NEW YORK, Aug. 7, 2019 /PRNewswire/ -- Golub Capital BDC, Inc., a business development company (NASDAQ: GBDC), today announced its financial results for its third fiscal quarter ended June 30, 2019.
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.
Third Fiscal Quarter 2019 Highlights
- Net increase in net assets resulting from operations for the quarter ended June 30, 2019 was $19.2 million, or $0.32 per share, as compared to $17.8 million, or $0.29 per share, for the quarter ended March 31, 2019;
- Net investment income for the quarter ended June 30, 2019 was $19.4 million, or $0.32 per share, as compared to $20.1 million, or $0.33 per share, for the quarter ended March 31, 2019;
- Net investment income for the quarter ended June 30, 2019, excluding a $28,000 accrual for the capital gain incentive fee under GAAP, was $19.4 million, or $0.32 per share, as compared to $19.4 million, or $0.32 per share, excluding a $0.7 million reversal for the capital gain incentive fee under GAAP, for the quarter ended March 31, 2019;
- Net loss on investments and foreign currency for the quarter ended June 30, 2019 was $0.2 million, or less than $0.01 per share, as compared to a net loss of $2.3 million, or $0.04 per share, for the quarter ended March 31, 2019;
- Our board of directors declared on August 6, 2019 a quarterly distribution of $0.32 per share which is payable on September 27, 2019 to stockholders of record as of August 19, 2019; and
- On July 11, 2019, the Company filed an amended registration statement on Form N-14, which included a joint proxy statement of the Company and Golub Capital Investment Corporation ("GCIC") and a prospectus of the Company, in connection with the Company's proposed merger with GCIC. The registration statement was declared effective by the SEC on July 12, 2019 and the special meetings for each of the Company's and GCIC's stockholders are scheduled for September 4, 2019. We remain very excited about the proposed merger with GCIC, which we anticipate to close shortly after the special meetings in September 2019, subject to stockholder approvals and other customary closing conditions.
Portfolio and Investment Activities
As of June 30, 2019, the Company had investments in 225 portfolio companies with a total fair value of $1,851.1 million and had investments in Senior Loan Fund LLC ("SLF") with a total fair value of $71.7 million. This compares to the Company's portfolio as of March 31, 2019, as of which date the Company had investments in 211 portfolio companies with a total fair value of $1,883.3 million and investments in SLF with a total fair value of $71.7 million. Investments in portfolio companies as of June 30, 2019 and March 31, 2019 consisted of the following:
The following table shows the asset mix of our new investment commitments for the three months ended June 30, 2019:
Overall, total investments at fair value decreased by 1.6%, or $32.2 million, during the three months ended June 30, 2019 after factoring in debt repayments, sales of securities, net fundings on revolvers and net change in unrealized gain (loss).
For the three months ended June 30, 2019, the weighted average annualized investment income yield (which includes interest and fee income and amortization of capitalized fees and discounts) and the weighted average annualized income yield (which excludes income resulting from amortization of capitalized fees and discounts) on the fair value of earning portfolio investments in the Company's portfolio were 9.2% and 8.6%, respectively.
Consolidated Results of Operations
Total investment income for the quarters ended June 30, 2019 and March 31, 2019 was $42.1 million and $41.8 million, respectively. This $0.3 million increase was primarily attributable to an increase in fee income. Total expenses for the quarters ended June 30, 2019 and March 31, 2019 were $22.7 million and $21.7 million, respectively. This $1.0 million increase was primarily attributable to a increase in incentive fee expense. During the quarter ended June 30, 2019, the Company recorded a net realized loss of $0.7 million and recorded net unrealized appreciation of $0.5 million. The net realized loss was primarily due to a realized loss recognized on the sale of one portfolio company investment which was partially offset by realized gains on the sale of two portfolio company equity investments. The net unrealized appreciation was primarily due to the rise in market prices of portfolio company investments and the reversal of the net unrealized depreciation associated with the sale or restructure of a few portfolio company investments.
Liquidity and Capital Resources
The Company's liquidity and capital resources are derived from the Company's debt securitizations (also known as collateralized loan obligations, or CLOs), U.S. Small Business Administration ("SBA") debentures, revolving credit facilities and cash flow from operations. The Company's primary uses of funds from operations include investments in portfolio companies and payment of fees and other expenses that the Company incurs. The Company has used, and expects to continue to use, its debt securitizations, SBA debentures, revolving credit facilities, proceeds from its investment portfolio and proceeds from offerings of its securities and its dividend reinvestment plan to finance its investment objectives.
As of June 30, 2019, the Company had cash, cash equivalents and foreign currencies of $8.3 million, restricted cash, cash equivalents and foreign currencies of $102.4 million and $1,050.6 million of debt and other short-term borrowings outstanding. As of June 30, 2019, the Company had $15.3 million of remaining commitments and $15.3 million available for additional borrowings on its senior secured revolving credit facility with Morgan Stanley Senior Funding, Inc. (the "Morgan Stanley Credit Facility"), as lender and administrative agent, subject to leverage and borrowing base restrictions. As of June 30, 2019, through our small business investment company licensees, we had $40.5 million of SBA debenture commitments, none of which was available to be drawn, subject to customary SBA regulatory requirements.
On August 6, 2019, our board of directors declared a quarterly distribution of $0.32 per share which is payable on September 27, 2019 to holders of record as of August 19, 2019.
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 an internal system developed by Golub Capital and its affiliates. This system is not generally accepted in our industry or used by our competitors. It is based on the following categories, which we refer to as GC Advisors' internal performance ratings:
Our internal performance ratings do not constitute any rating of investments by a nationally recognized statistical rating organization or represent or reflect any third-party assessment of any of our investments.
The following table shows the distribution of the Company's investments on the 1 to 5 internal performance rating scale at fair value as of June 30, 2019 and March 31, 2019:
Conference Call
The Company will host an earnings conference call at 3:30 p.m. (Eastern Time) on Thursday, August 8, 2019 to discuss the quarterly financial results. All interested parties may participate in the conference call by dialing (800) 659-6167 approximately 10-15 minutes prior to the call; international callers should dial (303) 223-4384. 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 06.30.2019 Investor Presentation under Events/Presentations. An archived replay of the call will be available shortly after the call until 5:30 p.m. (Eastern Time) on September 7, 2019. To hear the replay, please dial (800) 633-8284. International dialers, please dial (402) 977-9140. For all replays, please reference program ID number 21926772.
ABOUT GOLUB CAPITAL BDC, INC.
Golub Capital BDC, Inc. ("Golub Capital BDC") 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. Golub Capital BDC invests primarily in senior secured and one-stop loans to U.S. middle market companies that are often 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 LLC group of companies ("Golub Capital").
ABOUT GOLUB CAPITAL
Golub Capital is a market-leading, award-winning direct lender and investment manager, with over $30 billion of capital under management. We specialize in delivering reliable, creative and compelling financing solutions to U.S. middle market companies backed by private equity sponsors. The firm's credit expertise also forms the foundation of our Late Stage Lending business and our Broadly Syndicated Loan investment program. Across our activities, Golub Capital nurtures long-term, win-win partnerships that inspire repeat business from our private equity sponsor clients and investors. Founded 25 years ago, Golub Capital today has over 425 employees and lending offices in Chicago, New York and San Francisco. 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.
SOURCE Golub Capital BDC, Inc.