Saratoga Investment (SAR) Misses Q2 EPS by 11c

Saratoga Investment (NYSE: SAR) reported Q2 EPS of $0.45, $0.11 worse than the analyst estimate of $0.56. Revenue for the quarter came in at $11.4 million versus the consensus estimate of $10.49 million.

“Our second fiscal quarter of 2019 has been a very important one for us with many important accomplishments, including continued growth of our high quality asset base, sustained industry leadership in performance metrics and a material expansion of our long-term capital structure,” said Christian L. Oberbeck, Chairman and Chief Executive Officer of Saratoga Investment. “This quarter we successfully raised $40.0 million of new seven-year fixed rate notes under the ticker symbol “SAF”, and issued $28.75 million of new equity at a premium to NAV – this equity raise helped increase our total NAV to $172.7 million, and importantly also increased our share float by 1.15 million shares. In addition, we recently received a “green light” letter from the SBA for a second SBIC license. And last month we also increased our dividend for the sixteenth consecutive quarter, a $0.01 increase to $0.52 per share. Importantly, we continue to out-earn our dividend payments on a fully diluted basis factoring in the equity raise. In the current rising rate environment, we believe we are well-structured, with 82% of our interest earning investments having floating-rate interest rates and through their LIBOR floors, and all of our debt at quarter-end being fixed-rate.”

Michael J. Grisius, President and Chief Investment Officer, added, “This fiscal quarter has again demonstrated our long-term strategy to grow assets without sacrificing the quality of our investment portfolio, something we were able to accomplish this quarter with significant success. Our asset base grew by 14% since last quarter, while our credit quality remained strong at our highest levels. The asset growth also came not only in the form of follow-ons, but with investments in new platforms, with another four new portfolio companies added this quarter, bringing the total to seven since May this year. We remain confident that sticking to our long-term strategy of identifying and underwriting high quality credits will continue to garner positive results.”

For earnings history and earnings-related data on Saratoga Investment (SAR) click here.

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