Saratoga Investment Corp. Announces Fiscal Second Quarter 2025 Financial Results
Saratoga Investment Corp. (NYSE: SAR) announced its fiscal second quarter 2025 financial results ending August 31, 2024. Key highlights include:
Net Asset Value (NAV) increased to $372.1 million from $367.9 million in the prior quarter, with NAV per share rising to $27.07 from $26.85.
Net Investment Income (NII) per share increased to $1.33 from $1.05, driven by the reversal of interest reserves on the Knowland investment. Total investment income grew to $43.0 million, a 21.1% year-over-year increase.
Repayments totaled $60.1 million, significantly outpacing $2.6 million in originations. The company's cash position improved to $162.0 million, enhancing liquidity.
Dividends remained steady at $0.74 per share, supporting a 12.7% yield based on the October 7, 2024, stock price.
Return on Equity (ROE) increased to 14.4% annualized for the quarter, up from 7.2% in the previous quarter.
CEO Christian Oberbeck emphasized the company's strong performance, noting successful resolutions of key investments and a robust portfolio despite a volatile environment.
Saratoga Investment Corp. (NYSE: SAR) ha annunciato i risultati finanziari per il secondo trimestre fiscale 2025, conclusosi il 31 agosto 2024. I punti salienti includono:
Il Valore Patrimoniale Netto (NAV) è aumentato a 372,1 milioni di dollari rispetto ai 367,9 milioni di dollari del trimestre precedente, con un NAV per azione che è salito a 27,07 dollari da 26,85 dollari.
Il Reddito Netto da Investimenti (NII) per azione è aumentato a 1,33 dollari da 1,05 dollari, grazie al ripristino delle riserve sugli interessi relative all'investimento Knowland. Il reddito totale da investimenti è cresciuto a 43,0 milioni di dollari, un aumento del 21,1% rispetto all'anno precedente.
Le rimborsi hanno raggiunto 60,1 milioni di dollari, superando significativamente i 2,6 milioni di dollari in nuove originazioni. La posizione di liquidità dell'azienda è migliorata a 162,0 milioni di dollari, aumentando la liquidità.
I dividendi sono rimasti stabili a 0,74 dollari per azione, supportando un rendimento del 12,7% basato sul prezzo delle azioni del 7 ottobre 2024.
Il Ritorno sul Capitale Proprio (ROE) è aumentato al 14,4% annualizzato per il trimestre, rispetto al 7,2% del trimestre precedente.
Il CEO Christian Oberbeck ha sottolineato le ottime prestazioni dell'azienda, notando la risoluzione di investimenti chiave e un portafoglio robusto nonostante un ambiente volatile.
Saratoga Investment Corp. (NYSE: SAR) anunció sus resultados financieros para el segundo trimestre fiscal de 2025, finalizado el 31 de agosto de 2024. Los aspectos más destacados incluyen:
El Valor Neto de los Activos (NAV) aumentó a 372,1 millones de dólares desde 367,9 millones de dólares en el trimestre anterior, con un NAV por acción que subió a 27,07 dólares desde 26,85 dólares.
El Ingreso Neto por Inversiones (NII) por acción aumentó a 1,33 dólares desde 1,05 dólares, impulsado por la reversión de reservas de intereses en la inversión de Knowland. Los ingresos totales por inversiones crecieron a 43,0 millones de dólares, un aumento del 21,1% en comparación con el año anterior.
Los reembolsos totalizaron 60,1 millones de dólares, superando significativamente los 2,6 millones de dólares en originaciones. La posición de efectivo de la empresa mejoró a 162,0 millones de dólares, lo que aumentó la liquidez.
Los dividendos se mantuvieron estables en 0,74 dólares por acción, apoyando un rendimiento del 12,7% basado en el precio de la acción del 7 de octubre de 2024.
El Retorno sobre el Capital (ROE) aumentó al 14,4% anualizado para el trimestre, frente al 7,2% del trimestre anterior.
El CEO Christian Oberbeck enfatizó el sólido desempeño de la empresa, señalando la resolución exitosa de inversiones clave y un portafolio robusto a pesar de un entorno volátil.
사라토가 인베스트먼트 코퍼레이션 (NYSE: SAR)이 2025 회계 연도 두 번째 분기 재무 결과를 발표했습니다. 해당 분기는 2024년 8월 31일에 종료되었습니다. 주요 하이라이트는 다음과 같습니다:
순자산 가치(NAV)가 3억 7210만 달러로 증가했으며, 이전 분기 3억 6790만 달러에서 상승했습니다. 주당 NAV는 26.85달러에서 27.07달러로 상승했습니다.
주당 순투자소득(NII)는 1.33달러로 증가했으며, 이는 1.05달러에서 상승했습니다. 이는 노랜드 투자에 대한 이자 적립금의 환급으로 인한 것입니다. 총 투자 수입은 4300만 달러로 증가하여 전년 대비 21.1% 증가했습니다.
상환은 6010만 달러에 달했으며, 이는 260만 달러의 원금 초과로 상당히 증가했습니다. 회사의 현금 유동성은 1억 6200만 달러로 개선되어 유동성이 강화되었습니다.
배당금은 주당 0.74달러로 유지되었으며, 2024년 10월 7일 주가 기준으로 12.7%의 수익률을 지원합니다.
자기자본이익률(ROE)는 분기 동안 14.4%로 증가하였으며, 이는 전 분기의 7.2%에서 상승하였습니다.
CEO 크리스찬 오버벡은 회사의 강력한 성과를 강조하며, 변동성이 큰 환경 속에서도 주요 투자 문제를 성공적으로 해결하고 견고한 포트폴리오를 유지하고 있음을 언급했습니다.
Saratoga Investment Corp. (NYSE: SAR) a annoncé ses résultats financiers pour le deuxième trimestre fiscal 2025, qui s'est terminé le 31 août 2024. Les points forts incluent :
La Valeur Nette d'Actif (NAV) a augmenté pour atteindre 372,1 millions de dollars, contre 367,9 millions de dollars au trimestre précédent, avec un NAV par action passant de 26,85 dollars à 27,07 dollars.
Le Revenu Net d'Investissement (NII) par action a augmenté pour atteindre 1,33 dollar, contre 1,05 dollar, soutenu par le rétablissement des réserves d'intérêts sur l'investissement Knowland. Le revenu total d'investissement a crû à 43,0 millions de dollars, soit une augmentation de 21,1 % par rapport à l'année précédente.
Les remboursements se sont élevés à 60,1 millions de dollars, dépassant largement les 2,6 millions de dollars d'originations. La position de liquidité de l'entreprise s'est améliorée à 162,0 millions de dollars, augmentant ainsi la liquidité.
Les dividendes sont restés stables à 0,74 dollar par action, soutenant un rendement de 12,7 % basé sur le prix de l'action du 7 octobre 2024.
Le Retour sur Capitaux Propres (ROE) a augmenté à 14,4 % annualisé pour le trimestre, contre 7,2 % au trimestre précédent.
Le PDG Christian Oberbeck a souligné la performance solide de l'entreprise, notant la résolution réussie des investissements clés et un portefeuille solide malgré un environnement volatile.
Saratoga Investment Corp. (NYSE: SAR) hat die finanziellen Ergebnisse für das Fiskaljahr 2025 im zweiten Quartal bekannt gegeben, das am 31. August 2024 endete. Die wichtigsten Eckdaten umfassen:
Der Nettovermögenswert (NAV) stieg auf 372,1 Millionen Dollar von 367,9 Millionen Dollar im vorherigen Quartal, während der NAV pro Aktie auf 27,07 Dollar von 26,85 Dollar stieg.
Der Nettoinvestitionsertrag (NII) pro Aktie stieg auf 1,33 Dollar von 1,05 Dollar, was hauptsächlich auf die Umkehrung von Zinsreserven in der Knowland-Investition zurückzuführen ist. Der gesamte Anlageertrag wuchs auf 43,0 Millionen Dollar, ein Anstieg um 21,1 % im Jahresvergleich.
Die Rückzahlungen beliefen sich auf 60,1 Millionen Dollar und übertrafen damit die 2,6 Millionen Dollar an Neuinvestitionen erheblich. Die Liquiditätsposition des Unternehmens verbesserte sich auf 162,0 Millionen Dollar, was die Liquidität erhöhte.
Die Dividenden blieben stabil bei 0,74 Dollar pro Aktie, was eine Rendite von 12,7 % basierend auf dem Aktienkurs vom 7. Oktober 2024 unterstützt.
Die Eigenkapitalrendite (ROE) stieg für das Quartal auf annualisierte 14,4 %, gegenüber 7,2 % im vorherigen Quartal.
CEO Christian Oberbeck hob die starke Leistung des Unternehmens hervor und betonte die erfolgreichen Lösungen wichtiger Investitionen sowie ein robustes Portfolio in einem volatilen Umfeld.
- NAV increased to $372.1 million, up from $367.9 million last quarter.
- NII per share rose to $1.33 from $1.05 in the prior quarter.
- Total investment income grew to $43.0 million, a 21.1% YoY increase.
- Cash position improved to $162.0 million.
- ROE increased to 14.4% annualized for the quarter.
- AUM decreased by 5.3% YoY to $1.041 billion.
- Significant repayments ($60.1 million) outpaced originations ($2.6 million).
- NAV per share decreased YoY from $28.44 to $27.07.
Insights
Saratoga Investment Corp. reported strong financial results for Q2 2025, demonstrating resilience in a challenging economic environment. Key highlights include:
- Net Investment Income (NII) per share increased to
$1.33 from$1.05 last quarter - Net Asset Value (NAV) per share rose to
$27.07 from$26.85 - Total investment income grew
21.1% year-over-year to$43.0 million - Dividend declared at
$0.74 per share, implying a12.7% yield
The company's performance benefited from elevated interest rates on its floating rate assets and the successful resolution of non-accrual investments. With
Saratoga Investment's Q2 results reveal a company adeptly navigating market challenges while maintaining a strong financial position. The
Investors should take note of the company's robust liquidity position, with
However, the decrease in AUM and originations this quarter suggests a cautious approach to new investments, which could impact growth in the near term. The company's focus on high-quality credits and first lien positions should provide some insulation against economic headwinds, but investors should monitor how this conservative stance affects future earnings potential.
Reports Per Share Increases in Net Investment Income (“NII”), Adjusted NII, and Net Asset Value (“NAV”), as Compared to Prior Quarter
NEW YORK, Oct. 08, 2024 (GLOBE NEWSWIRE) -- Saratoga Investment Corp. (NYSE: SAR) (“Saratoga Investment” or “the Company”), a business development company (“BDC”), today announced financial results for its 2025 fiscal second quarter ended August 31, 2024.
Summary Financial Information
The Company’s summarized financial information is as follows:
| For the three months ended and as of | ||||||
| ($ in thousands, except per share) | August 31, 2024 | May 31, 2024 | August 31, 2023 | |||
| Assets Under Management (AUM) | 1,040,711 | 1,095,559 | 1,098,945 | |||
| Net Asset Value (NAV) | 372,054 | 367,855 | 362,079 | |||
| NAV per share | 27.07 | 26.85 | 28.44 | |||
| Total Investment Income | 43,003 | 38,678 | 35,514 | |||
| Net Investment Income (NII) per share | 1.33 | 1.05 | 1.15 | |||
| Adjusted NII per share | 1.33 | 1.05 | 1.08 | |||
| Earnings per share | 0.97 | 0.48 | 0.65 | |||
| Dividends per share (declared) | 0.74 | 0.74 | 0.71 | |||
| Return on Equity – last twelve months | ||||||
| – annualized quarter | ||||||
| Originations | 2,584 | 39,301 | 27,447 | |||
| Repayments | 60,140 | 75,703 | 6,036 | |||
Christian L. Oberbeck, Chairman and Chief Executive Officer of Saratoga Investment, commented, “Highlights this quarter include the successful full repayment and resolution of our Knowland investment, the last of our four non-accrual or watchlist investments in our portfolio resolved this past year, a return to increasing NAV per share and continued substantial overearning of our record level of dividends. Our annualized second quarter dividend of
“Though interest rates have decreased from their highs, they remained stable throughout our fiscal second quarter, resulting in solid recurring net interest margins on our portfolio. In addition, our strong reputation and differentiated market positioning, combined with our ongoing development of sponsor relationships, continues to create attractive investment opportunities from high quality sponsors. We appear to be seeing the early stages of a potential increase in M&A in the lower middle market, reflected in multiple repayments over the past few months, in addition to significant new originations, including importantly, two new portfolio investments closed subsequent to quarter-end.”
“Saratoga’s solid overall performance is reflected in our continued strong key performance indicators this past quarter, including: (i) sequential adjusted NII per share increase of
“At the foundation of our strong operating performance is the high-quality nature, resilience and balance of our
- the Zollege restructuring was completed last quarter, and the Pepper Palace restructuring this quarter. As of quarter-end, both investments are now being held at a total combined remaining fair value of
$3.6 million , and Saratoga has taken control over both investments and brought in new CEOs through consensual restructurings with the prior sponsors and former management. We continue to actively implement management changes, capital structure improvements and business plan adjustments, which have the potential for future increases in recovery value; - our Knowland investment repaid our full principal as well as all accrued and reserved interest through a sale transaction. As of August 31, 2024, we recognized the
$7.9 million previously reserved interest into NII, and also booked a$0.5 million unrealized appreciation. This leaves$2.7 million that will be recognized into unrealized appreciation in the third quarter; and - our Netreo investment was also sold in the prior quarter, with full recovery of our invested debt capital and a modest overall return.”
“The remaining core non-CLO portfolio was relatively unchanged this quarter, and the CLO and JV were marked down by
“We continue to remain prudent and discerning in terms of new commitments in the current volatile environment. Originations this quarter demonstrate that, despite an overall robust pipeline, there are periods when investments we review do not meet our high-quality credit and pricing standards, like this quarter where we originated no new portfolio company investments while benefitting from five follow-on investments in existing portfolio companies that we know well with strong business models and balance sheets. Subsequent to quarter-end we have seen actionable opportunities, and closed on two new platform companies for the first time in several quarters.”
“Our quarter-end cash position grew to
“Our overall credit quality for this quarter increased to
Mr. Oberbeck concluded, “As we navigate through a dynamic interest rate environment and uncertain economic outlook, we remain confident in our experienced management team, robust pipeline, strong leverage structure, and high underwriting standards to continue to steadily increase our portfolio size, quality and investment performance over the long-term to deliver exceptional risk adjusted returns to shareholders.”
Discussion of Financial Results for the Quarter ended August 31, 2024:
- AUM as of August 31, 2024, was
$1.04 1 billion, a decrease of5.3% from$1.09 9 billion as of August 31, 2023, and a decrease of5.0% from$1.09 6 billion as of last quarter. - Total investment income for the three months ended August 31, 2024, was
$43.0 million , an increase of$7.5 million , or21.1% , from$35.5 million in the three months ended August 31, 2023, and$4.3 million , or11.2% , as compared to$38.7 million for the quarter ended May 31, 2024. This quarter’s investment income increases were primarily due to the reversal of the Knowland interest reserve of$7.9 million that was previously on non-accrual status, following the investment’s full repayment subsequent to quarter-end, including accrued interest. Investment income reflects a weighted average interest rate of12.6% , consistent with last quarter and last year. - Total expenses for second fiscal quarter 2025, excluding interest and debt financing expenses, base management fees and incentive fees, and income and excise taxes, increased
$0.1 million to$2.2 million as compared to$2.1 million in the second quarter of fiscal year 2023, and decreased$0.7 million as compared to$2.9 million for the quarter ended May 31, 2024. This represented0.7% of average total assets on an annualized basis, unchanged from0.7% last year and down from1.0% last quarter. - Adjusted NII for the quarter ended August 31, 2024, was
$18.2 million , an increase of$5.0 million , or38.3% , from$13.2 million in the period ended August 31, 2023, and$3.9 million , or26.9% , from$14.3 million in the prior quarter. The increases in investment income were primarily offset by (i) increased interest expense resulting from the various new Notes Payable and SBA debentures issued during the past year, and (ii) increased incentive management fees from higher average AUM and earnings. - NII Yield as a percentage of average net asset value was
19.7% for the quarter ended August 31, 2024. Adjusted for the incentive fee accrual related to net capital gains, the NII Yield was also19.7% . In comparison, adjusted NII Yield was15.0% for the quarter ended August 31, 2023, and15.5% for the quarter ended May 31, 2024. - NAV was
$372.1 million as of August 31, 2024, an increase of$10.0 million from$362.1 million as of August 31, 2023, and an increase of$4.2 million from$367.9 million as of May 31, 2024. - NAV per share was
$27.07 as of August 31, 2024, compared to$28.44 as of August 31, 2023, and$26.85 as of May 31, 2024. - Return on equity (“ROE”) for the last twelve months ended August 31, 2024, was
5.8% , down from9.6% for the comparable period last year, and up from4.4% in the previous quarter. ROE on an annualized basis for the quarter ended August 31, 2024 was14.4% . - The weighted average common shares outstanding increased from 12.2 million last year to 13.7 million for both this year’s quarters.
Portfolio and Investment Activity as of August 31, 2024
- Fair value of Saratoga Investment’s portfolio was
$1.04 1 billion, excluding$162.0 million in cash and cash equivalents, principally invested in 50 portfolio companies, one collateralized loan obligation fund (the “CLO”) and one joint venture fund (the “JV”). - Cost of investments made during the period:
$2.6 million , including five follow-ons and no investments in new portfolio companies. - Principal repayments during the period:
$60.1 million , including three full and four partial repayments of existing investments, plus amortization.- The fair value of the portfolio also decreased by
$4.7 million of net realized losses and unrealized appreciation, consisting of a$34.0 million realized loss on our Pepper Palace investment following its restructuring this quarter, offset by a$0.5 million realized gain on our Book4time Class A preferred investment resulting from the sale of the company, and$28.7 million unrealized appreciation across the portfolio. - The unrealized appreciation includes (i) reversal of
$32.1 million net unrealized depreciation previously recognized on our Pepper Palace and Book4 time realized investments, offset by (i)$2.7 million net unrealized depreciation on our CLO and JV, primarily related to mark-downs due to individual credits in the CLO broadly syndicated portfolio, (ii) an additional$0.2 million unrealized depreciation completing the Zollege investment restructuring, and (iii)$0.5 million unrealized depreciation on the remaining core BDC portfolio. - Since taking over management of the BDC, the Company has generated
$1.03 billion of repayments and sales of investments originated by Saratoga Investment, generating a gross unlevered IRR of15.2% . Total investments originated by Saratoga is$2.2 billion .
- The fair value of the portfolio also decreased by
- The overall portfolio composition consisted of
85.2% of first lien term loans,2.5% of second lien term loans,1.6% of unsecured term loans,2.2% of structured finance securities, and8.5% of common equity. - The weighted average current yield on Saratoga Investment’s portfolio based on current fair values was
11.5% , which was comprised of a weighted average current yield of12.3% on first lien term loans,18.0% on second lien term loans,10.8% on unsecured term loans,13.3% on CLO subordinated notes and0.0% on equity interests.
Portfolio Update:
- Subsequent to quarter-end, Saratoga Investment has executed approximately
$56.7 million of new originations in two new portfolio companies and two follow-ons, including delayed draws, and had one repayment of$20.5 million , for a net increase in investments of$36.2 million . The repayment was the full repayment of Knowland, including interest, as previously noted.
Liquidity and Capital Resources
Outstanding Borrowings:
- As of August 31, 2024, Saratoga Investment had a combined
$52.5 million in outstanding combined borrowings under its$65.0 million senior secured revolving credit facility with Encina and its$75.0 million senior secured revolving credit facility with Live Oak. - At the same time, Saratoga Investment had
$175.0 million SBA debentures in its SBIC II license outstanding,$39.0 million SBA debentures in its SBIC III license outstanding,$269.4 million of listed baby bonds issued,$250.0 million of unsecured unlisted institutional bond issuances, five unlisted issuances of$52.0 million in total, and an aggregate of$162.0 million in cash and cash equivalents.
Undrawn Borrowing Capacity:
- With
$87.5 million available under the two credit facilities and$162.0 million of cash and cash equivalents as of August 31, 2024, Saratoga Investment has a total of$249.5 million of undrawn credit facility borrowing capacity and cash and cash equivalents for new investments or to support its existing portfolio companies in the BDC. - In addition, Saratoga Investment has
$136.0 million in undrawn SBA debentures available from its existing SBIC III license. Availability under the Encina and Live Oak credit facilities can change depending on portfolio company performance and valuation. In addition, certain follow-on investments in SBIC II and the BDC will not qualify for SBIC III funding. Overall outstanding SBIC debentures are limited to$350.0 million across all active SBIC licenses. - Total Saratoga undrawn borrowing capacity is therefore
$385.5 million . - As of quarter-end, Saratoga Investment had
$48.4 million of committed undrawn lending commitments and$83.7 million of discretionary funding commitments.
Additionally:
- Saratoga Investment has an active equity distribution agreement with Ladenburg Thalmann & Co. Inc., Raymond James and Associates, Inc, Lucid Capital Markets, LLC and Compass Point Research and Trading, LLC, through which Saratoga Investment may offer for sale, from time to time, up to
$300.0 million of common stock through an ATM offering.- As of August 31, 2024, Saratoga Investment has sold 6,543,878 shares for gross proceeds of
$172.5 million at an average price of$26.37 for aggregate net proceeds of$171.0 million (net of transaction costs). During the three and six months ended August 31, 2024, Saratoga Investment did not sell any shares under the ATM program.
- As of August 31, 2024, Saratoga Investment has sold 6,543,878 shares for gross proceeds of
- On June 14, 2024, Saratoga Investment and its wholly owned financing subsidiary, Saratoga Investment Funding III LLC (“SIF III”), entered into the First Amendment and Lender Joinder to the Credit and Security Agreement (the “Amendment” and the Credit and Security Agreement as amended by the Amendment, the “Credit Agreement”), by and among SIF III, as borrower, the Company, as collateral manager and as equity holder, the lenders parties thereto, and Live Oak Banking Company, as administrative agent and as collateral agent, relating to the special purpose vehicle financing credit facility (the “Live Oak Credit Facility”). The Amendment, among other things: (i) increased the borrowings available under the Live Oak Credit Facility from up to
$50.0 million to up to$75.0 million , subject to a borrowing base requirement; (ii) added New Lenders (as identified in the Amendment) to the Credit Agreement; (iii) replaced administrative agent approval with “Required Lender” (as defined in the Credit Agreement) approval with respect to certain matters; (iv) replaced Required Lender approval with100% lender approval with respect to certain matters; and (v) changed the definition of Required Lender to require the approval of at least two unaffiliated lenders.
Dividend
On August 22, 2024, Saratoga Investment announced that its Board of Directors declared a quarterly dividend of
Shareholders have the option to receive payment of dividends in cash or receive shares of common stock, pursuant to the Company’s DRIP. Shares issued under the Company’s DRIP is issued at a
The following table highlights Saratoga Investment’s dividend history over the past eleven quarters:
| Declared | Ex-Date | Record | Payable | Amount | |
| August 22, 2024 | September 11, 2024 | September 11, 2024 | September 26, 2024 | ||
| May 23, 2024 | June 13, 2024 | June 13, 2024 | June 27, 2024 | ||
| February 15, 2024 | March 12, 2024 | March 13, 2024 | March 28, 2024 | ||
| November 15, 2023 | December 8, 2023 | December 11, 2023 | December 28, 2023 | ||
| August 14, 2023 | September 13, 2023 | September 14, 2023 | September 28, 2023 | ||
| May 22, 2023 | June 12, 2023 | June 13, 2023 | June 29, 2023 | ||
| February 28, 2023 | March 15, 2023 | March 16, 2023 | March 30, 2023 | ||
| November 15. 2022 | December 14, 2022 | December 15, 2022 | January 4, 2023 | ||
| August 29, 2022 | September 13, 2022 | September 14, 2022 | September 29, 2022 | ||
| May 26, 2022 | June 13, 2022 | June 14, 2022 | June 29, 2022 | ||
| February 28, 2022 | March 11, 2022 | March 14, 2022 | March 28, 2022 | ||
Share Repurchase Plan
As of August 31, 2024, the Company purchased 1,035,203 shares of common stock, at the average price of
Of note, in fiscal year 2015, the Company announced the approval of an open market share repurchase plan that allows it to repurchase up to 200,000 shares of its common stock at prices below its NAV as reported in its then most recently published financial statements. Since then, the Share Repurchase Plan has been extended annually, and the Company has periodically increased the amount of shares of common stock that may be purchased under the Share Repurchase Plan, most recently to 1.7 million shares of common stock. On January 8, 2024, our board of directors extended the Share Repurchase Plan for another year to January 15, 2025.
2025 Fiscal Second Quarter Conference Call/Webcast Information
| When: | Wednesday, October 9, 2024 |
| 10:00 a.m. Eastern Time (ET) | |
| How: | Webcast: Interested parties may access a live webcast of the call and find the Q2 2025 presentation by going to the “Events & Presentations” section of Saratoga Investment Corp.’s investor relations website (Webcast Details). A replay of the webcast will also be available for a limited time at Saratoga events and presentations. |
| Call: | To access the call by phone, please go to this link (Registration Link) and you will be provided with dial in details. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the scheduled start time |
About Saratoga Investment Corp.
Saratoga Investment is a specialty finance company that provides customized financing solutions to U.S. middle-market businesses. The Company invests primarily in senior and unitranche leveraged loans and mezzanine debt, and, to a lesser extent, equity to provide financing for change of ownership transactions, strategic acquisitions, recapitalizations and growth initiatives in partnership with business owners, management teams and financial sponsors. Saratoga Investment’s objective is to create attractive risk-adjusted returns by generating current income and long-term capital appreciation from its debt and equity investments. Saratoga Investment has elected to be regulated as a business development company under the Investment Company Act of 1940 and is externally managed by Saratoga Investment Advisors, LLC, an SEC-registered investment advisor focusing on credit-driven strategies. Saratoga Investment Corp. owns two active SBIC-licensed subsidiaries, having surrendered its first license after repaying all debentures for that fund following the end of its investment period and subsequent wind-down. Furthermore, it manages a
Forward Looking Statements
This press release contains historical information and forward-looking statements with respect to the business and investments of the Company, including, but not limited to, the statements about future events or our future performance or financial condition. Forward-looking statements can be identified by the use of forward looking words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or negative versions of those words, other comparable words or other statements that do not relate to historical or factual matters. The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. These statements are not guarantees of future performance, condition or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including, but not limited to: changes in the markets in which we invest; changes in the financial, capital, and lending markets; an economic downturn and its impact on the ability of our portfolio companies to operate and the investment opportunities available to us; the impact of interest rate volatility on our business and our portfolio companies; the impact of supply chain constraints and labor shortages on our portfolio companies; and the elevated levels of inflation and its impact on our portfolio companies and the industries in which we invests, as well as those described from time to time in our filings with the Securities and Exchange Commission.
Any forward-looking statement speaks only as of the date on which it is made. The Company undertakes no duty to update any forward-looking statements made herein or on the webcast/conference call, whether as a result of new information, future developments or otherwise, except as required by law. Readers should not place undue reliance on any forward-looking statements and are encouraged to review the Company’s Annual Report on Form 10-Q for the fiscal quarter ended August 31, 2024 and subsequent filings, including the “Risk Factors” sections therein, with the Securities and Exchange Commission for a more complete discussion of the risks and other factors that could affect any forward-looking statements.
Contacts:
Saratoga Investment Corporation
535 Madison Avenue, 4th Floor
New York, NY 10022
Henri Steenkamp
Chief Financial Officer
Saratoga Investment Corp.
212-906-7800
Lena Cati
The Equity Group Inc.
212-836-9611
Val Ferraro
The Equity Group Inc.
212-836-9633
Financials
| Saratoga Investment Corp. Consolidated Statements of Assets and Liabilities | ||||||
| August 31, 2024 | February 29, 2024 | |||||
| (unaudited) | ||||||
| ASSETS | ||||||
| Investments at fair value | ||||||
| Non-control/Non-affiliate investments (amortized cost of | ||||||
| Affiliate investments (amortized cost of | 29,193,438 | 27,749,137 | ||||
| Control investments (amortized cost of | 48,341,503 | 91,270,036 | ||||
| Total investments at fair value (amortized cost of | 1,040,711,450 | 1,138,793,789 | ||||
| Cash and cash equivalents | 84,569,590 | 8,692,846 | ||||
| Cash and cash equivalents, reserve accounts | 77,434,591 | 31,814,278 | ||||
| Interest receivable (net of reserve of | 10,085,266 | 10,298,998 | ||||
| Management fee receivable | 333,826 | 343,023 | ||||
| Other assets | 1,567,007 | 1,163,225 | ||||
| Current income tax receivable | 1,931 | 99,676 | ||||
| Total assets | ||||||
| LIABILITIES | ||||||
| Revolving credit facilities | ||||||
| Deferred debt financing costs, revolving credit facilities | (1,651,311 | ) | (882,122 | ) | ||
| SBA debentures payable | 214,000,000 | 214,000,000 | ||||
| Deferred debt financing costs, SBA debentures payable | (5,306,833 | ) | (5,779,892 | ) | ||
| 20,000,000 | 20,000,000 | |||||
| Discount on | (61,587 | ) | (112,894 | ) | ||
| Deferred debt financing costs, | (2,557 | ) | (4,777 | ) | ||
| 12,000,000 | 12,000,000 | |||||
| Discount on | (132,133 | ) | (193,175 | ) | ||
| Deferred debt financing costs, | (16,212 | ) | (24,210 | ) | ||
| 5,000,000 | 5,000,000 | |||||
| Deferred debt financing costs, | (46,883 | ) | (74,531 | ) | ||
| 175,000,000 | 175,000,000 | |||||
| Premium on | 439,902 | 564,260 | ||||
| Deferred debt financing costs, | (1,283,387 | ) | (1,708,104 | ) | ||
| 75,000,000 | 75,000,000 | |||||
| Discount on | (254,551 | ) | (313,010 | ) | ||
| Deferred debt financing costs, | (859,567 | ) | (1,033,178 | ) | ||
| 15,000,000 | 15,000,000 | |||||
| Deferred debt financing costs, | (237,503 | ) | (273,449 | ) | ||
| 105,500,000 | 105,500,000 | |||||
| Discount on | (105,834 | ) | (123,782 | ) | ||
| Deferred debt financing costs, | (1,871,368 | ) | (2,224,403 | ) | ||
| 46,000,000 | 46,000,000 | |||||
| Deferred debt financing costs, | (1,099,544 | ) | (1,274,455 | ) | ||
| 60,375,000 | 60,375,000 | |||||
| Deferred debt financing costs, | (1,358,240 | ) | (1,563,594 | ) | ||
| 57,500,000 | 57,500,000 | |||||
| Deferred debt financing costs, | (1,474,914 | ) | (1,680,039 | ) | ||
| Base management and incentive fees payable | 9,316,716 | 8,147,217 | ||||
| Deferred tax liability | 4,417,880 | 3,791,150 | ||||
| Accounts payable and accrued expenses | 1,497,040 | 1,337,542 | ||||
| Interest and debt fees payable | 4,001,012 | 3,582,173 | ||||
| Directors fees payable | 80,000 | - | ||||
| Due to Manager | 784,693 | 450,000 | ||||
| Total liabilities | 842,649,819 | 820,981,727 | ||||
| Commitments and contingencies | ||||||
| NET ASSETS | ||||||
| Common stock, par value | 13,746 | 13,654 | ||||
| Capital in excess of par value | 373,087,033 | 371,081,199 | ||||
| Total distributable deficit | (1,046,937 | ) | (870,745 | ) | ||
| Total net assets | 372,053,842 | 370,224,108 | ||||
| Total liabilities and net assets | ||||||
| NET ASSET VALUE PER SHARE | ||||||
| Asset Coverage Ratio | ||||||
| Saratoga Investment Corp. Consolidated Statements of Operations (unaudited) | ||||||
| For the three months ended | ||||||
| August 31, 2024 | August 31, 2023 | |||||
| INVESTMENT INCOME | ||||||
| Interest from investments | ||||||
| Interest income: | ||||||
| Non-control/Non-affiliate investments | ||||||
| Affiliate investments | 491,015 | 907,064 | ||||
| Control investments | 1,247,256 | 2,085,448 | ||||
| Payment in kind interest income: | ||||||
| Non-control/Non-affiliate investments | 1,654,044 | 493,338 | ||||
| Affiliate investments | 250,346 | 215,547 | ||||
| Control investments | 1,277 | 142,289 | ||||
| Total interest from investments | 39,365,152 | 32,333,405 | ||||
| Interest from cash and cash equivalents | 1,671,031 | 539,093 | ||||
| Management fee income | 792,323 | 817,250 | ||||
| Dividend income(*): | ||||||
| Non-control/Non-affiliate investments | 162,779 | 94,613 | ||||
| Control investments | 915,590 | 1,536,970 | ||||
| Total dividend from investments | 1,078,369 | 1,631,583 | ||||
| Structuring and advisory fee income | 35,000 | 45,000 | ||||
| Other income | 61,500 | 147,814 | ||||
| Total investment income | 43,003,375 | 35,514,145 | ||||
| OPERATING EXPENSES | ||||||
| Interest and debt financing expenses | 13,128,941 | 12,413,462 | ||||
| Base management fees | 4,766,445 | 4,840,899 | ||||
| Incentive management fees expense (benefit) | 4,550,270 | 2,481,473 | ||||
| Professional fees | 125,886 | 486,673 | ||||
| Administrator expenses | 1,133,333 | 904,167 | ||||
| Insurance | 77,597 | 81,901 | ||||
| Directors fees and expenses | 80,000 | 111,000 | ||||
| General and administrative | 821,584 | 467,116 | ||||
| Income tax expense (benefit) | 121,921 | (237,330 | ) | |||
| Total operating expenses | 24,805,977 | 21,549,361 | ||||
| NET INVESTMENT INCOME | 18,197,398 | 13,964,784 | ||||
| REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS | ||||||
| Net realized gain (loss) from investments: | ||||||
| Non-control/Non-affiliate investments | 558,701 | - | ||||
| Control investments | (34,007,428 | ) | - | |||
| Net realized gain (loss) from investments | (33,448,727 | ) | - | |||
| Net change in unrealized appreciation (depreciation) on investments: | ||||||
| Non-control/Non-affiliate investments | 32,524,852 | (11,657,451 | ) | |||
| Affiliate investments | 353,445 | 39,648 | ||||
| Control investments | (4,150,142 | ) | 5,880,232 | |||
| Net change in unrealized appreciation (depreciation) on investments | 28,728,155 | (5,737,571 | ) | |||
| Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments | (159,187 | ) | (221,206 | ) | ||
| Net realized and unrealized gain (loss) on investments | (4,879,759 | ) | (5,958,777 | ) | ||
| Realized losses on extinguishment of debt | - | (110,056 | ) | |||
| NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | ||||||
| WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE | ||||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED | 13,726,142 | 12,158,440 | ||||
* Certain prior period amounts have been reclassified to conform to current period presentation.
| Saratoga Investment Corp. Consolidated Statements of Operations (unaudited) | ||||||
| For the six months ended | ||||||
| August 31, 2024 | August 31, 2023 | |||||
| INVESTMENT INCOME | ||||||
| Interest from investments | ||||||
| Interest income: | ||||||
| Non-control/Non-affiliate investments | ||||||
| Affiliate investments | 987,855 | 1,634,150 | ||||
| Control investments | 3,244,368 | 4,131,308 | ||||
| Payment in kind interest income: | ||||||
| Non-control/Non-affiliate investments | 1,717,874 | 618,233 | ||||
| Affiliate investments | 491,450 | 423,136 | ||||
| Control investments | 284,590 | 283,852 | ||||
| Total interest from investments | 73,671,628 | 61,891,191 | ||||
| Interest from cash and cash equivalents | 2,295,662 | 1,343,382 | ||||
| Management fee income | 1,596,779 | 1,634,038 | ||||
| Dividend income(*): | ||||||
| Non-control/Non-affiliate investments | 412,270 | 112,033 | ||||
| Control investments | 2,212,640 | 3,360,480 | ||||
| Total dividend from investments | 2,624,910 | 3,472,513 | ||||
| Structuring and advisory fee income | 445,843 | 1,474,222 | ||||
| Other income | 1,046,703 | 330,842 | ||||
| Total investment income | 81,681,525 | 70,146,188 | ||||
| OPERATING EXPENSES | ||||||
| Interest and debt financing expenses | 26,091,022 | 24,106,284 | ||||
| Base management fees | 9,749,025 | 9,405,088 | ||||
| Incentive management fees expense (benefit) | 8,135,004 | 2,584,821 | ||||
| Professional fees | 1,125,196 | 972,723 | ||||
| Administrator expenses | 2,208,333 | 1,722,917 | ||||
| Insurance | 155,193 | 163,802 | ||||
| Directors fees and expenses | 193,000 | 200,068 | ||||
| General and administrative | 1,430,711 | 1,297,844 | ||||
| Income tax expense (benefit) | 61,638 | (231,093 | ) | |||
| Total operating expenses | 49,149,122 | 40,222,454 | ||||
| NET INVESTMENT INCOME | 32,532,403 | 29,923,734 | ||||
| REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS | ||||||
| Net realized gain (loss) from investments: | ||||||
| Non-control/Non-affiliate investments | 558,701 | 90,691 | ||||
| Control investments | (55,202,425 | ) | - | |||
| Net realized gain (loss) from investments | (54,643,724 | ) | 90,691 | |||
| Net change in unrealized appreciation (depreciation) on investments: | ||||||
| Non-control/Non-affiliate investments | 46,681,677 | (13,385,585 | ) | |||
| Affiliate investments | 954,668 | (205,636 | ) | |||
| Control investments | (4,976,759 | ) | (8,468,657 | ) | ||
| Net change in unrealized appreciation (depreciation) on investments | 42,659,586 | (22,059,878 | ) | |||
| Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments | (620,188 | ) | (161,799 | ) | ||
| Net realized and unrealized gain (loss) on investments | (12,604,326 | ) | (22,130,986 | ) | ||
| Realized losses on extinguishment of debt | - | (110,056 | ) | |||
| NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | ||||||
| WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE | ||||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED | 13,704,759 | 12,011,180 | ||||
* Certain prior period amounts have been reclassified to conform to current period presentation.
Supplemental Information Regarding Adjusted Net Investment Income, Adjusted Net Investment Income Yield and Adjusted Net Investment Income per Share
On a supplemental basis, Saratoga Investment provides information relating to adjusted net investment income, adjusted net investment income yield and adjusted net investment income per share, which are non-GAAP measures. These measures are provided in addition to, but not as a substitute for, net investment income, net investment income yield and net investment income per share. Adjusted net investment income represents net investment income excluding any capital gains incentive fee expense or reversal attributable to realized and unrealized gains. The management agreement with the Company’s advisor provides that a capital gains incentive fee is determined and paid annually with respect to cumulative realized capital gains (but not unrealized capital gains) to the extent such realized capital gains exceed realized and unrealized losses for such year. In addition, Saratoga Investment accrues, but does not pay, a capital gains incentive fee in connection with any unrealized capital appreciation, as appropriate. All capital gains incentive fees are presented within net investment income within the Consolidated Statements of Operations, but the associated realized and unrealized gains and losses that these incentive fees relate to, are excluded. As such, Saratoga Investment believes that adjusted net investment income, adjusted net investment income yield and adjusted net investment income per share is a useful indicator of operations exclusive of any capital gains incentive fee expense or reversal attributable to gains. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. The following table provides a reconciliation of net investment income to adjusted net investment income, net investment income yield to adjusted net investment income yield and net investment income per share to adjusted net investment income per share for the three and six months ended August 31, 2024 and August 31, 2023.
| For the Three Months Ended | ||||||
| August 31, 2024 | August 31, 2023 | |||||
| Net Investment Income | ||||||
| Changes in accrued capital gains incentive fee expense/ (reversal) | - | (808,452) | ||||
| Adjusted net investment income | ||||||
| Net investment income yield | ||||||
| Changes in accrued capital gains incentive fee expense/ (reversal) | - | (1.0)% | ||||
| Adjusted net investment income yield(1) | ||||||
| Net investment income per share | ||||||
| Changes in accrued capital gains incentive fee expense/ (reversal) | - | (0.07) | ||||
| Adjusted net investment income per share(2) | ||||||
(1) Adjusted net investment income yield is calculated as adjusted net investment income divided by average net asset value.
(2) Adjusted net investment income per share is calculated as adjusted net investment income divided by weighted average common shares outstanding.
| For the Six Months Ended | ||||||
| August 31, 2024 | August 31, 2023 | |||||
| Net Investment Income | ||||||
| Changes in accrued capital gains incentive fee expense/ (reversal) | - | (3,918,274) | ||||
| Adjusted net investment income | ||||||
| Net investment income yield | ||||||
| Changes in accrued capital gains incentive fee expense/ (reversal) | - | (2.3)% | ||||
| Adjusted net investment income yield(1) | ||||||
| Net investment income per share | ||||||
| Changes in accrued capital gains incentive fee expense/ (reversal) | - | (0.32) | ||||
| Adjusted net investment income per share(2) | ||||||
(3) Adjusted net investment income yield is calculated as adjusted net investment income divided by average net asset value.
(4) Adjusted net investment income per share is calculated as adjusted net investment income divided by weighted average common shares outstanding.
FAQ
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