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Saratoga Investment Corp. Announces Fiscal Third Quarter 2025 Financial Results

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Saratoga Investment Corp (NYSE: SAR) reported financial results for Q3 FY2025 ended November 30, 2024. Key highlights include a 1.1% sequential quarter increase in Adjusted NII per share and growth in LTM ROE to 9.2%. The company reported $84.5 million in deployments across two new platforms and eight existing portfolio companies.

Assets Under Management (AUM) stood at $960.1 million, with Net Asset Value (NAV) at $374.9 million. Total investment income was $35.9 million, with Net Investment Income per share at $0.90. The company declared a dividend of $0.74 per share plus a special dividend of $0.35 per share.

The portfolio composition includes 86.8% first lien term loans, with a weighted average current yield of 10.8%. The company maintains strong liquidity with $250.2 million in cash and cash equivalents, and $473.7 million in total undrawn borrowing capacity.

Saratoga Investment Corp (NYSE: SAR) ha riportato i risultati finanziari per il terzo trimestre dell'anno fiscale 2025, terminato il 30 novembre 2024. I principali punti salienti includono un aumento sequenziale dell'1,1% nell'Adjusted NII per azione e una crescita del ROE LTM al 9,2%. L'azienda ha riportato 84,5 milioni di dollari in investimenti su due nuove piattaforme e otto aziende del portafoglio esistente.

Le attività in gestione (AUM) si attestavano a 960,1 milioni di dollari, con un valore patrimoniale netto (NAV) di 374,9 milioni di dollari. Il reddito totale da investimenti è stato di 35,9 milioni di dollari, con un reddito netto da investimenti per azione di 0,90 dollari. L'azienda ha dichiarato un dividendo di 0,74 dollari per azione più un dividendo straordinario di 0,35 dollari per azione.

La composizione del portafoglio include l'86,8% di prestiti garantiti di primo grado, con un rendimento medio ponderato attuale del 10,8%. L'azienda mantiene una forte liquidità con 250,2 milioni di dollari in contante e equivalenti di contante, e 473,7 milioni di dollari in capacità di prestito non utilizzato totale.

Saratoga Investment Corp (NYSE: SAR) informó sobre los resultados financieros del tercer trimestre del año fiscal 2025, que finalizó el 30 de noviembre de 2024. Los aspectos más destacados incluyen un aumento secuencial del 1.1% en el NII ajustado por acción y un crecimiento en el ROE LTM al 9.2%. La compañía reportó 84.5 millones de dólares en inversiones a través de dos nuevas plataformas y ocho empresas de la cartera existente.

Los activos bajo gestión (AUM) se situaron en 960.1 millones de dólares, con un valor neto de activos (NAV) de 374.9 millones de dólares. El ingreso total por inversiones fue de 35.9 millones de dólares, con un ingreso neto por inversión por acción de 0.90 dólares. La compañía declaró un dividendo de 0.74 dólares por acción más un dividendo especial de 0.35 dólares por acción.

La composición de la cartera incluye el 86.8% de préstamos a primer gravamen, con un rendimiento promedio ponderado actual del 10.8%. La compañía mantiene una fuerte liquidez con 250.2 millones de dólares en efectivo y equivalentes de efectivo, y 473.7 millones de dólares en capacidad total de endeudamiento no utilizado.

사라토가 투자 주식회사 (NYSE: SAR)는 2024년 11월 30일 종료된 2025 회계연도 3분기 재무 결과를 발표했습니다. 주요 하이라이트로는 조정된 NII 주당 1.1%의 순증과 LTM ROE가 9.2%로 증가한 것을 포함합니다. 회사는 8450만 달러의 배치액을 두 개의 새로운 플랫폼과 여덟 개의 기존 포트폴리오 기업에 보고했습니다.

운용 자산(AUM)은 9억 601만 달러로 나타났으며, 순 자산 가치(NAV)는 3억 7490만 달러로 집계되었습니다. 총 투자 수익은 3590만 달러이며, 주당 순 투자 수익은 0.90 달러입니다. 회사는 주당 0.74 달러의 배당금과 특별 배당금 0.35 달러를 선언했습니다.

포트폴리오 구성은 86.8%의 초기 담보 대출로 구성되어 있으며, 가중 평균 현재 수익률은 10.8%입니다. 회사는 2억 5020만 달러의 현금 및 현금 동등물과 함께 강력한 유동성을 유지하며, 총 미사용 차입 한도는 4억 7370만 달러입니다.

Saratoga Investment Corp (NYSE: SAR) a publié ses résultats financiers pour le troisième trimestre de l'exercice 2025, qui s'est terminé le 30 novembre 2024. Les faits saillants incluent une augmentation séquentielle de 1,1% du NII ajusté par action et une croissance du ROE LTM à 9,2%. L'entreprise a déclaré 84,5 millions de dollars en déploiements sur deux nouvelles plateformes et huit entreprises du portefeuille existant.

Les actifs sous gestion (AUM) s'élevaient à 960,1 millions de dollars, avec une valeur nette d'actifs (NAV) de 374,9 millions de dollars. Le revenu total des investissements était de 35,9 millions de dollars, avec un revenu net d'investissement par action de 0,90 dollar. L'entreprise a déclaré un dividende de 0,74 dollar par action ainsi qu'un dividende spécial de 0,35 dollar par action.

La composition du portefeuille comprend 86,8% de prêts à premier rang, avec un rendement moyen pondéré actuel de 10,8%. L'entreprise maintient une forte liquidité avec 250,2 millions de dollars en liquidités et équivalents de liquidités, ainsi que 473,7 millions de dollars en capacité totale d'emprunt non utilisée.

Saratoga Investment Corp (NYSE: SAR) hat die finanziellen Ergebnisse für das dritte Quartal des Geschäftsjahres 2025, das am 30. November 2024 endete, veröffentlicht. Zu den wichtigsten Höhepunkten zählen ein sequenzieller Anstieg des bereinigten NII pro Aktie um 1,1% und ein Anstieg des LTM ROE auf 9,2%. Das Unternehmen berichtete von 84,5 Millionen Dollar an Investitionen in zwei neuen Plattformen und acht bestehenden Portfoliounternehmen.

Die verwalteten Vermögenswerte (AUM) beliefen sich auf 960,1 Millionen Dollar, mit einem Nettovermögen (NAV) von 374,9 Millionen Dollar. Das Gesamteinkommen aus Investitionen betrug 35,9 Millionen Dollar, mit einem Nettoinvestitionseinkommen pro Aktie von 0,90 Dollar. Das Unternehmen erklärte eine Dividende von 0,74 Dollar pro Aktie sowie eine Sonderdividende von 0,35 Dollar pro Aktie.

Die Zusammensetzung des Portfolios umfasst 86,8% erste Hypothekendarlehen mit einer gewichteten durchschnittlichen Rendite von 10,8%. Das Unternehmen verfügt über hohe Liquidität mit 250,2 Millionen Dollar in bar und liquiden Mitteln sowie 473,7 Millionen Dollar an insgesamt ungenutzter Kreditaufnahme.

Positive
  • Increased LTM ROE to 9.2% from 5.8% in previous quarter
  • NAV increased by $2.8 million to $374.9 million
  • Strong deployment of $84.5 million in new investments
  • 99.7% of credits rated in highest category
  • Declared special dividend of $0.35 per share in addition to regular $0.74 dividend
Negative
  • AUM decreased 13.8% YoY to $960.1 million
  • Total investment income decreased 16.6% QoQ to $35.9 million
  • Portfolio weighted average interest rate declined to 11.8% from 12.6% last quarter
  • NAV per share decreased to $26.95 from $27.42 YoY

Insights

This quarterly report showcases Saratoga Investment Corp's resilient performance amid changing market conditions. The adjusted NII per share increased by 1.1% sequentially, while LTM ROE improved to 9.2%, demonstrating operational efficiency. The company deployed $84.5 million in new investments while managing $160.4 million in repayments, indicating active portfolio management.

Key metrics reveal strong fundamentals: NAV increased to $374.9 million, dividend coverage remains robust with a 12.2% yield and 99.7% of credits maintain highest rating category. The 86.8% first-lien portfolio composition provides defensive positioning. However, decreasing short-term rates are impacting floating-rate assets, while fixed-rate liabilities create near-term pressure on spreads.

The substantial cash position of $250.2 million presents both opportunity and challenge - creating negative carry but providing dry powder for future deployments as M&A activity shows early signs of revival in the lower middle market.

Portfolio quality metrics remain strong with minimal deterioration. Only two investments remain on non-accrual status, representing just 0.3% of fair value. The weighted average portfolio yield of 11.8%, though down from 12.5% year-over-year, reflects market-wide spread compression rather than credit deterioration.

The leverage profile is conservative at 183.2% net leverage when accounting for cash. The diverse funding sources, including $214 million in available SBA debentures and multiple credit facilities, provide significant financial flexibility. The resolution of four challenged investments through sales and restructurings demonstrates effective risk management capabilities.

The BDC sector is navigating a pivotal market environment with early indicators of increased M&A activity in the lower middle market. Saratoga's 15.0% gross unlevered IRR on $1.20 billion of historical repayments validates their investment strategy. The current $473.7 million in total undrawn borrowing capacity positions them well to capitalize on emerging opportunities.

The portfolio's mark-to-market adjustments this quarter were modest, with $4.0 million CLO/JV depreciation and $1.4 million core portfolio depreciation, offset by realized gains. The core non-CLO portfolio trading 3.0% above cost suggests continued underlying asset quality strength despite market volatility.

Reports 1.1% Sequential Quarter Increase in Adjusted NII per Share (Excluding the Effect of the One-Time Interest Reserve Reversal) and Grows LTM ROE to 9.2%

Reports Strong Deployments of $84.5 Million, Supporting Two New Platforms and Eight Existing Portfolio Companies, Offset by Repayments

__________________________________________

NEW YORK, Jan. 08, 2025 (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 third quarter ended November 30, 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)November 30, 2024
 August 31, 2024 November 30, 2023
 
Assets Under Management (AUM)960,093 1,040,711 1,114,039 
Net Asset Value (NAV)374,866 372,054 359,559 
NAV per share26.95 27.07 27.42 
Total Investment Income35,879 43,003 36,340 
Net Investment Income (NII) per share0.90 1.33 1.09 
Adjusted NII per share0.90 1.33 1.01 
Earnings per share0.64 0.97 (0.31) 
Dividends per share (declared)0.74* 0.74 0.72 
Return on Equity – last twelve months9.2% 5.8% 6.6% 
– annualized quarter9.5% 14.4% (4.5%) 
Originations84,490 2,584 35,612 
Repayments160,404 60,140 2,144 
 

* Actual dividend of $1.09 per share, including the additional special dividend of $0.35 per share declared this quarter in conjunction with the regular dividend.

Christian L. Oberbeck, Chairman and Chief Executive Officer of Saratoga Investment, commented, “Highlights this quarter include sequential quarterly increase of adjusted NII excluding the effect of the one-time Knowland interest reserve reversal, improved LTM ROE of 9.2%, another increase in NAV and steady NAV per share, healthy originations in both new and existing portfolio companies while also experiencing outsized redemptions of successful investments, including some large ones, and continued overearning of our dividends. From an overall investment value and current yield perspective, our annualized third quarter dividend of $0.74 per share implies a 12.2% dividend yield based on the stock price of $24.21 per share on January 7, 2025. The substantial overearning of the dividend this quarter continues to support the current level of dividends, increases NAV, supports increased portfolio growth and provides a cushion against adverse events. This quarter’s earnings reflect the impact of the past six month trend of decreasing levels of short-term interest rates and spreads on Saratoga Investment’s largely floating rate assets, while not yet recognizing the full period impact of the recent outsized repayments experienced this quarter. The costs of most long-term balance sheet liabilities are largely fixed though callable either now or in the near future. In the context of the significant level of available cash currently creating a negative arbitrage, management is evaluating the use of such calls prospectively to reduce current debt.”

“During the quarter, we began to see the early stages of a potential increase in M&A in the lower middle market, reflected in multiple repayments during the quarter, in addition to significant new originations. As was the case in previous quarters, 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.”

“Saratoga’s solid overall performance is reflected in our continued strong key performance indicators this past quarter, including: (i) quarterly ROE of 9.5% and LTM ROE of 9.2%, (ii) NAV increase of $2.8 million ($372.1 million to $374.9 million), (iii) adjusted NII per share increase of $0.01 per share ($0.89 to $0.90 per share) excluding the $7.6 million ($0.44 per share) net impact of the one-time Knowland investment interest reserve release in the previous and current quarter, (iv) dividend of $0.74 per share, up 2.8% from $0.72 per share in the third quarter of fiscal 2024, and (v) continued over-earning of the current dividend, most recently resulting in the $0.35 per share special dividend paid in December.”

“At the foundation of our strong operating performance is the high-quality nature, resilience and balance of our $960.1 million portfolio in the current environment. Where we had encountered significant challenges in four of our portfolio companies over the past year, we have completed decisive action and resolved all four of these situations through two sales and two restructurings. Our current core non-CLO portfolio was marked down by $1.4 million this quarter, and the CLO and JV were marked down by $4.0 million. This was offset by net realized gains of $1.2 million in the quarter on various repayments, and $0.7 million of escrow realized gains, for a total net reduction in portfolio value related to marks of $3.5 million this quarter. Our total portfolio fair value is now 0.7% below cost, while our core non-CLO portfolio is 3.0% above cost. The overall financial performance and strong earnings power of our current portfolio reflects strong underwriting in our solid, growing portfolio companies and sponsors in well-selected industry segments.”

“We continue to remain prudent and discerning in terms of new commitments in the current volatile environment. Originations of $84.5 million this quarter were elevated as we began to see the effect of declining interest rates and increased M&A activity in the market. During the quarter, we originated two new portfolio company investments while benefitting from eight follow-on investments in existing portfolio companies that we know well with strong business models and balance sheets.”

“Our quarter-end cash position grew to $250.2 million, largely due to an outsized $160.4 million of repayments in five portfolio companies and amortizations, exceeding the substantial $84.5 million of originations. The repayments included the recognition of a $4.8 million realized gain on our Invita investment, along with the repayment of $67 million of debt from this successful five-year investment. This increase in cash and cash equivalents has improved our effective leverage from 160.1% regulatory leverage to 183.2% net leverage, netting available cash against outstanding debt.”

“Our overall credit quality for this quarter remained steady at 99.7% of credits rated in our highest category, with the two investments remaining on non-accrual status being Zollege and Pepper Palace, both of which have been successfully restructured, representing only 0.3% and 0.3% of fair value and cost, respectively. With 86.8% of our investments at quarter-end in first lien debt and generally supported by strong enterprise values and balance sheets in industries that have historically performed well in stressed situations, we believe our portfolio and company leverage is well structured for future economic conditions and uncertainty.”

Mr. Oberbeck concluded, “As we navigate through a reshaped yield curve environment with decreasing short-term and increasing long-term rates, and an 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 November 30, 2024:

  • AUM as of November 30, 2024, was $960.1 million, a decrease of 13.8% from $1.114 billion as of November 30, 2023, and a decrease of 7.7% from $1.041 billion as of last quarter.
  • Total investment income for the three months ended November 30, 2024, was $35.9 million, a decrease of $0.4 million, or 1.3%, from $36.3 million in the three months ended November 30, 2023, and $7.1 million, or 16.6%, as compared to $43.0 million for the quarter ended August 31, 2024. This quarter’s investment income decrease as compared to the previous quarter was primarily due to the impact of the non-recurring Knowland interest reserve reversal of $7.9 million, that was previously on non-accrual status, following the investment’s full repayment, including accrued interest, being recognized last quarter, offset by the final interest of $0.3 million received this quarter. Investment income reflects a weighted average interest rate on the core BDC portfolio of 11.8%, as compared to 12.5% as of November 30, 2023 and 12.6% as of August 31, 2024. Approximately two thirds of the interest rate reduction is due to SOFR base rate decreases, and one third due to the higher yields of the recent repayments.
  • Total expenses for fiscal third quarter 2025, excluding interest and debt financing expenses, base management fees and incentive fees, and income and excise taxes, increased $0.5 million to $2.8 million as compared to $2.3 million in the third quarter of fiscal year 2023, and increased $0.6 million as compared to $2.2 million for the quarter ended August 31, 2024. This represented 0.9% of average total assets on an annualized basis, up from 0.7% last quarter and 0.8% last year.
  • Adjusted NII for the quarter ended November 30, 2024, was $12.4 million, a decrease of $0.7 million, or 5.3%, from $13.1 million in the period ended November 30, 2023, and a decrease of $5.8 million, or 31.7%, from $18.2 million in the prior quarter. This quarter’s decrease in investment income as compared to last quarter was primarily due to the impact of the non-recurring Knowland interest reserve reversal last quarter as previously noted, offset by higher prepayment and structuring and advisory fees this quarter reflective of the high level of originations and repayments.
  • NII Yield as a percentage of average net asset value was 13.3% for the quarter ended November 30, 2024. Adjusted for the incentive fee accrual related to net capital gains, the NII Yield was also 13.3%. In comparison, adjusted NII Yield was 14.6% for the quarter ended November 30, 2023, and 19.7% for the quarter ended August 31, 2024.
  • NAV was $374.9 million as of November 30, 2024, an increase of $15.3 million from $359.6 million as of November 30, 2023, and an increase of $2.8 million from $372.1 million as of August 31, 2024.
  • NAV per share was $26.95 as of November 30, 2024, compared to $27.42 as of November 30, 2023, and $27.07 as of August 31, 2024.
  • Return on equity (“ROE”) for the last twelve months ended November 30, 2024, was 9.2%, up from 6.6% for the comparable period last year, and up from 5.8% for the twelve months ended August 31, 2024. ROE on an annualized basis for the quarter ended November 30, 2024 was 9.5%.
  • The weighted average common shares outstanding for the quarter ended November 30, 2024 was 13.8 million, increasing from 13.7 million and 13.1 million for the quarters ended August 31, 2024 and November 30, 2023, respectively.

Portfolio and Investment Activity as of November 30, 2024

  • Fair value of Saratoga Investment’s portfolio was $960.1 million, excluding $250.2 million in cash and cash equivalents, principally invested in 48 portfolio companies, one collateralized loan obligation fund (the “CLO”) and one joint venture fund (the “JV”).
  • Cost of investments made during the period: $84.5 million, including eight follow-ons and two investments in new portfolio companies.
  • Principal repayments during the period: $160.4 million, including five full repayments of existing investments, plus amortization.
    • The fair value of the portfolio also decreased by $3.5 million of net realized gains and unrealized depreciation, consisting of $4.0 million net depreciation in the CLO and JV and $1.4 million net unrealized depreciation in our core non-CLO portfolio, including Pepper Palace and Zollege, offset by net realized gains of $1.2 million on the various repayments and realizations in the quarter, most notably the Invita investment, and $0.7 million of various escrow realized gains, most notably the former Netreo investment.
    • Since taking over management of the BDC, the Company has generated $1.20 billion of repayments and sales of investments originated by Saratoga Investment, generating a gross unlevered IRR of 15.0%. Total investments originated by Saratoga are $2.24 billion in 119 portfolio companies.
  • The overall portfolio composition consisted of 86.8% of first lien term loans, 0.6% of second lien term loans, 1.7% of unsecured term loans, 1.9% of structured finance securities, and 9.0% of common equity.
  • The weighted average current yield on Saratoga Investment’s portfolio based on current fair values was 10.8%, which was comprised of a weighted average current yield of 11.6% on first lien term loans, 16.8% on second lien term loans, 10.9% on unsecured term loans, 16.7% on CLO subordinated notes and 0.0% on equity interests.

Liquidity and Capital Resources

Outstanding Borrowings:

  • As of November 30, 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 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 $250.2 million in cash and cash equivalents.

Undrawn Borrowing Capacity:

  • With $87.5 million available under the two credit facilities and $250.2 million of cash and cash equivalents as of November 30, 2024, Saratoga Investment has a total of $337.7 million of undrawn credit facility borrowing capacity and cash and cash equivalents to be used for new investments or to support existing portfolio companies in the BDC and the SBIC.
  • 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 Investment undrawn borrowing capacity is therefore $473.7 million.
  • As of fiscal 2025 third quarter-end, Saratoga Investment had $52.3 million of committed undrawn lending commitments and $75.7 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 the Company may offer for sale, from time to time, up to $300.0 million of common stock through an ATM offering.
    • As of November 30, 2024, Saratoga Investment has sold 6,652,316 shares for gross proceeds of $175.5 million at an average price of $26.37 for aggregate net proceeds of $173.9 million (net of transaction costs). During both the three and nine months ended November 30, 2024, Saratoga Investment sold a total of 108,438 shares for gross proceeds of $2.9 million at an average price of $27.07 for aggregate net proceeds of $2.9 million (net of transaction costs).

Dividend

On November 7, 2024, Saratoga Investment announced that its Board of Directors declared a quarterly dividend of $0.74 per share for the fiscal quarter ended November 30, 2024, and an additional special dividend of $0.35 per share, fulfilling its fiscal 2024 distribution requirements. Both dividends were paid on December 19, 2024, to all stockholders of record at the close of business on December 4, 2024.

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 5% discount to the average market price per share at the close of trading on the ten trading days immediately preceding (and including) the payment date.

The following table highlights Saratoga Investment’s dividend history over the past eleven quarters:

Period (Fiscal Year ends Feb 28) Base Dividend Per Share Special Dividend Per Share Total Dividend Per Share
Fiscal Q3 2025 $0.74 $0.35 $1.09
Fiscal Q2 2025 $0.74  - $0.74
Fiscal Q1 2025 $0.74  - $0.74
Year-to-Date Fiscal 2025 $2.22 $0.35 $2.57
Fiscal Q4 2024 $0.73  - $0.73
Fiscal Q3 2024 $0.72  - $0.72
Fiscal Q2 2024 $0.71  - $0.71
Fiscal Q1 2023 $0.70  - $0.70
Full Year Fiscal 2024 $2.86  - $2.86
Fiscal Q4 2023 $0.69  - $0.69
Fiscal Q3 2023 $0.68  - $0.68
Fiscal Q2 2023 $0.54  - $0.54
Fiscal Q1 2023 $0.53  - $0.53
Full Year Fiscal 2023 $2.44  - $2.44
 

Share Repurchase Plan

As of November 30, 2024, the Company purchased 1,035,203 shares of common stock, at the average price of $22.05 for approximately $22.8 million pursuant to its existing Share Repurchase Plan. During the three and nine months ended November 30, 2024, the Company did not purchase any shares of common stock pursuant to its Share Repurchase Plan.

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 7, 2025, its board of directors extended the Share Repurchase Plan for another year to January 15, 2026.

2025 Fiscal Third Quarter Conference Call/Webcast Information

When:Thursday, January 9, 2025
 10:00 a.m. Eastern Time (ET)
  
How:Webcast: Interested parties may access a live webcast of the call and find the Q3 2025 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 $650 million collateralized loan obligation (“CLO”) fund that is in wind-down and co-manages a joint venture (“JV”) fund that owns a $400 million collateralized loan obligation (“JV CLO”) fund. It also owns 52% of the Class F and 100% of the subordinated notes of the CLO, 87.5% of both the unsecured loans and membership interests of the JV and 87.5% of the Class E notes of the JV CLO. The Company’s diverse funding sources, combined with a permanent capital base, enable Saratoga Investment to provide a broad range of financing solutions.

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 November 30, 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
      
      
  November 30, 2024 February 29, 2024 
  (unaudited)   
ASSETS     
Investments at fair value     
Non-control/Non-affiliate investments (amortized cost of $852,158,089 and $1,035,879,751, respectively) $875,707,680  $1,019,774,616  
Affiliate investments (amortized cost of $37,627,241 and $26,707,415, respectively)  39,803,456   27,749,137  
Control investments (amortized cost of $77,556,847 and $117,196,571, respectively)  44,582,096   91,270,036  
Total investments at fair value (amortized cost of $967,342,177 and $1,179,783,737, respectively)  960,093,232   1,138,793,789  
Cash and cash equivalents  147,614,810   8,692,846  
Cash and cash equivalents, reserve accounts  102,549,213   31,814,278  
Interest receivable (net of reserve of $68,735 and $9,490,340, respectively)  7,462,134   10,298,998  
Management fee receivable  327,368   343,023  
Other assets  1,871,192   1,163,225  
Current income tax receivable  1,931   99,676  
Total assets $1,219,919,880  $1,191,205,835  
      
LIABILITIES     
Revolving credit facilities $52,500,000  $35,000,000  
Deferred debt financing costs, revolving credit facilities  (1,467,001)  (882,122) 
SBA debentures payable  214,000,000   214,000,000  
Deferred debt financing costs, SBA debentures payable  (5,072,871)  (5,779,892) 
8.75% Notes Payable 2025  20,000,000   20,000,000  
Discount on 8.75% notes payable 2025  (35,045)  (112,894) 
Deferred debt financing costs, 8.75% notes payable 2025  (1,460)  (4,777) 
7.00% Notes Payable 2025  12,000,000   12,000,000  
Discount on 7.00% notes payable 2025  (100,675)  (193,175) 
Deferred debt financing costs, 7.00% notes payable 2025  (12,257)  (24,210) 
7.75% Notes Payable 2025  5,000,000   5,000,000  
Deferred debt financing costs, 7.75% notes payable 2025  (33,209)  (74,531) 
4.375% Notes Payable 2026  175,000,000   175,000,000  
Premium on 4.375% notes payable 2026  363,367   564,260  
Deferred debt financing costs, 4.375% notes payable 2026  (1,073,336)  (1,708,104) 
4.35% Notes Payable 2027  75,000,000   75,000,000  
Discount on 4.35% notes payable 2027  (233,940)  (313,010) 
Deferred debt financing costs, 4.35% notes payable 2027  (773,704)  (1,033,178) 
6.25% Notes Payable 2027  15,000,000   15,000,000  
Deferred debt financing costs, 6.25% notes payable 2027  (219,726)  (273,449) 
6.00% Notes Payable 2027  105,500,000   105,500,000  
Discount on 6.00% notes payable 2027  (96,638)  (123,782) 
Deferred debt financing costs, 6.00% notes payable 2027  (1,696,769)  (2,224,403) 
8.00% Notes Payable 2027  46,000,000   46,000,000  
Deferred debt financing costs, 8.00% notes payable 2027  (1,013,039)  (1,274,455) 
8.125% Notes Payable 2027  60,375,000   60,375,000  
Deferred debt financing costs, 8.125% notes payable 2027  (1,256,679)  (1,563,594) 
8.50% Notes Payable 2028  57,500,000   57,500,000  
Deferred debt financing costs, 8.50% notes payable 2028  (1,373,467)  (1,680,039) 
Base management and incentive fees payable  7,521,835   8,147,217  
Deferred tax liability  4,581,381   3,791,150  
Accounts payable and accrued expenses  2,500,210   1,337,542  
Interest and debt fees payable  5,875,852   3,582,173  
Due to Manager  796,396   450,000  
Total liabilities  845,054,225   820,981,727  
      
Commitments and contingencies     
      
NET ASSETS     
Common stock, par value $0.001, 100,000,000 common shares     
authorized, 13,909,206 and 13,653,476 common shares issued and outstanding, respectively  13,909   13,654  
Capital in excess of par value  377,235,609   371,081,199  
Total distributable deficit  (2,383,863)  (870,745) 
Total net assets  374,865,655   370,224,108  
Total liabilities and net assets $1,219,919,880  $1,191,205,835  
NET ASSET VALUE PER SHARE $26.95  $27.12  
      
Asset Coverage Ratio  160.1%  161.1% 
      


Saratoga Investment Corp. 
Consolidated Statements of Operations 
(unaudited) 
       
   For the three months ended 
   November 30, 2024 November 30, 2023 
INVESTMENT INCOME      
Interest from investments      
Interest income:      
Non-control/Non-affiliate investments  $28,301,622  $28,741,745  
Affiliate investments   458,765   1,165,585  
Control investments   1,220,769   2,183,242  
Payment in kind interest income:      
Non-control/Non-affiliate investments   355,161   88,106  
Affiliate investments   424,357   221,348  
Control investments   -   258,729  
Total interest from investments   30,760,674   32,658,755  
Interest from cash and cash equivalents   1,627,718   521,574  
Management fee income   775,398   819,929  
Dividend income(*):      
Non-control/Non-affiliate investments   172,557   509,365  
Control investments   948,102   1,319,219  
Total dividend from investments   1,120,659   1,828,584  
Structuring and advisory fee income   740,705   312,135  
Other income   853,481   199,368  
Total investment income   35,878,635   36,340,345  
       
OPERATING EXPENSES      
Interest and debt financing expenses   13,044,000   12,522,357  
Base management fees   4,412,000   4,857,059  
Incentive management fees expense (benefit)   3,109,834   2,243,621  
Professional fees   670,376   434,552  
Administrator expenses   1,250,000   1,075,000  
Insurance   76,743   81,002  
Directors fees and expenses   83,500   80,729  
General and administrative   759,902   660,062  
Income tax expense (benefit)   36,625   219,900  
Total operating expenses   23,442,980   22,174,282  
NET INVESTMENT INCOME   12,435,655   14,166,063  
       
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS      
Net realized gain (loss) from investments:      
Non-control/Non-affiliate investments   4,806,390   60,565  
Control investments   638,355   -  
Net realized gain (loss) from investments   5,444,745   60,565  
Net change in unrealized appreciation (depreciation) on investments:      
Non-control/Non-affiliate investments   (7,026,951)  (1,948,502) 
Affiliate investments   179,825   (1,084,259) 
Control investments   (2,071,457)  (14,833,592) 
Net change in unrealized appreciation (depreciation) on investments   (8,918,583)  (17,866,353) 
Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments   (126,875)  (415,894) 
Net realized and unrealized gain (loss) on investments   (3,600,713)  (18,221,682) 
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS  $8,834,942  $(4,055,619) 
       
WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE  $0.64  $(0.31) 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED   13,789,951   13,052,896  
       
* Certain prior period amounts have been reclassified to conform to current period presentation.      
       


Saratoga Investment Corp. 
Consolidated Statements of Operations 
(unaudited) 
       
   For the nine months ended 
   November 30, 2024 November 30, 2023 
INVESTMENT INCOME      
Interest from investments      
Interest income:      
Non-control/Non-affiliate investments  $95,247,113  $83,542,257  
Affiliate investments   1,446,620   2,799,735  
Control investments   4,465,137   6,314,550  
Payment in kind interest income:      
Non-control/Non-affiliate investments   2,073,035   706,339  
Affiliate investments   915,807   644,484  
Control investments   284,590   542,581  
Total interest from investments   104,432,302   94,549,946  
Interest from cash and cash equivalents   3,923,380   1,864,956  
Management fee income   2,372,177   2,453,967  
Dividend income(*):      
Non-control/Non-affiliate investments   584,827   621,398  
Control investments   3,160,742   4,679,699  
Total dividend from investments   3,745,569   5,301,097  
Structuring and advisory fee income   1,186,548   1,786,357  
Other income   1,900,184   530,210  
Total investment income   117,560,160   106,486,533  
       
OPERATING EXPENSES      
Interest and debt financing expenses   39,135,022   36,628,641  
Base management fees   14,161,025   14,262,147  
Incentive management fees expense (benefit)   11,244,838   4,828,442  
Professional fees   1,795,572   1,407,275  
Administrator expenses   3,458,333   2,797,917  
Insurance   231,936   244,804  
Directors fees and expenses   276,500   280,797  
General and administrative   2,190,613   1,957,906  
Income tax expense (benefit)   98,263   (11,193) 
Total operating expenses   72,592,102   62,396,736  
NET INVESTMENT INCOME   44,968,058   44,089,797  
       
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS      
Net realized gain (loss) from investments:      
Non-control/Non-affiliate investments   5,365,091   151,256  
Control investments   (54,564,070)  -  
Net realized gain (loss) from investments   (49,198,979)  151,256  
Net change in unrealized appreciation (depreciation) on investments:      
Non-control/Non-affiliate investments   39,654,726   (15,334,087) 
Affiliate investments   1,134,493   (1,289,895) 
Control investments   (7,048,216)  (23,302,249) 
Net change in unrealized appreciation (depreciation) on investments   33,741,003   (39,926,231) 
Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments   (747,063)  (577,693) 
Net realized and unrealized gain (loss) on investments   (16,205,039)  (40,352,668) 
Realized losses on extinguishment of debt   -   (110,056) 
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS  $28,763,019  $3,627,073  
       
WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE  $2.09  $0.29  
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED   13,733,008   12,355,815  
       
* 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 nine months ended November 30, 2024 and November 30, 2023.

 For the Three Months Ended
 
 November 30, 2024
November 30, 2023
 
  
Net Investment Income$12,435,655 $14,166,063  
Changes in accrued capital gains incentive fee expense/ (reversal) -  (1,039,033) 
Adjusted net investment income$12,435,655 $13,127,030  
    
Net investment income yield 13.3% 15.7 % 
Changes in accrued capital gains incentive fee expense/ (reversal) -  (1.1)% 
Adjusted net investment income yield (1) 13.3% 14.6 % 
    
Net investment income per share$0.90 $1.09  
Changes in accrued capital gains incentive fee expense/ (reversal) -  (0.08) 
Adjusted net investment income per share (2)$0.90 $1.01  

(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, 2024
November 30, 2023
 
         
Net Investment Income$44,968,058 $44,089,797  
Changes in accrued capital gains incentive fee expense/ (reversal) -  (4,957,306) 
Adjusted net investment income$44,968,058 $39,132,491  
    
Net investment income yield 16.2% 16.7 % 
Changes in accrued capital gains incentive fee expense/ (reversal) -  (1.7)% 
Adjusted net investment income yield (3) 16.2% 15.0 % 
    
Net investment income per share$3.27 $3.57  
Changes in accrued capital gains incentive fee expense/ (reversal) -  (0.40) 
Adjusted net investment income per share (4)$3.27 $3.17  

(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

What was Saratoga Investment's (SAR) Q3 2025 dividend yield?

Based on the stock price of $24.21 on January 7, 2025, SAR's annualized dividend of $0.74 per share implies a 12.2% dividend yield.

How much did SAR deploy in new investments during Q3 2025?

SAR deployed $84.5 million in Q3 2025, including investments in two new portfolio companies and eight follow-on investments.

What is SAR's portfolio composition as of November 30, 2024?

SAR's portfolio consisted of 86.8% first lien term loans, 0.6% second lien term loans, 1.7% unsecured term loans, 1.9% structured finance securities, and 9.0% common equity.

How much cash and undrawn borrowing capacity does SAR have available?

As of November 30, 2024, SAR had $250.2 million in cash and cash equivalents, with total undrawn borrowing capacity of $473.7 million.

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338.12M
11.66M
15.51%
15.88%
1.01%
Asset Management
Financial Services
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United States of America
NEW YORK