Attached files

file filename
8-K - GOLDMAN SACHS BDC, INC. - Goldman Sachs BDC, Inc.d367383d8k.htm

Exhibit 99.1

 

LOGO

Got Goldman Sachs BDC, Inc. Reports Second Quarter 2017 Financial Results and Announces Quarterly Dividend of $0.45 Per Share

Company Release – August 3, 2017

NEW YORK — (BUSINESS WIRE) — Goldman Sachs BDC, Inc. (“GS BDC” or the “Company”) (NYSE: GSBD) today announced its financial results for the second quarter ended June 30, 2017 and filed its Form 10-Q with the U.S. Securities and Exchange Commission.

QUARTERLY HIGHLIGHTS

 

  Net investment income for the quarter ended June 30, 2017 was $0.64 per share, as compared to $0.49 per share for the quarter ended March 31, 2017;

 

  The Company announced a third quarter dividend of $0.45 per share payable to shareholders of record as of September 29, 2017, equating to an annualized dividend yield of 9.9% on quarter end net asset value per share;1

 

  Net asset value per share for the quarter ended June 30, 2017 was stable at $18.23, as compared to $18.26 for the quarter ended March 31, 2017;

 

  New investment commitments and fundings were $124.0 million and $120.3 million, respectively, while sales and repayments totaled $160.4 million; the yield on new investment commitments was 10.1%, while the yield on investments repaid was 9.1%;2,3

 

  The Senior Credit Fund (“SCF”) produced a 14.2% return on investment to the Company; the Company’s investment in the SCF grew by approximately 4% during the quarter and continues to represent the Company’s largest investment at 8.5% of total investments at fair value;2,3,4

 

  Investments on non-accrual represented 0.2% and 0.7% of the total investments at fair value and amortized cost, respectively;2

 

  In May, the Company completed an offering of 3,737,500 shares of common stock at a public offering price of $22.50 per share. Total net proceeds were $80.3 million.

SELECTED FINANCIAL HIGHLIGHTS

 

(in $ millions, except per share data)   

 

As of

June 30, 2017

    

 

As of

March 31, 2017

 
   

Investment portfolio, at fair value2

   $ 1,111.8      $ 1,164.0  

Total debt outstanding5

     412.3        506.0  

Net assets

     730.7        663.6  

Net asset value per share

   $ 18.23      $ 18.26  
   
     

Three Months Ended

June 30, 2017

    

Three Months Ended

March 31, 2017

 
   

Total investment income

   $ 36.0      $ 32.2  

Net investment income after taxes

     24.1        18.0  

Net increase in net assets resulting from operations

     4.6        14.6  
   

Net investment income per share (basic and diluted)

     0.64        0.49  

Earnings per share (basic and diluted)

     0.12        0.40  

Regular distribution per share

     0.45        0.45  

INVESTMENT ACTIVITY2

During the three months ended June 30, 2017, new investment commitments and fundings were $124.0 million and $120.3 million, respectively, which includes net fundings of $2.1 million of previously unfunded commitments. The new investment commitments were across six new portfolio companies and three existing portfolio companies. The Company had sales and repayments of $160.4 million, primarily resulting from the full repayment of investments in three portfolio companies. During the quarter, the weighted average yield on new debt investment commitments and the Company’s additional investment in the SCF was 10.1%, while the weighted average yield on debt investments sold or repaid was 9.1%.3


Summary of Investment Activity for the Three Months Ended June 30, 2017:

 

      New Investment Commitments            

 

Sales and Repayments

 
Investment Type    $ Millions     

 

% of Total

            $ Millions      % of Total  

1st Lien/Senior Secured Debt

     $53.5        43.1        $81.6        50.9

1st Lien/Last-Out Unitranche

     17.5        14.1        26.2        16.3

2nd Lien/Senior Secured Debt

     48.3        39.0        52.6        32.8

Unsecured Debt

     -        -        -        -

Preferred Stock

     -        -        -        -

Common Stock

     1.3        1.1        -        -

Investment Funds & Vehicles (SCF)

     3.4        2.7              -        -

Total

     $124.0        100.0              $160.4        100.0

During the three months ended June 30, 2017, the SCF made new investment commitments and fundings of $65.0 million and $61.0 million, respectively. The new investment commitments were across three new portfolio companies and two existing portfolio companies. The SCF also had sales and repayments of $79.4 million, resulting in net funded portfolio change of $(18.4) million during the quarter. As of June 30, 2017, the SCF’s investment portfolio at fair value was $502.4 million, a decrease of 3.8% quarter over quarter. During the six months ended June 30, 2017, the weighted average yield on new investment commitments was 7.1% while the yield on investments repaid was 6.5%.3 The weighted average yield on the total investment portfolio at amortized cost increased from 6.9% to 7.2% since year-end. The Company increased its investment at cost in the SCF from $91.0 million to $94.3 million during the quarter. The SCF represents the Company’s largest investment at both cost and fair value.

PORTFOLIO SUMMARY2

As of June 30, 2017, the Company’s investment portfolio had an aggregate fair value of $1,111.8 million, comprised of investments in 45 portfolio companies operating across 27 different industries. The investment portfolio on a fair value basis was comprised of 88.8% secured debt investments (60.3% in first lien debt (including 27.6% in first lien/last-out unitranche debt) and 28.5% in second lien debt), 0.3% in unsecured debt, 1.0% in preferred stock, 1.4% in common stock, and 8.5% in the SCF.

Summary of Investment Portfolio as of June 30, 2017:

 

     

 

Investments at Fair Value

 
Investment Type   

 

$ Millions

     % of Total  

1st Lien/Senior Secured Debt

     $363.8        32.7

1st Lien/Last-Out Unitranche

     306.5        27.6

2nd Lien/Senior Secured Debt

     317.2        28.5

Unsecured Debt

     3.3        0.3

Preferred Stock

     11.2        1.0

Common Stock

     15.0        1.4

Senior Credit Fund (contains 97.3% 1st lien debt; 2.7% second lien debt)

     94.8        8.5

Total

     $1,111.8        100.0

As of June 30, 2017, the weighted average yield of the Company’s total investment portfolio at amortized cost and fair value was 10.8% and 12.5%, respectively, as compared to 10.5% and 11.8%, respectively, as of March 31, 2017.

On a fair value basis, the percentage of the Company’s debt investments bearing interest at a floating rate was 95.9%.6

As of June 30, 2017, the weighted average net debt/EBITDA of the companies in the Company’s investment portfolio was 5.0x versus 4.6x as of March 31, 2017. The weighted average interest coverage of interest-bearing companies in the investment portfolio was 2.6x versus 2.7x from the previous quarter. The median EBITDA of the portfolio companies was $26.6 million.7

As of June 30, 2017, investments on non-accrual status represented 0.2% and 0.7% of the total investment portfolio at fair value and amortized cost, respectively.

The Company’s investment in the SCF returned 14.2% and 14.0% at amortized cost and fair value, respectively, over the trailing four quarters ended June 30, 2017. The SCF’s investment portfolio had an aggregate fair value of $502.4 million, comprised of investments in


35 portfolio companies operating across 20 different industries. The SCF’s investment portfolio on a fair value basis was comprised of 100.0% secured debt investments (95.4% in first lien debt, 1.9% in a first-out portion of a unitranche loan and 2.7% 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.

As of June 30, 2017, the weighted average net debt/EBITDA and interest coverage of the companies in the SCF investment portfolio were 4.1x and 3.1x, respectively. The median EBITDA of the SCF’s portfolio companies was $44.0 million. None of the SCF’s investments were on non-accrual status as of June 30, 2017.

RESULTS OF OPERATIONS

Total investment income for the three months ended June 30, 2017 and March 31, 2017 was $36.0 million and $32.2 million, respectively. The increase in investment income over the quarter was primarily driven by higher interest income, including higher prepayment related income and other income. The $36.0 million of total investment income was comprised of $31.1 million from interest income, original issue discount accretion and dividend income, $1.0 million from other income and $3.9 million from prepayment related income.8

Total expenses before taxes for the three months ended June 30, 2017 and March 31, 2017 were $11.6 million and $13.9 million, respectively. The $2.3 million decrease in expenses was primarily driven by a decrease in incentive fees, partially offset by an increase in interest and credit facility expenses. The $11.6 million of total expenses were comprised of $4.8 million of interest and credit facility expenses, $5.6 million of management and incentive fees, and $1.2 million of other operating expenses.

Net investment income after taxes for the three months ended June 30, 2017 was $24.1 million, or $0.64 per share, compared with $18.0 million, or $0.49 per share for the three months ended March 31, 2017.

During the three months ended June 30, 2017, the Company had net realized and unrealized depreciation of $(19.5) million.

Net increase in net assets resulting from operations for the three months ended June 30, 2017 was $4.6 million, or $0.12 per share.

LIQUIDITY AND CAPITAL RESOURCES

In May 2017, the Company completed a public offering of 3,737,500 shares of common stock at a public offering price of $22.50 per share. Net proceeds were $80.3 million after offering and underwriting costs.

As of June 30, 2017, the Company had $412.3 million of total principal amount of debt outstanding, comprised of $297.3 million of outstanding borrowings under its revolving credit facility and $115.0 million of convertible notes. The combined weighted average interest rate on debt outstanding was 3.33% for the six months ended June 30, 2017. As of June 30, 2017, the Company had $307.8 million of availability under its revolving credit facility and $39.6 million in cash and cash equivalents.

The Company’s average and ending debt to equity leverage ratio was 0.70x and 0.56x, respectively, for the three months ended June 30, 2017, as compared with 0.70x and 0.76x, respectively, for the three months ended March 31, 2017.9

CONFERENCE CALL

The Company will host an earnings conference call on Friday, August 4, 2017 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 49411973. 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 4 through September 4. To hear the replay, participants should dial (855) 859-2056; international callers should dial +1 (404) 537-3406; conference ID 49411973. 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 October 16, 2017 to holders of record as of September 29, 2017.

2 The discussion of the investment portfolio of both the Company and the SCF excludes the investment in a money market fund managed by an affiliate of The Goldman Sachs Group, Inc.

3 Computed based on the (a) annual stated interest rate or yield earned plus amortization of fees and discounts on the performing debt and other income producing investments, divided by (b) the total performing debt and other income producing investments (excluding investments on non-accrual) at amortized cost. The yield on the SCF has been computed based on the net investment income earned from the SCF for the trailing twelve months ended June 30, 2017, which may include dividend income and loan origination and structuring fees, divided by GS BDC’s average member’s equity at cost and fair value, adjusted for equity contributions.


4 The SCF’s return to the Company was measured at amortized cost over the trailing four quarters.

5 Total debt outstanding excluding netting of debt issuance costs of $4.2 million and $4.4 million, respectively, for the quarter ended June 30, 2017 and March 31, 2017.

6 The fixed versus floating composition has been calculated as a percentage of performing debt investments, including income producing stock investments.

7 For a particular portfolio company, EBITDA typically represents net income before net interest expense, income tax expense, depreciation and amortization. The net debt to EBITDA represents the ratio of a portfolio company’s total debt (net of cash) and excluding debt subordinated to the Company’s investment in a portfolio company, to a portfolio company’s EBITDA. The interest coverage ratio represents the ratio of a portfolio company’s EBITDA as a multiple of a portfolio company’s interest expense. Weighted average net debt to EBITDA is weighted based on the fair value of the Company’s debt investments, including the Company’s exposure to underlying debt investments in the SCF and excluding investments where net debt to EBITDA may not be the appropriate measure of credit risk, such as cash collateralized loans and investments that are underwritten and covenanted based on recurring revenue. Weighted average interest coverage is weighted based on the fair value of the Company’s performing debt investments, including the Company’s exposure to underlying debt investments in the SCF and excluding investments where EBITDA may not be the appropriate measure of credit risk, such as cash collateralized loans and investments that are underwritten and covenanted based on recurring revenue. Median EBITDA is based on the Company’s debt investments, including the Company’s exposure to underlying debt investments in the SCF and excluding investments where EBITDA may not be the appropriate measure of credit risk, such as cash collateralized loans and investments that are underwritten and covenanted based on recurring revenue. As of June 30, 2017, investments where EBITDA may not be the appropriate measure of credit risk represented 6.7% of total debt investments, including the Company’s investment in the SCF, at fair value. Portfolio company statistics are derived from the most recently available financial statements of each portfolio company as of the respective reported end date. Portfolio company statistics have not been independently verified by us and may reflect a normalized or adjusted amount.

8 Interest income excludes accelerated accretion/amortization of $3.4 million. Prepayment related income includes prepayment premiums and accelerated accretion of upfront loan origination fees and unamortized discounts.

9 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.


Goldman Sachs BDC, Inc.

Consolidated Statements of Assets and Liabilities

(in thousands, except share and per share amounts)

 

         June 30, 2017    
(Unaudited)
        December 31, 2016      

Assets

    

Investments, at fair value

    

Non-controlled/non-affiliated investments (cost of $951,462 and $1,055,203, respectively)

   $ 926,267     $ 1,004,793  

Non-controlled affiliated investments (cost of $105,884 and $89,715, respectively)

     90,756       84,103  

Controlled affiliated investments (cost of $94,342 and $77,592, respectively)

     94,823       78,394  

Investments in affiliated money market fund (cost of $2,123 and $1, respectively)

     2,123       1  
  

 

 

   

 

 

 

Total investments, at fair value (cost of $1,153,811 and $1,222,511, respectively)

     1,113,969       1,167,291  

Cash

     37,493       4,565  

Interest and dividends receivable from non-controlled/affiliated investments and non-controlled/non-affiliated investments

     6,769       7,841  

Dividend receivable from controlled affiliated investments

     2,450       1,925  

Other income receivable from controlled affiliated investments

     746       2,212  

Deferred financing costs

     5,418       6,018  

Deferred offering costs

           605  

Other assets

     178       76  
  

 

 

   

 

 

 

Total assets

   $ 1,167,023     $ 1,190,533  
  

 

 

   

 

 

 

Liabilities

 

Debt (net of debt issuance costs of $4,165 and $4,598, respectively)

   $ 408,085     $ 498,152  

Interest and other debt expenses payable

     2,067       1,569  

Management fees payable

     4,351       4,406  

Incentive fees payable

     1,238       1,474  

Distribution payable

     18,041       16,349  

Accrued offering costs

     490       518  

Directors’ fees payable

     176       8  

Accrued expenses and other liabilities

     1,877       2,920  
  

 

 

   

 

 

 

Total liabilities

   $ 436,325     $ 525,396  
  

 

 

   

 

 

 

Commitments and Contingencies

 

Net Assets

 

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, 40,091,488 and 36,331,662 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively)

     40       36  

Paid-in capital in excess of par

     800,649       719,847  

Accumulated net realized gain (loss)

     (62,005     (23,729

Accumulated undistributed net investment income

     33,277       25,624  

Net unrealized appreciation (depreciation) on investments

     (39,842     (55,220

Allocated income tax expense

     (1,421     (1,421
  

 

 

   

 

 

 

TOTAL NET ASSETS

   $ 730,698     $ 665,137  
  

 

 

   

 

 

 

TOTAL LIABILITIES AND NET ASSETS

   $ 1,167,023     $ 1,190,533  
  

 

 

   

 

 

 

Net asset value per share

   $ 18.23     $ 18.31  


Goldman Sachs BDC, Inc.

Consolidated Statements of Operations

(in thousands, except share and per share amounts)

(Unaudited)

 

     For the three months ended
June 30,
    For the six months ended
June 30,
 
     2017     2016     2017     2016  

Investment Income:

        

From non-controlled/non-affiliated investments:

        

Interest income

   $ 30,213     $ 26,489     $ 57,179     $ 55,620  

Dividend income

           630             1,257  

Other income

     300       204       835       397  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total investment income from non-controlled/non-affiliated investments

     30,513       27,323       58,014       57,274  

From non-controlled affiliated investments:

        

Interest income

     2,282             4,494        

Dividend income

     20       11       43       22  

Other income

     6             12        
  

 

 

   

 

 

   

 

 

   

 

 

 

Total investment income from non-controlled affiliated investments

     2,308       11       4,549       22  

From controlled affiliated investments:

        

Dividend income

     2,450       1,550       4,900       2,825  

Other income

     746       437       746       544  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total investment income from controlled affiliated investments

     3,196       1,987       5,646       3,369  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total investment income

   $ 36,017     $ 29,321     $ 68,209     $ 60,665  
  

 

 

   

 

 

   

 

 

   

 

 

 

Expenses:

        

Interest and other debt expenses

   $ 4,839     $ 3,246     $ 9,351     $ 6,281  

Management fees

     4,351       4,188       8,812       8,314  

Incentive fees

     1,238       2,085       4,971       3,489  

Professional fees

     473       585       934       1,181  

Administration, custodian and transfer agent fees

     195       215       389       441  

Directors’ fees

     175       256       348       480  

Other expenses

     285       327       623       635  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

   $ 11,556     $ 10,902     $ 25,428     $ 20,821  
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INVESTMENT INCOME (LOSS) BEFORE TAXES

   $ 24,461     $ 18,419     $ 42,781     $ 39,844  
  

 

 

   

 

 

   

 

 

   

 

 

 

Excise tax expense

   $ 368     $ 221     $ 733     $ 434  
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INVESTMENT INCOME (LOSS) AFTER TAXES

   $ 24,093     $ 18,198     $ 42,048     $ 39,410  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net realized and unrealized gains (losses) on investment transactions:

 

     

Net realized gain (loss) from:

        

Non-controlled/non-affiliated investments

   $ (38,108   $     $ (38,276   $  

Net change in unrealized appreciation (depreciation) from:

        

Non controlled/non-affiliated investments

     26,002       (12,400     25,215       (27,715

Non controlled affiliated investments

     (6,652     (94     (9,516     (489

Controlled affiliated investments

     (750     1,296       (321     1,195  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net realized and unrealized gains (losses)

   $ (19,508   $ (11,198   $ (22,898   $ (27,009
  

 

 

   

 

 

   

 

 

   

 

 

 
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS    $ 4,585     $ 7,000     $ 19,150     $ 12,401  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income (loss) per share (basic and diluted)

   $ 0.64     $ 0.50     $ 1.13     $ 1.09  

Earnings per share (basic and diluted)

   $ 0.12     $ 0.19     $ 0.52     $ 0.34  

Weighted average shares outstanding

             37,902,018               36,311,582               37,125,726               36,309,232  

Distributions declared per share

   $ 0.45     $ 0.45     $ 0.90     $ 0.90  


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. Information on the website is not incorporated by reference into this press release and is provided merely for convenience.

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,” “target,” “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. These statements represent the Company’s belief regarding future events that, by their nature, are uncertain and outside of the Company’s control. We believe that it is important to communicate our future expectations to our investors. There are likely to 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, possibly materially from our expectations, include, but are not limited to, the risks, uncertainties and other factors we identify in the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” in filings we make with the Securities and Exchange Commission, and it is not possible for us to predict or identify 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, 212-902-3122

Media Contact: Andrew Williams, 212-902-5400

Source: Goldman Sachs BDC, Inc.