Saratoga Investment Corp. Reports 21.1% Increase in Total Investment Income, Net Asset Value Per Share Declines Slightly

Saratoga Investment Corp. reported significant financial developments in its recent 10-Q filing for the quarter ending August 31, 2024. The company experienced a notable increase in total investment income, which rose to $43.0 million for the three months ended August 31, 2024, compared to $35.5 million for the same period in 2023, marking a 21.1% increase. For the six-month period, total investment income reached $81.7 million, up from $70.1 million in the prior year, reflecting a 16.4% growth.

Net investment income also improved, with figures of $18.2 million for the three months and $32.5 million for the six months, compared to $14.0 million and $29.9 million, respectively, in the previous year. The net increase in net assets resulting from operations was $13.3 million for the three months and $19.9 million for the six months, significantly higher than the $7.9 million and $7.7 million reported in the same periods of 2023.

However, the company faced challenges with net realized losses from investments, totaling $33.4 million for the three months and $54.6 million for the six months, contrasting with a net realized gain of $0.1 million in the prior year. This was attributed to significant losses from restructurings and sales of certain portfolio companies, including $15.1 million from Zollege PBC and $34.0 million from Pepper Palace, Inc.

Saratoga's total investments at fair value decreased to $1.04 billion as of August 31, 2024, down from $1.14 billion at the end of February 2024. The company’s cash and cash equivalents saw a substantial increase, rising to $84.6 million from $8.7 million in the previous period, bolstering its liquidity position.

The company also reported total liabilities of $842.6 million, up from $820.9 million, while total net assets increased slightly to $372.1 million from $370.2 million. The net asset value per share was reported at $27.07, a slight decrease from $27.12.

Strategically, Saratoga Investment Corp. continues to focus on its investment in middle-market companies, with a significant portion of its portfolio in healthcare software and services. The company has also extended its Share Repurchase Plan, allowing for the repurchase of up to 1.7 million shares until January 15, 2025.

Overall, while Saratoga Investment Corp. demonstrated growth in income and liquidity, it faced challenges with realized losses impacting its overall financial performance.