Strong Double Digit Growth In Consumer Discretionary Spending In Q4 Is Driving The US Middle Market , According to Golub Capital Middle Market Report

NEW YORK, Jan. 11, 2016 /PRNewswire/ — Middle market private companies in the Golub Capital Altman Index increased revenues by 6.69% and earnings (defined as earnings before interest, taxes, depreciation and amortization, or "EBITDA") by 2.15% year-over-year during the first two months of the fourth quarter of 2015. This is compared to year-over-year increases of 7.95% and 3.95% in revenues and earnings, respectively, in the third quarter.

Lawrence E. Golub, CEO of Golub Capital, said "These results show that the middle market continues to grow at a healthy, albeit slower, rate.  Performance was buoyed by double digit revenue and profit growth in the non-apparel consumer discretionary segment – the highest growth in the life of our index – as increasing wages, higher employment and lower gas prices provided Americans with more disposable income.  At the same time, increasing labor costs and a continued strong dollar resulted in continued margin compression in virtually every segment we track, resulting in a second consecutive period of lower profit growth."

"Revenue growth in the health care segment seems to have benefited from continued increases in the number of insured Americans due to Affordable Care Act as well as lower unemployment.  The information technology segment again delivered solid top-line growth, while experiencing negative profit growth for the third consecutive period due to ongoing investments in product and talent.  The consumer staples and industrial segments continued to increase revenues, although these experienced negative profit growth as well."

Dr. Altman said, "While the broad market is experiencing significant macroeconomic headwinds, the report shows the middle market continues to grow, albeit at a declining rate over the last two quarters for both revenue and EBITDA.  Should economic conditions deteriorate, we believe private-equity backed middle market companies, which tend to be more resilient than equivalently rated companies without private equity support, are well positioned to navigate a tougher environment."

The Golub Capital Altman Index, which is produced by Golub Capital in collaboration with renowned credit expert Dr. Edward I. Altman, is the first and only index based on actual sales and earnings data for middle market companies. It measures median revenue and earnings performance from the data of more than 150 private U.S. companies in the loan portfolio of Golub Capital, a leading middle market lender. Reported shortly before public company quarterly earnings season, the index has served as a reliable indicator of the overall growth rates in revenue and earnings of public companies in market indexes such as the S&P 500 and S&P SmallCap 600, as well as quarterly Gross Domestic Product ("GDP"), according to statistical back-testing dating back to 2012, when data began to be tracked.

We believe the results (1) are representative of the general performance of middle market companies, which are a major contributor to U.S. private sector employment, (2) can be easily compared to the performance of the public companies that make up major stock indexes, (3) are relevant to the aggregate economic performance of the U.S. economy, and (4) provide timely information for the investment community.

Importantly, the size and diversity of the Golub Capital loan portfolio ensures that the confidentiality of all company-specific information used in the report is maintained in both the aggregate and industry segment data.

The companies in the Golub Capital AItman Index operate in a wide range of industries, and aggregate results are provided for the total universe and by industry segment. Given the index’s limited exposure to Financials, Utilities, Energy and Materials, calculations are made for the public indexes both including and excluding these sectors (for the latter, see charts marked "S&P 500 Adjusted" and "S&P 600 Adjusted").

About Golub Capital

Golub Capital’s award winning middle market lending team structures financing solutions with hold positions of up to $300 million. The team also underwrites and syndicates senior credit facilities and a proprietary suite of GOLD (one-loan debt) facilities, up to $500 million. Golub Capital has been a top 3 U.S. Middle Market Bookrunner each year from 2008 through Q1 2015 for senior secured loans of up to $500 million for leveraged buyouts (according to Thomson Reuters LPC and internal data; based on number of deals).

Golub Capital is a nationally recognized credit asset manager with over $15 billion of capital under management. Golub Capital has four highly complementary business lines led by exceptional teams of credit professionals: Middle Market Lending, Late Stage Lending, Broadly Syndicated Loans and Opportunistic Credit. Golub Capital’s lending offices are located in Chicago, New York and San Francisco. For more information, please visit the firm’s website at

About Dr. Edward I. Altman

A leading expert on credit markets, Dr. Edward I. Altman is the Max L. Heine Professor of Finance, Emeritus at the NYU Stern School of Business, and Director of Research in Credit and Debt Markets at the NYU Salomon Center for the Study of Financial Institutions. He is currently an advisor to several foreign central banks.  

Professor Altman has published or edited two-dozen books and over 150 articles in scholarly finance, accounting and economic journals. He has been inducted into the Fixed Income Analysts Society Hall of Fame, served as President of the Financial Management Association, was an FMA Fellow, and was amongst the inaugural inductees into the Turnaround Management Association Hall of Fame. He received his MBA and Ph.D. in Finance from the University of California, Los Angeles.

Important Disclosure
The Golub Capital Altman Index is provided as an indicator only, and does not constitute investment advice or the offer to sell or a solicitation to buy any security. Some of these statements constitute forward-looking statements, which may be predictions about future events, future performance, or future financial conditions.  Some of these statements reflect opinions based upon the data presented in the index, and these opinions may be incorrect. Actual results could vary materially from those implied or expressed in such forward-looking statements for any reason. The Golub Capital Altman Index has been created on the basis of information provided by third-party sources that are believed to be reliable, but the information has not been verified independently by Golub Capital. Golub Capital makes no warranty or representation as to the accuracy or completeness of such third-party information.

SOURCE Golub Capital