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þ
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QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF
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THE SECURITIES EXCHANGE ACT OF
1934
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o
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF
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THE
SECURITIES EXCHANGE ACT OF 1934
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Delaware
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27-2326940
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(State
or other jurisdiction of incorporation or organization)
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(I.R.S.
Employer Identification No.)
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Large
accelerated filer ¨
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Accelerated
filer ¨
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Non-accelerated
filer þ
(Do not check if a smaller reporting company)
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Smaller reporting company
¨
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Part
I. Financial Information
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Item
1.
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Financial
Statements
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1
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Consolidated
Statements of Financial Condition as of December 31, 2010 (unaudited) and
September 30, 2010
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1
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Consolidated
Statements of Operations for the three months ended December 31, 2010
(unaudited) and 2009 (unaudited)
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2
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Consolidated
Statements of Changes in Net Assets for the three months ended December
31, 2010 (unaudited) and 2009 (unaudited)
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3
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Consolidated
Statements of Cash Flows for the three months ended December 31, 2010
(unaudited) and 2009 (unaudited)
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4
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Consolidated
Schedules of Investments as of December 31, 2010 (unaudited) and September
30, 2010
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5
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Notes
to Consolidated Financial Statements
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14
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Item
2.
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Management's
Discussion and Analysis of Financial Condition and Results of
Operations
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34
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Item
3.
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Quantitative
And Qualitative Disclosures About Market Risk
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50
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Item
4.
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Controls
and Procedures
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50
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Part
II. Other Information
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Item
1.
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Legal
Proceedings
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50
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Item
1A.
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Risk
Factors
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50
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Item
2.
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Unregistered
Sales of Equity Securities and Use of Proceeds
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51
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Item
3.
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Defaults
Upon Senior Securities
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51
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Item
4.
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Removed
and Reserved
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51
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Item
5.
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Other
Information
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51
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Item
6.
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Exhibits
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51
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December
31, 2010
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September
30, 2010
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|||||||
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Assets
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||||||||
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Investments,
at fair value (cost of $383,507 and $345,536 respectively)
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$ | 382,414 | $ | 344,869 | ||||
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Cash
and cash equivalents
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41,389 | 61,219 | ||||||
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Restricted
cash and cash equivalents
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27,618 | 31,771 | ||||||
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Interest
receivable
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2,194 | 1,956 | ||||||
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Receivable
for investments sold
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2,895 | - | ||||||
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Deferred
financing costs
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3,548 | 2,748 | ||||||
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Other
assets
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256 | 200 | ||||||
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Total
Assets
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$ | 460,314 | $ | 442,763 | ||||
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Liabilities
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||||||||
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Debt
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$ | 194,000 | $ | 174,000 | ||||
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Payable
for investments purchased
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- | 5,328 | ||||||
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Interest
payable
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2,576 | 1,167 | ||||||
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Management
and incentive fees payable
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1,693 | 1,008 | ||||||
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Accounts
payable and accrued expenses
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570 | 719 | ||||||
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Total
Liabilities
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198,839 | 182,222 | ||||||
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Net
Assets
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||||||||
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Preferred
stock, par value $0.001 per share, 1,000,000 shares
authorized,
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||||||||
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zero
shares issued and outstanding as of December 31, 2010 and
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September
30, 2010
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$ | - | $ | - | ||||
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Common
stock, par value $0.001 per share, 100,000,000 shares
authorized,
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||||||||
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17,738,197
and 17,712,444 shares issued and outstanding, respectively
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18 | 18 | ||||||
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Paid
in capital in excess of par
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260,152 | 259,690 | ||||||
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Accumulated
over distributed net investment income
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(1,379 | ) | (1,122 | ) | ||||
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Net
unrealized appreciation on investments
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1,848 | 1,995 | ||||||
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Net
realized gains (losses) on investments
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836 | (40 | ) | |||||
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Total
Net Assets
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261,475 | 260,541 | ||||||
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Total
Liabilities and Total Net Assets
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$ | 460,314 | $ | 442,763 | ||||
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Number
of common shares outstanding
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17,738,197 | 17,712,444 | ||||||
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Net
asset value per common share
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$ | 14.74 | $ | 14.71 | ||||
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Golub
Capital BDC, Inc. and Subsidiaries
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||||||||
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Consolidated
Statements of Operations (unaudited)
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||||||||
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(In
thousands, except share and per share data)
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||||||||
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Three
months ended December 31,
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||||||||
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2010
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2009
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|||||||
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Investment
income
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||||||||
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Interest
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$ | 9,137 | $ | 10,843 | ||||
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Total
investment income
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9,137 | 10,843 | ||||||
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Expenses
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||||||||
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Interest
and other debt financing expenses
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1,577 | 690 | ||||||
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Base
management fee
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1,284 | 729 | ||||||
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Incentive
fee
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190 | - | ||||||
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Professional
fees
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567 | 33 | ||||||
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Administrative
service fee
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174 | 142 | ||||||
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General
and administrative expenses
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112 | 67 | ||||||
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Total
expenses
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3,904 | 1,661 | ||||||
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Net
investment income
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5,233 | 9,182 | ||||||
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Net
gain (loss) on investments
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||||||||
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Net
realized gains on investments
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876 | - | ||||||
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Net
change in unrealized depreciation on investments
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(147 | ) | (840 | ) | ||||
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Net
gain (loss) on investments
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729 | (840 | ) | |||||
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Net
increase in net assets resulting from operations
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$ | 5,962 | $ | 8,342 | ||||
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Per
Common Share Data
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||||||||
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Basic
and diluted earnings per common share(1)
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$ | 0.34 | N/A | |||||
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Dividends
and distributions declared per common share(2)
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$ | 0.31 | N/A | |||||
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Basic
and diluted weighted average common shares outstanding(1)
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17,712,724 | N/A | ||||||
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Accumulated
(Over
Distributed)
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||||||||||||||||||||||||||||||||
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Common
Stock
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Paid
in Capital
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Undistributed
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Net
Unrealized
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Net
Realized
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||||||||||||||||||||||||||||
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Members'
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Par
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in
Excess
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Net
Investment
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Appreciation
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Gains
(losses)
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Total
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||||||||||||||||||||||||||
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Equity
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Shares
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Amount
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of Par
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Income
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on Investments
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on Investments
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Net Assets
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|||||||||||||||||||||||||
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Balance
at September 30, 2009
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$ | 92,752 | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 92,752 | |||||||||||||||||
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Members'
equity contributions
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22,209 | - | - | - | - | - | - | 22,209 | ||||||||||||||||||||||||
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Members'
equity distributions
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(13,530 | ) | - | - | - | - | - | - | (13,530 | ) | ||||||||||||||||||||||
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Increase
in net assets resulting from operations
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8,342 | - | - | - | - | - | - | 8,342 | ||||||||||||||||||||||||
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Balance
at December 31, 2009
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$ | 109,773 | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 109,773 | |||||||||||||||||
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Balance
at September 30, 2010
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$ | - | 17,712,444 | $ | 18 | $ | 259,690 | $ | (1,122 | ) | $ | 1,995 | $ | (40 | ) | $ | 260,541 | |||||||||||||||
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Net
increase in net assets resulting from operations
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- | - | - | - | 5,233 | (147 | ) | 876 | 5,962 | |||||||||||||||||||||||
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Distributions
to stockholders:
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- | |||||||||||||||||||||||||||||||
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Stock
issued in connection with dividend reinvestment
plan
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- | 25,753 | - | 462 | - | - | - | 462 | ||||||||||||||||||||||||
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Dividends
and distributions
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- | - | - | - | (5,490 | ) | - | - | (5,490 | ) | ||||||||||||||||||||||
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Balance
at December 31, 2010
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$ | - | 17,738,197 | $ | 18 | $ | 260,152 | $ | (1,379 | ) | $ | 1,848 | $ | 836 | $ | 261,475 | ||||||||||||||||
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Consolidated
Statements of Cash Flows (unaudited)
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||||||||
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(In
thousands)
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Three Months Ended December
31,
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|||||||
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2010
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2009
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|||||||
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Cash
flows from operating activities
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||||||||
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Net
increase in net assets resulting from operations
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$ | 5,962 | $ | 8,342 | ||||
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Adjustments
to reconcile net increase in net assets resulting from
operations
|
||||||||
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to
net cash (used in) provided by operating activities
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||||||||
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Amortization
of deferred financing costs
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168 | - | ||||||
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Amortization
of discount and premium
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(2,816 | ) | (3,092 | ) | ||||
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Net
realized (gain) on investments
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(876 | ) | - | |||||
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Net
change in unrealized depreciation on investments
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147 | 840 | ||||||
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(Fundings)
proceeds on revolving loans, net
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(569 | ) | 1,778 | |||||
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Fundings
of portfolio investments
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(97,578 | ) | - | |||||
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Proceeds
from principal payments and sales of portfolio investments
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64,147 | 50,542 | ||||||
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Changes
in operating assets and liabilities:
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||||||||
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Interest
receivable
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(238 | ) | 577 | |||||
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Receivable
for investments sold
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(2,895 | ) | - | |||||
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Other
assets
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(56 | ) | 13 | |||||
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Members'
equity contributions receivable
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- | (21,312 | ) | |||||
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Payable
for investments purchased
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(5,328 | ) | - | |||||
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Interest
payable
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1,409 | (11 | ) | |||||
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Management
and incentive fees payable
|
685 | (10 | ) | |||||
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Accounts
payable and accrued expenses
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(149 | ) | (703 | ) | ||||
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Net
cash (used in) provided by operating activities
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(37,987 | ) | 36,964 | |||||
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Cash
flows from investing activities
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||||||||
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Net
change in restricted cash and cash equivalents
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4,153 | (15,678 | ) | |||||
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Net
cash provided by (used in) investing activities
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4,153 | (15,678 | ) | |||||
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Cash
flows from financing activities
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||||||||
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Borrowings
on debt
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20,000 | - | ||||||
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Repayments
of debt
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- | (29,965 | ) | |||||
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Capitalized
debt financing costs
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(968 | ) | - | |||||
|
Proceeds
from members' equity contributions
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- | 22,209 | ||||||
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Payments
of members' equity distributions
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- | (13,530 | ) | |||||
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Dividends
and distributions paid
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(5,028 | ) | - | |||||
|
Net
cash provided by (used in) financing activities
|
14,004 | (21,286 | ) | |||||
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Net
change in cash and cash equivalents
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(19,830 | ) | - | |||||
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Cash and cash
equivalents, beginning of period
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61,219 | - | ||||||
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Cash and cash
equivalents, end of period
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$ | 41,389 | $ | - | ||||
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Supplemental
information:
|
||||||||
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Cash
paid during the period for interest
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$ | - | $ | 702 | ||||
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Obligations
of Company paid by members of Golub Capital BDC LLC
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$ | - | $ | 225 | ||||
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Dividends
and distributions declared during the period
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$ | 5,490 | $ | - | ||||
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Golub
Capital BDC, Inc. and Subsidiaries
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|||||||||||||||||||||||||||
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Consolidated
Schedule of Investments (unaudited)
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|||||||||||||||||||||||||||
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December
31, 2010
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|||||||||||||||||||||||||||
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(In
thousands)
|
|||||||||||||||||||||||||||
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Investment
Type
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Spread
Above
Index(1)
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Interest
Rate(2)
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Maturity
Date
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Principal
Amount
|
Cost
|
Percentage
of
Net Assets
|
Fair
Value
|
||||||||||||||||||||
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Investments,
at fair value
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|||||||||||||||||||||||||||
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Canada
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|||||||||||||||||||||||||||
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Debt
investments
|
|||||||||||||||||||||||||||
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Leisure,
Amusement, Motion Pictures,
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|||||||||||||||||||||||||||
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Entertainment
|
|||||||||||||||||||||||||||
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Extreme
Fitness, Inc.
|
Senior
loan
|
L +
7.50%
|
11.50%
|
03/2012 | $ | 4,649 | $ | 4,649 | 1.8 | % | $ | 4,649 | |||||||||||||||
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Total
Canada (cost $4,649)
|
$ | 4,649 | $ | 4,649 | 1.8 | % | $ | 4,649 | |||||||||||||||||||
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Fair
Value as percentage of Principal Amount
|
100.0 | % | |||||||||||||||||||||||||
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United
States
|
|||||||||||||||||||||||||||
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Debt
investments
|
|||||||||||||||||||||||||||
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Aerospace
and Defense
|
|||||||||||||||||||||||||||
|
Whitcraft
LLC
|
Subordinated
debt
|
N/A |
12.00%
|
12/2018 | $ | 1,877 | $ | 1,840 | 0.7 | % | $ | 1,877 | |||||||||||||||
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Automobile
|
|||||||||||||||||||||||||||
|
CLP
Auto Interior Corporation
|
Senior
loan
|
L +
4.75%
|
5.01%
|
06/2013 | 3,206 | 3,206 | 1.2 | 3,109 | |||||||||||||||||||
|
Dealer
Computer Services, Inc.
|
Senior
loan
|
L +
3.50%
|
5.25%
|
04/2017 | 2,328 | 2,316 | 0.9 | 2,347 | |||||||||||||||||||
|
Driven
Brands, Inc.
|
Senior
loan
|
L +
5.00%
|
6.53%
|
10/2014 | 5,907 | 5,907 | 2.3 | 5,907 | |||||||||||||||||||
| 11,441 | 11,429 | 4.4 | 11,363 | ||||||||||||||||||||||||
|
Banking
|
|||||||||||||||||||||||||||
|
Bonddesk
Group LLC
|
Senior
loan
|
L +
3.00%
|
3.26%
|
08/2012 | 1,764 | 1,717 | 0.7 | 1,764 | |||||||||||||||||||
|
Prommis
Solutions Inc.
|
Senior
loan
|
L +
2.75%
|
5.00%
|
02/2013 | 1,240 | 1,240 | 0.3 | 1,141 | |||||||||||||||||||
| 3,004 | 2,957 | 1.0 | 2,905 | ||||||||||||||||||||||||
|
Beverage,
Food and Tobacco
|
|||||||||||||||||||||||||||
|
ABP
Corporation
|
Senior
loan
|
L +
4.50%
|
8.50%
|
02/2013 | 2,305 | 2,270 | 0.9 | 2,305 | |||||||||||||||||||
|
Atkins
Nutrionals, Inc.
|
Second
lien
|
L +
9.00%
|
11.00%
|
12/2015 | 5,028 | 4,929 | 1.9 | 5,028 | |||||||||||||||||||
|
Bertucci's
Corporation
|
Senior
loan
|
L +
9.00%
|
12.00%
|
07/2012 | 1,953 | 1,911 | 0.7 | 1,953 | |||||||||||||||||||
|
CTI
Foods Holding Co., LLC
|
Senior
loan
|
L +
4.00%
|
6.00%
|
06/2015 | 891 | 870 | 0.3 | 905 | |||||||||||||||||||
|
Lone
Star Beef Processors, L.P.
|
Senior
loan
|
L +
4.00%
|
4.46%
|
05/2013 | 3,550 | 3,531 | 1.4 | 3,550 | |||||||||||||||||||
|
Richelieu
Foods, Inc.
|
Senior
loan
|
L +
5.00%
|
6.75%
|
11/2015 | 2,282 | 2,221 | 0.9 | 2,236 | |||||||||||||||||||
|
Richelieu
Foods, Inc.
|
Senior
loan
|
L +
5.00%
|
7.11%
|
11/2015 | 127 | 111 | - | 115 | |||||||||||||||||||
| 16,136 | 15,843 | 6.1 | 16,092 | ||||||||||||||||||||||||
|
Building
and Real Estate
|
|||||||||||||||||||||||||||
|
American
Fire Protection Group, Inc.(5)
|
Senior
loan
|
L +
6.75%
|
9.00%
|
06/2011 | 4,422 | 4,373 | 1.0 | 2,653 | |||||||||||||||||||
|
Architectural
Testing, Inc.
|
Senior
loan
|
L +
6.50%
|
9.50%
|
05/2013 | 6,358 | 6,358 | 2.4 | 6,358 | |||||||||||||||||||
|
ASP
PDM Acquisition Co. LLC
|
Senior
loan
|
L +
2.75%
|
3.38%
|
12/2013 | 608 | 571 | 0.2 | 558 | |||||||||||||||||||
|
Infiltrator
Systems, Inc.
|
Senior
loan
|
L +
5.50%
|
8.50%
|
09/2012 | 7,799 | 7,525 | 2.9 | 7,643 | |||||||||||||||||||
|
ITEL
Laboratories, Inc.
|
Senior
loan
|
L +
6.75%
|
9.75%
|
03/2014 | 7,778 | 7,721 | 3.0 | 7,778 | |||||||||||||||||||
|
KHKI
Acquisition, Inc.
|
Senior
loan
|
L +
6.00%
|
8.50%
|
03/2012 | 290 | 289 | 0.1 | 281 | |||||||||||||||||||
|
KHKI
Acquisition, Inc.
|
Senior
loan
|
L +
6.00%
|
8.50%
|
03/2013 | 2,600 | 2,597 | 0.8 | 2,080 | |||||||||||||||||||
|
Tecta
America Corp.
|
Senior
loan
|
L +
5.75%
|
8.00%
|
12/2011 | 2,864 | 2,864 | 0.7 | 1,904 | |||||||||||||||||||
| 32,719 | 32,298 | 11.1 | 29,255 | ||||||||||||||||||||||||
|
Cargo
Transport
|
|||||||||||||||||||||||||||
|
Peco
Pallet, Inc.
|
Senior
loan
|
L +
3.75%
|
4.01%
|
06/2013 | 3,850 | 3,724 | 1.5 | 3,850 | |||||||||||||||||||
|
Chemicals,
Plastics and Rubber
|
|||||||||||||||||||||||||||
|
Celanese
Holdings LLC
|
Senior
loan
|
L +
3.00%
|
3.29%
|
10/2016 | 692 | 601 | 0.3 | 689 | |||||||||||||||||||
|
Styron
S.A.R.L.
|
Senior
loan
|
L +
5.75%
|
7.50%
|
06/2016 | 1,463 | 1,483 | 0.6 | 1,487 | |||||||||||||||||||
|
Syrgis
Holdings, Inc.
|
Senior
loan
|
L +
5.50%
|
7.75%
|
08/2012 | 291 | 280 | 0.1 | 291 | |||||||||||||||||||
|
Syrgis
Holdings, Inc.
|
Senior
loan
|
L +
6.00%
|
8.25%
|
08/2013 | 864 | 825 | 0.3 | 864 | |||||||||||||||||||
|
Syrgis
Holdings, Inc.
|
Senior
loan
|
L +
8.50%
|
10.75%
|
02/2014 | 474 | 451 | 0.2 | ||||||||||||||||||||