Golub Capital Middle Market Report
Featuring the Golub Capital Altman Index
Earnings in the U.S. Middle Market Continue To Boom Compared To Strong, Pre-Covid Q4 2019 Results
Industrial Sector Weaker due to Rising Costs and Physical Supply Chain Problems
The Golub Capital Altman Index can provide early insight into the financial performance of public companies and GDP in advance of earnings season.
Golub Capital Altman Index
Comparison Pre- and Post-Covid
|October–November 2021 vs. October–November 2019||Revenue||Earnings|
Source: Golub Capital Internal Data.
This table reflects a two-year growth period.
“Boomflation continued in Q4,” said Lawrence E. Golub, CEO of Golub Capital.
For the third consecutive quarter, median revenue and EBITDA grew by more than 20% compared to the same period in 2019, pre-Covid. That said, many industrial companies could not meet demand, and the missed operating leverage allowed increased labor and material costs to compress margins. With Omicron, 2022 will reveal which private equity backed companies fixed their 2020 Covid related problems permanently and which just kicked the can down the road and will now face hard times.
About the Golub Capital Altman Index
A leading expert on credit markets, Dr. Edward I. Altman is the Max L. Heine Professor of Finance, Emeritus at the NYU Stern School of Business, and Director of Research in Credit and Debt Markets at the NYU Salomon Center for the Study of Financial Institutions. He is currently an advisor to several foreign central banks. Professor Altman has published or edited two-dozen books and over 150 articles in scholarly finance, accounting and economic journals. He has been inducted into the Fixed Income Analysts Society Hall of Fame, served as President of the Financial Management Association, was an FMA Fellow, and was amongst the inaugural inductees into the Turnaround Management Association Hall of Fame. He received his MBA and Ph.D. in Finance from the University of California, Los Angeles.
The Golub Capital Altman Index is provided as an indicator only and does not constitute investment advice or the offer to sell or a solicitation to buy any security. Some of these statements constitute forward-looking statements, which may be predictions about future events, future performance, or future financial conditions. Some of these statements reflect opinions based upon the data presented in the Index, and these opinions may be incorrect. Actual results could vary materially from those implied or expressed in such forward-looking statements for any reason. The Golub Capital Altman Index has been created on the basis of information provided by third-party sources that are believed to be reliable, but the information has not been verified independently by Golub Capital. Golub Capital makes no warranty or representation as to the accuracy or completeness of such third-party information.
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- The Golub Capital Altman Index (GCAI) data for Q1 2020, Q2 2020 and Q2 2021 are presented solely for the purpose of continuity. Readers are encouraged to interpret the data from those periods with caution. The GCAI is designed to offer early insight into the performance of the U.S. economy, based on data from the first two months of each calendar quarter. GCAI results for Q1 2020 were based on data from January and February 2020 and did not reflect the economic impact of the COVID-19 pandemic in March 2020. GCAI results for Q2 2020 were based on data from April and May 2020 and did not reflect the meaningful reopening of the U.S. economy in June 2020. GCAI results for Q2 2021 were based on data from April and May 2021 compared to April and May 2020, when many businesses were affected by lockdowns and other restrictions.