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WhiteHorse Finance, Inc. Announces Third Quarter 2020 Earnings Results and Declares Quarterly Distribution of $0.355 Per Share
NEW YORK, NY, November 9, 2020 – WhiteHorse Finance, Inc. (“WhiteHorse Finance” or the “Company”) (Nasdaq: WHF) today announced its financial results for the quarter ended September 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 December 31, 2020. The distribution will be payable on January 5, 2021 to stockholders of record as of December 21, 2020.
Third Quarter 2020 Summary Highlights
|·||Net Asset Value of $314.6 million, or $15.31 per share|
|·||Investment portfolio(1) totaling $595.3 million|
|·||STRS JV investment portfolio totaling $162.6 million|
|·||Gross investment additions(2) of $58.5 million, including new positions of $42.6 million and $15.7 million of fundings for add-ons to existing investments|
|·||Net investment income of $5.9 million, or $0.289 per share|
|·||Core net investment income of $7.8 million, or $0.380 per share(3)|
|·||Third 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 $50.4 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, “As the market continues to recover from the effects of the COVID-19 pandemic, our portfolio showed strength and resilience during the third quarter. Core NII meaningfully exceeded our quarterly dividend and NAV increased materially back to pre-COVID levels. Our portfolio grew to a fair value of $595.3 million after adding three new first lien positions as well as several meaningful add-ons, and our debt portfolio was comprised of 94.2% first lien loans. With a strong pipeline coming up in the fourth quarter, we have successfully added another $40 million unsecured notes at favorable pricing to fully take advantage of the opportunities in the current market. While we are encouraged by our performance in the face of uncertainties in the current macro environment, we will remain prudent and judicious in our execution, maintaining our discipline and rigorous underwriting standards to enhance value for our shareholders.”
Portfolio and Investment Activity
As of September 30, 2020, the fair value of WhiteHorse Finance’s investment portfolio was $595.3 million, compared with $547.4 million as of June 30, 2020. The portfolio at September 30, 2020 consisted of 73 positions across 54 companies with a weighted average effective yield of 9.9% 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 83.1% first lien secured loans, 5.0% second lien secured loans, 0.1% subordinated debt, 3.3% equity and 8.5% 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 September 30, 2020, WhiteHorse Finance made investments in three new portfolio companies totaling $42.6 million, added a total of $15.7 million to five existing portfolio companies and funded $0.7 million to revolver commitments. Proceeds from sales and repayments totaled approximately $26.5 million for the quarter ended September 30, 2020, driven by full realizations in PMA Holdco, LLC as well as in Rural Media Group, Inc. and payments received from AG Kings Holdings Inc., which reduced the cost basis in the investment by $3.5 million.
In addition to the transactions above, during the three months ended September 30, 2020, WhiteHorse Finance transferred one position totaling $1.3 million to STRS JV in exchange for cash consideration.
WHF STRS Ohio Senior Loan Fund LLC
As of September 30, 2020, STRS JV’s portfolio totaled $162.6 million, consisted of 18 portfolio companies and had a weighted average effective yield of 8.1% on its portfolio.
The following information was filed by Whitehorse Finance, Inc. (WHF) on Monday, November 9, 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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