (1) (a) the adjusted net
investment income per share (b) annualized by multiplying by four
and (2) divided by the estimated net asset value per
share.
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3
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Adjusted return on
equity is calculated as (1) (a) the adjusted earnings/(loss) per
share (b) annualized by multiplying by four and (2) divided by the
estimated net asset value per share.
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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.
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 July 1, 2023, Golub Capital
had over 825 employees and over $60
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.
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SOURCE Golub Capital BDC, Inc.