Golub Capital BDC, Inc. Declares Third Fiscal Quarter Dividend of $0.32 Per Share and Announces Quarter Ended March 31, 2011 Financial Results
CHICAGO, May 5, 2011 /PRNewswire/ — Golub Capital BDC, Inc., a business development company (NASDAQ: GBDC), today announced its financial results for the second fiscal quarter ended March 31, 2011.
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 adviser.
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SELECTED FINANCIAL HIGHLIGHTS (in thousands, expect per share data) |
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March 31, 2011 |
December 31, 2010 |
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Investment portfolio |
$ 389,060 |
$ 382,414 |
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Total assets |
$ 459,519 |
$ 460,314 |
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NAV per share |
$ 14.75 |
$ 14.74 |
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Quarter Ended |
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March 31, 2011 |
December 31, 2010 |
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Investment income |
$ 9,111 |
$ 9,137 |
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Net investment income |
$ 5,181 |
$ 5,233 |
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Net realized and unrealized gain |
$ 695 |
$ 729 |
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Net increase in net assets resulting from operations |
$ 5,876 |
$ 5,962 |
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Net earnings per share |
$ 0.33 |
$ 0.34 |
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Net investment income per share |
$ 0.29 |
$ 0.30 |
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Net realized and unrealized gain per share |
$ 0.04 |
$ 0.04 |
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SECOND FISCAL QUARTER 2011 HIGHLIGHTS
- Net increase in net assets resulting from operations for the quarter ended March 31, 2011 was $5.9 million, or $0.33 per share, as compared to $6.0 million, or $0.34 per share, for the quarter ended December 31, 2010;
- Net realized and unrealized gains on investments for the quarter ended March 31, 2011 was $0.7 million, or $0.04 per share, as compared to $0.7 million, or $0.04 per share, for the quarter ended December 31, 2010;
- Net investment income for the quarter ended March 31, 2011 was $5.2 million, or $0.29 per share, as compared to $5.2 million, or $0.30 per share, for the quarter ended December 31, 2010;
- Our board of directors declared a third quarter distribution on May 3, 2011 of $0.32 per share, payable on June 29, 2011 to shareholders of record on of June 17, 2011
PORTFOLIO AND INVESTMENT ACTIVITIES
At March 31, 2011, the Company had investments in 98 portfolio companies, with a total fair value of $389.1 million. The portfolio consisted of $217.2 million of senior secured loans, $113.8 million of unitranche loans, $26.3 million of second lien loans, $24.8 million of subordinated debt and $7.0 million of common equity investments. This compares to the portfolio as of December 31, 2010, which had investments in 98 portfolio companies with a total fair value of $382.4 million and consisted of $226.8 million of senior secured loans, $98.1 million of unitranche loans, $26.3 million of second lien loans, $24.8 million of subordinated debt, and $6.4 million of common equity investments.
For the three months ended March 31, 2011, the Company originated $54.6 million in new investment commitments of which 67% were senior secured loans, 32% were unitranche loans, and 1% were equity securities. Sales and repayments on investments for the same period totaled $46.0 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.
For the quarter ended March 31, 2011, weighted average annualized investment income yield (which includes interest income and amortization of fees and discounts) and the weighted average annualized interest income yield (which excludes income resulting from amortization of fees and discounts) on the fair value of investments in the Company's portfolio was 9.9% and 8.3%, respectively.
CONSOLIDATED RESULTS OF OPERATIONS
Total investment income for the three months ended March 31, 2011 and December 31, 2010 was $9.1 million and $9.1 million, respectively. For the three months ended March 31, 2011, total investment income consisted of $7.9 million in interest income from investments and $1.2 million in income from the amortization of discounts and origination fees. For the three months ended December 31, 2010, total investment income consisted of $7.2 million in interest income from investments and $1.9 million in income from the amortization of discounts and origination fees.
Total expenses for the three months ended March 31, 2011 and December 31, 2010 were $3.9 million and $3.9 million, respectively. During the three months ended March 31, 2011, interest expense decreased by $0.1 million, which was offset by an increase in management fees, incentive fees, and administrative service fees. Management fees, incentive fees, and administrative service fees increased by a combined $0.1 million due to higher average invested assets and realized gains during the quarter. The decrease in interest expense was driven by a lower effective interest rate during the three months ended March 31, 2011.
During the three months ended March 31, 2011 and December 31, 2010, the Company had $1.0 and $0.9 million of net realized gains, respectively. During the three months ended March 31, 2011 and December 31, 2010, the Company recorded net unrealized depreciation of $(0.4) million and $(0.1) million, respectively.
"As expected, new deal activity slowed in January and February, but has since rebounded," commented David B. Golub, Chief Executive Officer of Golub Capital BDC. "We expect origination and growth in total investments to be robust in the quarter ended June 30, 2011. With the proceeds of our recent follow-on offering and additional borrowings through our SBIC, we are well-positioned to take advantage of opportunities to grow our portfolio, advance toward our targeted asset mix, and grow net investment income."
During the month of April 2011, we invested $33.3 million in new middle market portfolio companies.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 2011, the Company had cash and cash equivalents of $43.9 million, restricted cash of $16.1 million and $194.0 million of total debt outstanding.
On April 6, 2011, the Company closed on a public offering of 3,500,000 shares of its common stock at a public offering price of $15.75 per share, raising approximately $52.6 million in proceeds, net of offering costs. On May 2, 2011, the Company sold an additional 453,257 shares of its common stock at a price of $15.75 per share pursuant to the underwriters' partial exercise of the over-allotment option the Company granted to the underwriters in connection with the public offering of the 3,500,000 shares of common stock. Proceeds, net of offering costs, received by the Company for the partial exercise were approximately $6.8 million.
On May 3, 2011, the Company's board of directors declared a quarterly distribution of $0.32 per share, payable on June 29, 2011 to holders of record as of June 17, 2011. Additionally, on May 3, 2011, the Company's board of directors approved an amendment to the Dividend Reinvestment Plan ("DRIP") that in the event the market price per share of the Company's common stock on the date of a distribution exceeds the most recently computed net asset value per share of the common stock, the Company will issue shares of common stock to participants in the DRIP at the greater of the most recently computed net asset value per share of common stock or 95% of the current market price per share of common stock (or such lesser discount to the current market price per share that still exceeds the most recently computed net asset value per share of common stock). This amendment is expected to be effective for the distribution payable on June 29, 2011 to holders of record as of June 17, 2011.
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:
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Risk Ratings Definition |
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Rating |
Definition |
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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. |
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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. |
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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. |
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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). |
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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 reduce the fair market value of the loan to the amount we anticipate recovering. |
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The following table shows the distribution of our investments on the 1 to 5 investment performance rating scale at fair value as of March 31, 2011 and December 31, 2010:
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March 31, 2011 |
December 31, 2010 |
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Investment |
Investments |
Percentage of |
Investments |
Percentage of |
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Performance |
at Fair Value |
Total |
at Fair Value |
Total |
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Rating |
(In thousands) |
Investments |
(In thousands) |
Investments |
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5 |
$ 67,250 |
17.3% |
75,836 |
19.9% |
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4 |
275,563 |
70.8% |
277,356 |
72.5% |
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3 |
41,915 |
10.8% |
24,908 |
6.5% |
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2 |
4,332 |
1.1% |
4,314 |
1.1% |
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1 |
– |
0.0% |
– |
0.0% |
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Total |
$ 389,060 |
100.0% |
$ 382,414 |
100.0% |
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CONFERENCE CALL
The Company will host an earnings conference call at 11:00 a.m. (Eastern Time) on Friday, May 6, 2011. All interested parties may participate in the conference call by dialing (800) 897-4057 approximately 10-15 minutes prior to the call; international callers should dial (212) 231-2919. 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 March 31, 2011 Investor Presentation. An archived replay of the call will be available shortly after the call until 1:30 p.m. (Eastern Time) on May 27, 2011. To hear the replay, please dial (800) 633-8284. International dialers, please dial (402) 977-9140. For all replays, please reference program ID number 21520746.
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Golub Capital BDC, Inc. and Subsidiaries Consolidated Statements of Financial Condition (unaudited) (In thousands, except share and per share data) |
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March 31, 2011 |
December 31, 2010 |
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Assets |
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Investments, at fair value (cost of $390,629 and $383,507 respectively) |
$ 389,060 |
$ 382,414 |
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Cash and cash equivalents |
43,866 |
41,389 |
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Restricted cash and cash equivalents |
16,050 |
27,618 |
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Interest receivable |
2,181 |
2,194 |
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Receivable for investments sold |
4,389 |
2,895 |
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Deferred financing costs |
3,351 |
3,548 |
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Deferred offering costs |
593 |
– |
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Other assets |
29 |
256 |
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Total Assets |
$ 459,519 |
$ 460,314 |
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Liabilities |
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Debt |
$ 194,000 |
$ 194,000 |
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Interest payable |
935 |
2,576 |
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Management and incentive fees payable |
1,590 |
1,693 |
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Accounts payable and accrued expenses |
1,017 |
570 |
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Total Liabilities |
197,542 |
198,839 |
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Net Assets |
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Preferred stock, par value $0.001 per share, 1,000,000 shares authorized, |
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zero shares issued and outstanding as of March 31, 2011 and |
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December 31, 2010 |
$ – |
$ – |
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Common stock, par value $0.001 per share, 100,000,000 shares authorized, 17,755,976 |
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and 17,738,197 shares issued and outstanding, respectively |
18 |
18 |
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Paid in capital in excess of par |
260,455 |
260,152 |
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Capital distributions in excess of net investment income |
(1,875) |
(1,379) |
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Net unrealized appreciation on investments |
1,494 |
1,848 |
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Net realized gains (losses) on investments |
1,885 |
836 |
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Total Net Assets |
261,977 |
261,475 |
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Total Liabilities and Total Net Assets |
$ 459,519 |
$ 460,314 |
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Number of common shares outstanding |
17,755,976 |
17,738,197 |
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Net asset value per common share |
$ 14.75 |
$ 14.74 |
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Golub Capital BDC, Inc. and Subsidiaries Consolidated Statements of Operations (unaudited) (In thousands, except share and per share data) |
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Three months ended |
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March 31, 2011 |
December 31, 2010 |
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Investment income |
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Interest |
$ 9,111 |
$ 9,137 |
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Total investment income |
9,111 |
9,137 |
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Expenses |
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Interest and other debt financing expenses |
1,467 |
1,577 |
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Base management fee |
1,341 |
1,284 |
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Incentive fee |
221 |
190 |
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Professional fees |
491 |
567 |
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Administrative service fee |
214 |
174 |
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General and administrative expenses |
196 |
112 |
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Total expenses |
3,930 |
3,904 |
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Net investment income |
5,181 |
5,233 |
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Net gain (loss) on investments |
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Net realized gains (losses) on investments |
1,049 |
876 |
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Net change in unrealized (depreciation) appreciation on investments |
(354) |
(147) |
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Net gain on investments |
695 |
729 |
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Net increase in net assets resulting from operations |
$ 5,876 |
$ 5,962 |
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Per Common Share Data |
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Basic and diluted earnings per common share |
$ 0.33 |
$ 0.34 |
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Dividends and distributions declared per common share |
$ 0.32 |
$ 0.31 |
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Basic and diluted weighted average common shares outstanding |
17,738,395 |
17,712,724 |
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ABOUT GOLUB CAPITAL BDC, INC.
Golub Capital BDC, Inc. 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'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 2010, 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 March 31, 2011, Golub Capital managed approximately $4.5 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.
SOURCE Golub Capital BDC, Inc.