Saratoga Investment Corp. reported a net decrease in net assets of $6.9 million for the three months ended May 31, 2026, a decrease from a net increase of $13.9 million in the same period of the prior fiscal year. This resulted in a net loss per share of $0.42 for the current quarter, compared to earnings per share of $0.91 in the prior year's comparable period. Total investment income for the quarter was $30.8 million, a decrease of 4.8% from $32.3 million in the prior year's quarter, primarily due to lower interest income from cash and cash equivalents, reflecting reduced cash balances.
The company's total assets increased to $1.20 billion as of May 31, 2026, from $1.14 billion as of February 28, 2026. This increase was driven by a significant rise in cash and cash equivalents, which grew to $46.1 million from $1.7 million, alongside an increase in total investments at fair value to $1.13 billion from $1.11 billion. Concurrently, total liabilities rose to $819.0 million from $743.1 million, largely due to an increase in SBA debentures payable from $160.0 million to $213.0 million.
Saratoga Investment Corp. has strategically expanded its debt portfolio, with total investments increasing to $1.13 billion as of May 31, 2026, from $1.11 billion at the end of the previous fiscal quarter. The company's investment strategy continues to focus on senior and unitranche leveraged loans and mezzanine debt in middle-market companies, with a significant portion of its portfolio, 81.7%, allocated to first lien term loans. The company also maintains a diversified portfolio across various industries, with Healthcare Services, Structured Finance Securities, and Consumer Services representing the largest industry exposures at 8.3%, 7.7%, and 5.9% of the total portfolio, respectively.
Looking ahead, Saratoga Investment Corp. anticipates continued growth in its investment portfolio, supported by its access to various capital sources, including credit facilities and SBA debentures. The company's asset coverage ratio, a key regulatory metric, stood at 162.6% as of May 31, 2026, exceeding the required 150% threshold. Management believes the company has adequate liquidity to meet its near-term capital requirements and fund its unfunded commitments. The company also declared quarterly dividends totaling $0.75 per share for the quarter ending August 31, 2026, with shareholders having the option to receive payment in cash or reinvest in common stock.
About SARATOGA INVESTMENT CORP.
Saratoga Investment Corp. is a specialty finance company providing customized debt and equity financing solutions to U.S. middle-market businesses. Its core activities include investing in senior and mezzanine loans, structured finance, and opportunistic assets. The company targets companies with stable earnings, strong management, and growth potential, offering strategic capital for acquisitions, recapitalizations, and expansion, primarily through direct lending and syndications.
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