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WhiteHorse Finance, Inc. Announces Fourth Quarter and Full Year 2018 Earnings Results
NEW YORK, NY, March 6, 2019 – WhiteHorse Finance, Inc. (“WhiteHorse Finance” or the “Company”) (NASDAQ: WHF) today announced its financial results for the quarter and year ended December 31, 2018.
Fourth Quarter 2018 Summary Highlights
|·||Period-ending Net Asset Value of $315.3 million, or $15.35 per share, compared to $13.98 per share in 2017|
|·||New investments of $46.1 million for the fourth quarter|
|·||New investments of $189.8 million and add-on investments of $19.9 million for the year|
|·||Net investment income of $8.0 million, or $0.391 per share, for the fourth quarter|
|·||Core net investment income of $8.2 million, or $0.398 per share(1), for the fourth quarter|
|·||Annual net investment income of $25.0 million, or $1.217 per share|
|·||Annual core net investment income of $30.7 million, or $1.496 per share(1)|
|·||Annual distribution of $1.42 per share|
(1) 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) any excise or 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 as all of our new investments were first-lien loans, which comprise 79% of our credit portfolio. Our strong fourth quarter results were driven by our successful pursuit of high-yielding senior-secured direct originations. This transaction activity validates our rigorous and dynamic approach to sourcing, which facilitates business development in less competitive areas of the lower mid-market at leverage levels comparable to our historical averages. Additionally, with our newly formed joint venture with State Teachers Retirement System of Ohio, we are excited about the additional opportunities for increased diversification into lower-risk assets, all of which advances our ultimate goal of enhancing shareholder value.”
Portfolio and Investment Activity
As of December 31, 2018, the fair value of WhiteHorse Finance’s investment portfolio was $469.6 million, compared with $440.7 million as of December 31, 2017. The portfolio at December 31, 2018 consisted of 53 positions across 39 companies with an average debt investment size of $10.1 million and a weighted average effective yield of 11.9% on debt investments. 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, 2018, WhiteHorse Finance made investments in five new portfolio companies totaling $46.1 million. Also, the Company added $5.1 million to an existing portfolio company, exclusive of refinancing. Gross proceeds from sales and repayments totaled approximately $96.4 million for the quarter, driven by the sale of the Company’s equity investment in Aretec Group, Inc. (“Aretec”) for $53.7 million. In addition, WhiteHorse Finance refinanced its $7.1 million second lien loan to Mills Fleet Farm Group, LLC into a new first lien loan, increasing its position by adding a net $7.6 million. The Company remained highly selective in deploying new investments.
For the year ended December 31, 2018, WhiteHorse Finance invested $189.8 million across sixteen new portfolio companies. The Company also invested $19.9 million in existing portfolio companies exclusive of refinancing. Gross proceeds from sales and repayments totaled $210.8 million for the year exclusive of refinancing activities.
The following information was filed by Whitehorse Finance, Inc. (WHF) on Wednesday, March 6, 2019 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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