Middle-market private companies in the Golub Capital Altman Index experienced EBITDA growth of 21% and revenue growth of 24% in July and August 2021 compared with their July and August 2019 earnings and revenue. The data in the report reflects the median performance of approximately 120 companies that were in the Golub Capital Altman Index in both periods. The comparison over a two-year period is intended to provide greater insight than the report’s typical year-over-year analysis given the impact of COVID-19-pandemic-related lockdowns throughout much of 2020.

“The U.S. economy continued to boom in Q3. The consumer sector had a blockbuster quarter, with 27% revenue growth and 48% EBITDA growth compared to the same period in 2019,” Lawrence E. Golub, CEO of Golub Capital, said. “Consumer sector margins benefited from operating leverage as customers spent stimulus payments and caught up on purchases deferred by the pandemic. However, heading into Q4, the key question to ask is whether or not there will be enough inventory to keep pace with demand during the holiday season. With supply chain issues worsening by the day, it’s smart to get your holiday shopping done early this year.”

“While Q3 results were strong in aggregate, the industrial sector showed the inverse of the positive trend in the consumer sector for both revenue and EBITDA growth,” Edward I. Altman, professor emeritus of finance at New York University, said. “Average industrial revenue growth lagged the overall index, and industrial sector EBITDA declined compared to 2019. Industrial businesses were challenged by stockouts and delivery problems, reducing revenues and inflating costs which were not passed through to customers. We would not be surprised to see a rolling wave of stockouts affecting other sectors in Q4, especially consumer. On the other hand, businesses that sell intangible goods and services, like software companies, are well positioned to capitalize on the fundamental strength of the economy.”

The Golub Capital Altman Index (GCAI), which is produced by Golub Capital in collaboration with Altman, is an index based on actual revenue and earnings (defined as earnings before interest, taxes, depreciation and amortization for middle-market companies). It measures the median revenue and earnings growth of more than 150 private U.S. companies in the loan portfolio of Golub Capital.