Whitehorse Finance, Inc. (WHF) SEC Filing 10-K Annual report for the fiscal year ending Tuesday, December 31, 2019

Exhibit 99.1

WhiteHorse Finance, Inc. Announces Fourth Quarter and Full Year 2019 Earnings Results

NEW YORK, NY, March 2, 2020

Fourth Quarter 2019 Summary Highlights

(1) Includes investments in WHF STRS Ohio Senior Loan Fund LLC (“STRS JV”), an unconsolidated joint venture, totaling $33.3 million, at fair value.

(2) Excludes investments made in STRS JV.

(3) 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 (i) the net impact of costs associated with the refinancing of the Company’s indebtedness, (ii) the accrual of the capital gains incentive fee attributable to net realized and unrealized gains and losses, and (iii) excise and other income taxes related to such net realized gains and losses (net of incentive fees). 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. Additional information on core net investment income and a reconciliation of core net investment income to its most directly comparable GAAP financial measure, net investment income, are set forth in Schedule 1 hereto.

Stuart Aronson, WhiteHorse Finance’s Chief Executive Officer commented, “During the fourth quarter, we maintained our focus on strong credit quality and successfully originated 13 new first-lien loans. We continue to transfer qualified assets to our joint venture. At end of the quarter, the joint venture has a total of 10 portfolio companies in its portfolio. Due to the strong deployment in the quarter, our net leverage increased markedly from 68% to 88%, further closing the gap to our target leverage range. With the uncertainty in global trade environment and potential pandemic risk, we will continue leveraging our differentiated three-tiered sourcing infrastructure backed by H.I.G. to prudently deploy capital into high credit quality opportunities, further increase portfolio diversification and ultimately enhance shareholder value.”

Portfolio and Investment Activity

As of December 31, 2019, the fair value of WhiteHorse Finance’s investment portfolio was $589.7 million, compared with $469.6 million as of December 31, 2018. The portfolio at December 31, 2019 consisted of 66 positions across 51 companies with a weighted average effective yield of 10.4% on income-producing debt investments. The average debt investment size (excluding investments in STRS JV) was $10.0 million with the overall portfolio comprised of 81% in first lien secured loans, 11% in second lien secured loans, 3% in equity and the remainder in investments in STRS JV. Substantially, all loans were variable-rate investments (primarily indexed to LIBOR), with nearly all performing floating rate investments having interest rate floors.

During the three months ended December 31, 2019, WhiteHorse Finance transferred assets totaling $31.0 million in exchange for a net investment in STRS JV of approximately $5.5 million as well as cash proceeds of $25.5 million. The Company also contributed an additional $3.1 million in cash to STRS JV during the quarter to fund an investment. As of December 31, 2019, the Company’s investment in STRS JV was approximately $33.3 million, at fair value.

In addition to the transactions with STRS JV, WhiteHorse Finance made investments in thirteen new portfolio companies totaling $137.8 million. Also, the Company added $12.8 million to existing portfolio companies, exclusive of refinancing. Gross proceeds from sales and repayments (inclusive of refinancing activities but excluding asset transfers to STRS JV as well as an additional $0.2 million in net repayments on revolvers) totaled approximately $68.3 million for the quarter. The activity was driven by 5 full repayments: Crews of California, Inc. ($18.7 million), Multicultural Radio Broadcasting, Inc. ($16.6 million), StackPath, LLC ($15.5 million), London Trust Media Incorporated ($10.5 million) and Sunteck / TTS Holdings, LLC ($3.5 million).