Golub Capital BDC, Inc. Declares First Fiscal Quarter of 2013 Distribution of $0.32 Per Share and Announces Fourth Fiscal Quarter and Fiscal Year Ended September 30, 2012 Financial Results

CHICAGO, Nov. 29, 2012 /PRNewswire/ -- Golub Capital BDC, Inc., a business development company (NASDAQ: GBDC), today announced its financial results for the fourth fiscal quarter and fiscal year ended September 30, 2012. 

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.

Fourth Fiscal Quarter 2012 Highlights

• Net investment income for the quarter ended September 30, 2012 was $7.8 million, or $0.30 per share, as compared to $6.7 million, or $0.26 per share, for the quarter ended June 30, 2012;
• Net gain (loss) on investments and derivative instruments for the quarter ended September 30, 2012 was $0.9 million, or $0.04 per share, as compared to $(1.3) million, or $(0.05) per share, for the quarter ended June 30, 2012;
• Net increase in net assets resulting from operations for the quarter ended September 30, 2012 was $8.7 million, or $0.34 per share, as compared to $5.4 million, or $0.21 per share, for the quarter ended June 30, 2012; and
• Our board of directors declared a quarterly distribution on November 27, 2012 of $0.32 per share, payable on December 28, 2012 to stockholders of record as of December 14, 2012.

Portfolio and Investment Activities

At September 30, 2012, the Company had investments in 121 portfolio companies with a total fair value of $672.9 million.  The investments in these portfolio companies consisted of $274.0 million of senior secured loans, $265.7 million of one stop loans, $44.4 million of second lien loans, $67.4 million of subordinated debt and $21.4 million of equity investments.  This compares to the Company's portfolio as of June 30, 2012, at which the Company had investments in 116 portfolio companies with a total fair value of $636.6 million.  The investments in these portfolio companies consisted of $258.8 million of senior secured loans, $236.8 million of one stop loans, $48.4 million of second lien loans, $74.6 million of subordinated debt and $18.0 million of equity investments.

For the quarter ended September 30, 2012, the Company originated $113.4 million in new middle-market investment commitments. Approximately 63% of the new middle-market investment commitments were one stop loans, 34% were senior secured loans and 3% were equity securities. Sales and repayments on investments for the same period totaled $70.9 million.

For the quarter ended September 30, 2012, the weighted average annualized investment income yield (which includes interest income and amortization of fees and discounts) and the weighted average annualized interest income yield (which excludes income resulting from amortization of fees and discounts) on the fair value of earning investments in the Company's portfolio was 10.5% and 9.5%, respectively. 

Consolidated Results of Operations

Total investment income for the three months ended September 30, 2012 and June 30, 2012 was $16.2 million and $14.8 million, respectively.  This $1.4 million increase was primarily attributable to higher average invested assets during the three months ended September 30, 2012. 

Total expenses for the three months ended September 30, 2012 and June 30, 2012 were $8.4 million and $8.1 million, respectively.  This $0.3 million increase was primarily due to an increase in interest expense as a result of higher average debt outstanding and a higher effective yield, increased incentive fees due to higher net investment income and increased management fees due to higher average assets.  

During the three months ended September 30, 2012 and June 30, 2012, the Company had $(0.6) million and $1.2 million of net realized (losses) gains on investments and derivative instruments, respectively.  The realized loss for the quarter ended September 30, 2012 was primarily related to the sale of an investment in one portfolio company and a loss on the settlement of the Company's ten-year U.S. Treasury futures contracts.  During the three months ended September 30, 2012 and June 30, 2012, the Company recorded net unrealized appreciation (depreciation) on investments and derivative instruments of $1.5 million and $(2.4) million, respectively.  The unrealized appreciation for the three months ended September 30, 2012 was primarily a result of broad gains across several middle-market debt and equity securities. 

Liquidity and Capital Resources

The Company's liquidity and capital resources are derived from the Company's debt securitization, Small Business Administration ("SBA") debentures, revolving credit facility and cash flow from operations.  The Company's primary uses of funds from operations include investment 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 securitization, SBA debentures, revolving credit facility, proceeds from its investment portfolio and proceeds from offerings of its securities to finance its investment objectives. 

As of September 30, 2012, the Company had cash and cash equivalents of $13.9 million, restricted cash of $37.0 million and $352.3 million of total debt outstanding.   As of September 30, 2012, the Company had $20.2 million available for additional borrowings on its revolving credit facility, subject to leverage and borrowing base restrictions.

On October 16, 2012, we priced a public offering of 2,600,000 shares of our common stock at a public offering price of $15.58 per share, raising approximately $40.5 million in gross proceeds. Wells Fargo Securities, LLC and UBS Securities LLC acted as joint book-running managers for the offering. On October 19, 2012, the transaction closed, the shares were issued, and proceeds, net of offering costs but before expenses, of $39.4 million were received.  On November 14, 2012, we sold an additional 294,120 shares pursuant to the underwriters' partial exercise of the over-allotment option and we received net proceeds, before expenses, of $4.4 million.

On November 27, 2012, the Company's board of directors declared a quarterly distribution of $0.32 per share payable on December 28, 2012 to holders of record as of December 14, 2012. 

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 the following categories:

The following table shows the distribution of the Company's investments on the 1 to 5 investment performance rating scale at fair value as of September 30, 2012 and June 30, 2012:

Conference Call

The Company will host an earnings conference call at 12:00 p.m. (Eastern Time) on Thursday, November 29, 2012 to discuss the quarterly financial results.  All interested parties may participate in the conference call by dialing (800) 736-4594 approximately 10-15 minutes prior to the call; international callers should dial (212) 231-2912. 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 Events and Presentations link on the homepage of our website (www.golubcapitalbdc.com) and click on the Quarter Ended 9.30.12 Investor Presentation under Events and Presentations.  An archived replay of the call will be available shortly after the call until 2:00 p.m. (Eastern Time) on December 24, 2012. To hear the replay, please dial (800) 633-8284. International dialers, please dial (402) 977-9140. For all replays, please reference program ID number 21607887.  

ABOUT GOLUB CAPITAL BDC, INC.

Golub Capital BDC, Inc. principally invests in senior secured, one stop, mezzanine and second lien loans of middle-market companies that are, in most cases, sponsored by private equity investors. Golub Capital BDC, Inc.'s investment activities are managed by its investment adviser, GC Advisors LLC, an affiliate of the Golub Capital group of companies ("Golub Capital").

ABOUT GOLUB CAPITAL

With over $7 billion of capital under management, Golub Capital is a leading provider of financing solutions for the middle market, including one stop financings (through the firm's proprietary GOLD and MEGA GOLD facilities), senior, second lien, and subordinated debt, preferred stock and co-investment equity. The firm underwrites and syndicates senior credit facilities up to $250 million. Golub Capital's hold sizes range up to $200 million per transaction.

Golub Capital has been a Top 3 Traditional Middle Market Bookrunner each year from 2008 through 3Q 2012 for senior secured loans of up to $100 million for leveraged buyouts (according to Thomson Reuters LPC and internal data; based on number of deals). In 2012, Golub Capital was awarded the ACG New York Champion's Award for "Senior Lender Firm of the Year." Golub Capital is a national firm with principal offices in Chicago and New York. For more information, please visit the firm's website at www.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.