{"id":643,"date":"2017-05-15T17:19:08","date_gmt":"2017-05-15T17:19:08","guid":{"rendered":"http:\/\/henristeenkamp.com\/?p=643"},"modified":"2019-05-06T19:34:32","modified_gmt":"2019-05-06T19:34:32","slug":"saratoga-investment-corp-announces-fiscal-year-end-and-fourth-quarter-2017-financial-results","status":"publish","type":"post","link":"https:\/\/ragnarok-ms.us\/henristeenkamp-com\/saratoga-investment-corp-announces-fiscal-year-end-and-fourth-quarter-2017-financial-results\/","title":{"rendered":"Saratoga Investment Corp. Announces Fiscal Year End and Fourth Quarter 2017 Financial Results"},"content":{"rendered":"
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NEW YORK,\u00a0May 16, 2017<\/span>\u00a0\/PRNewswire\/ — Saratoga Investment Corp. (NYSE:\u00a0SAR<\/a>) (“Saratoga Investment” or “the Company”), a business development company, today announced financial results for its 2017 fiscal year end and fourth quarter.<\/a><\/p>\n<\/div>\n<\/div>\n

<\/div>\n
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Summary Financial Information<\/span><\/p>\n

The Company’s summarized financial information is as follows:<\/p>\n

 <\/p>\n

\n
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n\n

For the year<\/span><\/span><\/b><\/span><\/p>\n

ended and as of<\/span><\/span><\/b><\/span><\/p>\n

February 28, 2017<\/span><\/span><\/b><\/span><\/p>\n<\/td>\n

\n

For the year<\/span><\/span><\/b><\/span><\/p>\n

ended and as of<\/span><\/span><\/b><\/span><\/p>\n

February 29, 2016<\/span><\/span><\/b><\/span><\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n\n

($ in thousands except per share)<\/span><\/b><\/span><\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

AUM<\/span><\/span><\/p>\n<\/td>\n

\n

292,661<\/span><\/p>\n<\/td>\n

\n

283,996<\/span><\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

NAV<\/span><\/span><\/p>\n<\/td>\n

\n

127,295<\/span><\/p>\n<\/td>\n

\n

125,150<\/span><\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Investment Income<\/span><\/span><\/p>\n<\/td>\n

\n

33,157<\/span><\/p>\n<\/td>\n

\n

30,051<\/span><\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Net Investment Income per share<\/span><\/span><\/p>\n<\/td>\n

\n

1.68<\/span><\/p>\n<\/td>\n

\n

1.91<\/span><\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Adjusted Net Investment Income per share<\/span><\/span><\/p>\n<\/td>\n

\n

2.01<\/span><\/p>\n<\/td>\n

\n

1.90<\/span><\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Earnings per share<\/span><\/span><\/p>\n<\/td>\n

\n

1.98<\/span><\/p>\n<\/td>\n

\n

2.09<\/span><\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Return on Equity \u2013 last twelve months<\/span><\/span><\/p>\n<\/td>\n

\n

9.0%<\/span><\/p>\n<\/td>\n

\n

9.4%<\/span><\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n\n

For the quarter<\/span><\/span><\/b><\/span><\/p>\n

ended February<\/span><\/span><\/b><\/span><\/p>\n

28, 2017<\/span><\/span><\/b><\/span><\/p>\n<\/td>\n

\n

For the quarter<\/span><\/span><\/b><\/span><\/p>\n

ended November<\/span><\/span><\/b><\/span><\/p>\n

30, 2016<\/span><\/span><\/b><\/span><\/p>\n<\/td>\n

<\/td>\n\n

For the quarter<\/span><\/span><\/b><\/span><\/p>\n

ended February<\/span><\/span><\/b><\/span><\/p>\n

29, 2016<\/span><\/span><\/b><\/span><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

($ in thousands except per share)<\/span><\/b><\/span><\/p>\n<\/td>\n<\/tr>\n

\n

AUM<\/span><\/span><\/p>\n<\/td>\n

\n

292,661<\/span><\/p>\n<\/td>\n

\n

277,570<\/span><\/p>\n<\/td>\n

<\/td>\n\n

283,996<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

NAV<\/span><\/span><\/p>\n<\/td>\n

\n

127,295<\/span><\/p>\n<\/td>\n

\n

127,680<\/span><\/p>\n<\/td>\n

<\/td>\n\n

125,150<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Investment Income<\/span><\/span><\/p>\n<\/td>\n

\n

8,358<\/span><\/p>\n<\/td>\n

\n

8,442<\/span><\/p>\n<\/td>\n

<\/td>\n\n

7,795<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Net Investment Income per share<\/span><\/span><\/p>\n<\/td>\n

\n

0.19<\/span><\/p>\n<\/td>\n

\n

0.60<\/span><\/p>\n<\/td>\n

<\/td>\n\n

0.54<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Adjusted Net Investment Income per share<\/span><\/span><\/p>\n<\/td>\n

\n

0.49<\/span><\/p>\n<\/td>\n

\n

0.53<\/span><\/p>\n<\/td>\n

<\/td>\n\n

0.45<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Earnings per share<\/span><\/span><\/p>\n<\/td>\n

\n

0.22<\/span><\/p>\n<\/td>\n

\n

0.27<\/span><\/p>\n<\/td>\n

<\/td>\n\n

(0.07)<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Return on Equity \u2013 last twelve months<\/span><\/span><\/p>\n<\/td>\n

\n

9.0%<\/span><\/p>\n<\/td>\n

\n

7.7%<\/span><\/p>\n<\/td>\n

<\/td>\n\n

9.4%<\/span><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n<\/div>\n

 <\/p>\n

“In fiscal year 2017 we maintained our focus on expanding assets under management, maintaining our strong investment quality, broadening our investor base, diversifying sources of low-cost liquidity and increasing our pipeline of available deal sources,” said\u00a0Christian L. Oberbeck<\/span>, Chairman and Chief Executive Officer of Saratoga Investment. “We achieved market-leading results. In fiscal year 2017, we continued to increase our quarterly dividend by 12% while increasing it every quarter, paying a total of\u00a0$1.93<\/span>\u00a0per share through a special dividend and our regular quarterly dividends. Our investments in our business development and origination team enabled us to keep apace of heavy redemptions, putting a record\u00a0$127 million<\/span>\u00a0in new capital to work. AUM and NAV continue to grow. Total shareholder return for the most recent twelve months is almost 50%, and we remain at the top of the BDC space in terms of total return performance, both short- and long-term. In addition, we are well structured for a potential higher interest rate environment, with over 80% of our investments having floating rate interest rates and all of our currently outstanding debt fixed-rate and long-term. This has been another strong year for Saratoga Investment, and we are extremely pleased with the strong and leading risk-adjusted investment performance we have delivered for our shareholders.”<\/p>\n

Michael J. Grisius<\/span>, President and Chief Investment Officer, added, “During fiscal year 2017, the steady expansion of our asset base continued, with a year-on-year increase in our investments at fair value of 3%, and a 208% increase since 2012. Despite a market environment defined by reduced transaction volumes and high levels of repayments, we were able to review an increased amount of deal opportunities and deploy capital at a pace sufficient to grow AUM. Furthermore, we were able to do so generally at multiples below the market average. We continue to see demand for financing in the markets we serve and believe that our investments in new business development and origination capabilities will result in a continued robust and productive pipeline.”<\/p>\n

As of\u00a0February 28, 2017<\/span>, Saratoga Investment increased its assets under management (“AUM”) to\u00a0$292.7 million<\/span>, an increase of 3.1% from\u00a0$284.0 million<\/span>\u00a0as of\u00a0February 29, 2016<\/span>, and an increase of 5.4% from\u00a0$277.5 million<\/span>\u00a0as of\u00a0November 30, 2016<\/span>. This increase reflects the record originations of\u00a0$126.9 million<\/span>\u00a0new investments during the year ended\u00a0February 28, 2017<\/span>, offset by significant repayments of\u00a0$121.2 million<\/span>\u00a0during fiscal year 2017, generating a gross unlevered IRR of 17.0% for the fiscal year. These investments and repayments for the year are inclusive of the\u00a0$41.1 million<\/span>\u00a0in originations and\u00a0$26.5 million<\/span>\u00a0in repayments during the quarter ended\u00a0February 28, 2017<\/span>. Saratoga Investment’s portfolio has continued to grow this quarter and remains strong, with a continued high level of investment quality in loan investments with 94.1% of our loans at our highest internal rating for this quarter.<\/p>\n

As a result, both the year and quarter ended\u00a0February 28, 2017<\/span>\u00a0benefitted from higher investment income as compared to the prior period \u2013 investment income increased to\u00a0$33.2 million<\/span>\u00a0for the year ended\u00a0February 28, 2017<\/span>, up 10.3% from\u00a0$30.1 million<\/span>\u00a0for the year ended\u00a0February 29, 2016<\/span>, and up to\u00a0$8.4 million<\/span>\u00a0from\u00a0$7.8 million<\/span>\u00a0for the same quarterly periods, a 7.2% increase. This increased investment income was generated from an investment base that has grown by 3.1% since last year, resulting in both higher interest income and other income. The investment income increase was offset by (i) increased debt and financing expenses from higher outstanding Notes payable and SBA debentures this year reflective of the growing investment and asset base, (ii) increased base and incentive management fees generated from the management of this larger pool of investments, and (iii) increased total expenses, excluding interest and debt financing expenses, base management fees and incentive fees, reflecting higher administrator and deal research fees.<\/p>\n

Net investment income on a weighted average per share basis was\u00a0$1.68<\/span>\u00a0and\u00a0$0.19<\/span>\u00a0for the year and quarter ended\u00a0February 28, 2017<\/span>, respectively. Adjusted for (i) the incentive fee accrual related to net unrealized capital gains, (ii) the loss on extinguishment of our 2020 notes, and (iii) the interest on the 2020 notes during the call notice period while the 2023 notes were already issued and outstanding, the net investment income on a weighted average per share basis was\u00a0$2.01<\/span>\u00a0and\u00a0$0.49<\/span>, respectively. This compares to adjusted net investment income per share of\u00a0$1.90<\/span>\u00a0and\u00a0$0.45<\/span>\u00a0for the year and quarter ended\u00a0February 29, 2016<\/span>, reflecting an increase of 5.8% and 8.9%, respectively.<\/p>\n

Net investment income yield as percentage of average net asset value (“Net Investment Income Yield”) was 7.6% and 3.5% for the year and quarter ended\u00a0February 28, 2017<\/span>, respectively. Adjusted for (i) the incentive fee accrual related to net unrealized capital gains, (ii) the loss on extinguishment of our 2020 notes, and (iii) the interest on the 2020 notes during the call notice period while the 2023 notes were already issued and outstanding, the Net Investment Income Yield was 9.1% and 8.8%, respectively. In comparison, Net Investment Income Yield was 8.6% and 9.8% for the year and quarter ended\u00a0February 29, 2016<\/span>, respectively. Adjusted Net Investment Income Yield was 8.6% and 8.0% for the year and quarter ended\u00a0February 29, 2016<\/span>, respectively.<\/p>\n

Net Asset Value (“NAV”) increased\u00a0$2.1 million<\/span>\u00a0from\u00a0$125.1 million<\/span>\u00a0as of\u00a0February 29, 2016<\/span>\u00a0to\u00a0$127.3 million<\/span>\u00a0as of\u00a0February 28, 2017<\/span>.<\/p>\n