Le Lézard
Classified in: Business
Subjects: ERN, CCA, DIV

WhiteHorse Finance, Inc. Announces Fourth Quarter and Full Year 2017 Earnings Results


NEW YORK, March 2, 2018 /PRNewswire/ -- 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

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.

WhiteHorse Finance's NAV was $287.0 million, or $13.98 per share, as of December 31, 2017, as compared with $285.5 million, or $13.92 per share, as of September 30, 2017. As of December 31, 2016, WhiteHorse Finance's NAV was $249.4 million, or $13.63 per share.

Liquidity and Capital Resources

As of December 31, 2017, WhiteHorse Finance had cash and cash equivalents of $38.9 million, as compared with $41.9 million as of September 30, 2017, inclusive of restricted cash.  As of December 31, 2017, the Company also had $45.0 million of undrawn capacity under its revolving credit facility.

Distributions

On December 6, 2017, the Company declared a distribution of $0.355 per share for the quarter ended December 31, 2017, consistent for the twenty-first consecutive quarter since the Company's IPO. The distribution was paid on January 2, 2018 to shareholders of record as of December 18, 2017.

Distributions are paid from taxable earnings and may include return of capital and/or capital gains.  The specific tax characteristics of the distributions will be reported to stockholders on Form 1099-DIV after the end of the calendar year and in the Company's periodic reports filed with the Securities and Exchange Commission.

Conference Call

WhiteHorse Finance will host a conference call to discuss its fourth quarter and fiscal year-end results at 10:00 am ET on Friday, March 2, 2018. To access the teleconference, please dial 706-758-9224 (domestic and international) approximately 10 minutes before the teleconference's scheduled start time and reference ID #9589848. Investors may also access the call on the investor relations portion of the Company's website at www.whitehorsefinance.com.

If you are unable to access the live teleconference, a replay will be available beginning approximately two hours after the call's completion through March 9, 2018. The teleconference replay can be accessed by dialing 404-537-3406 (domestic and international) and entering ID #9589848. A webcast replay will also be available on the investor relations portion of the Company's website at www.whitehorsefinance.com.

About WhiteHorse Finance, Inc.

WhiteHorse Finance is a business development company that originates and invests in loans to privately held, lower middle market companies across a broad range of industries.  The Company's investment activities are managed by H.I.G. WhiteHorse Advisers, LLC, an affiliate of H.I.G. Capital, LLC, ("H.I.G. Capital"). H.I.G. Capital is a leading global alternative asset manager with $24 billion of capital under management(1) across a number of funds focused on the small and mid-cap markets. For more information about H.I.G. Capital, please visit http://www.higcapital.com.  For more information about the Company, please visit http://www.whitehorsefinance.com.

Forward-Looking Statements

This press release may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in filings with the Securities and Exchange Commission. The Company undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release.

(1) Based on total capital commitments managed by H.I.G. Capital and affiliates.

 

 

WhiteHorse Finance, Inc.

Consolidated Statements of Assets and Liabilities

(in thousands, except share and per share data)





December 31,
2017

December 31,
2016

Assets







Investments, at fair value







Non-controlled/non-affiliate company investments

$

404,434

$

385,216

Non-controlled affiliate company investments

36,246


26,498

Total investments, at fair value (amortized cost $448,522 and $427,689,
respectively)

440,680


411,714

Cash and cash equivalents

35,219


17,036

Restricted cash and cash equivalents

3,717


11,858

Interest receivable

4,947


3,891

Receivables from investments sold

783


881

Prepaid expenses and other receivables

185


854

Total assets

$

485,531

$

446,234

Liabilities







Debt

$

182,122

$

182,338

Distributions payable

7,289


6,498

Management fees payable

7,848


5,476

Payables for investments purchased

?


995

Interest payable

527


480

Accounts payable and accrued expenses

701


1,058

Advances received from unfunded credit facilities

92


?

Total liabilities

198,579


196,845

Commitments and contingencies (See Note 7)







Net assets







Common stock, 20,531,948 and 18,303,890 shares issued and outstanding,

par value $0.001 per share, respectively, and 100,000,000 shares

authorized

20


18

Paid-in capital in excess of par

302,292


272,242

Accumulated overdistributed net investment income

(6,784)


(5,423)

Accumulated net realized losses on investments

(734)


(842)

Accumulated net unrealized depreciation on investments

(7,842)


(16,606)

Total net assets

286,952


249,389

Total liabilities and total net assets

$

485,531

$

446,234

Number of shares outstanding

20,531,948


18,303,890

Net asset value per share

$

13.98

$

13.63

 


 

WhiteHorse Finance, Inc.

Consolidated Statements of Operations

(in thousands, except share and per share data)

Years ended December 31,

2017

2016

2015

Investment income











From non-controlled/non-affiliate company investments











     Interest income

$

49,233

$

48,649

$

42,380

     Fee income

2,858


2,290


1,894

From non-controlled affiliate company investments











     Dividend income

2,713


2,910


2,800

Total investment income

54,804


53,849


47,074

Expenses











Interest expense

9,811


8,188


9,970

Base management fees

9,508


8,990


8,560

Performance-based incentive fees

6,553


6,755


4,323

Administrative service fees

696


684


1,140

General and administrative expenses

2,024


2,221


2,326

Total expenses, before fees waived

28,592


26,838


26,319

Base management fees waived

?


?


?

Total expenses, net of fees waived

28,592


26,838


26,319

Net investment income

26,212


27,011


20,755

Realized and unrealized gains (losses) on investments











Net realized gains (losses)











     Non-controlled/non-affiliate company investments

108


(478)


(379)

          Net realized gains (losses)

108


(478)


(379)

Net change in unrealized appreciation (depreciation)











     Non-controlled/non-affiliate company investments

(1,620)


5,767


(23,404)

     Non-controlled affiliate company investments

9,748


(971)


200

          Net change in unrealized appreciation (depreciation)

8,128


4,796


(23,204)

Net realized and unrealized gains (losses) on investments

8,236


4,318


(23,583)

Net increase (decrease) in net assets resulting from operations

$

34,448

$

31,329

$

(2,828)

Per Common Share Data











Basic and diluted earnings (loss) per common share

$

1.77

$

1.72

$

(0.18)

Dividends and distributions declared per common share

$

1.42

$

1.42

$

1.42

Basic and diluted weighted average common shares outstanding

19,433,003


18,303,890


15,319,510

 

 

WhiteHorse Finance, Inc.

Consolidated Schedule of Investments

December 31, 2017

(in thousands) 















 

Investment Type(1)

Spread
Above
Index(2)

Interest
Rate(3)

Maturity
Date

Principal/
Share
Amount

Amortized
Cost

 

Fair
Value(7)

 

Fair Value
As A
Percentage
of Net
Assets

North America

















Debt Investments

















Advertising

















Fluent, LLC (f/k/a Fluent
     Acquisition II, LLC)
















First Lien Secured Term
     Loan

L+ 11.50%
(0.50% Floor)

13.05%
(1.00% PIK)

12/08/20

$

25,650

$

25,352

$

25,651

 

8.94%

Outcome Health

















First Lien Secured Term
     Loan

L+ 6.50%
(1.00% Floor)

8.13%

12/22/21

14,853


13,667

12,372

 

4.31







40,503


39,019

38,023

13.25

Application Software

















Intermedia Holdings, Inc

















Second Lien Secured
     Term Loan

L+ 9.50%
(1.00% Floor)

10.88%

02/03/25

18,000


17,680

17,892

 

6.24




















Auto Parts & Equipment




















Crowne Group, LLC




















First Lien Secured
     Term Loan

L+ 9.25%
(1.00% Floor)

10.73%

05/26/21

12,031


11,747

12,031

 

4.19

Broadcasting




















Multicultural Radio Broadcasting, Inc




















First Lien Secured Term
     Loan

L+ 8.00%
(1.00% Floor)

9.56%

12/28/22

20,000


19,601

19,600

6.83

Rural Media Group, Inc




















First Lien Secured Term
     Loan

P+ 5.75%
(1.00% Floor)

10.25%

12/29/22

7,133


6,991

6,991

2.44

First Lien Secured
     Delayed Draw Loan

P+ 5.75%
(1.00% Floor)

10.25%

12/29/22

?


?

?

 

?







27,133


26,592

26,591

9.27

Data Processing &
     Outsourced Services




















FPT Operating Company,
     LLC/




















TLabs Operating
     Company, LLC




















First Lien Secured Term
     Loan

L+ 8.25%
(1.00% Floor)

9.61%

12/23/21

23,305


22,975

23,188

 

8.08

Department Stores




















Mills Fleet Farm Group,
     LLC




















Second Lien Secured
     Term Loan

L+ 9.75%
(1.00% Floor)

11.32%

02/26/23

7,146


7,038

7,146

 

2.49

Diversified Support Services




















Account Control
     Technology Holdings,
     Inc




















First Lien Secured Term
     Loan

L+ 8.50%
(1.00% Floor)

9.88%

04/28/22

14,329


13,971

14,180

4.94

Sitel Worldwide
     Corporation




















Second Lien Secured
     Term Loan

L+ 9.50%
(1.00% Floor)

10.88%

09/18/22

8,670


8,553

8,651

 

3.01







22,999


22,524

22,831

 

7.95

Environmental & Facilities
     Services




















Montrose Environmental
     Group, Inc




















Second Lien Secured
     Term Loan

L+ 9.50%
(1.00% Floor)

10.88%

09/30/20

8,500


8,345

8,423

 

2.94

 

 

WhiteHorse Finance, Inc.

Consolidated Schedule of Investments - (continued)

December 31, 2017

 (in thousands)


Investment Type(1)

Spread
Above
Index(2)

Interest
Rate(3)

Maturity
Date

Principal/
Share
Amount

Amortized
Cost

Fair
Value(7)

Fair Value
As A
Percentage
of Net
Assets

Food Retail





















AG Kings Holdings, Inc.





















First Lien Secured Term
     Loan

L+ 9.95%
(1.00% Floor)

11.64%

08/10/21

$

13,615

$

13,190

$

13,479


4.70%

Crews of California, Inc.





















First Lien Secured Term  

     Loan                 


L+ 11.00%
(1.00% Floor)

12.48%
(1.00% PIK)

11/20/19

16,853


16,732


16,516


5.76

First Lien Secured 
     Revolving Loan


L+ 11.00%
(1.00% Floor)

12.48%
(1.00% PIK)

11/20/19

5,119


5,070


5,017


1.75

First Lien Secured Delayed

     Draw Loan

L+ 11.00%
(1.00% Floor)

12.48%
(1.00% PIK)

11/20/19

4,884


4,840


4,786


1.67









40,471


39,832


39,798


13.88

Health Care Facilities





















Grupo HIMA San Pablo, Inc.





















First Lien Secured Term
     Loan

L+ 9.00%
(1.50% Floor)

10.50%

01/31/18

14,250


14,245


12,430


4.33

Second Lien Secured Term
      Loan

N/A

15.75%
(2.00% PIK)

07/31/18

1,027


1,023


239


0.08









15,277


15,268


12,669


4.41

Internet Retail





















Clarus Commerce, LLC





















First Lien Secured Term
     Loan

L+ 9.77%
(1.00% Floor)

11.34%

03/17/21

6,000


5,923


6,000


2.09

Internet Software & Services





















StackPath, LLC & Highwinds
     Capital, Inc.





















Second Lien Secured Term
     Loan

L+ 9.50%
(1.00% Floor)

10.88%

02/02/24

18,000


17,608


17,576


6.13

Investment Banking and
     Brokerage





















JVMC Holdings Corp. (f/k/a
     RJO Holdings Corp)





















First Lien First Out Secured
     Term Loan

L+ 8.02%
(1.00% Floor)

9.59%

05/05/22

13,163


12,905


13,042


4.55

First Lien Last Out Secured
     Term Loan

L+ 12.00%
(1.00% Floor)

13.57%

05/05/22

4,875


4,780


4,830


1.68









18,038


17,685


17,872


6.23

IT Consulting & Other Services





















AST-Applications Software
     Technology LLC





















First Lien Secured
     Term Loan

L+ 9.00%
(1.00% Floor)

10.57%
(2.00% PIK)

01/10/23

4,150


4,067


3,901


1.36

Leisure Facilities





















Planet Fit Indy 10 LLC





















First Lien Initial Secured
     Term Loan

L+ 7.25%
(1.00% Floor)

8.77%

03/07/22

132


131


131


0.05

First Lien Secured
     Incremental Term Loan

L+ 7.25%
(1.00% Floor)

8.94%

03/07/22

1,935


1,916


1,916


0.67

First Lien Initial Secured
     Delayed Draw Term Loan

L+ 7.25%
(1.00% Floor)

8.73%

03/07/22

2,658


2,632


2,632


0.92









4,725


4,679


4,679


1.64

Office Services & Supplies





















Katun Corporation





















Second Lien Secured Term
     Loan

L+ 11.25%
(1.00% Floor)

12.61%

01/25/21

4,422


4,402


4,466


1.56

Oil & Gas Exploration &
     Production





















Caelus Energy Alaska O3, LLC





















Second Lien Secured Term
     Loan

L+ 7.50%
(1.25% Floor)

9.10%

04/15/20

13,000


12,929


10,837


3.78

 

 

WhiteHorse Finance, Inc.

Consolidated Schedule of Investments - (continued)

December 31, 2017

 (in thousands)


Investment Type(1)

Spread
Above
Index(2)

Interest
Rate(3)

Maturity
Date

Principal/
Share
Amount

Amortized
Cost

Fair
Value(7)

Fair Value
As A
Percentage
of Net
Assets

Other Diversified Financial
     Services





















Sigue Corporation(4)





















Second Lien Secured Term
     Loan

L+ 11.50%
(1.00% Floor)

13.19%

12/27/18

$

25,000

$

24,901

$

24,872


8.67%

The Pay-O-Matic Corp.





















First Lien Secured Term
     Loan

L+ 11.00%
(1.00% Floor)

12.38%

04/02/18

12,044


12,003


12,044


4.20









37,044


36,904


36,916


12.87

Research & Consulting
     Services





















Project Time & Cost, LLC





















First Lien Secured Term
     Loan

L+ 12.00%
(0.50% Floor)

13.53%

10/09/20

9,104


9,004


8,440


2.94

Security & Alarm Services





















SecurAmerica, LLC





















First Lien Secured Term
     Loan

L+ 9.50%
(1.00% Floor)

10.92%

11/17/22

11,320


11,044


11,084


3.86

Specialized Consumer Services





















Pre-Paid Legal Services, Inc.





















Second Lien Secured Term
     Loan

L+ 9.00%
(1.25% Floor)

10.57%

07/01/20

19,000


18,912


19,000


6.62

Specialized Finance





















Golden Pear Funding III,
     LLC(5)





















Second Lien Secured Term
     Loan

L+ 10.25%
(1.00% Floor)

11.63%

06/25/20

25,000


24,855


24,760


8.63

Second Lien Secured
     Revolving Loan

L+ 10.25%
(1.00% Floor)

11.63%

06/25/20

5,000


4,971


4,952


1.73

Oasis Legal Finance, LLC(5)





















Second Lien Secured Term
     Loan

L+ 10.75%
(1.00% Floor)

12.11%

03/09/22

20,000


19,696


20,000


6.97









50,000


49,522


49,712


17.33

Trucking





















Sunteck / TTS Holdings, LLC





















  Second Lien Secured Term
    Loan

L+ 9.00%
(1.00% Floor)

10.59%

06/15/22

3,500


3,450


3,456


1.20

Total Debt Investments







413,668


407,149


402,531


140.31














































 

 

WhiteHorse Finance, Inc.

Consolidated Schedule of Investments - (continued)

December 31, 2017

 (in thousands)


Investment Type(1)

Spread
Above
Index(2)

Interest
Rate(3)

Maturity
Date

Principal/
Share
Amount

Amortized
Cost

Fair
Value(7)

Fair Value
As A
Percentage
of Net
Assets

Equity Investments




















Advertising




















Cogint, Inc. (f/k/a IDI, Inc.)(4)

N/A

N/A

12/08/25

$

187

$

560

$

821

0.29%






















Food Retail




















Crews of California, Inc.
     Warrants(4)

N/A

N/A

12/31/24

?


?


14

0.00

Nicholas & Associates, LLC
     Warrants(4)

N/A

N/A

12/31/24

3


?


296

0.10

Pinnacle Management Group,
     LLC Warrants(4)

N/A

N/A

12/31/24

3


?


296

0.10

RC3 Enterprises, LLC
     Warrants(4)

N/A

N/A

12/31/24

3


?


296

0.10









9


?


902

0.30

Other Diversified Financial
     Services




















Aretec Group, Inc.(4)(5)(6)

N/A

N/A

N/A

536


20,693


17,314

6.03

RCS Creditor Trust Class B
     Units(4)(6)

N/A

N/A

N/A

143


?


428

0.15









679


20,693


17,742

6.18












































Specialized Finance




















NMFC Senior Loan Program I
     LLC Units(4)(5)(6)

N/A

N/A

06/13/20

20,000


20,120


18,504

6.45






















Trucking




















Fox Rent A Car, Inc.
     Warrants(4)

N/A

N/A

N/A

?


?


180

0.06






















Total Equity Investments







20,875


41,373


38,149

13.28






















Total Investments






$

434,543

$

448,522

$

440,680

153.59%












(1)

Except as otherwise noted, all investments are non-controlled/non-affiliate investments as de?ned by the Investment Company Act of 1940, as amended (the ''1940 Act''), and provide collateral for the Company's credit facility.

(2)

The investments bear interest at a rate that may be determined by reference to the London Interbank Offered Rate (''LIBOR'' or ''L''), which resets monthly, quarterly or semiannually, or the U.S. Prime Rate as published by the Wall Street Journal ("Prime" or "P"). The one, three and six-month LIBOR were 1.6%, 1.7% and 1.8%, respectively, as of December 31, 2017. The Prime was 4.5% as of December 31, 2017.

(3)

The interest rate is the ''all-in-rate'' including the current index and spread, the ?xed rate, and the payment-in-kind (''PIK'') interest rate, as the case may be.

(4)

The investment or a portion of the investment does not provide collateral for the Company's credit facility.

(5)

Not a qualifying asset under Section 55(a) of the 1940 Act. Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of total assets. Qualifying assets represented 82% of total assets as of the date of the consolidated schedule of investments.

(6)

Investment is a non-controlled/affiliate investment as de?ned by the 1940 Act.

(7)

Except as otherwise noted, the fair value of each investment was determined using signi?cant Unobservable inputs.

 

SOURCE WhiteHorse Finance, Inc.


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25 avr 2024
GREENBROOK TMS REPORTS FISCAL YEAR 2023 OPERATIONAL AND FINANCIAL RESULTS
Greenbrook TMS Inc. ("Greenbrook" or the "Company") today announced its fiscal year ended December 31, 2023 ("Fiscal 2023") operational and financial results. All values in this news release are in United States dollars, unless otherwise stated....

25 avr 2024
Dominion Lending Centres Inc. Announces Sale of its Interest in Impact Communications
Dominion Lending Centres Inc. ("DLCG" or the "Corporation") is pleased to announce that it has completed a sale of its 52% interest in Cape Communications International Inc. ("Impact") for aggregate cash proceeds of $3.71 million (the "Purchase...

25 avr 2024
Orbia Announces First Quarter 2024 Financial Results
Orbia Advance Corporation, S.A.B. de C.V. (BMV: ORBIA*) ("the Company" or "Orbia") today released unaudited results for the first quarter of 2024. Orbia's first quarter performance reflects the continued weakness in the market environment,...

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