Golub Capital Bdc, Inc. · NASDAQ:GBDC
Golub Capital Bdc — Q1 FY2023 Earnings Presentation
28 slides from Golub Capital Bdc's earnings presentation, Feb 8, 2023
Slide 1: Golub Capital BDC, Inc. Earnings Presentation, Quarter Ended December 31, 2022
Confidential | for discussion purposes only GOLUB CAPITAL BDC, INC. EARNINGS PRESENTATION QUARTER ENDED DECEMBER 31, 2022
Slide 2: Forward-looking statements
2 Such forward-looking statements may include statements preceded by, followed by or that otherwise include the words “may,” “might,” “will,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “estimate,” “anticipate,” “predict,” “potential,” “plan” or similar words. We have based the
Slide 3: Summary of Financial Results
Summary of Financial Results 01
Slide 4: Summary of Financial Results vs. Prior Quarter
4 Quarter Ended September 30, 2022 December 31, 2022 Net Investment Income Per Share Net investment income per share $0.32 $0.36 Amortization of purchase premium per share1 0.01 0.01 Adjusted net investment income per share2 $0.33 $0.37 Accrual (reversal) for capital gain incentive fee per share — —
Slide 5: GBDC Performance Drivers
GBDC Performance Drivers 0 Wi GOLUB CAPITAL a
Slide 6: Drivers of GBDC's FQ1 2023 Earnings
6 Drivers of GBDC’s FQ1 2023 Earnings Key Themes from Quarter Ended December 31, 2022 Key GBDC-Specific Takeaways ■ Continued volatility in U.S. equity and fixed income markets1 ■ Golub Capital’s middle market borrowers experienced a strong rebound in year-over-year profit growth2 ■ Headline CPI inf
Slide 7: NAV Per Share Bridge
7 $14.89 $0.36 $0.01 ($0.33) $0.02 ($0.23) ($0.01) $14.71 September 30, 2022 NAV Net Investment Income Reversal of Amortization of Purchase Premium Dividends Paid During December 31, 2022 Quarter Net Realized Gain (Loss) on Investments Net Change in Unrealized Appreciation (Depreciation) on Investme
Slide 8: Spread Widening Primary Driver of Unrealized Depreciation and NAV Decline
8 8 – FOR INTERNAL USE ONLY – Spread Widening in Highest Rated Credits Has Been the Primary Driver of Unrealized Depreciation and NAV Decline Since 3/31/22... Note: Per share metrics based on weighted average shares outstanding for the quarter ended December 31, 2022. 1. Includes only debt investmen
Slide 9: Effectively Creating a Large Embedded Loss Reserve
9 …Effectively Creating a Large Embedded “Loss Reserve” Relative to GBDC’s Historical Credit Track Record 1. Cumulative Net Unrealized Depreciation on Investments reflect the cumulative net change in unrealized depreciation on investments for the nine-month period ending 12/31/2022. Excludes the cha
Slide 10: Summary of Financial Results for the Quarter Ended
Summary of Financial Results for the Quarter Ended December 31, 2022 03
Slide 11: Summary of Quarterly Results
11 Summary of Quarterly Results Quarter Ended December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 Net Investment Income Per Share Net investment income per share $0.27 $0.25 $0.32 $0.32 $0.36 Amortization of purchase premium per share1 0.04 0.02 0.02 0.01 0.01 Adjuste
Slide 12: Portfolio Highlights - New Originations
12 Portfolio Highlights - New Originations Quarter Ended December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 Select Portfolio Funds Roll Data (in millions) New Investment Commitments $867.7 $323.3 $449.6 $176.7 $247.0 Exits and Sales of Investments 661.8 122.2 171.2 3
Slide 13: Portfolio Highlights – Investment Mix
13 $5,146,766 $5,426,159 $5,613,550 $5,446,356 $5,451,946 December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 $0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 $4,500,000 $5,000,000 $5,500,000 $6,000,000 Portfolio Highlights – In
Slide 14: Portfolio Highlights – Portfolio Diversity
14 Software 27% Healthcare Providers and Services 8% Specialty Retail 6% Automobiles 5% IT Services 5% Diversified Consumer Services 5% Insurance 4% Health Care Technology 4% Commercial Services and Supplies 3% Portfolio Highlights – Portfolio Diversity as of December 31, 2022 Investment Portfolio $
Slide 15: Portfolio Highlights - Yield and Spread
15 1. The weighted average cost of debt and weighted average net investment spread presented for the quarter ended September 30, 2021 exclude $3.6 million of accelerated capitalized debt issuance costs that resulted from the August 26, 2021 early redemption of notes issued by the 2020 Debt Securitiz
Slide 16: Portfolio Highlights - Positioned For Higher Interest Rates
16 Portfolio Highlights - Positioned For Higher Interest Rates Potential for meaningfully higher quarterly adjusted net investment income (“NII”) as loans continue to reset to higher base rates1 16 1. Reflects illustrative pro forma adjusted NII per share for GBDC if the ending 3-Month LIBOR rate of
Slide 17: Portfolio Highlights - Credit Quality
17 Portfolio Highlights - Credit Quality Quarter Ended December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 Non-Accrual - Debt Investments Non-accrual investments at amortized cost (000s) $60,984 $76,284 $80,791 $96,956 $145,572 Non-accrual investments / total debt inv
Slide 18: Portfolio Highlights – Portfolio Ratings
18 Portfolio Highlights – Portfolio Ratings * Represents an amount less than 0.1%. Internal Performance Ratings (% of Portfolio at Fair Value) Internal Performance Rating Definitions At Fiscal Year End At Quarter End Rating 2018 2019 2020 2021 2022 December 31, 2022 5 6.4% 2.7% 6.1% 10.2% 4.6% 2.8%
Slide 19: Quarterly Statements of Financial Condition
19 Quarterly Statements of Financial Condition As of (Dollar amounts in 000s, except share and per share data) December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 (unaudited) (unaudited) (unaudited) (audited) (unaudited) Assets Investments, at fair value $5,146,766 $5
Slide 20: Quarterly Operating Results
20 Quarterly Operating Results Quarter Ended (Dollar amounts in 000s, except share and per share data) December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) Investment Income Interest income $92,336 $88,679 $97
Slide 21: Financial Performance Highlights
21 Financial Performance Highlights * The quarterly return on equity for the periods up to and including the quarter ended June 30, 2019 are calculated as (a) the net increase in net assets resulting from operations (i.e., net income) for the period presented divided by (b) the daily average of tota
Slide 22: Long History of Strong Shareholder Returns
22 Long History of Strong Shareholder Returns 1. The 9.2% internal rate of return (“IRR”) on NAV is calculated using beginning of period NAV, distributions paid during the period and ending period NAV. Period beginning June 30, 2010 and ending December 31, 2022. GBDC made its initial public offering
Slide 23: Liquidity and Investment Capacity
23 Liquidity and Investment Capacity Cash and Cash Equivalents – Unrestricted cash and cash equivalents and foreign currencies totaled $103.2 million as of December 31, 2022. – Restricted cash and cash equivalents totaled $62.8 million as of December 31, 2022. Restricted cash is held in our securiti
Slide 24: Stable, Highly Flexible and Low-Cost Funding Structure
24 GBDC Has a Stable, Highly Flexible and Low-Cost Funding Structure GBDC Debt Capital Structure* Funding Source Debt Commitment Outstanding Par Undrawn Commitment Reinvestment Period Stated Maturity Interest Rate1 Securitizations: 2018 Debt Securitization $408,200 $408,200 $— January 20, 2023 Janua
Slide 25: Common Stock and Distribution Information
25 Common Stock and Distribution Information Date Declared Record Date Payment Date Amount Per Share Frequency Total Amount (in 000s) February 5, 2021 March 5, 2021 March 30, 2021 $0.29 Quarterly $48,505 May 7, 2021 June 11, 2021 June 29, 2021 $0.29 Quarterly $48,787 August 6, 2021 September 8, 2021
Slide 26: Appendix: Endnotes
Appendix: Endnotes A GOLUB CAPITAL
Slide 27: Endnotes - Non-GAAP Financial Measures
27 Endnotes - Non-GAAP Financial Measures 1. On September 16, 2019, the Company completed its acquisition of GCIC. The merger was accounted for under the asset acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) 805-50, Business Combinations — Related Issues
Slide 28: Endnotes - Drivers of GBDC's FQ1 2023 Earnings
28 Endnotes - Drivers of GBDC’s FQ1 2023 Earnings 1. Year-to-date as of December 31, 2022, the S&P 500 returned -18.1% and the Bloomberg U.S. Aggregate Bond Index returned -13.0%. Quarter-to-date as of December 31, 2022, the S&P 500 returned 7.6% and the Bloomberg U.S. Aggregate Bond Index returned