Golub Capital BDC, Inc. Declares Fiscal Year 2023 Third Quarter Distribution of $0.33 Per Share and Announces Fiscal Year 2023 Second Quarter Financial Results

NEW YORK, May 8, 2023 /PRNewswire/ -- Golub Capital BDC, Inc., a business development company (Nasdaq: GBDC), today announced its financial results for its second fiscal quarter ended March 31, 2023.

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.

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.

Second Fiscal Quarter 2023 Highlights

• Net investment income per share for the quarter ended March 31, 2023 was $0.41 as compared to $0.36 for the quarter ended December 31, 2022. Excluding $0.01 per share in purchase premium amortization from the GCIC acquisition and no accrual or reversal for the capital gain incentive fee under GAAP, Adjusted Net Investment Income Before Accrual for Capital Gain Incentive Fee¹ for the quarter ended March 31, 2023 was $0.42. This compares to Adjusted Net Investment Income Before Accrual for Capital Gain Incentive Fee¹ of $0.37 for the quarter ended December 31, 2022 when excluding $0.01 per share in purchase premium amortization from the GCIC acquisition and no accrual or reversal for the capital gain incentive fee under GAAP.
• Net realized and unrealized loss per share for the quarter ended March 31, 2023 was $0.07. Adjusted Net Realized and Unrealized Loss Per Share¹ was $0.08 when excluding the $0.01 per share reversal of net realized loss and unrealized depreciation resulting from the amortization of the purchase premium. The Adjusted Net Realized and Unrealized Loss Per Share¹ for the quarter ended March 31, 2023 was primarily due to unrealized depreciation resulting from modest credit migration in our portfolio and net realized losses that were partially offset by realized gains on the sale of equity investments. Net realized losses were driven primarily by the write-off of investments in a portfolio company which had a fair value of $0 as of December 31, 2022 and whose debt investments were on non-accrual status as of December 31, 2022. For additional analysis, please refer to the Quarter Ended 3.31.2023 Earnings Presentation available on the Investor Resources link on the homepage of the Company's website (www.golubcapitalbdc.com) under Events/Presentations. The Earnings Presentation was also filed with the Securities and Exchange Commission as an Exhibit to a Form 8-K.  These results compare to net realized and unrealized loss per share of $0.21 during the quarter ended December 31, 2022. Adjusted Net Realized and Unrealized Loss Per Share¹ for the quarter ended December 31, 2022 was $0.22 when excluding the $0.01 per share reversal of net realized loss and unrealized loss resulting from the amortization of the purchase premium.
• Earnings per share for the quarter ended March 31, 2023 was $0.34 as compared to $0.15 for the quarter ended December 31, 2022. Adjusted Earnings Per Share¹ for the quarter ended March 31, 2023 was $0.34 as compared to $0.15 for the quarter ended December 31, 2022.
• Net asset value per share increased to $14.73 at March 31, 2023 from $14.71 at December 31, 2022.  
• On March 29, 2023, we paid a quarterly distribution of $0.33 per share and on May 5, 2023, our board of directors declared a quarterly distribution of $0.33 per share, which is payable on June 29, 2023 to stockholders of record as of June 2, 2023.
• During the three months ended March 31, 2023, GBDC repurchased approximately $10 million, or 751,544 shares, of our common stock pursuant to the Company's previously disclosed share repurchase program.
• During the three months ended March 31, 2023, the Golub Capital Employee Grant Program Rabbi Trust (the "Trust") purchased approximately $4.8 million, or 356,204 shares, of our common stock for the purpose of awarding incentive compensation to employees of Golub Capital. During calendar year 2022, the Trust purchased $56.7 million, or 4,140,641 shares, of our common stock.

Portfolio and Investment Activities

As of March 31, 2023, the Company had investments in 333 portfolio companies with a total fair value of $5,486.4 million.  This compares to the Company's portfolio as of December 31, 2022, as of which date the Company had investments in 332 portfolio companies with a total fair value of $5,451.9 million. Investments in portfolio companies as of March 31, 2023 and December 31, 2022 consisted of the following:

The following table shows the asset mix of our new investment commitments for the three months ended March 31, 2023:

Total investments in portfolio companies at fair value were $5,486.4 million at March 31, 2023. As of March 31, 2023, total assets were $5,671.8 million, net assets were $2,506.1 million and net asset value per share was $14.73. 

Consolidated Results of Operations

For the second fiscal quarter of 2023, the Company reported GAAP net income and Adjusted Net Income¹ of $58.5 million or $0.34 per share. GAAP net investment income was $70.2 million or $0.41 per share and Adjusted Net Investment Income Before Accrual for Capital Gain Incentive Fee ¹ was $71.8 million or $0.42 per share. GAAP net realized and unrealized gain/(loss) was $(11.7) million or $(0.07) per share and Adjusted Realized and Unrealized Gain/(Loss)¹ was $(13.3) million or $(0.08) per share.

Net income can vary substantially from period to period due to various factors, including the level of new investment commitments, the recognition of realized gains and losses and unrealized appreciation and depreciation. As a result, quarterly comparisons of net income may not be meaningful. 

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), unsecured notes, 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, unsecured notes, 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 March 31, 2023, we had cash, cash equivalents and foreign currencies of $87.4 million, restricted cash and cash equivalents of $50.2 million and $3,116.9 million of debt outstanding. As of March 31, 2023, subject to leverage and borrowing base restrictions, we had approximately $772.1 million of remaining commitments and availability, in the aggregate, on our revolving credit facility with JPMorgan. In addition, as of March 31, 2023, we had $100.0 million of remaining commitments and availability on our unsecured line of credit with GC Advisors.

On March 17, 2023, we amended our revolving credit facility with JPMorgan to, among other things, increase the accordion feature that allows us to increase the total facility size to $2,000.0 million from $1,500.0 million, increase the aggregate commitments outstanding to $1,487.5 million from $1,237.5 million, extend the maturity date to March 17, 2028 from February 11, 2026 and decrease the adjustment to term SOFR to 0.10%.

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.  For additional analysis on the Company's internal performance ratings as of March 31, 2023, please refer to the Quarter Ended 3.31.2023 Earnings Presentation available on Investors Resources link on the homepage of the Company's website (www.golubcapitalbdc.com) under Events/Presentations.  

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 March 31, 2023 and December 31, 2022:

Conference Call
The Company will host an earnings conference call at 11:00 am (Eastern Time) on Tuesday, May 9, 2023 to discuss the quarterly financial results. All interested parties may participate in the conference call by dialing (888) 330-3529 approximately 10-15 minutes prior to the call; international callers should dial +1 (646) 960-0656. 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 3.31.2023 Earnings Presentation under Events/Presentations. An archived replay of the call will be available shortly after the call until 11:59 p.m. (Eastern Time) on May 23, 2023. To hear the replay, please dial (800) 770-2030. International dialers, please dial +1 (647) 362-9199. For all replays, please reference program ID number 5111111.

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 experienced credit asset manager. The firm specializes in delivering reliable, creative and compelling financing solutions to companies backed by private equity sponsors. Golub Capital's sponsor finance expertise also forms the foundation of its Broadly Syndicated Loan and Credit Opportunities investment programs. Golub Capital nurtures long-term, win-win partnerships that inspire repeat business from private equity sponsors and investors.

As of January 1, 2023, Golub Capital had over 775 employees and over $60 billion of capital under management, a gross measure of invested capital including leverage. The firm has lending offices in Chicago, New York, San Francisco and London. 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.