SARATOGA INVESTMENT CORP. Saratoga Investment Corp.
Fiscal First Quarter 2024 Shareholder Presentation
July 11, 2023
Continued Growth and Outperformance in Q1
Fiscal First Quarter 2024 Highlights:
- Continued high quality portfolio and strong performance
- Investment quality remains strong
- 96.5% of loan investments with highest internal rating and one non-accrual (0.9% of fair value/1.5% of cost)
- Return on equity of 7.2% for LTM, as compared to industry average of 1.5%
- Net unrealized depreciation of $16.3 million for Q1 includes approx. $11.0 million net unrealized depreciation related to our CLO and JV investments in the broadly syndicated loan market, and approx. $5.3 million net unrealized depreciation in the remaining core BDC portfolio
- Gross Unlevered IRR of 11.0% on total unrealized portfolio as of May 31, 2023
- Fair value of $1.1 billion is 0.9% below total cost of portfolio, with core BDC portfolio 1.3% above cost
- Gross Unlevered IRR of 15.6% on $907.7 million of total realizations
- Consistent strong long-term originations contribute to growing assets under management
- AUM up 11% this quarter, with originations of $140 million in Q1, resulting from strong pipeline and healthy success in term sheets and deals executed
- Base of liquidity and capital remains strong
- Quarter-endliquidity allows growth of AUM by 21% and is mostly long-term
- $53.2 million is cash, and this quarter issued one public (public ticker "SAZ") and one private baby bond totaling $77.5 million
- Declared dividend of $0.70 per share for the quarter ended May 31, 2023, paid on June 29, 2023
- Key performance indicators for Q1 and versus Q4 - Adjusted NII of $12.8 million (up 11%), Adjusted NII per share of $1.08 (up 10%), LTM ROE of 7.2% (up versus 1.5% for industry) and NAV per share of $28.48 (down 70c, or 2.4%)
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Continued Asset Growth and Strong Credit Quality
$1,200
$1,000
$800
$600
$400
$200
$0
Asset Base Expansion Trend
100%
$1,084 | ||||||||||||||||||||||||||
$973 | ||||||||||||||||||||||||||
$818 | ||||||||||||||||||||||||||
80% | ||||||||||||||||||||||||||
$554 | ||||||||||||||||||||||||||
$486 | ||||||||||||||||||||||||||
$402 | ||||||||||||||||||||||||||
$284 | $293 | $343 | ||||||||||||||||||||||||
$206 | $241 | |||||||||||||||||||||||||
$95 | $155 | 60% | ||||||||||||||||||||||||
Overall Credit Quality Remains Strong
98.3% | 94.1% | 96.8% 98.6% 99.0% | 98.5% | 95.9% | 96.5% |
94.2% | 93.3% | ||||
90.5% |
82.4%
Investments at Fair Value ($ million) | Performing | Underperforming | Expected Loss of Principal | ||
Fair value of AUM increased 21% year-over-year and increased 11% since last quarter.
Fair value of $1,084m at Q1 FY24 is less than 1% below cost, with core non-CLO BDC portfolio 1.3% above cost
96.5% of our SAR loan investments hold our highest internal rating, same as last quarter; one investment on non- accrual at year-end (0.9% of fair value/1.5% of cost)*
* Excludes our investment in our CLO and our equity positions
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Q1 FY24: Strong Financial Foundation and Momentum
Key Performance Metrics for the Fiscal Quarter
For the quarter ended | May 31, 2022 | February 28, | May 31, 2023 |
and as of | |||
2023 | |||
($ in millions except per share) | |||
Net investment income | $7,976 | $9,649 | $15,959 |
Adjusted net investment income* | $6,432 | $11,591 | $12,849 |
Net investment income per share | $0.66 | $0.81 | $1.35 |
Adjusted net investment income per share* | $0.53 | $0.98 | $1.08 |
Net investment income yield | 9.1% | 11.5% | 18.7% |
Adjusted net investment income yield* | 7.3% | 13.6% | 15.0% |
Return on Equity - Last Twelve Months | 6.9% | 7.2% | 7.2% |
Fair value of investment portfolio | $894.5 | $972.6 | $1,084.1 |
Total net assets | $345.2 | $347.0 | $337.5 |
Investments in new/existing portfolio | $97.2 | $40.0 | $139.8 |
companies | |||
Loan Investments held in "Performing" credit | 95.0% | 95.9% | 96.5% |
ratings | |||
$20,000 $10,000 $0
$20,000 $10,000 $0
$1.00 $0.50 $0.00
$1.00 $0.50 $0.00
16%
12%
8%
15%
10%
5%
8%
7%
6%
$1,100
$800
$350
$300
$120 $60 $0
100%
95%
90%
*Adjusted for accrued capital gains incentive fee expense, and interest expense and amortization of deferred financing costs related to the 2025 SAK Notes during the period while the 2027 SAT Notes were already issued and outstanding, reconciliation to GAAP net investment income, net investment income per share and net investment income yield included in our fiscal first quarter 20244 earnings release.
Long-Term Accretive NAV and NAV Per Share Growth
Net Asset Value and NAV per Share
(FY11 to FYQ124)
NAV: 3% decrease this quarter. 292% increase since Saratoga took over management.
NAV/Share: 2% decrease this quarter. 30% increase since FY17 with increases 16 of
the last 21 quarters.
(in millions) | $355.8 | $30 | ||||||||||||||||
$345.2 | $347.0 | |||||||||||||||||
$342.6 | $335.8 | |||||||||||||||||
$29.33 | $337.2 | $337.5 | $29 | |||||||||||||||
$330 | $320.3 | $324.1 | $29.17 | $29.18 | ||||||||||||||
$28.69 | ||||||||||||||||||
$304.3 | $298.2 | $299.9 | $304.2 | $28.97 | $28.48 | $28 | ||||||||||||
$28.70 | $28.27 | $28.25 | ||||||||||||||||
$281.6 | ||||||||||||||||||
$280 | $27.13 | $27 | ||||||||||||||||
$26.68 | $27.25 | |||||||||||||||||
$26.84 | $26 | |||||||||||||||||
$230 | $26.19 | |||||||||||||||||
$25.11 | $25 | |||||||||||||||||
$24.94 | $180.9 | |||||||||||||||||
$180 | $24 | |||||||||||||||||
$143.7 | $23.62 | $23 | ||||||||||||||||
$130 | $22.72 | $122.6 | $125.1 | $127.3 | ||||||||||||||
$107.0 | $113.0 | $22.96 | ||||||||||||||||
$22 | ||||||||||||||||||
$97.0 | $21.08 | $22.70 | $22.06 | |||||||||||||||
$86.0 | $21.97 | |||||||||||||||||
$80 | $21 |
Net Asset Value | NAV per Share | |
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Disclaimer
Saratoga Investment Corporation published this content on 10 July 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 July 2023 20:09:07 UTC.
