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Often we look to insiders for incite into the workings of their company. Often these losers are to be mistrusted abusing the system and pocketing untold wealth while the regular man toils away. There are however certain companies that also give an accurate reflection of the economy and for those we must pay attention. I'm sure you guys all rememeber Lord Of The Rings and that scary little character Golub. Well this cat made so much doegh from that movie that he went on to form Golub Capital. Lets take a look inside-->
Now I've read a lot of earnings reports in my time and I have to say none of them really caught me attention as being " uplifting " or particularly different, they all are the same.. Safe Harbor statement before turning over to CFO and then I'll wrap up by taking your questions before I fall asleep in my soup.
But this Golub you know his style... he just stepped up and slammed it!
-Let me start with two headlines. The first headline is that GBDC's results for fiscal Q3 were consistent with the estimates we filed on July 15. Adjusted net investment income per share was $0.28, adjusted EPS was $0.94 and NAV per share was $14.05.
The second headline is that our fiscal Q3 results were strong. The portfolio generated solid adjusted net investment income and demonstrated strong resilient credit results, including the reversal of a meaningful portion of the unrealized losses that depressed performance in fiscal Q2. I'm going to start by reviewing key performance drivers for fiscal Q3 and then I'm going to go through GBDC's results for the quarter in detail with a lot of help from my colleagues on the phone. After that, we'll take your questions.
--> Love it! Created two headlines himself and the second one was life is good! 1st headline jerks-- we did what we said 2nd headline idiots-- results were strong! Questions?
You got to like this guys style. Slide 6 please.
On Slide 6, we've outlined three themes beyond good underwriting that we believe drove GBDC's strong fiscal third quarter. First, the US economy began reopening sooner than expected; second, GBDC's portfolio companies generally performed better than expected, especially the ones in impacted sub-sectors; and third,
our private equity sponsors have generally stepped up to support their portfolio companies.
Let me elaborate on each of these three. First, the economy reopened faster than we expected. When we did our risk assessments in late March and April, our base case was a meaningful reopening by mid-summer. Our downside case was a bit after Labor Day and our upside case was the end of June. In fact, we saw substantial reopening in May.
Now maybe Dr. Fauchi is right [Phonetic], and this was too soon from the standpoint of controlling COVID. But we believe the earlier reopening gave a substantial boost to many borrowers in GBDC's portfolio. Second theme within GBDC's portfolio in general, borrowers performed better than expected, especially those in COVID-impacted sub-sectors. You'll recall from our fiscal second quarter earnings presentation that we focused on
five industry sub-sectors where we saw more risk of COVID impact; restaurants, dental care, eye care, fitness franchises and retail.
-> Very concise and clear!
In fiscal Q3, we're encouraged to see that many of GBDC's obligors in these industry sub-sectors performed better than expected. In general, most of GBDC's restaurant retail obligors found ways to stay open, to cut costs, to pivot, to emphasize takeout delivery curbside or Internet-based models. Some of the obligors in these industry sub-sectors actually posted same-store sales gains during the quarter. And our dental and eye care obligors who were closed for a period of time, have also in general opened stronger and better than we expected.
--> This is really helpful because I live in NYC and there we are waiting for Snake Plissken to drop from the heavens and save us... (I've been using alot of movie references lately)
Third theme, our private equity sponsors are generally stepping up to support their portfolio companies. We worried in March and April, at the beginning of COVID, that sponsors would have so many problem children that they wouldn't have bandwidth or sufficient capital to be able to address them. So far, those worries are not playing out. We're seeing sponsors contributing time, expertise, operating executives and in many cases capital. We think this reflects the strength of our borrowers, the strength of our sponsors and the strength of Golub Capital's relationships with those sponsors.
--> Another important point. Now the flip side of this is the dirty banks are stealing homes again and all of that nonsense of buying cheap undervalued properties from struggling Americans who can't make their mortgage... But lets stick to the good stuff--
Golub Capital BDC (NASDAQ:
GBDC) +1.1% as
CEO David Golub buys 149,404 common shares for total transaction value of $1.89M.
Over 80% of the portfolio at June 30 consisted of investments in industries we believe are relatively insulated from COVID-19, areas like enterprise software, business services, financial services and more. By the same token [Phonetic], less than 1% of the portfolio consisted of investments in sectors we now have been particularly hard hit by COVID-19 like airlines, entertainment, hotels, energy and others. Most of our proactive portfolio management has focused on the roughly 20% of the portfolio in industry sub-sectors we identified as less insulated from COVID-19.
In
another filing, Chairman Lawrence Golub
bought 149,404 common shares for total transaction value of $1.89M.
Lawrence Golub, Chairman and David Golub, CEO has collectively bought 923,268 common shares in the last 10 days.!!!!!!!!!!
10 days of buying... hummmmm. The stock has been $12 the entire time.....
1st Idea For Next Week is GBDC-$12.75
