Saratoga Investment Corp. Announces Fiscal First Quarter 2021 Financial Results and Declares $0.40 Per Share Quarterly Dividend for the Quarter Ending May 31, 2020
Summary Financial Information
The Company’s summarized financial information is as follows:
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For the quarter ended and as of |
For the quarter ended and as of |
For the quarter ended and as of |
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($ in thousands except per share) | |||||||
AUM | 482,947 | 485,632 | 409,451 | ||||
NAV | 281,631 | 304,287 | 186,784 | ||||
NAV per share | 25.11 | 27.13 | 24.06 | ||||
Investment Income | 13,297 | 17,613 | 12,751 | ||||
Net Investment Income per share | 0.80 | 0.01 | 0.48 | ||||
Adjusted Net Investment Income per share | 0.51 | 0.61 | 0.60 | ||||
Earnings per share | (2.02 | ) | 2.39 | 0.99 | |||
Dividends per share (declared) | 0.40 | 0.00 | 0.55 | ||||
Return on Equity – last twelve months | 9.9 | % | 23.6 | % | 11.7 | % | |
– annualized quarter | (30.9 | )% | 36.5 | % | 16.6 | % | |
Originations | 38,999 | 43,971 | 27,369 | ||||
Repayments | 9,350 | 70,100 | 26,917 | ||||
“Coming off one of the most challenging quarters in our experience, we believe Saratoga is in a strong position to weather the increased economic challenges presented by COVID-19,” said
Following our recent baby bond raise and considering the current resiliency of our portfolio, the Board of Directors decided to declare a
Business Update:
The outbreak of COVID-19 has severely impacted global economic activity and caused significant volatility and negative pressure in financial markets. The global impact of the outbreak has been rapidly evolving and many countries, including
Discussion of Financial Results for the Quarter ended
As of
For the three months ended
As compared to the three months ended
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 12.3% for the quarter ended
Net Asset Value (“NAV”) was
- For the three months ended
May 31, 2020 ,$9.0 million of net investment income and$0.3 million deferred tax benefit on net unrealized depreciation were earned, partially offset by$32.0 million of net unrealized depreciation on investments. There were no distributions to shareholders during the quarter and no activity related to the Company’s At-the-Market (“ATM”) equity offering or share repurchase plan.
NAV per share was
- For the three months ended
May 31, 2020 , NAV per share decreased by$2.02 per share, reflecting the$31.7 million , or$2.82 net realized and unrealized loss on investments, offset by the$9.0 million , or$0.80 net investment income.
Return on equity for the last twelve months ended
Earnings per share for the quarter ended
Investment portfolio activity for the quarter ended
- Cost of investments made during the period:
$39.0 million , including investments in two new portfolio companies. - Principal repayments during the period:
$9.4 million .
Additional Financial Information
For the fiscal quarter ended
Adjusted for the incentive fee accrual related to net capital gains, the net investment income was
Total expenses, excluding interest and debt financing expenses, base management fees and incentive management fees, increased from
Portfolio and Investment Activity
As of
For the fiscal quarter ended
As of
Liquidity and Capital Resources
As of
With
On
On
On
- Permit certain amendments related to the Paycheck Protection Program (“Permitted PPP Amendment”) to Loan Asset Documents;
- Exclude certain debt and interest amounts allowed by the Permitted PPP Amendments from certain calculations related to Net Leverage Ratio, Interest Coverage Ratio and EBITDA; and
- Exclude such Permitted PPP Amendments from constituting a Material Modification.
Dividend
Furthermore, while many BDCs have spillover obligations from prior years, representing taxable income from past obligations yet to be distributed,
Following Saratoga Investment’s recent baby bond raise and the current resiliency of its portfolio, the Board of Directors declared a
The Board of Directors declared this dividend on
In fiscal year 2020, the Company declared a quarterly dividend of
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. During fiscal year 2017, the share repurchase plan was increased to 600,000 shares of common stock, and during fiscal years 2018, 2019 and 2020, this share repurchase plan was extended for another year at the same level of approval, currently through
2021 Fiscal First Quarter Conference Call/Webcast Information |
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When: | |
Call: | Interested parties may participate by dialing (877) 312-9208 ( |
A replay of the call will be available from |
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Webcast: | Interested parties may access a simultaneous webcast of the call and find the Q1 2021 presentation by going to the “Events & Presentations” section of Saratoga Investment Corp.’s investor relations website, http://ir.saratogainvestmentcorp.com/events-presentations |
About
Forward Looking Statements
Statements included herein contain certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, which relate to 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 the impact of the COVID-19 pandemic and the pandemic's impact on the
Financials
Consolidated Statements of Assets and Liabilities | ||||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Investments at fair value | ||||||||
Non-control/Non-affiliate investments (amortized cost of |
$ | 420,930,113 | $ | 420,442,928 | ||||
Affiliate investments (amortized cost of |
18,041,254 | 18,485,854 | ||||||
Control investments (amortized cost of |
43,975,865 | 46,703,192 | ||||||
Total investments at fair value (amortized cost of |
482,947,232 | 485,631,974 | ||||||
Cash and cash equivalents | 12,842,608 | 24,598,905 | ||||||
Cash and cash equivalents, reserve accounts | 12,952,393 | 14,851,447 | ||||||
Interest receivable (net of reserve of |
4,308,981 | 4,810,456 | ||||||
Management fee receivable | 285,588 | 272,207 | ||||||
Other assets | 660,775 | 701,007 | ||||||
Total assets | $ | 513,997,577 | $ | 530,865,996 | ||||
LIABILITIES | ||||||||
Revolving credit facility | $ | - | $ | - | ||||
Deferred debt financing costs, revolving credit facility | (489,361 | ) | (512,628 | ) | ||||
SBA debentures payable | 170,000,000 | 150,000,000 | ||||||
Deferred debt financing costs, SBA debentures payable | (2,892,760 | ) | (2,561,495 | ) | ||||
2025 Notes payable | 60,000,000 | 60,000,000 | ||||||
Deferred debt financing costs, 2025 notes payable | (1,953,054 | ) | (2,046,735 | ) | ||||
Base management and incentive fees payable | 3,552,457 | 15,800,097 | ||||||
Deferred tax liability | 1,070,678 | 1,347,363 | ||||||
Accounts payable and accrued expenses | 1,580,913 | 1,713,157 | ||||||
Interest and debt fees payable | 994,956 | 2,234,042 | ||||||
Directors fees payable | 63,000 | 61,500 | ||||||
Due to manager | 439,730 | 543,842 | ||||||
Total liabilities | 232,366,559 | 226,579,143 | ||||||
NET ASSETS | ||||||||
Common stock, par value |
||||||||
authorized, 11,217,545 and 11,217,545 common shares issued and outstanding, respectively | 11,218 | 11,218 | ||||||
Capital in excess of par value | 289,476,991 | 289,476,991 | ||||||
Total distributable earnings (loss) | (7,857,191 | ) | 14,798,644 | |||||
Total net assets | 281,631,018 | 304,286,853 | ||||||
Total liabilities and net assets | $ | 513,997,577 | $ | 530,865,996 | ||||
NET ASSET VALUE PER SHARE | $ | 25.11 | $ | 27.13 | ||||
Asset Coverage Ratio | 569.4 | % | 607.1 | % | ||||
Consolidated Statements of Operations | |||||||||
(unaudited) | |||||||||
For the three months ended | |||||||||
INVESTMENT INCOME | |||||||||
Interest from investments | |||||||||
Interest income: | |||||||||
Non-control/Non-affiliate investments | $ | 9,955,562 | $ | 8,527,740 | |||||
Affiliate investments | 398,370 | 249,325 | |||||||
Control investments | 1,133,584 | 1,648,146 | |||||||
Payment-in-kind interest income: | |||||||||
Non-control/Non-affiliate investments | 581,946 | 151,897 | |||||||
Affiliate investments | 46,223 | 40,150 | |||||||
Control investments | 34,782 | 985,869 | |||||||
Total interest from investments | 12,150,467 | 11,603,127 | |||||||
Interest from cash and cash equivalents | 11,796 | 51,359 | |||||||
Management fee income | 634,572 | 629,516 | |||||||
Structuring and advisory fee income* | 313,306 | 316,375 | |||||||
Other income* | 187,000 | 150,807 | |||||||
Total investment income | 13,297,141 | 12,751,184 | |||||||
OPERATING EXPENSES | |||||||||
Interest and debt financing expenses | 2,563,876 | 3,864,576 | |||||||
Base management fees | 2,160,528 | 1,812,169 | |||||||
Incentive management fees expense (benefit) | (1,858,310 | ) | 2,113,169 | ||||||
Professional fees | 386,888 | 395,126 | |||||||
Administrator expenses | 556,250 | 500,000 | |||||||
Insurance | 67,726 | 64,619 | |||||||
Directors fees and expenses | 60,000 | 60,000 | |||||||
General & administrative | 350,814 | 258,601 | |||||||
Income tax expense (benefit) | (8,945 | ) | 2,136 | ||||||
Total operating expenses | 4,278,827 | 9,070,396 | |||||||
NET INVESTMENT INCOME | 9,018,314 | 3,680,788 | |||||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS | |||||||||
Net realized gain (loss) from investments: | |||||||||
Non-control/Non-affiliate investments | 8,480 | - | |||||||
Net realized gain (loss) from investments | 8,480 | - | |||||||
Net change in unrealized appreciation (depreciation) on investments: | |||||||||
Non-control/Non-affiliate investments | (24,422,894 | ) | 2,393,191 | ||||||
Affiliate investments | (2,444,252 | ) | 169,944 | ||||||
Control investments | (5,083,223 | ) | 1,425,995 | ||||||
Net change in unrealized appreciation (depreciation) on investments | (31,950,369 | ) | 3,989,130 | ||||||
Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments | 267,740 | (20,930 | ) | ||||||
Net realized and unrealized gain (loss) on investments | (31,674,149 | ) | 3,968,200 | ||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | (22,655,835 | ) | $ | 7,648,988 | ||||
WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE | $ | (2.02 | ) | $ | 0.99 | ||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED | 11,217,545 | 7,746,187 | |||||||
* 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,
For the three months ended |
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2020 | 2019 | ||||||
Net Investment Income | $ | 9,018,314 | $ | 3,680,788 | |||
Changes in accrued capital gains incentive fee expense/(reversal) | (3,250,239 | ) | 954,007 | ||||
Adjusted net investment income | 5,768,075 | 4,634,795 | |||||
Net investment income yield | 12.3 | % | 8.0 | % | |||
Changes in accrued capital gains incentive fee expense/(reversal) | (4.4 | %) | 2.1 | % | |||
Adjusted net investment income yield (1) | 7.9 | % | 10.1 | % | |||
Net investment income per share |
$ | 0.80 | $ | 0.48 | |||
Changes in accrued capital gains incentive fee expense/(reversal) | $ | (0.29 | ) | $ | 0.12 | ||
Adjusted net investment income per share (2) | $ | 0.51 | $ | 0.60 | |||
- Adjusted net investment income yield is calculated as adjusted net investment income divided by average net asset value.
- Adjusted net investment income per share is calculated as adjusted net investment income divided by weighted average common shares outstanding.
Contact:
212-906-7800
212-232-2222
Source: Saratoga Investment Corp