Middle market private companies in the Golub Capital Altman Index experienced year-over-year revenue growth of 12% and earnings decline of 2% during the first two months of the third quarter of 2022. This compares to year-over-year revenue growth of 12% and earnings growth of 2% in the second quarter of 2022.

Lawrence E. Golub, CEO of Golub Capital, said, "The U.S. economy continues to muddle through an environment of heightened uncertainty. This quarter's data is consistent with our expectation that economic growth will likely remain low in real terms for the rest of 2022 into 2023. Although profit growth declined slightly in aggregate, the data also shows increasing dispersion in performance by industry and company. Successfully navigating this environment will require management teams and owners to adapt quickly to changing circumstances. In our view, this type of environment plays to the strengths of private equity-backed businesses."

Dr. Edward I. Altman said, "EBITDA growth rates in the first two months of Q3 were negative versus the same period of 2021 with four of the five major industrial sectors registering negative growth. Only Industrials showed relative strong profit growth as these firms improved their cost management after suffering margin pressure in earlier quarters. Indeed, the Consumer and Technology sectors turned negative this past quarter despite revenue growth of more than 12%. The pullback in Consumer sector profit growth suggests companies struggled to pass rising input costs on to consumers, who faced rising prices for food and gasoline. Even Technology companies faced margin pressure, after a long stretch of very strong profit growth. That said, across all four of the sectors we track, companies with the strongest pricing power, like mission critical business-to-business SaaS companies, are in general keeping up with inflation."

The Golub Capital Altman Index ("GCAI"), which is produced by Golub Capital in collaboration with credit expert Dr. Edward I. Altman, is the first and longest-running index based on actual revenue and earnings (defined as earnings before interest, taxes, depreciation and amortization, or "EBITDA") for middle market companies. It measures the median revenue and earnings growth of approximately 110–150 private U.S. companies in the loan portfolio of Golub Capital, a leading middle market lender. Reported shortly before public company quarterly earnings season, the GCAI has served as a reliable indicator of the overall growth rates in revenue and earnings of public companies in market indexes such as the S&P 500 and S&P SmallCap 600 ("S&P 600"), as well as quarterly Gross Domestic Product ("GDP"), according to statistical back-testing dating back to 2012, when data began to be tracked.

The size and diversity of the Golub Capital loan portfolio ensure that the confidentiality of all company-specific information used in the index is maintained in both the aggregate and industry segment data.

We believe the results (1) are representative of the general performance of middle market companies, which are a major contributor to U.S. private sector employment; (2) can be easily compared to the performance of the public companies that make up major stock indexes; (3) are relevant to the aggregate economic performance of the U.S. economy and (4) provide timely information for the investment community.

The companies in the GCAI operate in a wide range of industries. Results are provided for the total universe of GCAI constituents and by industry segment. Given the index's limited exposure to Financials, Utilities, Energy and Materials, comparisons are made to the S&P 500 and S&P 600 as well as to "adjusted" versions of those indexes that exclude the aforementioned sectors.