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WhiteHorse Finance, Inc. Announces Fourth Quarter and Full Year 2016 Earnings Results
NEW YORK, NY, March 2, 2017 – WhiteHorse Finance, Inc. (“WhiteHorse Finance” or the “Company”) (NASDAQ: WHF) today announced its financial results for the quarter and year ended December 31, 2016.
Fourth Quarter 2016 Summary Highlights
|·||New investments of $20.1 million and $63.9 million for the fourth quarter and year, respectively|
|·||Net investment income of $6.6 million, or $0.358 per share, for the fourth quarter|
|·||Annual net investment income of $27.0 million, or $1.48 per share|
|·||Annual distribution of $1.42 per share|
Stuart Aronson, WhiteHorse Finance’s Chief Executive Officer commented, “This was a solid quarter for WhiteHorse, with strong net interest income and modest gains in our NAV. The leadership of our firm remains committed to conservative investing in senior secured assets with a goal of earning our dividend each year and protecting NAV. The pipeline for the first quarter is strong.”
Portfolio and Investment Activity
As of December 31, 2016, the fair value of WhiteHorse Finance’s investment portfolio was $411.7 million, compared with $415.3 million as of December 31, 2015. The portfolio at December 31, 2016 consisted of 37 positions across 29 companies with an average investment size of $11.1 million based on fair value, a weighted average effective yield of 11.8%, and an estimated weighted average leverage multiple of 3.4x. The majority of the portfolio comprised senior secured loans and approximately 99.8% of these loans were variable-rate investments (primarily indexed to LIBOR), which should continue to position the portfolio well in a rising interest rate environment.
For the three months ended December 31, 2016, WhiteHorse Finance invested $20.1 million across two new portfolio companies. Gross proceeds from sales and repayments totaled $2.5 million for the quarter. In addition, WhiteHorse Finance refinanced its $36.8 million loan to Future Payment Technologies into a new $23.3 million first lien loan; reducing its net position by $13.5 million.
For the year ended December 31, 2016, WhiteHorse Finance invested $63.9 million across seven new portfolio companies. Also, the Company invested $3.2 million in existing portfolio companies. Gross proceeds from sales and repayments totaled $71.3 million for the year. In addition, WhiteHorse Finance refinanced two investments resulting in a net decrease in these investments of $2.9 million.
Results of Operations
For the three months and year ended December 31, 2016, net investment income was approximately $6.6 million and $27.0 million, compared with approximately $3.9 million and $20.8 million for the same periods in the prior year. The increase in net investment income was primarily attributable to (i) an increase in the balance of average earning investments over the same periods in the prior year, (ii) higher amortization of original issue discount related to repayments and (iii) the 2015 write off of deferred financing costs related to a credit line refinancing. In the past 24 months, cumulative core net investment income, a non-GAAP financial measure, exceeded distributions to stockholders.(1)
For the three months and year ended December 31, 2016, WhiteHorse Finance reported realized and unrealized gain on investments of $2.5 million and $4.3 million, respectively. This compares with realized and unrealized losses on investments of $18.7 million and $23.6 million for the three months and year ended December 31, 2015, respectively. The increase in realized and unrealized gains on investments was primarily attributable to the recognition of unrealized loss in the Company’s investment in RCS Capital Corporation during the fourth quarter of 2015.
For the three months and year ended December 31, 2016, WhiteHorse Finance reported net increases in net assets of $9.1 million and $31.3 million, respectively, which compares to net decreases in net assets of $14.8 million and $2.8 million for the three months and year ended December 31, 2015.
WhiteHorse Finance’s NAV was $249.4 million, or $13.63 per share, as of December 31, 2016, as compared with $246.8 million, or $13.48 per share, as of September 30, 2016. As of December 31, 2015, WhiteHorse Finance’s NAV was $244.0 million, or $13.33 per share.
The following information was filed by Whitehorse Finance, Inc. (WHF) on Thursday, March 2, 2017 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-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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