Goldman Sachs BDC Reports Q2, 2015 Results

August 6, 2015 by
Filed under: Americas, Finance 

Goldman Sachs BDC, Inc. Reports Second Quarter 2015 Financial Results and Announces Third Quarter Dividend of $0.45 Per Share

Company Release –August 6, 2015

New York–(Business Wire)–Goldman Sachs BDC, Inc. (the “Company”) (NYSE:GSBD) announced its financial results for the second quarter ended June 30, 2015 and filed its Form 10-Q with the U.S. Securities and Exchange Commission.

QUARTERLY HIGHLIGHTS

  • Earnings per share for the quarter ended June 30, 2015 were $0.50, as compared to $0.46 for the quarter ended March 31, 2015;
  • Net asset value per share increased $0.05 per share to $19.46, up from $19.41(1) as of March 31, 2015;
  • Investments at fair value(2) were $1,004.9 million as of June 30, 2015, up from $909.9 million as of March 31, 2015, representing a 10.4% quarter-over-quarter increase;
  • Investments at fair value(2) in the Senior Credit Fund, LLC (the “SCF”) were $255.9 million as of June 30, 2015, up from $181.0 million as of March 31, 2015, representing a 41.4% quarter-over-quarter increase;
  • Subsequent to quarter end, the Company received an Investment Grade credit rating from Standard & Poor’s and announced a third quarter dividend of $0.45 per share.

PORTFOLIO AND INVESTMENT ACTIVITY(2)

During the three months ended June 30, 2015, the Company made new investment commitments and fundings of $126.1 million and $98.2 million, respectively, including $10.0 million in the SCF. The new investment commitments were comprised of 73.5% first lien debt, 18.6% second lien debt and 7.9% in the SCF. New investment commitments were in seven portfolio companies, including five new portfolio companies and two existing portfolio companies.

During the three months ended June 30, 2015, the Company had repayments of $9.0 million, resulting in net funded investment activity of $89.2 million.

During the three months ended June 30, 2015, the SCF made new investment fundings of $80.8 million and had sales and repayments of $6.4 million, resulting in net funded investment activity of $74.4 million. The new investment fundings were all first lien loans.

The Company’s investment portfolio had an aggregate fair value of $1,004.9 million, comprised of 38 portfolio companies across 27 different industries. The investment portfolio on a fair value basis was comprised of 93.6% secured debt investments (57.1% in first lien debt (including 26.9% in first lien/last-out unitranche loans) and 36.5% in second lien debt), 2.6% in preferred stock and 3.8% in the SCF.

As of June 30, 2015, the weighted average yield of the total investment portfolio at amortized cost and fair value was 11.0% and 11.3%, respectively.

On a fair value basis, 85.8% of debt investments were in floating rate instruments and 14.2% was in fixed rate investments.

As of June 30, 2015, the weighted average net debt/EBITDA and interest coverage of the companies in the investment portfolio were 4.2x and 3.0x, respectively. These portfolio company statistics were unchanged from March 31, 2015. The median EBITDA of the portfolio companies was $33.2 million. There continues to be no investments on non-accrual.

As of June 30, 2015, the SCF had an investment portfolio with an aggregate fair value of $255.9 million comprised of 20 portfolio companies across 16 different industries. The SCF’s investment portfolio on a fair value basis was comprised of 100% secured debt investments (97.7% in first lien debt and 2.3% in second lien debt). As of June 30, 2015, 100% of the SCF’s portfolio investments were invested in debt bearing a floating interest rate with an interest rate floor.

The weighted average net debt/EBITDA and interest coverage of the companies in the SCF investment portfolio were 3.3x and 3.9x, respectively, as compared to 3.0x and 3.9x, respectively, as of March 31, 2015. The median EBITDA of the SCF’s portfolio companies was $69.1 million. No investments in the SCF are on non-accrual.

RESULTS OF OPERATIONS

Total investment income for the three months ended June 30, 2015 and March 31, 2015 was $27.3 million and $26.4 million, respectively. The $0.9 million increase was primarily driven by higher dividend and other income earned from the SCF. The $27.3 million of total investment income was comprised of $26.3 million from interest income, original issue discount accretion and dividend income(3) and $1.0 million from prepayment income, accelerated accretion/amortization and other income.

Total expenses for the three months ended June 30, 2015 and March 30, 2015 were $11.4 million and $10.6 million, respectively. The $0.8 million increase in expenses was driven primarily by an increase in incentive fees. The $11.4 million of total expenses were comprised of $2.1 million of interest and credit facility expenses, $8.0 million of management and incentive fees, and $1.3 million of other operating expenses.

Net investment income after taxes for the three months ended June 30, 2015 was $15.8 million, or $0.44 per share, compared with $15.7 million, or $0.52 per share for the three months ended March 31, 2015. While total net investment income increased, net investment income per share was lower quarter over quarter, reflecting the timing impact of the Company’s initial public offering in late March, which resulted in higher weighted average shares outstanding for the three months ended June 30, 2015.

During the three months ended June 30, 2015, the Company had no net realized gain (loss) on investments and had net unrealized appreciation on investments of $2.1 million, or $0.06 per share.

Net increase in net assets resulting from operations for the three months ended June 30, 2015 was $17.9 million, or $0.50 per share.

LIQUIDITY AND CAPITAL RESOURCES

In April 2015, the Company issued a total of 900,000 shares of its common stock pursuant to the exercise of the underwriters’ over-allotment option in connection with the initial public offering (IPO). Net of underwriting fees, the Company received additional cash proceeds of $17.3 million. In connection with the closing of the over-allotment option, Goldman Sachs paid 70% of the sales load, or $0.8 million.

As of June 30, 2015, the Company had $301.0 million of borrowings and $259.0 million of availability under its revolving credit facility. The weighted average interest rate on debt outstanding was 2.46% for the three months ended June 30, 2015. As of June 30, 2015, the Company had cash of $11.5 million and had an investment in an affiliated money market fund of $21.3 million.

The Company’s average and ending debt to equity leverage ratio was 0.35x and 0.43x, respectively, for the three months ended June 30, 2015, as compared with 0.56x and 0.33x, respectively, for the three months ended March 31, 2015. The decrease in the average debt to equity leverage ratio during the quarter resulted from the issuance of equity in the Company’s IPO on March 18, 2015. The ending debt to equity ratio of 0.43x remains below the Company’s target ratio of 0.50x to 0.75x.(4)

CONFERENCE CALL

The Company will host an earnings conference call on Friday, August 7, 2015 at 10:00 am Eastern Time to discuss its quarterly financial results. All interested parties are invited to participate in the conference call by dialing (866) 884-8289; international callers should dial +1 (631) 485-4531; conference ID 81192405. All participants are asked to dial in approximately 10-15 minutes prior to the call, and reference “Goldman Sachs BDC, Inc.” when prompted. For a slide presentation that the Company may refer to on the earnings conference call, please visit the Investor Resources section of the Company’s website at www.goldmansachsbdc.com. The conference call will be webcast simultaneously on the Company’s website. An archived replay of the call will be available from approximately 1:00 pm Eastern Time on August 7 through September 7. To hear the replay, participants should dial (855) 859-2056; international callers should dial +1 (404) 537-3406; conference ID 81192405. An archived replay will also be available on the Company’s webcast link located on the Investor Resources section of the Company’s website. Please direct any questions regarding obtaining access to the conference call to Goldman Sachs BDC, Inc. Investor Relations, via e-mail, at gsbdc-investor-relations@gs.com.

ENDNOTES
(1) Adjusted net asset value per share is a non-GAAP measure and is provided in addition to, but not as a substitute for, net asset value per share. Adjusted net asset value per share represents the dilutive impact of the underwriters’ over-allotment option on NAV per share, which was exercised in April 2015. As of March 31, 2015, adjusted and GAAP net asset value per share was $19.41 and $19.43, respectively. GSBD uses this non-GAAP financial measure in analyzing the respective quarter-over-quarter financial results and believes that the use of this non-GAAP financial measure is useful to investors as an additional tool to evaluate the quarter-over-quarter effect of the over-allotment option that occurred during the second quarter of 2015.
(2) The discussion of the investment portfolio excludes our investment in a money market fund managed by an affiliate of The Goldman Sachs Group, Inc.
(3) Interest income excludes accelerated accretion/amortization of $0.2 million.
(4) The average debt to equity leverage ratio has been calculated using the average daily borrowings during the quarter divided by average net assets, adjusted for equity contributions. The ending and average debt to equity leverage ratio excludes unfunded commitments.

Please see full press release here:
https://www.goldmansachsbdc.com/content/dam/bdc/pdfs/us/en/Press-Releases/GSBD%20Earnings%20Press%20Release_Q215.pdf

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