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WhiteHorse Finance, Inc. Announces Fourth Quarter and Full Year 2017 Earnings Results
NEW YORK, NY, March 2, 2018 – WhiteHorse Finance, Inc. (“WhiteHorse Finance” or the “Company”) (NASDAQ: WHF) today announced its financial results for the quarter and year ended December 31, 2017.
Fourth Quarter 2017 Summary Highlights
|·||New investments of $22.7 million and $111.0 million for the fourth quarter and year, respectively|
|·||Net investment income of $6.8 million, or $0.331 per share, for the fourth quarter|
|·||Annual net investment income of $26.2 million, or $1.35 per share|
|·||Period-ending NAV of $13.98 per share compared to $13.63 per share in 2016|
|·||Annual distribution of $1.42 per share|
Stuart Aronson, WhiteHorse Finance’s Chief Executive Officer commented, “During the fourth quarter, we originated several first-lien, senior-secured loans that enhanced the quality of our already strong portfolio while preserving an attractive yield. These results illustrate the impact of our three-tiered sourcing architecture, which differentiates us in the lower-middle market by facilitating access to both the sponsor and non-sponsor markets and allowing us to maintain a disciplined approach to capital deployment. We are optimistic about our pipeline for the first quarter.”
Portfolio and Investment Activity
As of December 31, 2017, the fair value of WhiteHorse Finance’s investment portfolio was $440.7 million, compared with $411.7 million as of December 31, 2016. The portfolio at December 31, 2017 consisted of 43 positions across 32 companies with an average investment size of $10.2 million and a weighted average effective yield of 11.9%. 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 December 31, 2017, WhiteHorse Finance made investments in three new portfolio companies totaling $22.7 million. Gross proceeds from sales and repayments totaled $26.2 million for the quarter. In addition, WhiteHorse Finance refinanced its $13.8 million second lien loan to Multicultural Radio Broadcasting, Inc. into a new first lien loan, increasing its position by adding a net $5.8 million. The Company remained highly selective in deploying new investments.
For the year ended December 31, 2017, WhiteHorse Finance invested $111.0 million across ten new portfolio companies. Also, the Company invested $6.6 million in existing portfolio companies exclusive of refinancing. Gross proceeds from sales and repayments totaled $106.3 million for the year exclusive of refinancing activities.
Results of Operations
For the three months and year ended December 31, 2017, net investment income was approximately $6.8 million and $26.2 million, respectively, compared with approximately $6.6 million and $27.0 million for the same period in the prior year. The decrease in net investment income for the year-over-year period was primarily attributable to an increase in interest expense resulting from higher interest rates and higher borrowing balances on the Company’s line of credit facility as well as a lower average on the total principal amount of investments as compared to the prior year.
For the three months and year ended December 31, 2017, WhiteHorse Finance reported net realized and unrealized gains on investments of $1.7 million and $8.2 million, respectively. This compares with net realized and unrealized gains on investments of $2.5 million and $4.3 million for the three months and year ended December 31, 2016, respectively. The increase in net realized and unrealized gains on investments for the year-over-year period was primarily attributable to favorable fair value adjustments on an aggregate basis.
WhiteHorse Finance reported a net increase in net assets resulting from operations of approximately $8.5 million and $34.4 million for the three months and year ended December 31, 2017, respectively, which compares with a net increase of $9.1 million and $31.3 million for the three months and year ended December 31, 2016, respectively.
The following information was filed by Whitehorse Finance, Inc. (WHF) on Friday, March 2, 2018 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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