Golub Capital BDC, Inc. Announces Fiscal Year 2022 Second Quarter Financial Results and Declares Fiscal Year 2022 Third Quarter Distribution of $0.30 Per Share

SELECTED FINANCIAL HIGHLIGHTS

(in thousands, expect per share data)

March 31, 2022

December 31, 2021

Investment portfolio, at fair value

$                   5,426,159

5,146,766

Total assets

$                   5,624,964

5,480,437

Net asset value per share

$                          15.35

15.26

Quarter Ended

March 31, 2022

December 31, 2021

Net investment income per share

$                            0.25

$                            0.27

Amortization of purchase premium per share

0.02

0.04

Adjusted net investment income per share¹

$                            0.27

$                            0.31

Accrual for capital gain incentive fee per share

0.03

0.00

*

Adjusted net investment income before accrual for capital gain incentive fee per share¹

$                            0.30

$                            0.31

Net realized/unrealized gain/(loss) per share

$                            0.14

$                            0.10

Reversal of realized / unrealized loss resulting from the purchase premium per share

(0.02)

(0.04)

Adjusted net realized/unrealized gain/(loss) per share¹

$                            0.12

$                            0.06

Earnings/(loss) per share

$                            0.39

$                            0.37

Adjusted earnings/(loss) per share¹

$                            0.39

$                            0.37

Net asset value per share

$                          15.35

$                          15.26

Distributions paid per share

$                            0.30

$                            0.30

*

Represents an amount less than $0.01 per share

¹

On September 16, 2019, the Company completed its acquisition of Golub Capital Investment Corporation ("GCIC"). The merger 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, 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 non-GAAP financial measures that it believes are useful for the reasons described below:

• "Adjusted Net Investment Income" and "Adjusted Net Investment Income Per Share" – excludes the amortization of the purchase premium from net investment income calculated in accordance with GAAP.

• "Adjusted Net Investment Income Before Accrual for Capital Gain Incentive Fee" - Adjusted Net Investment Income excluding the accrual or reversal for the capital gain incentive fee required under GAAP;

• "Adjusted Net Realized and Unrealized Gain/(Loss)" and "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 from the determination of realized and unrealized gain/(loss) in accordance with GAAP.

• "Adjusted Net Income/(Loss)" and "Adjusted Earnings/(Loss) Per Share" – calculates net income and earnings per share based on Adjusted Net Investment Income and Adjusted Net Realized and Unrealized Gain/(Loss).

The Company believes that excluding the financial impact of the purchase premium write down 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 under GAAP is useful as a portion of such accrual is not contractually payable under the terms of the Company's investment advisory agreement with GC Advisors.

As of March 31, 2022

As of December 31, 2021

Investments

Percentage of

Investments

Percentage of

at Fair Value

Total

at Fair Value

Total

Investment Type

(In thousands)

Investments

(In thousands)

Investments

Senior secured

$                 605,007

11.1 %

$              620,168

12.0 %

One stop

4,508,470

83.1

4,235,533

82.3

Junior debt^*

46,356

0.9

44,312

0.9

Equity

266,326

4.9

246,753

4.8

Total

$              5,426,159

100.0 %

$           5,146,766

100.0 %

^*

Junior debt is comprised of second lien and subordinated debt. 

For the three months ended March 31, 2022

New Investment

Commitments

Percentage of

(In thousands)

Commitments

Senior secured

$                                                5,940

1.8 %

One stop

304,844

94.4

Junior debt^*

—

—

Equity

12,399

3.8

Total new investment commitments   

$                                            323,183

100.0 %

^*

Junior debt is comprised of second lien and subordinated debt.

Internal Performance Ratings

Rating

Definition

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.

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.

3

Involves a borrower performing below expectations and indicates that the loan's risk has increased somewhat since origination. The borrower could be out of compliance with debt covenants; however, loan payments are generally not past due.

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 could be past due (but generally not more than 180 days past due).

1

Involves a borrower performing substantially below expectations and indicates that the loan's risk has substantially increased since origination. Most or all of the debt covenants are out of compliance and payments are substantially delinquent. Loans rated 1 are not anticipated to be repaid in full and we will reduce the fair market value of the loan to the amount we anticipate will be recovered.

March 31, 2022

December 31, 2021

Internal

Investments

Percentage of

Investments

Percentage of

Performance

at Fair Value

Total

at Fair Value

Total

Rating

(In thousands)

Investments

(In thousands)

Investments

5

$                    337,368

6.2

%

$                    349,616

6.8

%

4

4,670,103

86.1

4,406,567

85.6

3

367,590

6.8

341,026

6.6

2

50,810

0.9

49,317

1.0

1

288

0.0

*

240

0.0

*

Total

$                 5,426,159

100.0

%

$                 5,146,766

100.0

%

*

Represents an amount less than 0.1%.

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Statements of Financial Condition

(In thousands, except share and per share data)

March 31, 2022

December 31, 2021

Assets

(unaudited)

(unaudited)

Investments, at fair value (cost of $5,405,019 and $5,143,591, respectively)

$                 5,426,159

$                 5,146,766

Cash and cash equivalents

130,453

180,203

Unrestricted foreign currencies (cost of $5,587 and $2,445, respectively)

5,716

2,480

Restricted cash and cash equivalents

35,749

117,144

Restricted foreign currencies (cost of $2,412 and $1,641, respectively)

2,414

1,650

Interest receivable

21,251

21,268

Other assets

3,222

10,926

Total Assets

$                 5,624,964

$                 5,480,437

Liabilities

Debt

$                 2,980,962

$                 2,852,832

     Less unamortized debt issuance costs

20,786

22,404

          Debt less unamortized debt issuance costs

2,960,176

2,830,428

Interest payable

15,643

16,184

Management and incentive fees payable

20,929

20,799

Accounts payable and accrued expenses

4,667

5,547

Total Liabilities

3,001,415

2,872,958

Net Assets

Preferred stock, par value $0.001 per share, 1,000,000 shares authorized, zero shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively.

—

—

Common stock, par value $0.001 per share, 350,000,000 shares authorized, 170,895,670 issued and outstanding as of March 31, 2022; 200,000,000 shares authorized, 170,865,742 issued and outstanding as of December 31, 2021

171

171

Paid in capital in excess of par

2,677,424

2,676,967

Distributable earnings

(54,046)

(69,659)

Total Net Assets

2,623,549

2,607,479

Total Liabilities and Total Net Assets

$                 5,624,964

$                 5,480,437

Number of common shares outstanding

170,895,670

170,865,742

Net asset value per common share

$                         15.35

$                         15.26

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Statements of Operations

(In thousands, except share and per share data)

Three months ended

March 31, 2022

December 31, 2021

(unaudited)

(unaudited)

Investment income

     Interest income

$                               88,679

$                               92,336

     GCIC acquisition purchase price premium amortization

(2,940)

(7,095)

     Dividend income

3

317

     Fee income

219

1,009

          Total investment income

85,961

86,567

Expenses

     Interest and other debt financing expenses

19,275

17,836

     Base management fee, net of waiver

16,115

17,501

     Incentive fee

4,362

3,381

     Professional fees

729

899

     Administrative service fee

1,640

1,818

     General and administrative expenses

400

342

          Total net expenses

42,521

41,777

Net investment income

43,440

44,790

Net gain (loss) on investment transactions

     Net realized gain (loss) from:

          Investments

321

14,573

          Foreign currency transactions

51

(25)

     Net realized gain (loss) in investment transactions

372

14,548

     Net change in unrealized appreciation (depreciation) from:

          Investments

17,965

3,686

          Translation of assets and liabilities in foreign currencies

3,337

268

          Forward currency contracts

1,856

281

     Net change in unrealized appreciation (depreciation) on investment transactions

23,158

4,235

Net gain (loss) on investments

23,530

18,783

     Provision for taxes on unrealized appreciation on investments

(97)

(495)

Net increase (decrease) in net assets resulting from operations

$                               66,873

$                               63,078

Per Common Share Data

     Basic and diluted earnings (loss) per common share

$                                    0.39

$                                    0.37

     Dividends and distributions declared per common share

$                                    0.30

$                                    0.30

     Basic and diluted weighted average common shares outstanding

170,866,740

170,046,783