WhiteHorse Finance, Inc. Announces Second Quarter 2017 Earnings Results

NEW YORK, Aug. 8, 2017 /PRNewswire/ -- WhiteHorse Finance, Inc. ("WhiteHorse Finance" or the "Company") WHF today announced its financial results for the quarter ended June 30, 2017.

Second Quarter 2017 Summary Highlights

• New investments of $36.1 million
• Net investment income of $6.9 million
• Second quarter net investment income of $0.378 per share
• Second quarter distribution of $0.355 per share
• Public offering of 2,200,000 shares at $13.97 per share results in net proceeds of approximately $30.3 million

Stuart Aronson, WhiteHorse Finance's Chief Executive Officer commented, "This was a solid quarter for WhiteHorse Finance, with strong net interest income and modest gains in our NAV. We remain committed to conservative investing in senior secured assets with a goal of earning our dividend each year and protecting NAV. The pipeline for the third quarter is strong, with the majority of the pipeline comprised of directly originated sponsor and non-sponsor deals with low leverage and expected double digit returns."

Portfolio and Investment Activity

As of June 30, 2017, the fair value of WhiteHorse Finance's investment portfolio was $437.9 million, compared with $431.7 million as of March 31, 2017. The portfolio at June 30, 2017 consisted of 39 positions across 30 companies with an average investment size of $11.2 million and a weighted average effective yield of 11.9%, remaining relatively flat as compared to last quarter.  The majority of the portfolio was comprised of senior secured loans, and these loans were substantially all variable-rate investments (primarily indexed to LIBOR), which should continue to position the portfolio well for a potential rising interest rate environment.

During the three months ended June 30, 2017, WhiteHorse Finance made investments in two new portfolio companies totaling $36.1 million. Gross proceeds from sales and repayments totaled $35.5 million for the quarter. The Company continued to be highly selective in deploying new investments.

Results of Operations

For the three months ended June 30, 2017, net investment income was approximately $6.9 million, compared with approximately $6.4 million for the same period in the prior year, representing an increase of 7.9%. The increase in net investment income was primarily attributable to an increase of investment income due to higher interest and non-recurring fee income partially offset by an increase in interest expense resulting from higher interest rates and higher borrowing balances on the Company's line of credit facility as compared to the same period in the prior year. Over the past 10 quarters, cumulative core net investment income, a non-GAAP financial measure, exceeded distributions to stockholders.⁽¹⁾

For the three months ended June 30, 2017, WhiteHorse Finance reported realized and unrealized gains on investments of $0.3 million. This compares with realized and unrealized gains on investments of $1.7 million for the three months ended June 30, 2016. The decrease in realized and unrealized gains on investments was primarily attributable to a smaller net amount of fair value adjustments.

WhiteHorse Finance reported a net increase in net assets resulting from operations of approximately $7.3 million for the three months ended June 30, 2017, which compares with a net increase of $8.1 million for the three months ended June 30, 2016.

WhiteHorse Finance's NAV was $283.8 million, or $13.83 per share, as of June 30, 2017, as compared with $252.5 million, or $13.80 per share, reported as of March 31, 2017.

Public Offering

In June 2017, we issued 2,200,000 shares of our common stock in a follow-on public offering at an offering price of $13.97 per share (the "Offering").  H.I.G. WhiteHorse Advisers, LLC (the "Investment Adviser") agreed to pay a portion of the underwriting discounts and commissions in connection with the Offering such that the issuance of shares was at or above the NAV per share at the time of the Offering.  All payments by the Investment Adviser in connection with the Offering are not subject to reimbursement by us.  We received net proceeds from this Offering of approximately $30.3 million.

Liquidity and Capital Resources

As of June 30, 2017, WhiteHorse Finance had cash and cash equivalents of $43.7 million, as compared with $20.1 million as of March 31, 2017, inclusive of restricted cash.  As of June 30, 2017, the Company also had $37.7 million of undrawn capacity under its revolving credit facility.

Distributions

On June 2, 2017, the Company declared a distribution of $0.355 per share for the quarter ended June 30, 2017, consistent for the nineteenth consecutive quarter since the Company's IPO. The distribution was paid on July 6, 2017 to shareholders of record as of June 19, 2017.

Distributions are paid from taxable earnings and may include return of capital and/or capital gains.  The specific tax characteristics of the distributions will be reported to stockholders on Form 1099-DIV after the end of the calendar year and in the Company's periodic reports filed with the Securities and Exchange Commission.

Conference Call

WhiteHorse Finance will host a conference call to discuss its second quarter results at 11:00 am ET on Tuesday, August 8, 2017. To access the teleconference, please dial 706-758-9224 (domestic and international) approximately 10 minutes before the teleconference's scheduled start time and reference ID #55184882. Investors may also access the call on the investor relations portion of the Company's website at www.whitehorsefinance.com.  

If you are unable to access the live teleconference, a replay will be available beginning approximately two hours after the call's completion through August 15, 2017. The teleconference replay can be accessed by dialing 404-537-3406 (domestic and international) and entering ID #55184882. A webcast replay will also be available on the investor relations portion of the Company's website at www.whitehorsefinance.com.  

About WhiteHorse Finance, Inc.

WhiteHorse Finance is a business development company that originates and invests in loans to privately held lower mid-cap companies across a broad range of industries.  The Company's investment activities are managed by H.I.G. WhiteHorse Advisers, LLC, an affiliate of H.I.G. Capital, LLC, ("H.I.G. Capital"). H.I.G. Capital is a leading global alternative asset manager with $21 billion of capital under management⁽²⁾ across a number of funds focused on the small and mid-cap markets. For more information about H.I.G. Capital, please visit http://www.higcapital.com.  For more information about the Company, please visit http://www.whitehorsefinance.com.

Forward-Looking Statements

This press release may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in filings with the Securities and Exchange Commission. The Company undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release.

^{(1) Net investment income and core net investment income during the three months ended December 31, 2015 were $0.237 per share and $0.352 per share, respectively. Net investment income was equal to core net investment income for every other quarter since the Company's initial public offering. Core net investment income is a non-GAAP financial measure. The Company believes that core net investment income provides useful information to investors and management because it reflects the Company's financial performance excluding the net impact of costs associated with the refinancing of the Company's revolving credit facility. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP.}

^{(2) Based on total capital commitments managed by H.I.G. Capital and affiliates.}

 

 

 

 

 

 

 

 

 

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SOURCE WhiteHorse Finance, Inc.