Golub Capital(US:GBDC)2022-02-08 16:00Investment Performance - As of December 31, 2021, the total fair value of investments was $5,146.8 million, an increase from $4,894.9 million as of September 30, 2021[435] - One stop loans accounted for 82.3% of total investments at fair value as of December 31, 2021, up from 79.3% as of September 30, 2021[435] - The total return based on average net asset value for the three months ended December 31, 2021, was 9.7%, compared to 11.1% for the previous quarter[439] - The company had debt and equity investments in 301 portfolio companies as of December 31, 2021, an increase from 296 companies as of September 30, 2021[438] - Late stage lending loans included $657.0 million at fair value as of December 31, 2021, compared to $527.8 million as of September 30, 2021[437] - Average earning debt investments at fair value increased to $4,784,517,000, up by $387,548,000 (8.8%) from $4,396,969,000 for the previous quarter[463] - The portfolio median EBITDA for portfolio companies was $44.8 million as of December 31, 2021, up from $41.1 million as of September 30, 2021[518] - The total fair value of investments increased to $5.1 billion as of December 31, 2021, from $4.9 billion as of September 30, 2021[512] Income and Expenses - Interest income for the three months ended December 31, 2021, was $84,601,000, an increase of $6,353,000 (8.1%) from $78,248,000 for the previous quarter[463] - Total investment income for the three months ended December 31, 2021, was $86,567,000, up by $5,458,000 (6.7%) compared to $81,109,000 for the previous quarter[463] - Net investment income for the three months ended December 31, 2021, was $44,790,000, a decrease of $1,502,000 (3.2%) from $46,292,000 for the previous quarter[463] - Total expenses for the three months ended December 31, 2021, were $41.78 million, an increase of $6.96 million compared to the previous quarter[474] - Interest and other debt financing expenses increased by $2.8 million from the three months ended December 31, 2020, primarily due to an increase in average debt outstanding of $571.5 million[475] - The base management fee, net of waiver, increased to $17.50 million for the three months ended December 31, 2021, due to an increase in average adjusted gross assets[479] - The Income Incentive Fee increased by $2.7 million from the three months ended September 30, 2021, primarily due to an increase in Pre-Incentive Fee Net Investment Income[482] Cash and Debt Management - Cash used in operating activities for the three months ended December 31, 2021, was $181.7 million, driven by fundings of portfolio investments of $890.9 million[493] - As of December 31, 2021, the company had cash and cash equivalents of $180.2 million, an increase from $175.6 million as of September 30, 2021[495] - The company had outstanding debt under the JPM Credit Facility of $453.1 million as of December 31, 2021, down from $472.1 million as of September 30, 2021[497] - The company had $408.2 million in outstanding debt under the 2018 Debt Securitization as of December 31, 2021[499] - The company had outstanding commitments to fund investments totaling $308.2 million as of December 31, 2021, down from $340.7 million as of September 30, 2021[509] Valuation and Investment Strategy - The investment objective is to generate current income and capital appreciation primarily through one stop and senior secured loans to U.S. middle-market companies[429] - The board of directors is responsible for determining the fair value of investments not publicly traded, with a multi-step valuation process conducted quarterly[536] - Approximately 25% of valuations of debt and equity investments without readily available market quotations are subject to review by an independent valuation firm[542] - The primary method for determining enterprise value involves applying appropriate multiples to the portfolio company's EBITDA, which may include pro-forma adjustments[543] Market and Economic Conditions - The company continues to monitor the impacts of the COVID-19 pandemic on its portfolio companies and overall financial condition[452] - The transition from LIBOR to alternative reference rates is ongoing, with amendments made to credit agreements to incorporate SOFR as an alternative[459] - The company expects that a prolonged reduction in interest rates could decrease gross investment income and net investment income if not offset by an increase in the spread over LIBOR[558] - The company may incur a 4% excise tax on retained taxable income in excess of current year dividend distributions[553] Shareholder Returns and Distributions - The board of directors declared a quarterly distribution of $0.30 per share, payable on March 29, 2022[460] - The company has a share repurchase program allowing for the repurchase of up to $150.0 million of outstanding common stock, although no repurchases were made during the three months ended December 31, 2021[508] - The company has adopted an "opt out" dividend reinvestment plan, allowing stockholders to reinvest cash distributions into additional shares unless they opt out[527] Legal and Compliance - The company, along with GC Advisors and Golub Capital LLC, is not currently subject to any material legal proceedings[565] - As of December 31, 2021, the company's disclosure controls and procedures were deemed effective by management, providing reasonable assurance for SEC filing compliance[563] - There have been no material changes in internal controls over financial reporting during the reporting period[563]