{"id":751,"date":"2019-05-13T16:16:27","date_gmt":"2019-05-13T16:16:27","guid":{"rendered":"http:\/\/henristeenkamp.com\/?p=751"},"modified":"2019-05-13T16:18:30","modified_gmt":"2019-05-13T16:18:30","slug":"saratoga-investment-corp-announces-fiscal-year-end-and-fourth-quarter-2019-financial-results","status":"publish","type":"post","link":"https:\/\/ragnarok-ms.us\/henristeenkamp-com\/saratoga-investment-corp-announces-fiscal-year-end-and-fourth-quarter-2019-financial-results\/","title":{"rendered":"Saratoga Investment Corp. Announces Fiscal Year End and Fourth Quarter 2019 Financial Results"},"content":{"rendered":"
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May 8, 2019<\/div>\n<\/div>\n
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Saratoga Investment Corp. Announces Fiscal Year End and Fourth Quarter 2019 Financial Results<\/strong><\/a><\/div>\n<\/div>\n
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NEW YORK,\u00a0May 08, 2019\u00a0(GLOBE NEWSWIRE) —\u00a0Saratoga Investment Corp.\u00a0(NYSE:SAR) (\u201cSaratoga Investment\u201d or \u201cthe Company\u201d), a business development company, today announced financial results for its 2019 fiscal year end and fourth quarter.<\/p>\n

Summary Financial Information<\/p>\n

The Company\u2019s summarized financial information is as follows:<\/p>\n

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\u201cFiscal year 2019 continued the strong performance trend for\u00a0Saratoga Investment Corp.\u00a0with significant strengthening of our organizational and capital foundation,\u201d said\u00a0Christian L. Oberbeck, Chairman and Chief Executive Officer of\u00a0Saratoga Investment. \u201cWe continued to make steady progress growing our high quality asset base while maintaining our industry leadership in key performance metrics and credit quality. We also took important steps to expand our capitalization and liquidity through equity and long-term debt issuances, raising over\u00a0$90 million\u00a0in the public capital markets. We increased our quarterly dividend for the 18th<\/sup>\u00a0consecutive quarter to\u00a0$0.54\u00a0per share, reflecting a 2% year-over-year increase while still overearning the dividend. Year-over-year, NAV grew by 26% and NAV per share by 3%. Our LTM ROE for the year was 10.6% is in the top tier of the BDC industry.\u201d<\/p>\n

Michael J. Grisius, President and Chief Investment Officer, added, \u201cIn this fiscal year, our organization originated\u00a0$167.7 million\u00a0of new investments, excluding the CLO warehouse \u2013 a record amount for us. We continue to see steady year-over-year asset base expansion, with an increase in our investments at fair value of 17% compared to last year, despite some significant repayments in Q4 of\u00a0$57.0 million, excluding the CLO warehouse. Furthermore, market headwinds have not impaired our exceptional underwriting standards and consistent ability to deploy capital in high quality credits. This continued post quarter-end as we closed investments in three new platforms. 99% of our investments continue to hold our highest quality rating. Our belief remains that successful investing rests on sound judgment and steady, continuous discipline, taken one decision at a time. It is our conviction that our commitment to a long-term strategy and focus on quality will continue to reap positive rewards.\u201d<\/p>\n

As of\u00a0February 28, 2019,\u00a0Saratoga Investment\u00a0increased its assets under management (\u201cAUM\u201d) to\u00a0$402.0 million, an increase of 17.3% from\u00a0$342.7 million\u00a0as of\u00a0February 28, 2018, and a decrease of 9.4% from\u00a0$443.8 million\u00a0as of\u00a0November 30, 2018. The annual increase reflects originations of\u00a0$187.7 million\u00a0new investments during the year ended\u00a0February 28, 2019, offset by repayments and amortizations of\u00a0$135.7 million. These investments and repayments for the year are inclusive of the\u00a0$29.3 million\u00a0in originations and\u00a0$77.0 million\u00a0in repayments during the quarter ended\u00a0February 28, 2019. Since Saratoga management has taken over the management of the BDC,\u00a0$357.8 million\u00a0of repayments and sales of investments originated by Saratoga have generated a gross unlevered IRR of 13.8%. Saratoga Investment\u2019s portfolio has remained strong, with a continued high level of investment quality in loan investments, with 98.6% of its loans at its highest internal rating for this quarter.<\/p>\n

As a result, both the year and quarter ended\u00a0February 28, 2019\u00a0benefitted from higher investment income as compared to the prior-year period \u2013 investment income increased to\u00a0$47.7 million\u00a0for the year ended\u00a0February 28, 2019, up 23.5% from\u00a0$38.6 million\u00a0for the year ended\u00a0February 28, 2018, and up to\u00a0$13.0 million\u00a0from\u00a0$10.1 million\u00a0for the same quarterly periods, a 28.2% increase. This increased investment income was generated from an investment base that has grown by 17.3% since last year, partially offset by the weighted average current yield decreasing from 11.1% to 10.7%. In addition, this quarter\u2019s investment income was also up 1.2% from\u00a0$12.8 million\u00a0for the quarter ended\u00a0November 30, 2018.<\/p>\n

As compared to the year ended\u00a0February 28, 2018, the investment income increase was offset by (i) increased debt and financing expenses, as the growth in AUM this year was partially financed from increased SBA debentures and the\u00a0$60.0 million\u00a0baby bond issuance, (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 and income tax benefit, reflecting primarily higher administrator expenses, higher directors fees and expenses and higher professional and general and administrative expenses, partially due to increased Sarbanes-Oxley (\u201cSOX\u201d) activities now that the Company has qualified as an accelerated filer. The increased expenses were offset by the recognition of a\u00a0$1.0 million\u00a0income tax benefit generated from net operating losses in Saratoga Investment\u2019s blocker subsidiaries.<\/p>\n

Net investment income on a weighted average per share basis was\u00a0$2.60\u00a0and\u00a0$0.54\u00a0for the year and quarter ended\u00a0February 28, 2019, respectively. Adjusted for the incentive fee accrual related to net unrealized capital gains, the net investment income on a weighted average per share basis was\u00a0$2.63\u00a0and\u00a0$0.66, respectively. This compares to adjusted net investment income per share of\u00a0$2.27\u00a0and\u00a0$0.60\u00a0for the year and quarter ended\u00a0February 28, 2018, reflecting an increase of\u00a0$0.36\u00a0and\u00a0$0.06\u00a0per share, respectively. This also compares to adjusted net investment income of\u00a0$0.65\u00a0per share for the quarter ended\u00a0November 30, 2018, an increase of\u00a0$0.01\u00a0per share.<\/p>\n

Net investment income yield as a percentage of average net asset value (\u201cNet Investment Income Yield\u201d) was 10.5% and 9.2% for the year and quarter ended\u00a0February 28, 2019, respectively. Adjusted for the incentive fee accrual related to net unrealized capital gains, the Net Investment Income Yield was 10.6% and 11.2%, respectively. In comparison, adjusted Net Investment Income Yield was 10.2% for the year ended\u00a0February 28, 2018, and 11.2% and 10.7% for the quarters ended\u00a0November 30, 2018, and\u00a0February 28, 2018, respectively.<\/p>\n

Net Asset Value (\u201cNAV\u201d) was\u00a0$180.9 million\u00a0as of\u00a0February 28, 2019, an increase of\u00a0$37.2 million\u00a0from\u00a0$143.7 millionas of\u00a0February 28, 2018, and an increase of\u00a0$7.6 million\u00a0from\u00a0$173.3 million\u00a0as of\u00a0November 30, 2018.<\/p>\n