Announces Base Management Fee Rate
Reduction
NEW
YORK, Nov. 9, 2023 /PRNewswire/ -- WhiteHorse
Finance, Inc. ("WhiteHorse Finance" or the "Company")
(Nasdaq: WHF) today announced its financial results for the quarter
ended September 30, 2023. In
addition, the Company's board of directors has declared a
distribution of $0.385 per share with
respect to the quarter ended December 31,
2023. The distribution will be payable on January 3, 2024 to stockholders of record as of
December 20, 2023.
Recent Highlights
- On November 1, 2023, the
Company's board of directors approved a decrease in the base
management fee rate paid to H.I.G WhiteHorse Advisers, LLC (the
"Investment Adviser"). The base management fee rate decreases to
1.75%, from 2.00%, and is effective January
1, 2024.
- The board of directors approved an increase in the quarterly
distribution to $0.385 per share,
from $0.37 per share.
- In August 2023, the Company
completed a public offering of 7.875% 2028 Notes in the aggregate
principal amount of $34.5
million.
Stuart Aronson, WhiteHorse
Finance's Chief Executive Officer, commented, "I am pleased to
report continued growth in WhiteHorse's core net investment income,
which increased by 25% compared to the third quarter of 2022 and
was well in excess of our regular dividend. Based on the
portfolio's increased earnings power as well as the consistent
strength of the platform, the Company's board of directors approved
an increase in the quarterly distribution, the second increase
since the start of the year. While we marked down certain assets
during the quarter, the vast majority of our existing portfolio is
generally well positioned to service our debt in a rising interest
rate environment. We are seeing a continuing rebound in terms of
both deal volume and quality in the lower middle markets, and our
pipeline activity levels remain high, due in part to the
significant advantages we derive from our three-tier sourcing
architecture and our affiliation with H.I.G. Capital, a leader in
the low and mid-markets. The strength of the pipeline enables us to
be conservative in our deal selection as repayment activity picks
up in the second half of 2023, and we are being cautious in the
face of a weakening economy and remain focused on credits with
compelling risk return characteristics."
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Summary Information
as of September 30, 2023 and June 30, 2023
(unaudited):
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Three Months Ended
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Three Months Ended
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Change
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($ in thousands except per share
data)
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September 30, 2023
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June 30, 2023
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$
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%
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Total investment
income
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$
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25,868
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$
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25,595
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273
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1.1
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Total expenses,
including excise tax
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15,055
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15,003
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52
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0.3
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Net investment income
and core net investment income(1)
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10,813
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10,592
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221
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2.1
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Net investment income
and core net investment income(1) per share
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0.465
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0.456
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0.01
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2.1
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Distributions per
share
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0.370
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0.370
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-
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-
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Net realized gains
(losses)
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211
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(289)
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500
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(173.0)
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Net unrealized
appreciation (depreciation)
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(5,425)
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(6,422)
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997
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(15.5)
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Net increase in net
assets resulting from operations
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5,599
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3,881
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1,718
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44.3
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($ in thousands except per share
data)
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As of
September 30, 2023
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As of June 30, 2023
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$
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%
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Total investments, at
fair value(2)
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$
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706,790
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$
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728,352
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(21,562)
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(3.0)
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STRS JV total
investments, at fair value
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312,950
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324,501
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(11,551)
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(3.6)
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Net asset value per
share
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13.87
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14.00
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(0.13)
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(0.9)
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Base Management Fee Reduction
On November 1, 2023, the Company's
board of directors approved a permanent reduction in the base
management fee rate the Company pays to the Investment Adviser. The
base management fee rate was reduced to 1.75% per annum from 2.00%
per annum and remains based on the Company's consolidated gross
assets (including cash and cash equivalents and assets purchased
with borrowed funds); provided, however, the base management fee
will be calculated at an annual rate equal to 1.25% of the
Company's consolidated gross assets (including cash and cash
equivalents and assets purchased with borrowed funds), that exceed
the product of (i) 200% and (ii) the value of the Company's total
net assets, at the end of the two most recently completed calendar
quarters. The new base management fee rate is effective
January 1, 2024.
Distributions
The Company's board of directors has declared a distribution of
$0.385 per share with respect to the
quarter ending December 31, 2023. The
distribution will be payable on January 3,
2024 to stockholders of record as of December 20, 2023.
On August 8, 2023, the Company
declared a distribution of $0.37 per
share for the quarter ended September 30, 2023, with
distributions declared at or above $0.355 for the forty-fourth consecutive quarter
since the Company's initial public offering. The distribution was
paid on October 3, 2023 to
stockholders of record as of September 19,
2023.
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
third quarter results for the period ended September 30, 2023 at 2:00 p.m. ET on
Thursday, November 9, 2023. To access
the teleconference, please dial 800-343-5172 (domestic and
international) approximately 10 minutes before the teleconference's
scheduled start time and reference ID #WHFQ323. Investors may also
access the call on the investor relations portion of the Company's
website 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 November 16,
2023. The teleconference replay can be accessed by dialing
800-839-3736 (domestic and international). 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 $59
billion of capital under management(3) 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) "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) excise and 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.
(2) Includes investments in WHF STRS Ohio Senior Loan Fund LLC
("STRS JV"), an unconsolidated joint venture, totaling $106.8 million, at fair value.
(3) Based on total capital raised by H.I.G.
Capital and affiliates.
SCHEDULE 1
As a supplement to GAAP financial measures, the Company has
provided information relating to core net investment income, which
is a non-GAAP measure. This measure is provided in addition to, but
not as a substitute for, net investment income determined in
accordance with GAAP. The Company's non-GAAP measures may differ
from similar measures by other companies, even if similar terms are
used to identify such measures. Core net investment income
represents net investment income adjusted to exclude the net impact
of costs associated with the refinancing of the Company's
indebtedness, the accrual of the capital gains incentive fee
attributable to net realized and unrealized gains and losses, and
excise or other income taxes related to such net realized gains and
losses (net of incentive fees). There were no excise or other
income taxes related to net realized gains and losses nor did the
Company incur any costs with refinancing any of its indebtedness
for the quarters ended September 30, 2023 and
September 30, 2022.
The following table provides a reconciliation of net investment
income to core net investment income for the three months ended
September 30, 2023 and September 30, 2022 (in thousands, except per
share data):
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September 30, 2023
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September 30, 2022
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Amount
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Per
Share
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Amount
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Per
Share
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Amounts
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Amounts
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Net investment
income
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$
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10,813
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$
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0.465
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$
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9,768
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$
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0.420
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Net impact of costs
associated with refinancing of indebtedness
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-
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-
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-
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-
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Accrual for capital
gains incentive fee
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-
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-
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(1,132)
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(0.048)
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Net impact of excise
tax expense related to net realized gains and losses
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-
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-
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-
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-
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Core net investment
income
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$
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10,813
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$
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0.465
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$
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8,636
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$
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0.372
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Contacts
Stuart Aronson
WhiteHorse Finance, Inc.
212-506-0500
saronson@higwhitehorse.com
or
Joyson Thomas
WhiteHorse Finance, Inc.
305-379-2322
jthomas@higwhitehorse.com
or
Robert Brinberg
Rose & Company
212-257-5932
whitehorse@roseandco.com
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content:https://www.prnewswire.com/news-releases/whitehorse-finance-inc-announces-third-quarter-2023-earnings-results-and-declares-increased-quarterly-distribution-to-0-385-per-share-301982725.html
SOURCE WhiteHorse Finance, Inc.