NEW YORK, Jan. 14, 2011 /PRNewswire/ -- Saratoga Investment Corp. , a business development company, today announced financial results for the fiscal third quarter ended November 30, 2010.
Operating Results
For the quarter ended November 30, 2010, Saratoga Investment Corp. reported net investment income of $1.9 million, or $0.70 per share, and net gain on investments of $1.4 million, or $0.50 per share, resulting in a net increase in net assets from operations of $3.3 million, or $1.20 per share. Net asset value was $24.95 per share as of November 30, 2010 as compared to $29.71 per share reported as of August 31, 2010. The decrease in reported NAV per share from August 31, 2010 was primarily the result of the dividend of $1.2 million and 596,235 shares of common stock declared on November 12, 2010 and paid on December 29, 2010. In accordance with generally accepted accounting principals, the number of shares outstanding used to calculate NAV per share as of November 30, 2010 was retroactively adjusted to reflect the additional shares issued as a result of the stock dividend. Excluding the effect of the dividend, the NAV per share would have been $30.94 as of November 30, 2010.
"We are pleased to see continued credit market stabilization and general improvement in the overall economy, which has assisted us in realizing parts of our portfolio and reducing debt," said Christian L. Oberbeck, Chief Executive Officer of Saratoga Investment Corp. "We made over $50 million of new portfolio investments in our BDC and CLO this quarter. We continue to focus on generating current income and capital appreciation through investment in the middle market."
Portfolio and Investment Activity
As of November 30, 2010, the value of the Company's investment portfolio was $91.2 million, principally invested in 26 portfolio companies and one $381.4 million collateralized loan obligation fund ("CLO"). The overall portfolio composition consisted of 17.2% first lien term loans, 21.4% second lien term loans, 26.9% senior secured notes, 3.2% unsecured notes, and 25.3% subordinated notes of the CLO.
During the third quarter, Saratoga Investment Corp. invested $1.6 million in a new portfolio company and had $6.7 million in aggregate amount of exits and repayments, resulting in net repayments of $5.1 million for the period at the BDC level. In the CLO, the company invested $28.5 million in new investments and had $40.2 million in exits.
As of November 30, 2010, 43.8%, or $27.5 million, of the Company's interest-bearing portfolio was fixed rate debt with a weighted average current coupon of 11.7% and 56.2%, or $35.2 million, of its interest-bearing portfolio was floating rate debt with a weighted average current spread of LIBOR plus 7.2%.
Liquidity and Capital Resources
At November 30, 2010, the Company had $15.8 million in borrowings under its credit facility and an asset coverage ratio of 619%.
At January 7, 2011, the Company had $4.5 million in borrowings under its credit facility.
Dividend
On November 12, 2010, the Company's Board of Directors declared a dividend of $4.40 per share payable on December 29, 2010, to shareholders of record as of November 19, 2010. Shareholders had until December 20, 2010 to elect whether to receive the dividend in cash (up to an aggregate maximum cash amount of approximately $1.2 million or approximately 10% of the total dividend paid) or in shares of common stock. The dividend consisted of $1.2 million in cash and 596,235 shares of common stock or 22% of Saratoga Investment Corp.'s outstanding shares prior to the dividend. The dividend included the balance of the Company's fiscal year 2010 taxable income and a significant portion of the Company's fiscal year 2011 taxable income including a component for the third quarter of fiscal year 2011.
2011 Fiscal Third Quarter Conference Call/Webcast Information When: Tuesday, January 18, 2011 at 10:30 a.m. Eastern Time (ET)
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 1:30 p.m. ET on Tuesday, January 18, 2011 through 11:59 p.m. ET on Tuesday, January 25, 2011 by dialing (800) 642-1687 (U.S. and Canada) or (706) 645-9291 (outside U.S. and Canada), passcode for both replay numbers: 37331393.
Webcast: Interested parties may also access a simultaneous webcast of the call by going to http://ir.saratogainvestmentcorp.com/events.cfm.
About Saratoga Investment Corp.
Saratoga Investment Corp. is a specialty finance company that invests primarily in leveraged loans and mezzanine debt issued by U.S. middle-market companies, both through direct lending and through participation in loan syndicates. It has elected to be treated as a business development company under the Investment Company Act of 1940. Saratoga Investment Corp. is traded on the New York Stock Exchange under the symbol SAR.
Saratoga Investment Corp. Consolidated Statements of Assets and Liabilities As of ----- November 30, February 28, 2010 2010 ------------- ------------- (unaudited) ASSETS Investments at fair value Non-control/non-affiliate investments (amortized cost of $95,792,289 and $117,678,275, respectively) $68,176,984 $72,674,847 Control investments (cost of $28,414,863 and $29,233,097, respectively) 23,037,967 16,698,303 ---------- ---------- Total investments at fair value (amortized cost of $124,207,152 and $146,911,372, respectively) 91,214,951 89,373,150 Cash and cash equivalents 4,571,926 3,352,434 Cash and cash equivalents, securitization accounts 3,407,260 225,424 Outstanding interest rate cap at fair value (cost of $131,000 and $131,000, respectively) 22,352 42,147 Interest receivable, (net of reserve of $579,291 and $2,120,309, respectively) 2,017,807 3,473,961 Deferred credit facility financing costs, net 1,805,799 - Management fee receivable 231,838 327,928 Other assets 266,245 140,272 ------- ------- Total assets $103,538,178 $96,935,316 ============ =========== LIABILITIES Revolving credit facility $15,750,000 $36,992,222 Payable for unsettled trades 1,614,000 - Dividend payable 1,179,800 - Management and incentive fees payable 1,868,744 3,071,093 Accounts payable and accrued expenses 885,297 1,111,081 Interest and credit facility fees payable 152,448 267,166 Due to manager 310,000 15,602 ------- ------ Total liabilities $21,760,289 $41,457,164 =========== =========== NET ASSETS Common stock, par value $.001 and $.001 per share, respectively, 100,000,000 common shares authorized, 3,277,077 and 1,694,011* common shares issued and outstanding, respectively $3,277 $1,694 Capital in excess of par value 153,768,680 128,339,497 Distribution in excess of net investment income (10,223,021) (2,846,135) Accumulated net realized loss from investments and derivatives (28,670,200) (12,389,830) Net unrealized depreciation on investments and derivatives (33,100,847) (57,627,074) ----------- ----------- Total Net Assets 81,777,889 55,478,152 ---------- ---------- Total liabilities and Net Assets $103,538,178 $96,935,316 ============ =========== NET ASSET VALUE PER SHARE* $24.95 $32.75 ====== ====== *Net Asset Value per share and end of period shares outstanding for the year ended February 28, 2010 has been adjusted to reflect a one- for-ten reverse stock split in August 2010. See accompanying notes to consolidated financial statements. Saratoga Investment Corp. Consolidated Statements of Operations For the three months ended November 30 ----------- 2010 2009 ---- ---- (unaudited) (unaudited) INVESTMENT INCOME Interest from investments Non-control/Non-affiliate investments $3,639,216 $2,593,082 Control investments 941,281 368,374 ------- ------- Total interest income 4,580,497 2,961,456 Interest from cash and cash equivalents 2,460 2,752 Management fee income 508,674 511,236 Other income - 54,699 --- ------ Total investment income 5,091,631 3,530,143 --------- --------- EXPENSES Interest and credit facility financing expenses 618,810 1,126,162 Base management fees 424,044 462,755 Professional fees 381,096 714,789 Administrator expenses 240,000 171,861 Incentive management fees 1,173,144 - Insurance 170,684 220,059 Directors fees and expenses 48,000 71,989 General & administrative 100,961 65,298 ------- ------ Expenses before expense waiver and reimbursement 3,156,739 2,832,913 --------- --------- Expense reimbursement - (171,861) Waiver of deferred incentive management fees - - --- --- Total expenses net of expense waiver and reimbursement 3,156,739 2,661,052 --------- --------- NET INVESTMENT INCOME 1,934,892 869,091 --------- ------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized loss from investments (13,731,107) (549,864) Net unrealized appreciation/ (depreciation) on investments 15,107,701 8,825,100 Net unrealized appreciation/ (depreciation) on derivatives (1,366) (16,754) ------ ------- Net gain/(loss) on investments 1,375,228 8,258,482 --------- --------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $3,310,120 $9,127,573 ========== ========== WEIGHTED AVERAGE -BASIC AND DILUTED EARNINGS PER COMMON SHARE* $1.20 $10.08 WEIGHTED AVERAGE COMMON STOCK OUTSTANDING -BASIC AND DILUTED* 2,752,914 905,171 For the nine months ended November 30 ----------- 2010 2009 ---- ---- (unaudited) (unaudited) INVESTMENT INCOME Interest from investments Non-control/Non-affiliate investments $7,006,161 $8,566,587 Control investments 2,410,803 1,686,088 --------- --------- Total interest income 9,416,964 10,252,675 Interest from cash and cash equivalents 3,642 22,934 Management fee income 1,523,530 1,549,167 Other income 71,192 155,111 ------ ------- Total investment income 11,015,328 11,979,887 ---------- ---------- EXPENSES Interest and credit facility financing expenses 2,188,078 3,174,603 Base management fees 1,258,875 1,515,813 Professional fees 3,138,221 1,396,567 Administrator expenses 568,562 515,583 Incentive management fees 1,173,144 322,183 Insurance 536,934 649,535 Directors fees and expenses 320,844 217,125 General & administrative 306,558 191,223 ------- ------- Expenses before expense waiver and reimbursement 9,491,216 7,982,632 --------- --------- Expense reimbursement (258,562) (515,583) Waiver of deferred incentive management fees (2,636,146) - ---------- --- Total expenses net of expense waiver and reimbursement 6,596,508 7,467,049 --------- --------- NET INVESTMENT INCOME 4,418,820 4,512,838 --------- --------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized loss from investments (16,280,370) (1,579,812) Net unrealized appreciation/ (depreciation) on investments 24,546,024 (4,562,979) Net unrealized appreciation/ (depreciation) on derivatives (19,797) 33,080 ------- ------ Net gain/(loss) on investments 8,245,857 (6,109,711) --------- ---------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $12,664,677 $(1,596,873) =========== =========== WEIGHTED AVERAGE -BASIC AND DILUTED EARNINGS PER COMMON SHARE* $5.86 $(1.87) WEIGHTED AVERAGE COMMON STOCK OUTSTANDING -BASIC AND DILUTED* 2,162,832 854,298 *Earnings per share and Weighted average shares outstanding for the three and nine months ended November 30, 2009 have been adjusted to reflect a one-for-ten reverse stock split in August 2010. See accompanying notes to consolidated financial statements. Contact: Richard Petrocelli Saratoga Investment Corp. 212-906-7800 Roland Tomforde Broadgate Consultants 212-232-2222
Saratoga Investment Corp.
CONTACT: Richard Petrocelli, Saratoga Investment Corp., +1-212-906-7800;
Roland Tomforde, Broadgate Consultants, +1-212-232-2222
Web Site: http://www.saratogainvestmentcorp.com/
