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WhiteHorse Finance, Inc. Announces Second Quarter 2020 Earnings Results and Declares Quarterly Distribution of $0.355 Per Share
NEW YORK, NY, August 10, 2020 – WhiteHorse Finance, Inc. (“WhiteHorse Finance” or the “Company”) (Nasdaq: WHF) today announced its financial results for the quarter ended June 30, 2020. Additionally, the Company announced that its board of directors has declared a distribution of $0.355 per share with respect to the quarter ending September 30, 2020. The distribution will be payable on October 2, 2020 to stockholders of record as of September 21, 2020.
Second Quarter 2020 Summary Highlights
|·||Net Asset Value of $300.2 million, or $14.61 per share|
|·||Investment portfolio(1) totaling $547.4 million|
|·||STRS JV investment portfolio totaling $160.8 million|
|·||Gross investment additions(2) of $39.4 million, including new positions of $33.6 million and $5.8 million of fundings for add-ons to existing investments|
|·||Net investment income of $5.2 million, or $0.255 per share|
|·||Core net investment income of $5.2 million, or $0.255 per share(3)|
|·||Second quarter distribution of $0.355 per share|
(1) Includes investments in WHF STRS Ohio Senior Loan Fund LLC (“STRS JV”), an unconsolidated joint venture, totaling $48.9 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, “Five months into the COVID-19 pandemic, we have seen the market slowly recover from the first shock with moderate pricing and slightly higher deal activity. While NII for the quarter was below our goal, NAV increased materially and liquidity dramatically improved. During the quarter, we continued to grow our portfolio with three new first lien positions and our portfolio is now comprised of 93.8% first lien loans. Recently, we also reduced outstanding borrowings on our credit facility to its minimum requirement and this influx of liquidity will allow us to rebuild our pipeline and take advantage of the better deals we are now seeing in the marketplace. We will continue leveraging our three-tiered sourcing approach and rigorous underwriting standards while continuing to build value for our shareholders.”
Portfolio and Investment Activity
As of June 30, 2020, the fair value of WhiteHorse Finance’s investment portfolio was $547.4 million, compared with $557.1 million as of March 31, 2020. The portfolio at June 30, 2020 consisted of 68 positions across 53 companies with a weighted average effective yield of 9.6% on income-producing debt investments. The average debt investment size (excluding investments in STRS JV) was $8.8 million with the overall portfolio comprised of approximately 83% first lien secured loans, 5% second lien secured loans, 3% equity and 9% in investments in STRS JV. Almost all loans were substantially variable-rate investments (primarily indexed to the London Interbank Offered Rate) with fixed rate securities representing only 0.4%of loans at fair value. Nearly all performing floating rate investments have interest rate floors.
During the three months ended June 30, 2020, WhiteHorse Finance made investments in three new portfolio companies totaling $33.6 million and added a total of $5.8 million to three existing portfolio companies. Proceeds from sales and repayments, including $0.3 million of net repayments on revolvers, totaled approximately $36.9 million for the quarter ended June 30, 2020, driven by a full paydown from Sigue Corporation of $24.8 million.
In addition to the transactions above, during the three months ended June 30, 2020, WhiteHorse Finance transferred an aggregate of $36.6 million in assets to STRS JV in exchange for a net investment in STRS JV of $5.7 million as well as cash proceeds of $30.9 million.
The following information was filed by Whitehorse Finance, Inc. (WHF) on Monday, August 10, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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