Saratoga Investment Corp. Announces Fiscal Second Quarter 2020 Financial Results
Summary Financial Information
The Company’s summarized financial information is as follows:
For the three months ended and as of August 31, 2019 | For the three months ended and as of May 31, 2019 | For the three months ended and as of August 31, 2018 | ||||||||||
($ in thousands except per share) | ||||||||||||
AUM | 486,880 | 409,451 | 392,887 | |||||||||
NAV | 224,337 | 186,784 | 172,658 | |||||||||
NAV per share | 24.47 | 24.06 | 23.16 | |||||||||
Investment Income | 13,888 | 12,751 | 11,403 | |||||||||
Net Investment Income per share | 0.59 | 0.48 | 0.74 | |||||||||
Adjusted Net Investment Income per share | 0.68 | 0.60 | 0.69 | |||||||||
Earnings per share | 0.91 | 0.99 | 0.45 | |||||||||
Dividends per share (declared) | 0.56 | 0.55 | 0.52 | |||||||||
Return on Equity – last twelve months | 14.3 | % | 11.7 | % | 11.6 | % | ||||||
– annualized quarter | 14.7 | % | 16.6 | % | 7.9 | % | ||||||
Originations | 93,194 | 27,369 | 51,726 | |||||||||
Repayments | 19,004 | 26,917 | 1,016 |
“The second fiscal quarter of 2020 has been important for us with many significant accomplishments”, said
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 NAV (“Net Investment Income Yield”) was 9.6% for the three months ended
NAV was
• | For the six months ended August 31, 2019, $8.6 million of net investment income, $1.9 million in net realized gain from investments and $5.4 million of net unrealized appreciation were earned, partially offset by $0.7 million deferred tax expense on net unrealized gains in Saratoga Investment’s blocker subsidiaries and $8.5 million of dividends declared. In addition, $1.4 million of stock dividend distributions were made through the Company’s dividend reinvestment plan (“DRIP”), and 1,371,666 shares were sold through the ATM equity offering during the quarter for net proceeds of $33.6 million. |
NAV per share was
• | For the six months ended August 31, 2019, NAV per share increased by $0.85 per share, primarily reflecting the $6.7 million, or $0.80 per share increase in net assets (net of the $1.09 dividend paid during the first two quarters). In addition, there was a $0.05 net accretive impact of the quarter’s 1,510,900 share issuances from the DRIP and ATM programs. The Company made no repurchases of common stock in the open market during the quarter. |
Return on equity for the last twelve months ended
Earnings per share for the three months ended
Investment portfolio activity for the three months ended
• | Cost of investments made during the period: $93.2 million, including investments in four new portfolio companies | |
• | Principal repayments during the period: $19.0 million |
Additional Financial Information
For the fiscal quarter ended
The
The
This is compared to the fiscal quarter ended
Adjusted for the incentive fee accrual related to net unrealized 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
On
With
On
Dividend
On
Shareholders have the option to receive payment of the dividend 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. During fiscal year 2017, the share repurchase plan was increased to 600,000 shares of common stock, and during fiscal years 2018 and 2019, this share repurchase plan was extended for another year at the same level of approval, currently through
2020 Fiscal Second Quarter Conference Call/Webcast Information
When:
Call: | Interested parties may participate by dialing (877) 312-9208 (U.S. and Canada) or (678) 224-7872 (outside U.S. and Canada). | |
A replay of the call will be available from 1:00 p.m. ET on Thursday, October 10, 2019 through 1:00 p.m. ET on Thursday, October 17, 2019 by dialing (855) 859-2056 (U.S. and Canada) or (404) 537-3406 (outside U.S. and Canada), passcode for both replay numbers: 8626898. | ||
Webcast: | Interested parties may access a simultaneous webcast of the call and find the Q2 2020 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
This press release contains certain forward-looking statements. These forward-looking statements are subject to risks and uncertainties and other factors enumerated in this press release and the filings Saratoga Investment makes with the SEC.
Financials
Consolidated Statements of Assets and Liabilities
August 31, 2019 | February 28, 2019 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Investments at fair value | ||||||||
Non-control/Non-affiliate investments (amortized cost of $376,936,296 and $307,136,188, respectively) | $ | 379,070,267 | $ | 306,511,427 | ||||
Affiliate investments (amortized cost of $23,901,306 and $18,514,716, respectively) | 17,750,919 | 11,463,081 | ||||||
Control investments (amortized cost of $80,491,992 and $76,265,189, respectively) | 90,059,037 | 84,045,212 | ||||||
Total investments at fair value (amortized cost of $481,329,594 and $401,916,093, respectively) | 486,880,223 | 402,019,720 | ||||||
Cash and cash equivalents | 2,846,767 | 30,799,068 | ||||||
Cash and cash equivalents, reserve accounts | 21,271,658 | 31,295,326 | ||||||
Interest receivable (net of reserve of $1,098,807 and $647,210, respectively) | 4,896,769 | 3,746,604 | ||||||
Due from affiliate | - | 1,673,747 | ||||||
Management and incentive fee receivable | 279,960 | 542,094 | ||||||
Other assets | 665,227 | 595,543 | ||||||
Total assets | $ | 516,840,604 | $ | 470,672,102 | ||||
LIABILITIES | ||||||||
Revolving credit facility | $ | - | $ | - | ||||
Deferred debt financing costs, revolving credit facility | (558,655 | ) | (605,189 | ) | ||||
SBA debentures payable | 150,000,000 | 150,000,000 | ||||||
Deferred debt financing costs, SBA debentures payable | (2,152,801 | ) | (2,396,931 | ) | ||||
2023 Notes payable | 74,450,500 | 74,450,500 | ||||||
Deferred debt financing costs, 2023 notes payable | (1,719,614 | ) | (1,919,620 | ) | ||||
2025 Notes payable | 60,000,000 | 60,000,000 | ||||||
Deferred debt financing costs, 2025 notes payable | (2,232,061 | ) | (2,377,551 | ) | ||||
Base management and incentive fees payable | 8,633,468 | 6,684,785 | ||||||
Deferred tax liability | 1,001,121 | 739,716 | ||||||
Accounts payable and accrued expenses | 1,503,867 | 1,615,443 | ||||||
Interest and debt fees payable | 3,200,510 | 3,224,671 | ||||||
Directors fees payable | 75,000 | 62,000 | ||||||
Due to manager | 302,702 | 319,091 | ||||||
Total liabilities | $ | 292,504,037 | $ | 289,796,915 | ||||
Commitments and contingencies | ||||||||
NET ASSETS | ||||||||
Common stock, par value $.001, 100,000,000 common shares | ||||||||
authorized, 9,168,056 and 7,657,156 common shares issued and outstanding, respectively | $ | 9,168 | $ | 7,657 | ||||
Capital in excess of par value | 240,296,267 | 203,552,800 | ||||||
Total distributable earnings (loss) | (15,968,868 | ) | (22,685,270 | ) | ||||
Total net assets | 224,336,567 | 180,875,187 | ||||||
Total liabilities and net assets | $ | 516,840,604 | $ | 470,672,102 | ||||
NET ASSET VALUE PER SHARE | $ | 24.47 | $ | 23.62 | ||||
Asset Coverage Ratio | 266.9 | % | 234.5 | % |
Consolidated Statements of Operations
(unaudited)
For the three months ended | ||||||||
August 31, 2019 | August 31, 2018 | |||||||
INVESTMENT INCOME | ||||||||
Interest from investments | ||||||||
Interest income: | ||||||||
Non-control/Non-affiliate investments | $ | 8,585,609 | $ | 8,046,730 | ||||
Affiliate investments | 267,533 | 241,607 | ||||||
Control investments | 1,678,326 | 1,251,573 | ||||||
Payment-in-kind interest income: | ||||||||
Non-control/Non-affiliate investments | 179,847 | 145,012 | ||||||
Affiliate investments | 41,265 | 35,482 | ||||||
Control investments | 989,367 | 594,367 | ||||||
Total interest from investments | 11,741,947 | 10,314,771 | ||||||
Interest from cash and cash equivalents | 145,793 | 11,455 | ||||||
Management fee income | 629,745 | 363,962 | ||||||
Incentive fee income | - | 147,061 | ||||||
Other income | 1,370,728 | 565,525 | ||||||
Total investment income | 13,888,213 | 11,402,774 | ||||||
OPERATING EXPENSES | ||||||||
Interest and debt financing expenses | 3,866,722 | 2,866,414 | ||||||
Base management fees | 1,997,240 | 1,645,653 | ||||||
Incentive management fees | 2,085,486 | 807,521 | ||||||
Professional fees | 384,874 | 468,253 | ||||||
Administrator expenses | 518,750 | 458,333 | ||||||
Insurance | 64,619 | 63,860 | ||||||
Directors fees and expenses | 97,500 | 75,000 | ||||||
General & administrative | 382,873 | 206,295 | ||||||
Income tax benefit | (465,925 | ) | (341,232 | ) | ||||
Other expense | - | 8,449 | ||||||
Total operating expenses | 8,932,139 | 6,258,546 | ||||||
NET INVESTMENT INCOME | 4,956,074 | 5,144,228 | ||||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS | ||||||||
Net realized gain from investments: | ||||||||
Non-control/Non-affiliate investments | 1,870,089 | 163 | ||||||
Net realized gain from investments | 1,870,089 | 163 | ||||||
Net change in unrealized appreciation (depreciation) on investments: | ||||||||
Non-control/Non-affiliate investments | 365,541 | (1,086,162 | ) | |||||
Affiliate investments | 731,304 | (855,742 | ) | |||||
Control investments | 361,027 | (212,617 | ) | |||||
Net change in unrealized appreciation (depreciation) on investments | 1,457,872 | (2,154,521 | ) | |||||
Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments | (704,263 | ) | 152,546 | |||||
Net realized and unrealized gain (loss) on investments | 2,623,698 | (2,001,812 | ) | |||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 7,579,772 | $ | 3,142,416 | ||||
WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS PER COMMON SHARE | $ | 0.91 | $ | 0.45 | ||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED | 8,333,570 | 6,915,966 |
Consolidated Statements of Operations
(unaudited)
For the six months ended | ||||||||
August 31, 2019 | August 31, 2018 | |||||||
INVESTMENT INCOME | ||||||||
Interest from investments | ||||||||
Interest income: | ||||||||
Non-control/Non-affiliate investments | $ | 17,113,349 | $ | 15,452,639 | ||||
Affiliate investments | 516,858 | 480,957 | ||||||
Control investments | 3,326,472 | 2,398,238 | ||||||
Payment-in-kind interest income: | ||||||||
Non-control/Non-affiliate investments | 331,744 | 361,022 | ||||||
Affiliate investments | 81,415 | 69,629 | ||||||
Control investments | 1,975,236 | 1,159,224 | ||||||
Total interest from investments | 23,345,074 | 19,921,709 | ||||||
Interest from cash and cash equivalents | 197,152 | 27,748 | ||||||
Management fee income | 1,259,261 | 749,156 | ||||||
Incentive fee income | - | 346,244 | ||||||
Other income | 1,837,910 | 845,935 | ||||||
Total investment income | 26,639,397 | 21,890,792 | ||||||
OPERATING EXPENSES | ||||||||
Interest and debt financing expenses | 7,731,298 | 5,589,206 | ||||||
Base management fees | 3,809,409 | 3,178,121 | ||||||
Incentive management fees | 4,198,655 | 1,880,133 | ||||||
Professional fees | 780,000 | 1,011,050 | ||||||
Administrator expenses | 1,018,750 | 895,833 | ||||||
Insurance | 129,238 | 127,719 | ||||||
Directors fees and expenses | 157,500 | 170,500 | ||||||
General & administrative | 641,474 | 554,145 | ||||||
Income tax benefit | (463,789 | ) | (608,542 | ) | ||||
Excise tax credit | - | (270 | ) | |||||
Other expense | - | 21,021 | ||||||
Total operating expenses | 18,002,535 | 12,818,916 | ||||||
NET INVESTMENT INCOME | 8,636,862 | 9,071,876 | ||||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS | ||||||||
Net realized gain from investments: | ||||||||
Non-control/Non-affiliate investments | 1,870,089 | 212,171 | ||||||
Net realized gain from investments | 1,870,089 | 212,171 | ||||||
Net change in unrealized appreciation (depreciation) on investments: | ||||||||
Non-control/Non-affiliate investments | 2,758,732 | (782,457 | ) | |||||
Affiliate investments | 901,248 | (1,331,304 | ) | |||||
Control investments | 1,787,022 | 602,445 | ||||||
Net change in unrealized appreciation (depreciation) on investments | 5,447,002 | (1,511,316 | ) | |||||
Net change in provision for deferred taxes on unrealized appreciation on investments | (725,193 | ) | (788,000 | ) | ||||
Net realized and unrealized gain (loss) on investments | 6,591,898 | (2,087,145 | ) | |||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 15,228,760 | $ | 6,984,731 | ||||
WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS PER COMMON SHARE | $ | 1.89 | $ | 1.06 | ||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED | 8,041,365 | 6,597,324 |
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 August 31 | For the six months ended August 31 | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Net Investment Income | $ | 4,956,074 | $ | 5,144,228 | $ | 8,636,862 | $ | 9,071,876 | ||||||||
Changes in accrued capital gains incentive fee expense/reversal | 676,801 | (383,118 | ) | 1,630,809 | (310,852 | ) | ||||||||||
Adjusted net investment income | 5,632,875 | 4,761,109 | 10,267,671 | 8,761,024 | ||||||||||||
Net investment income yield | 9.6 | % | 12.9 | % | 8.8 | % | 12.0 | % | ||||||||
Changes in accrued capital gains incentive fee expense/reversal | 1.4 | % | (1.0 | %) | 1.6 | % | (0.5 | %) | ||||||||
Adjusted net investment income yield (1) | 11.0 | % | 11.9 | % | 10.4 | % | 11.5 | % | ||||||||
Net investment income per share | $ | 0.59 | $ | 0.74 | $ | 1.07 | $ | 1.38 | ||||||||
Changes in accrued capital gains incentive fee expense/reversal | $ | 0.09 | ($ | 0.05 | ) | $ | 0.21 | ($ | 0.05 | ) | ||||||
Adjusted net investment income per share (2) | $ | 0.68 | $ | 0.69 | $ | 1.28 | $ | 1.33 |
(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. 212-906-7800Roland Tomforde Broadgate Consultants 212-232-2222
Source: Saratoga Investment Corp