Saratoga Investment Corp. (NYSE: SAR) a business development company, announced financial results for its 2012 fiscal third quarter.
Operating Results
For the fiscal quarter ended November 30, 2011, Saratoga Investment reported net investment income of $0.8 million, or $0.25 per share, and net gain on investments of $5.4 million, or $1.63 per share, resulting in a net increase in net assets from operations of $6.2 million, or $1.88 per share. The net gain was primarily due to a $6.5 million repayment at par of our Senior Secured Notes in Energy Alloys. The position was valued at $2.5 million at August 31, 2011.
Net asset value (“NAV”) was $94.3 million as of November 30, 2011, compared to $90.0 million as of August 31, 2011 and $86.1 million as of February 28, 2011. NAV per share was $24.32 ($29.38 before the effect of the dividend described below) as of November 30, 2011 and $27.48 as of August 31, 2011 and $26.26 as of February 28, 2011. The decrease in reported NAV per share from August 31, 2011 was primarily the result of the $9.8 million cash/stock dividend (which consisted of $2.0 million in cash and 599,584 shares of common stock) declared by Saratoga Investment Corp.’s Board of Directors on November 15, 2011 and paid on December 30, 2011. In accordance with generally accepted accounting principles (“GAAP”), the number of shares outstanding used to calculate NAV per share as of November 30, 2011 was retroactively adjusted to reflect the additional shares issued in connection with the cash/stock dividend.
Christian L. Oberbeck, Chairman, Chief Executive Officer and President of Saratoga Investment, said, “We continue to re-position our portfolio into companies with better long-term prospects and employ a conservative and disciplined approach. We made two new investments and exited Energy Alloys at a level substantially higher than its carrying value, resulting in a $6.2 million increase in net asset value resulting from operations for the quarter.”
The Company continues to work toward the grant of a license by the U.S. Small Business Administration (SBA) to operate as a Small Business Investment Company (SBIC). The SBA previously issued a “green light” or “go forth” letter inviting Saratoga Investment to continue its application process to obtain a license to form and operate an SBIC subsidiary in the 2012 fiscal second quarter. An SBIC license would permit Saratoga to issue SBA-guaranteed debentures, which carry long-term fixed rates that are generally lower than rates on comparable bank debt and other debt.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
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