Richard A. Petrocelli - Chief Financial Officer, Principal Accounting Officer, Chief Compliance Officer, Vice President, Secretary and Member of Investment Committee Christian L. Oberbeck - Chairman of the Board, Chief Executive Officer and Member of Investment Committee

Good day, ladies and gentlemen, and welcome to Saratoga Investment Corp. First Quarter 2014 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to hand the conference over to Mr. Rich Petrocelli, Chief Financial Officer. Sir, you may begin.

Thank you. I'd like to welcome everyone to Saratoga Investment Corp.'s Fiscal First Quarter 2014 Earnings Conference Call. Before we begin, I need to remind everyone that this conference call contains statements that, to the extent they are not recitations of historical fact, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual outcomes and results could differ materially from those forecasted due to many factors, which are described in the company's filings with the U.S. Securities and Exchange Commission. We do not undertake to update our forward-looking statements unless required to do so by law. A replay of this conference call will be available from 1:00 p.m. today through July 22. Please refer to our earnings press release for details. I would now like to introduce our Chairman and Chief Executive Officer, Christian Oberbeck, who will be making a few introductory remarks.

Thank you, Rich, and welcome, everyone. In the fiscal first quarter of 2014, our robust pipeline, balance sheet strength and management team enabled us to make $32.9 million of investments in new and existing portfolio companies. We continue to see attractive opportunities and the number and quality of our portfolio investments have increased as a result. I will return shortly with a review of our portfolio, but I would now like to turn the call back over to Rich to review our financial results.

Thanks, Chris. Saratoga Investment Corp.'s net investment income for the first fiscal quarter ended May 31, 2013, was $2.5 million or $0.52 per share. Net gain on investments was $1.3 million or $0.28 per share, resulting in a net increase and net assets from operations of $3.8 million or $0.80 per share. Net asset value per share was $23.78 as of May 31, 2013, compared to $22.98 as of February 28, 2013. Our total investment income for the quarter was $6 million, an increase of approximately $2.4 million or 66.3% compared to the fiscal first quarter of 2013. Our investment income was comprised primarily of $5.2 million of interest income and approximately $500,000 of management fee income associated with the investment in the CLO. Our total operating expenses were $3.5 million for the quarter and consisted of $1.1 million in interest and debt financing expenses; $737,000 in base management fees; $821,000 in incentive management fees; $331,000 in professional fees; $120,000 of insurance expenses; $250,000 in administrator expenses; and $161,000 in directors' fees and expenses, general, administrative and other expenses. For the 3 months ended May 31, 2013, total operating expenses compared to the 3 months ended May 31, 2013 (sic) [May 31, 2012] were higher by approximately $1.2 million. The higher expenses were primarily due to a larger and better performing portfolio, which has increased interest and debt financing expenses, as well as base and incentive management fees. On May 31, 2013, we had no borrowings under our $45 million revolving credit facility with Madison Capital Funding, $31.6 million in cash and cash equivalents and $4.8 million in cash and cash equivalents in reserve accounts. As of May 31, 2013, the company's Small Business Investment Company subsidiary had $25 million in regulatory capital and $40 million of SBA guaranteed debentures outstanding. In the first quarter, Saratoga Investment closed an underwritten public offering of $48.3 million in aggregate principal amount of 7 ½ % fixed-rate notes due in 2020. The proceeds of the offering were used to pay down the revolving credit facility and to fund new investment opportunities. With the $45 million credit facility and the up to $150 million of borrowing capacity at the SBIC subsidiary, Saratoga Investment has a total of $195 million of borrowing capacity, in addition to the notes. That concludes my financial review. I will now turn the call back over to Chris.

Thanks, Rich. Before we open for questions, I'd like to review the composition and performance of our investment portfolio. At the quarter ended May 31, 2013, the fair value of the company's investment portfolio was $164.8 million, principally invested in 28 portfolio companies and 1 CLO fund with $354.1 million of assets under management. Saratoga's investment portfolio was composed of 58% first lien term loans, 4.1% second lien term loans, 15% senior secured notes, 3% unsecured notes, 5.6% of equity interests and 14.3% of subordinated notes of the CLO. At the end of the 2014 fiscal first quarter, we had no investments in senior unsecured loans. During the 2014 fiscal first quarter, Saratoga Investment Corp. invested $32.9 million in new or existing portfolio companies and had $24.9 million in aggregate amount of exits and repayments, resulting in net investments of $8 million for the quarter. At the CLO, Saratoga had $34.7 million of exits and repayments. As of May 31, 2013, weighted average current yields of Saratoga Investment's first lien term loans, second lien term loans, seniors secured notes, unsecured notes and the CLO subordinated notes were 10.6%, 11.1%, 14.7%, 16.2%, 29.3%, respectively, which resulted in aggregate weighted average current yield of 14.3%. The company's new investments during the quarter included Vector Controls for $9.3 million; community investors, $6.2 million; and Easy Ice, $7.2 million. In closing, I would again like to thank all of our shareholders for their ongoing support. We're excited about the growth and profitability that lies ahead for Saratoga Investment Corp. I would now like to open the call for questions.

[Operator Instructions] I'm showing no one in queue at this time. I'll turn the conference back over for any closing remarks.

Well, I guess we don't have any questions and so we thank everyone for joining us today, and we look forward to speaking with you next quarter. Thank you very much.

Ladies and gentlemen, thank you for participating in today's conference. This concludes our program. You may all disconnect, and have a wonderful day.