WhiteHorse Finance : Q4 2024 Earnings Presentation

Published: 2025-03-07 08:28:04 ET WHF

WhiteHorse Finance, Inc.

Earnings Presentation

Quarter Ended December 31, 2024

NASDAQ: WHF (Common Stock)

NASDAQ: WHFCL (7.875% Notes due 2028)

WhiteHorse Finance Snapshot

Company:

WhiteHorse Finance, Inc.

Equity Ticker:

NASDAQ: WHF

Market Cap:

$244.3MM(1)

Credit Rating:

Egan-Jones: BBB+ / DBRS: BBB (low)

NAV / Share:

$12.31(2)

Portfolio Fair Value:

$642.2MM

Current Dividend Yield:

14.7%(1)(3); consistent quarterly dividends at or above $0.355 per share since 2012 IPO

External Manager:

Affiliate of H.I.G. Capital, LLC ("H.I.G. Capital" or "H.I.G.")

(2)

As of December 31, 2024.

2

(3)

Based on LTM dividend rate, excluding special dividends, relative to closing share price.

Overview of WhiteHorse Finance, Inc.

Portfolio at Fair Value ($MM)

$819.2

$760.2

$690.7

$696.2

$642.2

$589.7

$403.5 $415.3 $411.7 $440.7 $469.6

$272.4

$180.5

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

Note: As of December 31st, of each respective year presented, unless otherwise noted.

Source: Company filings

NAV + Cumulative Dividends per share

$28.45

$29.12

$30.00

$30.46

$21.19

$23.98

$25.48

$27.02

$15.79

$12.89

$14.31

$17.33

$17.99

$17.70

$19.42

$8.63

$10.05

$11.47

$15.41

$16.69

$5.79

$7.21

$0.20

$0.32

$0.46

$2.95

$0.51

$0.11

$1.53

$4.37

$0.58

$15.30

$15.16

$15.04

$15.35

$15.23

$15.23

$15.10

$14.30

$0.82

$13.98

$13.33

$13.63

$13.63

$12.31

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

Net asset value

Cumulative special dividends paid

Cumulative base dividends paid

3

Overview of WhiteHorse Finance, Inc. (continued)

Investment Strategy

Summary Stats:

Invested Capital since IPO:

Number of Investments Made:

Average Investment Size:

All-in Yield:

Net Debt / EBITDA of Current Portfolio Companies:

Secured Debt as a % of Total Debt:

$2,737MM(1)

~253(1)

~$4.3MM(2)

12.5%(3)

~4.1x(4)

~99.8%(5)

Note: As of December 31, 2024, unless otherwise noted.

4

Summary of Quarterly Results

Earnings Summary

Portfolio Highlights

and two existing portfolio companies, to the STRS JV totaling $13.7 million.

 The weighted average effective yield on income-producing investments at the end of Q4 2024 was approximately 12.5%, as

compared to 13.1% in Q3 2024.

 As of December 31, 2024, STRS JV had total assets of $309.1 million. The Company's return on its investment in STRS JV at

the end of Q4 2024 was 15.2%(2).

 NAV per share at the end of Q4 2024 was $12.31 per share compared with $12.77 per share from Q3 2024.

Balance Sheet



Gross leverage levels increased during the quarter to 1.24x from 1.20x at the end of Q3 2024. Cash on-hand at the end of Q4

Update

2024 was $27.8 million resulting in net leverage of 1.15x, an increase from 1.13x at the end of Q3 2024.

• Declared a quarterly distribution of $0.385 per share that was paid on January 3, 2025.

Dividend Policy

•

Declared a special distribution of $0.245 per share that was paid on December 10, 2024.

(1) Core net investment income is a non-GAAP financial measure. Refer to next slide for components and discussion of core net investment income. 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, can also be found by accessing

the earnings releases posted to the Company's website at http://www.whitehorsefinance.com.

(2) Computed as the annual stated rate of the subordinated notes, based on the subordinated notes outstanding as of the period, and dividends received over the last twelve-month

5

period, based on average capital invested.

Quarterly Operating Highlights

Unaudited Quarterly Financials

Q4 2023

Q1 2024

Q2 2024

Q3 2024

Q4 2024

(USD in MM, expect per share data)

Total Investment Income (1)

$

25.6

$

25.5

$

23.5

$

22.9

$

21.0

Expenses

Interest Expense

7.5

7.4

7.1

6.9

6.5

Base Management Fees

3.6

3.1

3.1

3.0

2.9

Performance-based Incentive Fees

2.6

2.7

2.3

2.3

2.0

Other Expenses

1.3

1.5

1.7

1.5

1.6

Total Expenses

15.0

14.7

14.2

13.7

13.0

Net Investment Income

$

10.6

$

10.8

$

9.3

$

9.2

$

8.0

Net Realized and Unrealized Gain / (Loss)

(7.2)

(4.8)

(1.5)

(16.0)

(4.1)

Net Increase/(Decrease) in Net Assets

from Operations

$

3.4

$

6.0

$

7.8

$

(6.8)

$

3.9

Per Share

Net Investment Income (NII)

$

0.46

$

0.47

$

0.40

$

0.39

$

0.34

Core NII (2)

$

0.46

$

0.47

$

0.40

$

0.39

$

0.34

Net Realized and Unrealized Gain / (Loss)

$

(0.31)

$

(0.21)

$

(0.06)

$

(0.68)

$

(0.17)

Earnings / (Losses)

$

0.15

$

0.26

$

0.34

$

(0.30)

$

0.17

Dividends Declared

$

0.385

$

0.385

$

0.385

$

0.385

$

0.385

Special Dividends Declared

$

-

$

-

$

-

$

-

$

0.245

Core NII Dividend Coverage

118%

121%

104%

102%

89%

Note: Numbers may not foot due to rounding.

Source: Company filings

6

Quarterly Balance Sheet Highlights

Unaudited Quarterly Financials

Q4 2023

Q1 2024

Q2 2024

Q3 2024

Q4 2024

(USD in MM, expect per share data)

Assets

Investments at Fair Value

$

696.2

$

697.9

$

660.0

$

654.3

$

642.2

Cash and Equivalents(1)

24.5

20.9

21.8

20.7

27.8

Other Assets

10.1

16.2

21.4

8.6

6.8

Total Assets

$

730.8

$

735.0

$

703.2

$

683.6

$

676.8

Liabilities

Debt (net of issuance costs)

386.4

390.3

358.9

352.8

353.1

Other Liabilities

27.6

30.9

31.6

33.9

37.6

Total Liabilities

$

414.0

$

421.2

$

390.5

$

386.7

$

390.7

Total Net Assets

$

316.8

$

313.8

$

312.7

$

296.9

$

286.1

Total Liabilities and Net Assets

$

730.8

$

735.0

$

703.2

$

683.6

$

676.8

Net Asset Value per Share

$

13.63

$

13.50

$

13.45

$

12.77

$

12.31

Leverage Ratio (2)

1.23x

1.26x

1.16x

1.20x

1.24x

Net Leverage Ratio (3)

1.16x

1.19x

1.09x

1.13x

1.15x

Asset Coverage Ratio (4)

181.0%

179.5%

186.2%

183.4%

180.4%

Note: Numbers may not foot due to rounding

7

Portfolio Highlights

Portfolio Highlights

Q4 2023

Q1 2024

Q2 2024

Q3 2024

Q4 2024

(USD in MM)

Portfolio Activity

New Investment Commitments

$

65.3

$

65.2

$

69.2

$

60.5

$

42.0

Gross Fundings (1)

58.6

58.2

58.2

52.9

37.9

Exits and Repayments (1)

(65.1)

(54.9)

(97.1)

(46.2)

(47.3)

Net Fundings / (Repayments)

$

(6.5)

$

3.3

$

(38.9)

$

6.7

$

(9.4)

Portfolio Rotation

Weighted Average Interest Rate On New

Investments

12.3%

12.6%

11.8%

10.9%

9.9%

Weighted Average Spread Over The Applicable

Base Rate Of New Floating Rate Investments

7.0%

7.3%

6.5%

5.9%

5.6%

Weighted Average Interest Rate On Investment

Realizations Or Repayments

13.3%

12.1%

13.0%

12.9%

12.5%

Note: Numbers may not foot due to rounding

(1) Fundings, exits and repayments may include non-cash transactions (e.g., PIK, equity issuances).

8

Portfolio Highlights

($ in MM, except per share data)

Portfolio Investment

Q4

2023

Q1

2024

Q2 2024

Q3

2024

Q4 2024

Total Fair Value of Investments

$

696.2

$

697.9

$

660.0

$

654.3

$

642.2

Number of Portfolio Investments

116

120

125

129

127

Number of Portfolio Companies

72

71

72

73

71

Average Investment Size(1)

$

5.2

$

5.0

$

4.5

$

4.3

$

4.3

Average Borrower Size(1)

$

8.3

$

8.4

$

7.8

$

7.6

$

7.6

Average Debt Investment Size(1)

$

6.7

$

6.5

$

5.8

$

5.6

$

5.5

Fair Value as a Percentage of Principal(1)(2)

91.8%

94.4%

93.5%

91.8%

91.1%

Total Portfolio Effective Yield (3)

Q4

2023

Q1

2024

Q2 2024

Q3 2024

Q4 2024

Weighted average effective yield on income-producing debt investments(1)

13.7%

13.7%

13.8%

13.1%

12.5%

Weighted average effective yield on total portfolio(4)

12.4%

12.1%

11.7%

10.6%

10.2%

Portfolio Composition - Floating vs. Fixed Investments (Debt Investments at Fair Value)(1)

Q4

2023

Q1

2024

Q2 2024

Q3 2024

Q4 2024

Percentage of fixed rate investments

0.9%

1.1%

1.2%

1.3%

1.3%

Percentage of floating rate investments

99.1%

98.9%

98.8%

98.7%

98.7%

Portfolio Composition - Sponsor vs. Non-Sponsor (Fair Value)(1)

Q4

2023

Q1

2024

Q2 2024

Q3 2024

Q4 2024

Sponsor

64.9%

63.4%

62.1%

63.1%

66.6%

Non-Sponsor

35.1%

36.6%

37.9%

36.9%

33.4%

Total Portfolio Composition by Instrument Type (Fair Value)

Q4

2023

Q1

2024

Q2 2024

Q3 2024

Q4 2024

First lien secured loans

79.5%

80.2%

78.8%

78.5%

78.2%

Second lien secured loans

2.7%

1.1%

1.2%

1.3%

1.3%

Subordinated debt

0.0%

0.2%

0.2%

0.2%

0.2%

STRS JV

15.4%

15.3%

16.3%

16.5%

16.7%

Equity

2.4%

3.2%

3.5%

3.5%

3.6%

Investments on Non-Accrual Status (Debt Investments)

Q4

2023

Q1

2024

Q2 2024

Q3 2024

Q4 2024

Fair Value of Investments on Non-accrual Status

$

14.1

$

7.5

$

22.3

$

34.2

$

37.0

Cost of Investments on Non-accrual Status

$

38.3

$

22.4

$

40.2

$

57.0

$

69.6

% of Investments on Non-accrual Status (Based on Fair Value of Debt Investments)(5)

2.1%

1.1%

3.6%

5.6%

6.2%

% of Investments on Non-accrual Status (Based on Cost of Debt Investments)(5)

5.5%

3.3%

6.3%

8.9%

11.0%

Note: Not a guarantee of future performance or investment pace.

Source: Company filings

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Disclaimer

WhiteHorse Finance Inc. published this content on March 07, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on March 07, 2025 at 13:27:10.068.