Goldman Sachs BDC, Inc. Reports September 30, 2022 Financial Results and Announces Quarterly Dividend of $0.45 Per Share

Goldman Sachs BDC, Inc. (“GSBD” or the “Company”) (NYSE: GSBD) today reported financial results for the third quarter ended September 30, 2022 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, 2022 was $0.60. Excluding purchase discount amortization per share of $0.04 from the Merger (as defined below), adjusted net investment income per share was $0.56, equating to an annualized net investment income yield on book value of 14.9%.¹ Earnings per share for the quarter ended September 30, 2022 was $(0.07).
• The Company’s Board of Directors declared a regular fourth quarter dividend of $0.45 per share payable to shareholders of record as of December 30, 2022².
• Net asset value per share for the quarter ended September 30, 2022 decreased 3.3% to $15.02 from $15.53 as of June 30, 2022.
• The Company's ending net debt to equity ratio increased to 1.34x as of September 30, 2022 from 1.25x as of June 30, 2022.
• During the quarter, the Company had gross originations of $205.3 million of which $134.1 million were funded. Fundings of previously unfunded commitments for the quarter were $149.7 million and sales and repayments activity totaled $(211.9) million, resulting in a net funded portfolio change of $71.9 million.
• As of September 30, 2022, the Company’s total investments at fair value and commitments were $4,054.0 million, comprised of investments in 133 portfolio companies. The investment portfolio was comprised of 97.7% senior secured debt, including 91.7% in first lien investments³.
• During the quarter, four additional investments across three portfolio companies were put on the non-accrual status. As of September 30, 2022, investments on non-accrual status amounted to 0.4% and 1.4% of the total investment portfolio at fair value and amortized cost, respectively.
• As of September 30, 2022, 40.8% of the Company’s approximately $2,106.3 million of total principal amount of debt outstanding was in unsecured debt and 59.2% in secured debt.
• On May 26, 2022, the Company entered into equity distribution agreements to issue up to $200.0 million in aggregate offering price of shares of its common stock through at-the-market offerings. During the three months ended September 30, 2022, the Company issued and sold 616,975 shares of common stock for net proceeds of approximately $10.6 million, after deducting underwriting and offering costs of approximately $0.2 million.

SELECTED FINANCIAL HIGHLIGHTS

Total investment income for the three months ended September 30, 2022 and June 30, 2022 was $95.2 million and $77.5 million, respectively. The increase in investment income was primarily driven by an increase in interest rates.

Net expenses before taxes for the three months ended September 30, 2022 and June 30, 2022 were $33.2 million and $27.0 million, respectively. Net expenses increased by $6.2 million, primarily as a result of an increase in interest and other debt expenses.

INVESTMENT ACTIVITY³

Summary of Investment Activity for the three months ended September 30, 2022 was as follows:

During the three months ended September 30, 2022, new investment commitments were across six new portfolio companies and ten existing portfolio companies. Sales and repayments were primarily driven by the full repayment of investments in two portfolio companies.³

PORTFOLIO SUMMARY³

As of September 30, 2022, the Company’s investments consisted of the following:

The following table presents certain selected information regarding the Company’s investments:

As of September 30, 2022, investments on non-accrual status represented 0.4% and 1.4% of the total investment portfolio at fair value and amortized cost, respectively.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2022, the Company had $2,106.3 million of total principal amount of debt outstanding, comprised of $1,246.3 million of outstanding borrowings under its senior secured revolving credit facility (“Secured Revolving Credit Facility”), $360.0 million of unsecured notes due 2025, and $500.0 million of unsecured notes due 2026. The combined weighted average interest rate on debt outstanding was 3.19% for the quarter ended September 30, 2022. As of September 30, 2022, the Company had $449.3 million of availability under its Senior Revolving Credit Facility and $32.7 million in cash.^4,8

The Company’s ending net debt to equity leverage ratio was 1.34x for the three months ended September 30, 2022, as compared to 1.25x for the three months ended June 30, 2022.⁹

CONFERENCE CALL

The Company will host an earnings conference call on Friday, November 4, 2022 at 9:00 am Eastern Time. All interested parties are invited to participate in the conference call by dialing (800) 289-0459; international callers should dial +1 (929) 477-0443; conference ID 427709. 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 on our webcast link located in the Investor Resources section of our website www.goldmansachsbdc.com.

Please direct any questions regarding the conference call to Goldman Sachs BDC, Inc. Investor Relations, via e-mail, at gsbdc-investor-relations@gs.com.

ENDNOTES

1. On October 12, 2020, we completed our merger (the “Merger”) with Goldman Sachs Middle Market Lending Corp. (“MMLC”). The Merger was accounted for as an asset acquisition in accordance with ASC 805-50, Business Combinations — Related Issues. The consideration paid to MMLC’s stockholders was less than the aggregate fair values of the assets acquired and liabilities assumed, which resulted in a purchase discount (the “purchase discount”). The purchase discount was allocated to the cost of MMLC investments acquired by us on a pro-rata basis based on their relative fair values as of the closing date. Immediately following the Merger with MMLC, we marked the investments to their respective fair values and, as a result, the purchase discount allocated to the cost basis of the investments acquired was immediately recognized as unrealized appreciation on our Consolidated Statement of Operations. The purchase discount allocated to the loan investments acquired will amortize over the life of each respective loan through interest income, with a corresponding adjustment recorded as unrealized appreciation on such loan acquired through its ultimate disposition. The purchase discount allocated to equity investments acquired will not amortize over the life of such investments through interest income and, assuming no subsequent change to the fair value of the equity investments acquired and disposition of such equity investments at fair value, we will recognize a realized gain with a corresponding reversal of the unrealized appreciation on disposition of such equity investments acquired.
   
   As a supplement to our financial results reported in accordance with GAAP, we have provided, as detailed below, certain non-GAAP financial measures to our operating results that exclude the aforementioned purchase discount and the ongoing amortization thereof, as determined in accordance with GAAP. The non-GAAP financial measures include i) Adjusted net investment income per share; ii) Adjusted net investment income after taxes; and iii) Adjusted net realized and unrealized gains (losses). We believe that the adjustment to exclude the full effect of the purchase discount is meaningful because it is a measure that we and investors use to assess our financial condition and results of operations. Although these non-GAAP financial measures are intended to enhance investors’ understanding of our business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP. The aforementioned non-GAAP financial measures may not be comparable to similar non-GAAP financial measures used by other companies.
2. The $0.45 per share dividend is payable on January 27, 2023 to stockholders of record as of December 30, 2022.
3. The discussion of the investment portfolio excludes the investment in a money market fund managed by an affiliate of The Goldman Sachs Group, Inc.
4. Total debt outstanding excludes netting of debt issuance costs of $9.6 million and $10.4 million, respectively, as of September 30, 2022 and June 30, 2022.
5. The fixed versus floating composition has been calculated as a percentage of performing debt investments measured on a fair value basis, including income producing preferred stock investments and excludes investments, if any, placed on non-accrual.
6. Computed based on the (a) annual actual interest rate or yield earned plus amortization of fees and discounts on the performing debt and other income producing investments as of the reporting date, divided by (b) the total performing debt and other income producing investments (excluding investments on non-accrual) at amortized cost or fair value, respectively. This calculation excludes exit fees that are receivable upon repayment of the investment. Excludes the purchase discount and amortization related to the Merger.
7. For a particular portfolio company, we calculate the level of contractual indebtedness net of cash (“net debt”) owed by the portfolio company and compare that amount to measures of cash flow available to service the net debt. To calculate net debt, we include debt that is both senior and pari passu to the tranche of debt owned by us but exclude debt that is legally and contractually subordinated in ranking to the debt owned by us. We believe this calculation method assists in describing the risk of our portfolio investments, as it takes into consideration contractual rights of repayment of the tranche of debt owned by us relative to other senior and junior creditors of a portfolio company. We typically calculate cash flow available for debt service at a portfolio company by taking net income before net interest expense, income tax expense, depreciation and amortization (“EBITDA”) for the trailing twelve month period. Weighted average net debt to EBITDA is weighted based on the fair value of our debt investments and excludes 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.
   
   For a particular portfolio company, we also compare that amount of EBITDA to the portfolio company’s contractual interest expense (“interest coverage ratio”). We believe this calculation method assists in describing the risk of our portfolio investments, as it takes into consideration contractual interest obligations of the portfolio company. Weighted average interest coverage is weighted based on the fair value of our performing debt investments and excludes investments where interest coverage 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 our debt investments and excludes 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.
   
   Portfolio company statistics are derived from the financial statements most recently provided to us of each portfolio company as of the reported end date. Statistics of the portfolio companies have not been independently verified by us and may reflect a normalized or adjusted amount. As of September 30, 2022 and June 30, 2022, investments where net debt to EBITDA may not be the appropriate measure of credit risk represented 38.6% and 35.7%, respectively, of total debt investments at fair value.
8. The Company’s revolving credit facility has debt outstanding denominated in currencies other than U.S. Dollars (“USD”). These balances have been converted to USD using applicable foreign currency exchange rates as of September 30, 2022. As a result, the revolving credit facility’s outstanding borrowings and the available debt amounts may not sum to the total debt commitment amount.
9. The ending net debt to equity leverage ratio is calculated by using the total borrowings net with cash and cash equivalents divided by equity as of September 30, 2022.

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. GSBD 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. GSBD 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, including the impact of COVID-19 on the business, future operating results, access to capital and liquidity of the Company and its portfolio companies. 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. 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.

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