Golub Capital BDC, Inc. Announces Preliminary Fiscal Year 2021 First Quarter Financial Results

Rhea-AI Summary

Golub Capital BDC (NASDAQ: GBDC) reported preliminary estimates for Q1 FY2021 ending December 31, 2020, indicating a strong financial performance. Net investment income per share is estimated between $0.22 and $0.23, while adjusted earnings per share are expected to be $0.51 to $0.59. The estimated net asset value per share stands between $14.55 and $14.63, showing solid portfolio performance since COVID-19. The Company also expects to report a total of $526.8 million in new middle-market investment commitments.

Positive

• Estimated net investment income per share between $0.22 and $0.23.
• Adjusted earnings per share estimated between $0.51 and $0.59.
• Estimated net asset value per share between $14.55 and $14.63.
• Strong performance in new middle-market investment commitments of $526.8 million.
• Non-accrual investments decreased to less than 1.5% of total investments at fair value.

Negative

• None.

NEW YORK, Jan. 20, 2021 /PRNewswire/ -- Golub Capital BDC, Inc. (NASDAQ: GBDC) ("we," "us," "our," "GBDC" or the "Company") announced preliminary estimates of certain financial results for its first fiscal quarter ended December 31, 2020.

Set forth in the table below are certain preliminary estimates of our financial condition and results of operations for the three months ended December 31, 2020. 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 December 31, 2020. 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 December 31, 2020 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.

"GBDC expects to report strong net income and solid credit results for the quarter ended December 31, 2020," said David B. Golub, Chief Executive Officer of GBDC. "We believe the portfolio's performance since the onset of COVID-19 validates our underwriting focus on resilient businesses backed by strong private equity sponsors."

The Company began in April 2020 providing supplemental, preliminary estimates of its quarterly financial performance in light of financial market volatility and the evolving economic impact from COVID-19. Given that market volatility and uncertainty have decreased considerably since that time, we currently plan to return to our normal course of reporting for our second fiscal quarter financial results.

PRELIMINARY ESTIMATES OF CERTAIN FINANCIAL RESULTS
	Estimated Ranges for the three months ended December 31, 2020
Net Investment Income Per Share
Net investment income per share	$	0.22			$	0.23
Amortization of purchase premium per share1	0.05				0.06
Adjusted net investment income per share1	0.27				0.29
Net Realized/Unrealized Gain (Loss) Per Share
Net realized/unrealized gain (loss) per share	0.29				0.36
Reversal of unrealized loss resulting from the amortization of the purchase price premium per share1	(0.05)				(0.06)
Adjusted net realized/unrealized gain (loss) per share1	0.24				0.30
Earnings per Share
Earnings per share	0.51				0.59
Adjusted earnings per share1	0.51				0.59

Based on the estimated range of earnings per share in the table above, the Company is estimating a net asset value per share between $14.55 and $14.63 as of December 31, 2020, as shown below: 

Net Asset Value per Share
Actual net asset value per share, September 30, 2020	$	14.33			$	14.33
Estimated earnings per share for the three months ended December 31, 2020	0.51				0.59
Dividend paid per share on December 30, 2020	(0.29)				(0.29)
Estimated net asset value per share, December 31, 2020	$	14.55			$	14.63

1

On September 16, 2019, the Company completed its acquisition of Golub Capital Investment Corporation ("GCIC"). The acquisition 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 and the liabilities assumed, 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.

As a supplement to U.S. generally accepted accounting principles ("GAAP") financial measures, the Company is providing the following estimates of non-GAAP financial measures that it believes are useful for the reasons described below:

• "Adjusted Net Investment Income Per Share" - excludes the amortization of the purchase premium and the accrual for the capital gain incentive fee (including the portion of such accrual that is not payable under the Company's investment advisory agreement) from net investment income calculated in accordance with GAAP.
• "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 on loans or from the sale of equity investments from the determination of realized and unrealized gain/(loss) determined in accordance with GAAP.
• "Adjusted Earnings Per Share" - calculates net income and earnings per share based on Adjusted Net Investment Income Per Share and Adjusted Net Realized and Unrealized Gain/(Loss) Per Share.

The Company believes that excluding the financial impact of the purchase premium 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 in the above non-GAAP financial measures is useful as it includes the portion of such accrual that is not contractually payable under the terms of the Company's investment advisory agreement with GC Advisors. Although these estimates of non-GAAP financial measures are intended to enhance investors' understanding of our business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP.

Other First Fiscal Quarter 2021 Preliminary Estimates

• During the three months ended December 31, 2020, the Company estimates originations in new middle market investment commitments were $526.8 million. Approximately 75.0% of the new middle-market investment commitments were one stop loans, 22.0% were senior secured loans and 3.0% were equity and other securities. Total investments at fair value are estimated to have increased by approximately $266.3 million during the three months ended December 31, 2020 after factoring in debt repayments, sales of securities, net fundings on revolvers, and net change in unrealized gains (losses).
• As of December 31, 2020, the Company estimates it had well over $350.0 million of liquidity in the form of cash, restricted cash, available commitments under its revolving credit facilities, and undrawn SBIC debentures and a GAAP debt-to-equity ratio between 0.94x and 0.98x. 
• As of December 31, 2020, the Company was in compliance with all of its covenants under its revolving credit facilities and debt securitizations.
• As of December 31, 2020, the Company estimates that non-accrual investments declined again as a percentage of total investments at fair value to less than 1.5% and that non-accrual investments as a percentage of total investments at cost declined to less than 2.0%. Additionally, the Company estimates that the number of non-accrual investments decreased from nine investments as of September 30, 2020 to seven investments as of December 31, 2020.

Conference Call

The Company will report its financial results for the quarter ended December 31, 2020 on Monday, February 8, 2021 after the close of the financial markets. The Company will host an earnings conference call at 1:00 p.m. (Eastern Time) on Tuesday, February 9, 2021 to discuss its quarterly financial results. All interested parties may participate in the conference call by dialing (833) 900-2240 approximately 10-15 minutes prior to the call; international callers should dial +1 (236) 714-2752. Participants should reference Golub Capital BDC, Inc. when prompted. An archived replay of the call will be available shortly after the call until 12:00 a.m. (Eastern Time) on February 16, 2021. To hear the replay, please dial (800) 585-8367. International dialers, please dial +1 (416) 621-4642. For all replays, please reference program ID number 7894556.

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 credit asset manager, with over $35 billion of capital under management. Golub Capital specializes in delivering reliable, creative and compelling financing solutions to middle market companies backed by private equity sponsors. The firm's credit expertise also forms the foundation of its Late Stage Lending business and its Broadly Syndicated Loan investment program. Across its activities, Golub Capital nurtures long-term, win-win partnerships that inspire repeat business from its private equity sponsor clients and investors. Founded over 25 years ago, Golub Capital today has over 500 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.

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SOURCE Golub Capital BDC, Inc.

FAQ

What were Golub Capital BDC's estimated earnings for Q1 FY2021?

Golub Capital BDC estimated earnings per share for Q1 FY2021 between $0.51 and $0.59.

What is the estimated net asset value per share for GBDC as of December 31, 2020?

The estimated net asset value per share for GBDC is between $14.55 and $14.63 as of December 31, 2020.

How much did GBDC estimate in new middle-market investment commitments for Q1 FY2021?

GBDC estimated new middle-market investment commitments at $526.8 million for Q1 FY2021.

When will Golub Capital BDC report its Q1 FY2021 financial results?

Golub Capital BDC will report its Q1 FY2021 financial results on February 8, 2021.