Saratoga Investment Corp. Announces Fiscal Year-End and Fourth Quarter 2021 Financial Results
Summary Financial Information
The Company’s summarized financial information is as follows:
For the year ended and as of |
For the year ended and as of |
For the year ended and as of |
|||||
($ thousands except per share) | |||||||
AUM | 554,313 | 485,632 | 402,020 | ||||
NAV | 304,186 | 304,287 | 180,875 | ||||
NAV per share | 27.25 | 27.13 | 23.62 | ||||
Investment Income | 57,650 | 58,448 | 47,708 | ||||
Net Investment Income per share | 2.07 | 1.59 | 2.60 | ||||
Adjusted Net Investment Income per share | 2.02 | 2.49 | 2.63 | ||||
Earnings per share | 1.32 | 5.98 | 2.63 | ||||
Dividends per share (record date) | 1.23 | 2.21 | 2.06 | ||||
Return on Equity – last twelve months | 5.0 | % | 23.6 | % | 10.6 | % | |
Originations | 202,261 | 204,643 | 187,708 | ||||
Repayments* *Includes |
130,259 | 167,253 | 135,265 | ||||
For the three months ended and as of |
For the three months ended and as of |
For the three months ended and as of |
|||||
($ in thousands except per share) | |||||||
AUM | 554,313 | 546,944 | 485,632 | ||||
NAV | 304,186 | 299,853 | 304,287 | ||||
NAV per share | 27.25 | 26.84 | 27.13 | ||||
Investment Income | 16,215 | 14,283 | 17,613 | ||||
Net Investment Income per share | 0.38 | 0.40 | 0.15 | ||||
Adjusted Net Investment Income per share | 0.52 | 0.50 | 0.61 | ||||
Earnings per share | 0.83 | 0.57 | 2.39 | ||||
Dividends per share (most recent) | 0.43 | 0.42 | 0.56 | ||||
Return on Equity – last twelve months | 5.0 | % | 11.0 | % | 23.6 | % | |
– annualized quarter | 12.3 | % | 8.5 | % | 36.5 | % | |
Originations | 80,233 | 51,320 | 43,971 | ||||
Repayments* | 79,330 | 18,296 | 70,100 | ||||
*Includes |
“Our fiscal 2021 year represents a full twelve months of unprecedented times. Our company and industry has proven resilient as we and our portfolio companies managed through these challenges. We continue to believe Saratoga is well positioned for potential future economic opportunities and challenges,” said
“Portfolio management continues to be critically important, and we remain highly discerning in the current environment. We continue to bring new platform investments into the portfolio, with investments in two new companies added this calendar quarter, in addition to the success we continue to have with follow-ons in existing borrowers with strong business models and balance sheets, all totaling
Discussion of Financial Results for the Year and Quarter ended
As of
For the year ended
The reduction in adjusted net investment income this year as compared to the year 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 7.8% and 5.7% for the year and quarter ended
NAV was
- For the twelve months ended
February 28, 2021 , there were$23.1 million of net investment income and$5.0 million in net unrealized appreciation on investments earned, partially offset by$8.7 million of net realized loss from investments,$3.9 million federal tax paid on net capital gains realized in fiscal 2020,$0.6 million deferred tax expense on net unrealized appreciation,$0.1 million realized loss on extinguishment of debt and$13.7 million of dividends declared. In addition,$2.4 million of stock dividend distributions were made through the Company’s dividend reinvestment plan (“DRIP”), and 190,321 shares were repurchased during the twelve months, at a cost of$3.6 million and an average price of$18.96 per share. For the year endedFebruary 28, 2021 , there was no activity related to the ATM offerings. - During the quarter ended
February 28, 2021 , the Company repurchased 50,000 shares at a cost of$1.1 million and an average price of$22.88 per share.
NAV per share was
- For the twelve months ended
February 28, 2021 , NAV per share increased by$0.12 per share, primarily reflecting the$1.0 million , or$0.10 per share increase in net assets (net of the$1.23 dividend paid during the year). The$0.02 difference is the net accretive impact of the share repurchase plan partially offset by the DRIP share issuance. - This is the highest level of NAV per share since Saratoga took over the management of the Company
Return on equity for the last twelve months ended
Earnings per share for the year and quarter ended
Investment portfolio activity for the year ended
- Cost of investments made during the period:
$202.3 million - Principal repayments and amortizations during the period:
$130.3 million
Investment portfolio activity for the three months ended
- Cost of investments made during the period:
$80.2 million - Principal repayments during the period:
$79.3 million
Additional Financial Information
For the fiscal year ended
Adjusted for the incentive fee accrual related to net capital gains, the net investment income was
For the fiscal quarter ended
The
This is compared to the fiscal quarter ended
Adjusted for the incentive fee accrual related to net capital gains, net investment income was
Total expenses, excluding interest and debt financing expenses, base management fees, incentive fees, income tax benefit and excise tax expense, increased from
Portfolio and Investment Activity
As of
For the fiscal year ended
As of
Liquidity and Capital Resources
As of
With
The Company announced on
On
On
Dividend
Saratoga Investment’s Board of Directors paid a
Shareholders have the option to receive payment of dividends 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, 2019 and 2020, this share repurchase plan was extended for another year at the same level of approval, currently through
During the year ended
During the quarter ended
2021 Fiscal Fourth Quarter and Year End Conference Call/Webcast Information
When: | |
Call: | Interested parties may participate by dialing (877) 312-9208 ( A replay of the call will be available from |
Webcast: | Interested parties may access a simultaneous webcast of the call and find the Q4 and FY 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 | |||||
ASSETS | |||||
Investments at fair value | |||||
Non-control/Non-affiliate investments (amortized cost of |
$ | 469,946,494 | $ | 420,442,928 | |
Affiliate investments (amortized cost of |
19,367,740 | 18,485,854 | |||
Control investments (amortized cost of |
64,998,481 | 46,703,192 | |||
Total investments at fair value (amortized cost of |
554,312,715 | 485,631,974 | |||
Cash and cash equivalents | 18,828,047 | 24,598,905 | |||
Cash and cash equivalents, reserve accounts | 11,087,027 | 14,851,447 | |||
Interest receivable (net of reserve of |
4,223,630 | 4,810,456 | |||
Due from affiliate | 2,719,000 | - | |||
Management fee receivable | 34,644 | 272,207 | |||
Other assets | 947,315 | 701,007 | |||
Total assets | $ | 592,152,378 | $ | 530,865,996 | |
LIABILITIES | |||||
Revolving credit facility | $ | - | $ | - | |
Deferred debt financing costs, revolving credit facility | (639,982) | (512,628) | |||
SBA debentures payable | 158,000,000 | 150,000,000 | |||
Deferred debt financing costs, SBA debentures payable | (2,642,622) | (2,561,495) | |||
6.25% Notes Payable 2025 | 60,000,000 | 60,000,000 | |||
Deferred debt financing costs, 6.25% notes payable 2025 | (1,675,064) | (2,046,735) | |||
7.25% Notes Payable 2025 | 43,125,000 | - | |||
Deferred debt financing costs, 7.25% notes payable 2025 | (1,401,307) | - | |||
7.75% Notes Payable 2025 | 5,000,000 | - | |||
Deferred debt financing costs, 7.75% notes payable 2025 | (239,222) | - | |||
6.25% Notes Payable 2027 | 15,000,000 | - | |||
Deferred debt financing costs, 6.25% notes payable 2027 | (476,820) | - | |||
Base management and incentive fees payable | 6,556,674 | 15,800,097 | |||
Deferred tax liability | 1,922,664 | 1,347,363 | |||
Accounts payable and accrued expenses | 1,750,266 | 1,713,157 | |||
Interest and debt fees payable | 2,645,784 | 2,234,042 | |||
Directors fees payable | 70,500 | 61,500 | |||
Due to manager | 279,065 | 543,842 | |||
Excise tax payable | 691,672 | - | |||
Total liabilities | 287,966,608 | 226,579,143 | |||
Commitments and contingencies | |||||
NET ASSETS | |||||
Common stock, par value |
|||||
authorized, 11,161,416 and 11,217,545 common shares issued and outstanding, respectively | 11,161 | 11,218 | |||
Capital in excess of par value | 304,874,957 | 289,476,991 | |||
Total distributable earnings (deficit) | (700,348) | 14,798,644 | |||
Total net assets | 304,185,770 | 304,286,853 | |||
Total liabilities and net assets | $ | 592,152,378 | $ | 530,865,996 | |
NET ASSET VALUE PER SHARE | $ | 27.25 | $ | 27.13 | |
Asset Coverage Ratio | 347.1% | 607.1% | |||
Consolidated Statements of Operations | |||||
For the three months ended | |||||
INVESTMENT INCOME | |||||
Interest from investments | |||||
Interest income: | |||||
Non-control/Non-affiliate investments | $ | 11,036,031 | $ | 9,389,470 | |
Affiliate investments | 451,423 | 356,762 | |||
Control investments | 1,811,065 | 1,547,725 | |||
Payment-in-kind interest income: | |||||
Non-control/Non-affiliate investments | 1,126,193 | 285,313 | |||
Affiliate investments | 29,052 | 44,024 | |||
Control investments | 45,209 | 179,247 | |||
Total interest from investments | 14,498,973 | 11,802,541 | |||
Interest from cash and cash equivalents | 433 | 219,362 | |||
Management fee income | 623,801 | 614,872 | |||
Incentive fee income | - | - | |||
Structuring and advisory fee income* | 358,745 | 3,411,250 | |||
Other income* | 732,829 | 1,565,014 | |||
Total investment income | 16,214,781 | 17,613,039 | |||
OPERATING EXPENSES | |||||
Interest and debt financing expenses | 4,135,008 | 3,054,345 | |||
Base management fees | 2,404,351 | 2,143,372 | |||
Incentive management fees expense (benefit) | 2,937,132 | 6,862,982 | |||
Professional fees | 448,522 | 503,079 | |||
Administrator expenses | 693,750 | 556,250 | |||
Insurance | 83,066 | 66,807 | |||
Directors fees and expenses | 95,000 | 60,000 | |||
General & administrative | 464,921 | 289,959 | |||
Income tax expense (benefit) | (27,637) | 2,426,873 | |||
Excise tax expense (credit) | 691,672 | - | |||
Total operating expenses | 11,925,785 | 15,963,667 | |||
NET INVESTMENT INCOME | 4,288,996 | 1,649,372 | |||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS | |||||
Net realized gain (loss) from investments: | |||||
Non-control/Non-affiliate investments | - | (957,777) | |||
Affiliate investments | (8,726,013) | - | |||
Control investments | - | 31,225,165 | |||
Net realized gain (loss) from investments | (8,726,013) | 30,267,388 | |||
Net change in unrealized appreciation (depreciation) on investments: | |||||
Non-control/Non-affiliate investments | 5,654,556 | 4,624,537 | |||
Affiliate investments | 8,970,702 | 678,619 | |||
Control investments | (287,798) | (10,984,921) | |||
Net change in unrealized appreciation (depreciation) on investments | 14,337,460 | (5,681,765) | |||
Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments | (515,796) | 2,141,150 | |||
Net realized and unrealized gain (loss) on investments | 5,095,651 | 26,726,773 | |||
Realized losses on extinguishment of debt* | (128,617) | (1,583,266) | |||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | 9,256,030 | $ | 26,792,879 | |
WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE | $ | 0.83 | $ | 2.39 | |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED | 11,159,010 | 11,190,152 | |||
* Certain prior period amounts have been reclassified to conform to current period presentation. | |||||
Consolidated Statements of Operations | ||||||||
For the year ended | ||||||||
INVESTMENT INCOME | ||||||||
Interest from investments | ||||||||
Interest income: | ||||||||
Non-control/Non-affiliate investments | $ | 41,621,899 | $ | 36,252,113 | $ | 33,329,539 | ||
Affiliate investments | 1,656,263 | 1,230,578 | 963,289 | |||||
Control investments | 5,848,980 | 6,175,120 | 4,785,044 | |||||
Payment-in-kind interest income: | ||||||||
Non-control/Non-affiliate investments | 2,251,499 | 816,041 | 780,112 | |||||
Affiliate investments | 172,626 | 167,836 | 150,284 | |||||
Control investments | 162,658 | 3,405,307 | 3,288,902 | |||||
Total interest from investments | 51,713,925 | 48,046,995 | 43,297,170 | |||||
Interest from cash and cash equivalents | 14,609 | 536,053 | 64,024 | |||||
Management fee income | 2,507,626 | 2,503,804 | 1,722,180 | |||||
Incentive fee income | - | - | 633,232 | |||||
Structuring and advisory fee income* | 2,157,405 | 5,286,475 | 1,355,393 | |||||
Other income* | 1,256,691 | 2,074,864 | 635,964 | |||||
Total investment income | 57,650,256 | 58,448,191 | 47,707,963 | |||||
OPERATING EXPENSES | ||||||||
Interest and debt financing expenses | 13,587,201 | 14,682,611 | 13,125,718 | |||||
Base management fees | 9,098,495 | 8,098,995 | 6,879,324 | |||||
Incentive management fees expense (benefit) | 4,903,499 | 14,163,776 | 4,891,004 | |||||
Professional fees | 1,705,942 | 1,684,089 | 1,849,424 | |||||
Administrator expenses | 2,545,833 | 2,131,250 | 1,895,833 | |||||
Insurance | 285,529 | 259,981 | 253,141 | |||||
Directors fees and expenses | 290,000 | 277,500 | 290,500 | |||||
General & administrative | 1,428,293 | 1,326,457 | 1,224,462 | |||||
Income tax expense (benefit) | 667 | 961,995 | (1,027,118) | |||||
Excise tax expense (credit) | 691,672 | - | - | |||||
Other expense | - | - | 23,466 | |||||
Total operating expenses | 34,537,131 | 43,586,654 | 29,405,754 | |||||
NET INVESTMENT INCOME | 23,113,125 | 14,861,537 | 18,302,209 | |||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS | ||||||||
Net realized gain (loss) from investments: | ||||||||
Non-control/Non-affiliate investments | 22,207 | 11,651,990 | 4,874,305 | |||||
Affiliate investments | (8,726,013) | - | - | |||||
Control investments | - | 31,225,165 | - | |||||
Net realized gain (loss) from investments | (8,703,806) | 42,877,155 | 4,874,305 | |||||
Income tax (provision) benefit from realized gain on investments | (3,895,354) | - | - | |||||
Net change in unrealized appreciation (depreciation) on investments: | ||||||||
Non-control/Non-affiliate investments | (3,817,921) | 3,060,964 | (5,152,206) | |||||
Affiliate investments | 7,549,096 | 1,538,572 | (853,588) | |||||
Control investments | 1,235,147 | (5,370,450) | 3,105,485 | |||||
Net change in unrealized appreciation (depreciation) on investments | 4,966,322 | (770,914) | (2,900,309) | |||||
Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments | (574,634) | 354,349 | (1,766,835) | |||||
Net realized and unrealized gain (loss) on investments | (8,207,472) | 42,460,590 | 207,161 | |||||
Realized losses on extinguishment of debt* | (128,617) | (1,583,266) | - | |||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | 14,777,036 | $ | 55,738,861 | $ | 18,509,370 | ||
WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE | $ | 1.32 | $ | 5.98 | $ | 2.63 | ||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED | 11,188,629 | 9,319,192 | 7,046,686 | |||||
* 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 Years Ended |
|||||||||
Net Investment Income | $ | 23,113,125 | $ | 14,861,537 | $ | 18,302,209 | |||
Changes in accrued capital gains incentive fee expense/ reversal | (543,735 | ) | 8,359,207 | 251,090 | |||||
Adjusted net investment income | 22,569,390 | 23,220,744 | 18,553,299 | ||||||
Net investment income yield | 7.8 | % | 6.3 | % | 10.5 | % | |||
Changes in accrued capital gains incentive fee expense/ reversal | (0.2 | %) | 3.6 | % | 0.1 | % | |||
Adjusted net investment income yield (1) | 7.6 | % | 9.9 | % | 10.6 | % | |||
Net investment income per share | $ | 2.07 | $ | 1.59 | $ | 2.60 | |||
Changes in accrued capital gains incentive fee expense/ reversal | (0.05 | ) | 0.90 | 0.03 | |||||
Adjusted net investment income per share (2) | $ | 2.02 | $ | 2.49 | $ | 2.63 | |||
(1) Adjusted net investment income 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 Quarters Ended | |||||||
Net Investment Income | $ | 4,288,966 | $ | 1,649,372 | |||
Changes in accrued capital gains incentive fee expense/ reversal | 1,491,312 | 5,162,197 | |||||
Adjusted net investment income | 5,780,309 | 6,811,569 | |||||
Net investment income yield | 5.7 | % | 2.3 | % | |||
Changes in accrued capital gains incentive fee expense/ reversal | 2.0 | % | 7.0 | % | |||
Adjusted net investment income yield (1) | 7.7 | % | 9.3 | % | |||
Net investment income per share | $ | 0.38 | $ | 0.15 | |||
Changes in accrued capital gains incentive fee expense/ reversal | 0.14 | 0.46 | |||||
Adjusted net investment income per share (2) | $ | 0.52 | $ | 0.61 | |||
(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:
212-906-7800
212-232-2222
Source: Saratoga Investment Corp