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| 8-K - GOLDMAN SACHS BDC, INC. - Goldman Sachs BDC, Inc. | d71595d8k.htm |
Exhibit 99.1
Goldman Sachs BDC, Inc. Reports Third Quarter 2015 Financial Results and Announces Fourth Quarter Dividend of $0.45 Per Share
Company Release – November 5, 2015
NEW YORK — (BUSINESS WIRE) — Goldman Sachs BDC, Inc. (“GS BDC” or the “Company”) (NYSE: GSBD) announced its financial results for the third quarter ended September 30, 2015 and filed its Form 10-Q with the U.S. Securities and Exchange Commission.
QUARTERLY HIGHLIGHTS
| ¡ | Net investment income per share for the quarter ended September 30, 2015 was $0.57 per share, as compared to $0.44 for the quarter ended June 30, 2015; |
| ¡ | The Company announced a fourth quarter dividend of $0.45 per share payable to shareholders of record as of December 31, 2015, bringing total dividends for 2015 to $1.80, or an annualized dividend yield of 9.3% at book value;(1) |
| ¡ | Gross and net originations were $203.5 and $145.6 million, respectively, resulting in 14.1% quarter-over-quarter investment portfolio growth;(2) |
| ¡ | Goldman Sachs & Co. purchased 165,106 shares of GSBD common stock in the open market, in accordance with its previously announced 10b5-1 plan;(3) |
| ¡ | The Company announced that it favorably amended its senior secured revolving credit facility subsequent to quarter-end, resulting in a reduction of the stated interest rate and an extension of the maturity date. |
SELECTED FINANCIAL HIGHLIGHTS
| Three months ended | ||||||||||||
| (in $ millions, except per share data) | September 30, 2015 | June 30, 2015 | September 30, 2014 | |||||||||
| Investment portfolio, at fair value(2) |
$1,146.8 | $1,004.9 | $824.4 | |||||||||
| Debt |
447.0 | 301.0 | 237.0 | |||||||||
| Net assets |
703.5 | 706.3 | 587.0 | |||||||||
| Total investment income |
$32.9 | $27.3 | $19.1 | |||||||||
| Net investment income after taxes |
20.6 | 15.8 | 12.4 | |||||||||
| Net increase in net assets resulting from operations |
13.5 | 17.9 | 11.3 | |||||||||
| Per Share Data: |
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| Net asset value per share |
$19.38 | $19.46 | $19.95 | |||||||||
| Net investment income (loss) per share (basic and diluted) |
0.57 | 0.44 | 0.42 | |||||||||
| Earnings per share (basic and diluted) |
0.37 | 0.50 | 0.38 | |||||||||
| Regular distribution per share |
0.45 | 0.45 | 0.42 | |||||||||
INVESTMENT ACTIVITY(2)
During the three months ended September 30, 2015, the Company made new investment commitments and fundings of $203.5 million and $205.0 million, respectively, which includes fundings of $27.7 million of previously unfunded commitments. The new investment commitments were comprised of 70.7% first lien debt (including 14.6% first lien, last-out unitranche), 21.7% second lien debt, 4.9% common stock and 2.7% in the Senior Credit Fund (“SCF”). New investment commitments were in seven portfolio companies, including four new portfolio companies and three existing portfolio companies.
During the three months ended September 30, 2015, the Company had sales and repayments of $57.9 million, primarily across investments in three portfolio companies. The sales and repayments activity was predominantly in second lien debt obligations.
During the three months ended September 30, 2015, the SCF made new investment fundings of $5.1 million and had sales and repayments of $1.2 million, resulting in net funded investment activity of $3.9 million. The new investment fundings were all first lien loans to existing portfolio companies.
Summary of Investment Activity for the three months ended September 30, 2015:
| New Investment Commitments | Sales and Repayments | |||||||||||||||
| Investment Type | $ Millions | % of Total | $ Millions | % of Total | ||||||||||||
| 1st Lien/Senior Secured Debt |
$114.2 | 56.1% | $17.4 | 30.0% | ||||||||||||
| 1st Lien/Last-Out Unitranche |
29.7 | 14.6% | 0.5 | 0.8% | ||||||||||||
| 2nd Lien/Senior Secured Debt |
44.1 | 21.7% | 40.0 | 69.2% | ||||||||||||
| Preferred Stock |
- | -% | - | -% | ||||||||||||
| Common Stock |
10.0 | 4.9% | - | -% | ||||||||||||
| Investment Funds & Vehicles (SCF) |
5.5 | 2.7% | - | -% | ||||||||||||
| Total |
$203.5 | 100.0% | $57.9 | 100.0% | ||||||||||||
PORTFOLIO SUMMARY(2)
The Company’s investment portfolio had an aggregate fair value of $1,146.8 million, comprised of investments in 40 portfolio companies operating across 27 different industries. The investment portfolio on a fair value basis was comprised of 93.2% secured debt investments (63.3% in first lien debt (including 26.6% in first lien/last-out unitranche loans) and 29.9% in second lien debt), 2.1% in preferred stock, 0.9% in common stock and 3.8% in the SCF.
Summary of Investment Portfolio as of September 30, 2015:
| Investments at Fair Value | ||||||||
| Investment Type | $ Millions | % of Total | ||||||
| 1st Lien/Senior Secured Debt |
$420.8 | 36.7% | ||||||
| 1st Lien/Last-Out Unitranche |
304.9 | 26.6% | ||||||
| 2nd Lien/Senior Secured Debt |
342.8 | 29.9% | ||||||
| Preferred Stock |
24.9 | 2.1% | ||||||
| Common Stock |
10.0 | 0.9% | ||||||
| Investment Funds & Vehicles (SCF) |
43.4 | 3.8% | ||||||
| Total |
$1,146.8 | 100.0% | ||||||
As of September 30, 2015, the weighted average yield of the total investment portfolio at amortized cost and fair value was 10.7% and 11.1%, respectively.
On a fair value basis, 87.6% of debt investments were in floating rate instruments and 12.4% were in fixed rate investments.
As of September 30, 2015, the weighted average net debt/EBITDA and interest coverage of the companies in the investment portfolio were 4.4x and 2.9x, respectively. The median EBITDA of the portfolio companies was $27.7 million. There continue to be no investments on non-accrual.
As of September 30, 2015, the SCF’s investment portfolio had an aggregate fair value of $258.5 million, comprised of investments in 20 portfolio companies operating 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). All of the investments in the SCF 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 3.8x, respectively. The median EBITDA of the SCF’s portfolio companies was $71.3 million. There continue to be no investments on non-accrual.
RESULTS OF OPERATIONS
Total investment income for the three months ended September 30, 2015 and June 30, 2015 was $32.9 million and $27.3 million, respectively. The increase in investment income was driven by higher average income producing assets, coupled with higher prepayment related income. The $32.9 million of total investment income was comprised of $30.6 million from interest income, original issue discount accretion and dividend income(4) and $2.3 million from prepayment income, accelerated accretion/amortization and other income.
Total expenses for the three months ended September 30, 2015 and June 30, 2015 were $12.1 million and $11.4 million, respectively. The $0.7 million increase in expenses was driven by higher interest expense on higher average debt. This was partially offset by a reduction in total investment advisor fee expense, as net unrealized losses resulted in lower incentive fee expense.(5)
Net investment income after taxes for the three months ended September 30, 2015 was $20.6 million, or $0.57 per share, compared with $15.8 million, or $0.44 per share for the three months ended June 30, 2015.
During the three months ended September 30, 2015, the Company had net realized and unrealized depreciation on investments of $(7.1) million, which was driven by $(7.0) million of unrealized depreciation.
Net increase in net assets resulting from operations for the three months ended September 30, 2015 was $13.5 million, or $0.37 per share.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2015, the Company had $447.0 million of borrowings and $113.0 million of availability under its revolving credit facility. The weighted average interest rate on debt outstanding was 2.47% for the three months ended September 30, 2015. As of September 30, 2015, the Company had cash of $11.7 million and had an investment in an affiliated money market fund of $3.5 million.
The Company’s average and ending debt to equity leverage ratio was 0.58x and 0.64x, respectively, for the three months ended September 30, 2015, as compared with 0.35x and 0.43x, respectively, for the three months ended June 30, 2015.(6)
In November 2015, the Company favorably amended its senior secured revolving credit agreement (as amended and supplemented, the “Revolving Credit Facility”), resulting in a reduction of the stated interest rate and an extension of the maturity date. Aggregate commitments under the Revolving Credit Facility increased from $560 million to $570 million. The Revolving Credit Facility includes an accordion feature that permits the Company, under certain circumstances, to increase its total borrowing capacity to a maximum of $1.0 billion. The stated interest rate on the Revolving Credit Facility was changed from LIBOR plus 2.25% to either LIBOR plus 1.75% or LIBOR plus 2.00%, subject to borrowing base conditions. The final maturity date has been extended from October 3, 2019 to November 4, 2020.
CONFERENCE CALL
The Company will host an earnings conference call on Friday, November 6, 2015 at 10:00 am Eastern Time. 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 56396832. 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 November 6 through December 5. To hear the replay, participants should dial (855) 859-2056; international callers should dial +1 (404) 537-3406; conference ID 56396832. 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) The $0.45 per share dividend is payable on or about January 28, 2016 to holders of record as of December 31, 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) Includes purchases from July 1, 2015 through October 31, 2015.
(4) Interest income excludes accelerated accretion/amortization of $0.9 million.
(5) Investment advisor fee expense includes management and incentive fee expenses.
(6) 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.
FINANCIAL STATEMENTS
Goldman Sachs BDC, Inc.
Consolidated Statements of Assets and Liabilities
(in thousands, except share and per share amounts)
| September 30, 2015 (unaudited) |
December 31, 2014 |
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| Assets |
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| Investments, at fair value |
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| Non-controlled/non-affiliated investments (cost of $1,114,313 and $893,464, respectively) |
$ | 1,099,301 | $ | 882,742 | ||||
| Non-controlled affiliated investments (cost of $9,237 and $9,237, respectively) |
4,171 | 6,578 | ||||||
| Controlled affiliated investments (cost of $43,667 and $25,000, respectively) |
43,373 | 24,627 | ||||||
| Investments in affiliated money market fund (cost of $3,500 and $29,568, respectively) |
3,500 | 29,568 | ||||||
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| Total investments, at fair value (cost of $1,170,717 and $957,269, respectively) |
1,150,345 | 943,515 | ||||||
| Cash |
11,718 | 8,609 | ||||||
| Interest and dividends receivable from non-controlled/non-affiliated investments |
10,147 | 8,701 | ||||||
| Dividend receivable from controlled affiliated investments |
1,363 | 309 | ||||||
| Other income receivable from controlled affiliated investments |
446 | — | ||||||
| Deferred financing costs |
4,625 | 4,974 | ||||||
| Deferred offering costs |
— | 1,384 | ||||||
| Other assets |
114 | — | ||||||
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| Total assets |
$ | 1,178,758 | $ | 967,492 | ||||
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| Liabilities |
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| Debt |
$ | 447,000 | $ | 350,000 | ||||
| Interest and credit facility expense payable |
445 | 527 | ||||||
| Management fees payable |
4,089 | 3,326 | ||||||
| Incentive fees payable |
3,515 | — | ||||||
| Payable for investments purchased |
— | 19,700 | ||||||
| Common stock repurchased |
— | 732 | ||||||
| Distribution payable |
16,338 | 15,506 | ||||||
| Accrued offering costs |
631 | 474 | ||||||
| Directors’ fees payable |
76 | 115 | ||||||
| Accrued expenses and other liabilities |
3,125 | 2,530 | ||||||
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| Total liabilities |
$ | 475,219 | $ | 392,910 | ||||
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| Commitments and Contingencies |
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| Net Assets |
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| Preferred stock, par value $0.001 per share (1,000,000 shares authorized, no shares issued and outstanding) |
$ | — | $ | — | ||||
| Common stock, par value $0.001 per share (200,000,000 shares authorized, 36,293,445 and 29,381,127 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively) |
36 | 29 | ||||||
| Paid-in capital in excess of par |
719,974 | 587,882 | ||||||
| Accumulated net realized gain (loss) |
(2,558) | (2,212) | ||||||
| Accumulated undistributed net investment income |
7,880 | 4,058 | ||||||
| Net unrealized appreciation (depreciation) on investments |
(20,372) | (13,754) | ||||||
| Allocated income tax expense |
(1,421) | (1,421) | ||||||
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| TOTAL NET ASSETS |
$ | 703,539 | $ | 574,582 | ||||
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| TOTAL LIABILITIES AND NET ASSETS |
$ | 1,178,758 | $ | 967,492 | ||||
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| Net asset value per share |
$ | 19.38 | $ | 19.56 | ||||
Goldman Sachs BDC, Inc.
Consolidated Statements of Operations
(in thousands, except share and per share amounts)
(Unaudited)
| For the three months ended September 30, |
For the nine months ended September 30, |
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| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Investment Income: |
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| From non-controlled/non-affiliated investments: |
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| Interest income |
$ | 30,278 | $ | 18,418 | $ | 80,479 | $ | 46,535 | ||||||||
| Dividend income |
620 | 608 | 1,852 | 2,269 | ||||||||||||
| Other income |
635 | 49 | 1,164 | 113 | ||||||||||||
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| Total investment income from non-controlled/non-affiliated investments |
31,533 | 19,075 | 83,495 | 48,917 | ||||||||||||
| From non-controlled affiliated investments: |
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| Dividend income |
— | 1 | 1 | 3 | ||||||||||||
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| Total investment income from non-controlled affiliated investments |
— | 1 | 1 | 3 | ||||||||||||
| From controlled affiliated investments: |
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| Dividend income |
1,363 | — | 2,642 | — | ||||||||||||
| For the three months ended September 30, |
For the nine months ended September 30, |
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| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Other income |
— | — | 446 | — | ||||||||||||
| Total investment income from controlled affiliated investments |
1,363 | — | 3,088 | — | ||||||||||||
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| Total investment income |
$ | 32,896 | $ | 19,076 | $ | 86,584 | $ | 48,920 | ||||||||
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| Expenses: |
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| Interest and credit facility expense |
$ | 3,053 | $ | 1,355 | $ | 7,656 | $ | 2,559 | ||||||||
| Management fees |
4,089 | 2,738 | 11,199 | 6,744 | ||||||||||||
| Incentive fees |
3,515 | 1,495 | 11,426 | 1,495 | ||||||||||||
| Professional fees |
936 | 626 | 2,062 | 1,498 | ||||||||||||
| Administration and custodian fees |
211 | 192 | 640 | 610 | ||||||||||||
| Directors’ fees |
172 | 92 | 440 | 296 | ||||||||||||
| Other expenses |
144 | 162 | 740 | 375 | ||||||||||||
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| Total expenses |
$ | 12,120 | $ | 6,660 | $ | 34,163 | $ | 13,577 | ||||||||
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| NET INVESTMENT INCOME (LOSS) BEFORE TAXES |
$ | 20,776 | $ | 12,416 | $ | 52,421 | $ | 35,343 | ||||||||
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| Excise tax expense |
$ | 174 | $ | — | $ | 264 | $ | — | ||||||||
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| NET INVESTMENT INCOME (LOSS) AFTER TAXES |
$ | 20,602 | $ | 12,416 | $ | 52,157 | $ | 35,343 | ||||||||
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| Net realized and unrealized gains (losses) on investment transactions: |
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| Net realized gain (loss) from: |
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| Non-controlled/non-affiliated investments |
$ | (98 | ) | $ | 739 | $ | (98 | ) | $ | (1,453 | ) | |||||
| Net change in unrealized appreciation (depreciation) from: |
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| Non-controlled/non-affiliated investments |
(5,480 | ) | (1,024 | ) | (4,290 | ) | 199 | |||||||||
| Non-controlled affiliated investments |
(806 | ) | (876 | ) | (2,407 | ) | (943 | ) | ||||||||
| Controlled affiliated investments |
(735 | ) | — | 79 | — | |||||||||||
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| Net realized and unrealized gains (losses) |
$ | (7,119 | ) | $ | (1,161 | ) | $ | (6,716 | ) | $ | (2,197 | ) | ||||
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| NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
$ | 13,483 | $ | 11,255 | $ | 45,441 | $ | 33,146 | ||||||||
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| Net investment income (loss) per share (basic and diluted) |
$ | 0.57 | $ | 0.42 | $ | 1.52 | $ | 1.18 | ||||||||
| Earnings per share (basic and diluted) |
$ | 0.37 | $ | 0.38 | $ | 1.33 | $ | 1.11 | ||||||||
| Weighted average shares outstanding |
36,292,619 | 29,461,726 | 34,270,102 | 29,844,602 | ||||||||||||
| Distribution declared per share |
$ | 0.45 | $ | 0.42 | $ | 1.35 | $ | 1.16 | ||||||||
ABOUT GOLDMAN SACHS BDC, INC.
Goldman Sachs BDC, Inc. is a specialty finance company that has elected to be regulated as a business development company under the Investment Company Act of 1940. GS BDC was formed by The Goldman Sachs Group, Inc. (“Goldman Sachs”) to invest primarily in middle-market companies in the United States, and is externally managed by Goldman Sachs Asset Management, L.P., an SEC-registered investment adviser and a wholly-owned subsidiary of Goldman Sachs. GS BDC seeks to generate current income and, to a lesser extent, capital appreciation primarily through direct originations of secured debt, including first lien, first lien/last-out unitranche and second lien debt, and unsecured debt, including mezzanine debt, as well as through select equity investments. For more information, visit www.goldmansachsbdc.com.
FORWARD-LOOKING STATEMENTS
This press release may contain forward-looking statements that involve substantial risks and uncertainties. You can identify these statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue” or “believe” or the negatives thereof or other variations thereon or comparable terminology. You should read statements that contain these words carefully because they discuss our plans, strategies, prospects and expectations concerning our business, operating results, financial condition and other similar matters. We believe that it is important to communicate our future expectations to our investors. There may be events in the future, however, that we are not able to predict accurately or control. Any forward-looking statement made by us in this press release speaks only as of the date on which we make it. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Goldman Sachs BDC, Inc.
Investor Contact: Katherine Schneider, 203-983-2529
Media Contact: Andrew Williams, 212-902-5400
Source: Goldman Sachs BDC, Inc.