Saratoga Investment Stock Earnings Reports

Key points for investors: Saratoga posted sequential and year-over-year NAV growth (NAV $410.5M; NAV per share $25.61). Adjusted NII declined materially versus last year and slightly versus last quarter (adjusted NII per share $0.58) driven by lower short-term rates, elevated repayments, and share dilution from ATM/DRIP issuance. Management declared a quarterly aggregate dividend of $0.75 ($0.25/month), representing a ~12.3% annualized yield on the cited stock price; the Board will review dividends quarterly. Credit quality is strong: portfolio fair value ~$995M, 84% first-lien, only one investment remains on nonaccrual (~0.2% of portfolio), and core non‑CLO portfolio is marked above cost. Liquidity/“dry powder” is a key strength — $201M cash and total available liquidity of ~$407M (including SBA debentures and undrawn credit), enabling accretive deployment without external financing. Originations were $52.2M in the quarter (mix of follow-ons and BB/BBB CLO debt), and management is increasing exposure to select CLO BB/BBB tranches as a diversifier and yield source. Management emphasizes disciplined underwriting and business development to grow deal flow but notes a highly competitive lower-middle-market with compressed spreads and elevated lender competition. Outlook/risk points: lower short‑term rates have pressured yields and NII; repayments create lumpiness in earnings; competition and looser covenant terms from some entrants are a market risk, but management states they will remain selective and focused on underwriting and NAV preservation. Longer-term metrics remain favorable: latest 12‑month ROE ~9.1% (above industry) and multi-year realized return track record cited.