Unassociated Document
 


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
____________________________

FORM 10-Q

   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2010

OR

  o      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number 333-163279

Golub Capital BDC, Inc.
(Exact name of registrant as specified in its charter)

Delaware
 
27-2326940
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)

150 South Wacker Drive, Suite 800
Chicago, IL 60606
(Address of principal executive offices)

(312) 205-5050
(Registrant's telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer o
Accelerated filer o
 
 
Non-accelerated filer x (Do not check if a smaller reporting company)
Smaller reporting company o
 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes o No x

As of May 13, 2010, the Registrant had 17,407,444 shares of common stock, $0.001 par value, outstanding.
 



 
 

 

Table of Contents
 
Part I.
Financial Information
 
     
Item 1.
Financial Statements
 
     
 
Consolidated Statements of Financial Condition as of March 31, 2010 (unaudited)
and September 30, 2009
1
     
 
Consolidated Condensed Schedules of Investments as of March 31, 2010 (unaudited)
and September 30, 2009
2-16
     
 
Consolidated Statements of Operations for the three and six months ended March 31, 2010
(unaudited) and March 31, 2009 (unaudited)
 17
     
 
Consolidated Statements of Members’ Equity for six months ended March 31, 2010
(unaudited) and March 31, 2009 (unaudited)
 18
     
 
Consolidated Statements of Cash Flows for the six months ended March 31, 2010
(unaudited) and March 31, 2009 (unaudited)
19-20
     
 
Notes to Consolidated Financial Statements (unaudited)
21-33
     
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
34
     
Item 3.
Quanitative and Qualitative Disclosures About Market Risk
49
     
Item 4.
Controls and Procedures
49
     
Part II.
Other Information
 
     
Item 1.
Legal Proceedings
50
     
Item 1A.
Risk Factors
50
     
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
50
     
Item 3.
Defaults Upon Senior Securities 
50
     
Item 4.
Removed and Reserved
51
     
Item 5.
Other Information
51
     
Item 6.
Exhibits
51


 
 

 


Golub Capital BDC LLC and Subsidiary
     
       
Consolidated Statements of Financial Condition
     
(In thousands)
     

             
   
March 31, 2010
      
September 30, 2009
 
   
(unaudited)
       
Assets
           
Investments in securities, at fair value (cost of $295,730 and
  $ 293,226     $ 376,294  
  $387,293 respectively)
               
Cash and cash equivalents
    24,802       -  
Restricted cash and cash equivalents
    33,679       30,614  
Deferred offering costs
    1,384       -  
Interest receivable
    1,708       2,198  
Other assets
    28       16  
                 
Total Assets
  $ 354,827     $ 409,122  
                 
Liabilities and Members' Equity
               
Liabilities
               
Facility advances
  $ 210,444     $ 315,306  
Accrued deferred offering costs
    1,384       -  
Due to affiliates
    1,135       934  
Interest payable
    148       130  
                 
Total Liabilities
    213,111       316,370  
                 
Members' Equity
    141,716       92,752  
                 
Total Liabilities and Members' Equity
  $ 354,827     $ 409,122  
                 
 
Note: For periods prior to November 2009, the financial statements only reflect the financial  results of Golub Capital Master Funding LLC (GCMF).
                 
See Notes to Unaudited Consolidated Financial Statements.
               

 
1

 
 
Golub Capital BDC LLC and Subsidiary
                       
                         
Consolidated Condensed Schedule of Investments
                       
March 31, 2010 (unaudited)
                       
(In thousands)
             
Percentage of
       
   
Principal Amount
   
Cost
   
Members' Equity
   
Fair Value
 
                         
Investments in securities, at fair value1
                       
Canada
                141,769,190        
Debt securities
                         
Diversified Conglomerate Service
                         
Open Text Corporation
                         
Senior loan (2.54%, due 10/2013)
  $ 1,317     $ 1,124       0.9 %   $ 1,304  
                                 
Leisure, Amusement, Motion Pictures, Entertainment
                               
Extreme Fitness, Inc.
                               
Senior loan (11.50%, due 3/2012)
    4,649       4,649       3.3       4,649  
Total Canada (cost $5,773)
                    4.2 %   $ 5,953  
                                 
United States
                               
Debt securities
                               
Aerospace and Defense
                               
Thermal Solutions LLC
                               
Senior loans (4.50%, due 3/2011-3/2012)
  $ 2,037     $ 2,022       1.4 %   $ 1,940  
                                 
Automobile
                               
CLP Auto Interior Corporation
                               
Senior loan (5.00%, due 6/2013)
    3,382       3,382       2.2       3,179  
Driven Brands, Inc.
                               
Senior loan (10.25%, due 10/2014)
    6,089       6,089       4.3       6,089  
                      6.5       9,268  
                                 
Banking
                               
Bonddesk Group, LLC
                               
Senior loan (3.23%, due 8/2012)
    2,185       2,100       1.5       2,119  
Prommis Solutions, Inc.
                               
Senior loan (3.25%, due 2/2013)
    1,651       1,651       1.1       1,519  
                      2.6       3,638  
                                 
Beverage, Food and Tobacco
                               
ABP Corporation
                               
Senior loan (8.50%, due 2/2013)
    2,334       2,286       1.6       2,334  
Bertucci's Corporation
                               
Senior loan (12.00%, due 7/2012)
    1,974       1,911       1.4       1,974  
Lone Star Beef Processors, L.P.
                               
Senior loan (4.44%, due 5/2013)
    3,640       3,614       2.5       3,567  
                      5.5       7,875  


1 - The majority of the debt securities bear interest at a rate that may be determined by reference to LIBOR or prime and which reset daily, quarterly or  semi-annually. For each debt security we have provided the weighted average current interest rate in effect at March 31, 2010.

See Notes to Unaudited Consolidated Financial Statements. 

 
2

 


Golub Capital BDC LLC and Subsidiary
                       
                         
Consolidated Condensed Schedule of Investments
                       
March 31, 2010 (unaudited)
                       
(In thousands)
             
Percentage of
       
   
Principal Amount
   
Cost
   
Members' Equity
   
Fair Value
 
                         
Investments in securities, at fair value1 (continued)
                       
United States (continued)
                141,769,190        
Debt securities (continued)
                         
Building and Real Estate
                               
American Fire Protection Group, Inc.
                               
                                 
Senior loan (9.00%, due 6/2011)
  $ 4,548     $ 4,416       3.1 %   $ 4,411  
Architectural Testing, Inc.
                               
Senior loan (9.50%, due 5/2013)
    6,776       6,776       4.8       6,776  
Best Lighting Products, Inc.
                               
Senior loan (10.00%, due 8/2012)
    2,432       2,354       1.7       2,432  
Infiltrator Systems, Inc.
                               
Senior loan (8.50%, due 9/2012)
    3,821       3,569       2.6       3,668  
ITEL Laboratories, Inc.
                               
Senior loan (9.75%, due 3/2014)
    8,794       8,715       6.2       8,794  
KHKI Acquisition, Inc.
                               
Senior loans (8.50%, due 3/2012-3/2013)
    3,049       3,043       1.7       2,363  
Other2
    2,335       2,286       1.1       1,594  
                      21.2       30,038  
                                 
Cargo Transport
                               
Peco Pallet, Inc.
                               
Senior loan (4.00%, due 6/2013)
    4,235       4,054       3.0       4,193  
Tangent Rail Services, Inc.
                               
Senior loans (6.75%, due 9/2014)
    9,366       9,366       6.6       9,366  
                      9.6       13,559  
                                 
Chemicals, Plastics and Rubber
                               
Syrgis Holdings LLC
                               
Senior loans (8.82%, due 8/2012-2/2014)
    1,716       1,618       1.1       1,625  
                                 
Other
    987       836       0.7       970  
                      1.8       2,595  


1 - The majority of the debt securities bear interest at a rate that may be determined by reference to LIBOR or prime and which reset daily, quarterly or  semi-annually. For each debt security we have provided the weighted average current interest rate in effect at March 31, 2010. 
 
2 - No indevidual investment (or single investment) is greater than 1% of members' equity.

See Notes to Unaudited Consolidated Financial Statements. 

 
3

 


                       
                         
Consolidated Condensed Schedule of Investments
                       
March 31, 2010 (unaudited)
                       
(In thousands)
             
Percentage of
       
   
Principal Amount
   
Cost
   
Members' Equity
   
Fair Value
 
                         
Investments in securities, at fair value1 (continued)
                       
United States (continued)
                       
Debt securities (continued)
                         
Containers, Packaging and Glass
                         
Industrial Container Services, LLC
                         
Senior loan (4.30%, due 9/2011)
  $ 1,409     $ 1,379       1.0 %   $ 1,395  
Pelican Products, Inc.
                               
Senior loans (7.75%, due 1/2013-1/2014)
    2,938       2,686       2.0       2,881  
                      3.0       4,276  
                                 
Diversified Conglomerate Manufacturing
                               
Heat Transfer Parent, Inc.
                               
Senior loan (3.23%, due 6/2013)
    1,833       1,755       1.1       1,595  
Neptco Inc.
                               
Senior loan (7.25%, due 3/2013)
    4,541       4,351       2.7       3,860  
Pasternack Enterprises, Inc.
                               
Senior loan (4.27%, due 2/2014)
    3,371       3,245       2.1       3,034  
Vintage Parts, Inc.
                               
Senior loan (5.79%, due 12/2013)
    8,173       8,071       5.6       7,927  
                      11.5       16,416  
                                 
Diversified Conglomerate Service
                               
Benetech, Inc.
                               
Senior loan (5.25%, due 12/2013)
    8,845       8,519       5.9       8,402  
Compass Group Diversified Holdings, LLC
                               
Senior loan (4.25%, due 12/2013)
    4,628       4,628       3.3       4,627  
Cortz, Inc.
                               
Senior loan (8.50%, due 3/2014)
    7,019       6,961       5.0       7,019  
The Service Companies, Inc.
                               
Senior loan (8.50%, due 3/2014)
    5,901       5,766       4.1       5,783  
                      18.3       25,831  
                                 
Diversified Natural Resources, Precious Metals and Minerals
                               
Metal Spinners, Inc.
                               
Senior loans (10.54%, due 12/2014)
    5,463       5,245       3.7       5,279  
Virginia Explosives & Drilling Company, Inc.
                               
Senior loans (10.50%, due 5/2011-10/2011)
    3,467       3,319       2.0       2,885  
                      5.7       8,164  
 
1 - The majority of the debt securities bear interest at a rate that may be determined by reference to LIBOR or prime and which reset daily, quarterly or  semi-annually. For each debt security we have provided the weighted average current interest rate in effect at March 31, 2010.

See Notes to Unaudited Consolidated Financial Statements.

 
4

 
 
                       
                         
Consolidated Condensed Schedule of Investments
                       
March 31, 2010 (unaudited)
                       
(In thousands)
             
Percentage of
       
   
Principal Amount
   
Cost
   
Members' Equity
   
Fair Value
 
                         
Investments in securities, at fair value1 (continued)
                       
United States (continued)
                       
Debt securities (continued)
                         
Electronics
                         
Cape Electrical Supply LLC
                         
Senior loan (6.00%, due 11/2013)
  $ 2,630     $ 2,474       1.7 %   $ 2,380  
Inovis International, Inc.
                               
Senior loan (8.53%, due 6/2010)
    1,744       1,738       1.2       1,744  
The Sloan Company, Inc
                               
Senior loan (7.25%, due 10/2012)
    2,424       2,408       1.7       2,424  
                      4.6       6,548  
                                 
Finance
                               
Collect America, Ltd.
                               
Senior loans (7.97%, due 12/2011-3/2012)
    3,547       3,336       2.5       3,511  
eVestment Alliance Holdings, LLC
                               
Senior loan (9.50%, due 5/2014)
    7,729       7,587       5.5       7,729  
Pillar Processing LLC
                               
Senior loans (8.67%, due 11/2013-5/2014)
    9,513       9,489       6.7       9,449  
Wall Street Systems Holdings, Inc.
                               
Senior loan (8.00%, due 5/2013)
    8,101       8,101       5.7       8,101  
Fidelity National Information (Metavante Corporation)
                               
Senior loans (3.56%, due 1/2012-11/2014)
    1,399       1,182       1.0       1,410  
                      21.4       30,200  
                                 
Grocery
                               
JRD Holdings, Inc.
                               
Senior loan (2.49%, due 7/2014)
    1,241       1,078       0.9       1,217  
                                 
Healthcare, Education and Childcare
                               
Community Hospices of America, Inc.
                               
Senior loan (8.00%, due 1/2011)
    1,004       988       0.7       1,004  
Second lien loan (12.50%, due 4/2011)
    4,865       4,830       3.4       4,865  

 
1 - The majority of the debt securities bear interest at a rate that may be determined by reference to LIBOR or prime and which reset daily, quarterly or  semi-annually. For each debt security we have provided the weighted average current interest rate in effect at March 31, 2010.

See Notes to Unaudited Consolidated Financial Statements.


 
5

 

Golub Capital BDC LLC and Subsidiary
                       
                         
Consolidated Condensed Schedule of Investments
                       
March 31, 2010 (unaudited)
                       
(In thousands)
             
Percentage of
       
   
Principal Amount
   
Cost
   
Members' Equity
   
Fair Value
 
                         
Investments in securities, at fair value1 (continued)
                       
United States (continued)
                141,769,190        
Debt securities (continued)
                         
Healthcare, Education and Childcare (continued)
                         
DaVita, Inc.
                         
Senior loan (1.75%, due 10/2012)
  $ 5,000     $ 4,558       3.5 %   $ 4,937  
DDC Center Inc.
                               
Senior loan (9.50%, due 10/2014)
    12,543       12,543       8.0       11,289  
Delta Educational Systems, Inc.
                               
Senior loan (6.00%, due 6/2012)
    4,140       3,956       2.9       4,057  
Den-Mat Holdings, LLC
                               
Senior loan (4.25%, due 12/2012)
    3,113       3,113       1.9       2,708  
Excelligence Learning Corporation
                               
Second lien (7.25%, due 11/2013)
    1,600       1,529       1.1       1,504  
The Hygenic Corporation
                               
Senior loan (2.75%, due 4/2013)
    2,751       2,673       1.8       2,558  
Oncure Medical Corporation
                               
Senior loan (3.76%, due 6/2012)
    5,626       5,340       3.7       5,232  
ReachOut Healthcare America Ltd
                               
Senior loan (8.04%, due 8/2013)
    6,388       6,368       4.5       6,388  
United Surgical Partners International, Inc.
                               
Senior loan (2.25%, due 4/2014)
    1,537       1,537       1.1       1,489  
                                 
Other
    773       762       0.5       755