Saratoga Investment Corp. Announces Fiscal Third Quarter 2024 Financial Results
- None.
- Net Investment Income per share is down 5% from last quarter.
Insights
The reported decrease in Net Investment Income (NII) per share of Saratoga Investment Corp. by 5% sequentially yet an increase of 27% year-over-year is indicative of a mixed performance. While the dip from the previous quarter can signal potential concerns or volatility, the significant annual growth suggests a robust underlying business strategy. The 31% year-over-year increase in adjusted NII per share further underscores the company's ability to leverage its growing Assets under Management (AUM) and to benefit from favorable interest rate environments, given its portfolio of largely floating rate assets.
The reported dividend yield of 11.0% and earnings yield of 15.4% are particularly impressive, exceeding typical market averages and possibly indicating a strong income-generating potential for investors. However, the 40% overearning of its dividend raises questions about the sustainability of such high payouts, despite the cushion it provides against adverse events. Investors should monitor whether these earnings can be consistently generated or if they are the result of transient market conditions.
The company's strategic focus on first lien debt, which comprises 86% of its investments, suggests a conservative risk profile. This is further corroborated by the reported 97.1% of credits rated in the highest category, signaling high credit quality within Saratoga's portfolio. However, a 3% markdown in the overall portfolio value compared to cost warrants attention, as it may reflect valuation adjustments in response to market conditions or specific credit performance issues.
Saratoga Investment Corp.'s emphasis on smaller middle market businesses and the development of sponsor relationships appear to be a strategic response to the contraction of available credit in this segment. This niche focus allows the company to capture attractive investment opportunities at favorable terms, which could be a competitive advantage in the BDC space. The reported growth in originations, despite a challenging environment, is a testament to the company's strong deal-sourcing capabilities.
The company's active management of its portfolio, marked by a disciplined approach to new commitments and a prudent selection process, is crucial in maintaining portfolio health, especially during volatile market conditions. The current environment, characterized by uncertainty surrounding interest rate movements, makes Saratoga's conservative leverage and high-quality portfolio particularly relevant. The company's ability to navigate these conditions and maintain strong investment performance could position it well for long-term growth.
The broader economic implications of Saratoga Investment Corp.'s performance are multifaceted. On one hand, the company's ability to grow its AUM and maintain high yields in a potentially rising interest rate environment reflects a well-positioned portfolio that could benefit from higher rates. This is particularly relevant given the ongoing discussions about potential rate cuts in 2024, which could impact the yields of floating rate assets.
On the other hand, the net asset value (NAV) decrease from the previous quarter, despite being up year-over-year, might be reflective of broader economic trends affecting asset valuations. The markdowns in specific credits and the overall CLO portfolio could be symptomatic of underlying economic stressors that may affect future performance. The company's resilience, as well as that of the small to mid-sized business sector it serves, will be a key indicator of economic health in this market segment.
NEW YORK, Jan. 09, 2024 (GLOBE NEWSWIRE) -- Saratoga Investment Corp. (NYSE:SAR) (“Saratoga Investment” or “the Company”), a business development company (“BDC”), today announced financial results for its 2024 fiscal third quarter, with Net Investment Income (“NII”) per share down
Saratoga Investment’s annualized third quarter dividend of
Summary Financial Information
The Company’s summarized financial information is as follows:
| For the three months ended and as of November 30, 2023 | For the three months ended and as of August 31, 2023 | For the three months ended and as of November 30, 2022 | |||||||
| ($ in thousands except per share) | |||||||||
| AUM | 1,114,039 | 1,098,945 | 982,034 | ||||||
| NAV | 359,559 | 362,079 | 335,764 | ||||||
| NAV per share | 27.42 | 28.44 | 28.25 | ||||||
| Investment Income | 36,340 | 35,514 | 26,257 | ||||||
| Net Investment Income per share | 1.09 | 1.15 | 0.83 | ||||||
| Adjusted Net Investment Income per share | 1.01 | 1.08 | 0.77 | ||||||
| Earnings per share | (0.31 | ) | 0.65 | 0.51 | |||||
| Dividends per share (declared) | 0.72 | 0.71 | 0.68 | ||||||
| Return on Equity | |||||||||
| – last twelve months | |||||||||
| – annualized quarter | ( | ||||||||
| Originations | 35,612 | 27,447 | 87,574 | ||||||
| Repayments | 2,144 | 6,036 | 56,917 | ||||||
“The rise in interest rates has stabilized in the recent quarter, resulting in elevated margins on our growing portfolio relative to the past year. The continued general contraction of available credit for smaller middle market businesses and our ongoing development of sponsor relationships have created an abundant flow of attractive investment opportunities from high quality sponsors at attractive pricing, terms and absolute rates,” said Christian L. Oberbeck, Chairman and Chief Executive Officer of Saratoga Investment.
“Saratoga’s solid performance is reflected in our continued strong key performance indicators this past quarter, including: (i) quarterly adjusted NII per share increases of
“We have made substantial progress in building our NAV this year to further support the substantial growth of our portfolio, raising more than
“Most importantly, at the foundation of our performance is the high-quality nature, resilience and balance of our
“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 zero new portfolio company investments and had fourteen smaller follow-on investments in existing portfolio companies we know well with strong business models and balance sheets. Originations this quarter totaled
“As we navigate through this challenging and volatile environment, we remain confident in our experienced management team, high underwriting standards and ability to steadily grow portfolio size and maintain quality and investment performance over the long-term.”
Discussion of Financial Results for the Quarter ended November 30, 2023:
As of November 30, 2023, Saratoga Investment’s AUM was
Saratoga Investment’s portfolio remains strong, with
For the three months ended November 30, 2023, total investment income of
For the three months ended November 30, 2023, adjusted net investment income of
Total expenses for the third fiscal quarter 2024, excluding interest and debt financing expenses, base management fees and incentive fees and income and excise taxes, increased from
Net investment income on a weighted average per share basis was
Net investment income yield as a percentage of average net asset value (“Net Investment Income Yield”) was
Return on equity for the last twelve months ended November 30, 2023 was
NAV was
NAV per share was
Investment portfolio activity for the quarter ended November 30, 2023:
- Cost of investments made during the period:
$35.6 million , including zero investments in new portfolio companies and fourteen follow-ons. - Principal repayments during the period:
$2.1 million , including one partial repayment of an existing investment, plus amortization.
Additional Financial Information
For the fiscal quarter ended November 30, 2023, Saratoga Investment reported NII of
This quarter’s
Portfolio and Investment Activity
As of November 30, 2023, the fair value of Saratoga Investment’s portfolio was
For the fiscal quarter ended November 30, 2023, Saratoga Investment invested
As of November 30, 2023, the weighted average current yield on Saratoga Investment’s portfolio based on current fair values was
Liquidity and Capital Resources
As of November 30, 2023, Saratoga Investment had
With
On July 30, 2021, Saratoga Investment entered into an equity distribution agreement with Ladenburg Thalmann & Co. Inc. and Compass Point Research and Trading, LLC, through which Saratoga Investment may offer for sale, from time to time, up to
Dividend
On November 15, 2023, Saratoga Investment announced that its Board of Directors declared a quarterly dividend of
The Company previously declared in fiscal 2024 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.
Share Repurchase Plan
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.
As of November 30, 2023, the Company had purchased 1,035,203 shares of common stock, at the average price of
2024 Fiscal Third Quarter Conference Call/Webcast Information
| When: | Wednesday, January 10, 2024 |
| 10:00 a.m. Eastern Time (ET) | |
| How: | Webcast: Interested parties may access a live webcast of the call and find the Q3 2024 presentation by going to the “Events & Presentations” section of Saratoga Investment Corp.’s investor relations website, Saratoga events and presentations. 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-K for the fiscal year ended February 28, 2023 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.
Financials
| Saratoga Investment Corp. | ||||||||
| Consolidated Statements of Assets and Liabilities | ||||||||
| November 30, 2023 | February 28, 2023 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Investments at fair value | ||||||||
| Non-control/Non-affiliate investments (amortized cost of | $ | 976,440,074 | $ | 828,028,800 | ||||
| Affiliate investments (amortized cost of | 47,128,397 | 28,305,871 | ||||||
| Control investments (amortized cost of | 90,470,138 | 116,255,582 | ||||||
| Total investments at fair value (amortized cost of | 1,114,038,609 | 972,590,253 | ||||||
| Cash and cash equivalents | 21,386,880 | 65,746,494 | ||||||
| Cash and cash equivalents, reserve accounts | 25,639,619 | 30,329,779 | ||||||
| Interest receivable (net of reserve of | 9,235,919 | 8,159,951 | ||||||
| Management fee receivable | 364,032 | 363,809 | ||||||
| Other assets | 932,383 | 531,337 | ||||||
| Current tax receivable | 99,676 | 436,551 | ||||||
| Total assets | $ | 1,171,697,118 | $ | 1,078,158,174 | ||||
| LIABILITIES | ||||||||
| Revolving credit facility | $ | 35,000,000 | $ | 32,500,000 | ||||
| Deferred debt financing costs, revolving credit facility | (996,961 | ) | (1,344,005 | ) | ||||
| SBA debentures payable | 205,000,000 | 202,000,000 | ||||||
| Deferred debt financing costs, SBA debentures payable | (5,789,246 | ) | (4,923,488 | ) | ||||
| 20,000,000 | - | |||||||
| Discount on | (251,521 | ) | - | |||||
| Deferred debt financing costs, | (10,576 | ) | - | |||||
| 12,000,000 | 12,000,000 | |||||||
| Discount on | (222,781 | ) | (304,946 | ) | ||||
| Deferred debt financing costs, | (28,165 | ) | (40,118 | ) | ||||
| 5,000,000 | 5,000,000 | |||||||
| Deferred debt financing costs, | (88,206 | ) | (129,528 | ) | ||||
| 175,000,000 | 175,000,000 | |||||||
| Premium on | 641,310 | 830,824 | ||||||
| Deferred debt financing costs, | (1,918,155 | ) | (2,552,924 | ) | ||||
| 75,000,000 | 75,000,000 | |||||||
| Discount on | (330,619 | ) | (408,932 | ) | ||||
| Deferred debt financing costs, | (1,119,041 | ) | (1,378,515 | ) | ||||
| 15,000,000 | 15,000,000 | |||||||
| Deferred debt financing costs, | (291,226 | ) | (344,949 | ) | ||||
| 105,500,000 | 105,500,000 | |||||||
| Discount on | (132,538 | ) | (159,334 | ) | ||||
| Deferred debt financing costs, | (2,399,002 | ) | (2,926,637 | ) | ||||
| 46,000,000 | 46,000,000 | |||||||
| Deferred debt financing costs, | (1,360,960 | ) | (1,622,376 | ) | ||||
| 60,375,000 | 60,375,000 | |||||||
| Deferred debt financing costs, | (1,665,155 | ) | (1,944,536 | ) | ||||
| 57,500,000 | - | |||||||
| Deferred debt financing costs, | (1,781,486 | ) | - | |||||
| Base management and incentive fees payable | 8,139,713 | 12,114,878 | ||||||
| Deferred tax liability | 3,422,306 | 2,816,572 | ||||||
| Accounts payable and accrued expenses | 2,086,243 | 1,464,343 | ||||||
| Interest and debt fees payable | 4,609,435 | 3,652,936 | ||||||
| Directors fees payable | - | 14,932 | ||||||
| Due to manager | 250,000 | 10,935 | ||||||
| Total liabilities | 812,138,369 | 731,200,132 | ||||||
| Commitments and contingencies | ||||||||
| NET ASSETS | ||||||||
| Common stock, par value | ||||||||
| authorized, 13,114,977 and 11,890,500 common shares issued and outstanding, respectively | 13,115 | 11,891 | ||||||
| Capital in excess of par value | 356,698,595 | 321,893,806 | ||||||
| Total distributable earnings | 2,847,039 | 25,052,345 | ||||||
| Total net assets | 359,558,749 | 346,958,042 | ||||||
| Total liabilities and net assets | $ | 1,171,697,118 | $ | 1,078,158,174 | ||||
| NET ASSET VALUE PER SHARE | $ | 27.42 | $ | 29.18 | ||||
| Asset Coverage Ratio | 159.3 | % | 165.9 | % | ||||
| Saratoga Investment Corp. | |||||||||
| Consolidated Statements of Operations | |||||||||
| (unaudited) | |||||||||
| For the three months ended | |||||||||
| November 30, 2023 | November 30, 2022 | ||||||||
| INVESTMENT INCOME | |||||||||
| Interest from investments | |||||||||
| Interest income: | |||||||||
| Non-control/Non-affiliate investments | $ | 28,741,745 | $ | 19,549,044 | |||||
| Affiliate investments | 1,165,585 | 1,914,800 | |||||||
| Control investments | 2,183,242 | 1,671,354 | |||||||
| Payment-in-kind interest income: | |||||||||
| Non-control/Non-affiliate investments | 88,106 | 87,130 | |||||||
| Affiliate investments | 221,348 | 191,860 | |||||||
| Control investments | 258,729 | 102,720 | |||||||
| Total interest from investments | 32,658,755 | 23,516,908 | |||||||
| Interest from cash and cash equivalents | 521,574 | 200,258 | |||||||
| Management fee income | 819,929 | 818,254 | |||||||
| Dividend Income | 1,828,584 | 436,941 | |||||||
| Structuring and advisory fee income | 312,135 | 553,497 | |||||||
| Other income | 199,368 | 731,166 | |||||||
| Total investment income | 36,340,345 | 26,257,024 | |||||||
| OPERATING EXPENSES | |||||||||
| Interest and debt financing expenses | 12,522,357 | 8,449,900 | |||||||
| Base management fees | 4,857,059 | 4,258,821 | |||||||
| Incentive management fees expense (benefit) | 2,243,621 | 1,531,060 | |||||||
| Professional fees | 434,552 | 558,531 | |||||||
| Administrator expenses | 1,075,000 | 818,750 | |||||||
| Insurance | 81,002 | 89,187 | |||||||
| Directors fees and expenses | 80,729 | 80,000 | |||||||
| General and administrative | 660,062 | 525,202 | |||||||
| Income tax expense (benefit) | 219,900 | 68,136 | |||||||
| Total operating expenses | 22,174,282 | 16,379,587 | |||||||
| NET INVESTMENT INCOME | 14,166,063 | 9,877,437 | |||||||
| REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS | |||||||||
| Net realized gain (loss) from investments: | |||||||||
| Non-control/Non-affiliate investments | 60,565 | (740,434 | ) | ||||||
| Net realized gain (loss) from investments | 60,565 | (740,434 | ) | ||||||
| Income tax (provision) benefit from realized gain on investments | - | 479,318 | |||||||
| Net change in unrealized appreciation (depreciation) on investments: | |||||||||
| Non-control/Non-affiliate investments | (1,948,502 | ) | 2,082,634 | ||||||
| Affiliate investments | (1,084,259 | ) | 693,483 | ||||||
| Control investments | (14,833,592 | ) | (5,952,325 | ) | |||||
| Net change in unrealized appreciation (depreciation) on investments | (17,866,353 | ) | (3,176,208 | ) | |||||
| Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments | (415,894 | ) | (425,848 | ) | |||||
| Net realized and unrealized gain (loss) on investments | (18,221,682 | ) | (3,863,172 | ) | |||||
| NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | (4,055,619 | ) | $ | 6,014,265 | ||||
| WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE | $ | (0.31 | ) | $ | 0.51 | ||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED | 13,052,896 | 11,893,173 | |||||||
| Saratoga Investment Corp. | ||||||||
| Consolidated Statements of Operations | ||||||||
| (unaudited) | ||||||||
| For the nine months ended | ||||||||
| November 30, 2023 | November 30, 2022 | |||||||
| INVESTMENT INCOME | ||||||||
| Interest from investments | ||||||||
| Interest income: | ||||||||
| Non-control/Non-affiliate investments | $ | 83,542,257 | $ | 49,597,660 | ||||
| Affiliate investments | 2,799,735 | 4,287,449 | ||||||
| Control investments | 6,314,550 | 4,731,150 | ||||||
| Payment-in-kind interest income: | ||||||||
| Non-control/Non-affiliate investments | 706,339 | 258,557 | ||||||
| Affiliate investments | 644,484 | 221,027 | ||||||
| Control investments | 542,581 | 260,161 | ||||||
| Total interest from investments | 94,549,946 | 59,356,004 | ||||||
| Interest from cash and cash equivalents | 1,864,956 | 235,410 | ||||||
| Management fee income | 2,453,967 | 2,451,242 | ||||||
| Dividend Income | 5,301,097 | 949,758 | ||||||
| Structuring and advisory fee income | 1,786,357 | 2,813,311 | ||||||
| Other income | 530,210 | 983,277 | ||||||
| Total investment income | 106,486,533 | 66,789,002 | ||||||
| OPERATING EXPENSES | ||||||||
| Interest and debt financing expenses | 36,628,641 | 23,243,438 | ||||||
| Base management fees | 14,262,147 | 12,164,989 | ||||||
| Incentive management fees expense (benefit) | 4,828,442 | 216,915 | ||||||
| Professional fees | 1,407,275 | 1,344,021 | ||||||
| Administrator expenses | 2,797,917 | 2,341,667 | ||||||
| Insurance | 244,804 | 266,723 | ||||||
| Directors fees and expenses | 280,797 | 300,000 | ||||||
| General and administrative | 1,957,906 | 1,492,063 | ||||||
| Income tax expense (benefit) | (11,193 | ) | (132,487 | ) | ||||
| Total operating expenses | 62,396,736 | 41,237,329 | ||||||
| NET INVESTMENT INCOME | 44,089,797 | 25,551,673 | ||||||
| REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS | ||||||||
| Net realized gain (loss) from investments: | ||||||||
| Non-control/Non-affiliate investments | 151,256 | 7,365,913 | ||||||
| Net realized gain (loss) from investments | 151,256 | 7,365,913 | ||||||
| Income tax (provision) benefit from realized gain on investments | - | 548,568 | ||||||
| Net change in unrealized appreciation (depreciation) on investments: | ||||||||
| Non-control/Non-affiliate investments | (15,334,087 | ) | (12,430,125 | ) | ||||
| Affiliate investments | (1,289,895 | ) | 3,861,523 | |||||
| Control investments | (23,302,249 | ) | (17,199,511 | ) | ||||
| Net change in unrealized appreciation (depreciation) on investments | (39,926,231 | ) | (25,768,113 | ) | ||||
| Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments | (577,693 | ) | (1,017,953 | ) | ||||
| Net realized and unrealized gain (loss) on investments | (40,352,668 | ) | (18,871,585 | ) | ||||
| Realized losses on extinguishment of debt | (110,056 | ) | (1,204,809 | ) | ||||
| NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | 3,627,073 | $ | 5,475,279 | ||||
| WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE | $ | 0.29 | $ | 0.46 | ||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED | 12,355,815 | 11,989,811 | ||||||
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. In addition, adjusted net investment income in fiscal 2023 also excludes the interest expense and amortization of deferred financing costs related to the 2025 SAK Notes during the period while the 2027 SAT Notes were already issued and outstanding. These expenses are directly attributable to the issuance of the 2027 SAT Notes and the subsequent repayment of the 2025 SAK Notes. 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 nine months ended November 30, 2023 and November 30, 2022.
| For the Quarters Ended | ||||||||
| November 30, 2023 | November 30, 2022 | |||||||
| Net Investment Income | $ | 14,166,063 | $ | 9,877,437 | ||||
| Changes in accrued capital gains incentive fee expense/ reversal | (1,039,033 | ) | (751,307 | ) | ||||
| Adjusted net investment income | 13,127,030 | $ | 9,126,130 | |||||
| Net investment income yield | ||||||||
| Changes in accrued capital gains incentive fee expense/ reversal | ( | ) | ( | ) | ||||
| Adjusted net investment income yield (1) | ||||||||
| Net investment income per share | $ | 1.09 | $ | 0.83 | ||||
| Changes in accrued capital gains incentive fee expense/ reversal | (0.08 | ) | (0.06 | ) | ||||
| Adjusted net investment income per share (2) | $ | 1.01 | $ | 0.77 | ||||
| (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 Nine Months Ended | ||||||||
| November 30, 2023 | November 30, 2022 | |||||||
| Net Investment Income | $ | 44,089,797 | $ | 25,551,673 | ||||
| Changes in accrued capital gains incentive fee expense/(reversal) | (4,957,306 | ) | (3,723,699 | ) | ||||
| Interest expense on 2025 SAK Notes during the period | - | 655,305 | ||||||
| Adjusted net investment income | $ | 39,132,491 | $ | 22,483,279 | ||||
| Net investment income yield | ||||||||
| Changes in accrued capital gains incentive fee expense/(reversal) | ( | ) | ( | ) | ||||
| Interest expense on 2025 SAK Notes during the period | - | |||||||
| Adjusted net investment income yield (1) | 15.0 | % | ||||||
| Net investment income per share | $ | 3.57 | $ | 2.13 | ||||
| Changes in accrued capital gains incentive fee expense/(reversal) | (0.40 | ) | (0.30 | ) | ||||
| Interest expense on 2025 SAK Notes during the period | - | 0.05 | ||||||
| Adjusted net investment income per share (2) | $ | 3.17 | $ | 1.88 | ||||
| (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. |
Contact: Henri Steenkamp
Saratoga Investment Corp.
212-906-7800
Roland Tomforde
Broadgate Consultants
212-232-2222
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