Exhibit 99.1

 

 

WhiteHorse Finance, Inc. Announces Fourth Quarter and Full Year 2015 Earnings Results

 

NEW YORK, NY, March 3, 2016 – WhiteHorse Finance, Inc. (“WhiteHorse Finance” or the "Company") (NASDAQ: WHF) today announced its financial results for the quarter and year ended December 31, 2015.

 

Fourth Quarter 2015 Summary Highlights

 

·

New investments of $63.7 million and $140.4 million for the fourth quarter and year, respectively

·

Completed a public offering of subscription rights to purchase shares of common stock, which were fully exercised, resulting approximately $44.0 million of net proceeds

·

Refinanced the revolving credit facility, increasing the facility size from $150 million to $200 million and extending the reinvestment period by three years through 2018

·

Net investment income of $3.9 million, or $0.24 per share, for the fourth quarter

·

Net credit facility refinancing costs of $1.8 million, or $0.11 per share

·

Core net investment income of $5.7 million, or $0.35 per share, for the fourth quarter(1)

·

Annual core net investment income of $1.48 per share(1)

·

Annual distributions 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 the net impact of costs associated with the refinancing of the Company’s revolving credit facility. 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.}

 

Jay Carvell, WhiteHorse Finance’s Chief Executive Officer commented, “We are pleased to report strong core earnings for the quarter. Our affiliation with H.I.G. Capital remains strong, and we are pleased with the forward pipeline. We continue to source attractive investments and believe opportunities in the credit markets will allow us to continue to execute on our origination strategy."

 

Portfolio and Investment Activity

 

As of December 31, 2015, the fair value of WhiteHorse Finance’s investment portfolio was $415.3 million, compared with $403.5 million as of December 31, 2014. The portfolio at December 31, 2015 consisted of 35 positions across 29 companies with an average investment size of $11.5 million and a weighted average effective yield of 11.8 % on income producing investments. The majority of the portfolio was comprised of senior secured loans and more than 97.0% of these loans were variable-rate investments (primarily indexed to LIBOR), which should continue to position the portfolio well for a potential rising interest rate environment.

 

For the three months ended December 31, 2015, WhiteHorse Finance invested $63.7 million across five portfolio companies. Gross proceeds from sales and repayments totaled $6.4 million for the quarter.

 

For the year ended December 31, 2015, WhiteHorse Finance invested $140.4 million across twelve portfolio companies. Gross proceeds from sales and repayments totaled $107.7 million for the year.

 

Results of Operations

 

For the three months and year ended December 31, 2015, net investment income was $3.9 million and $20.8 million, compared with $5.0 million and $17.0 million for the same periods in the prior year. For the three months and year ended December 31, 2015, core net investment income, a non-GAAP financial measure, was $5.7 million and $22.6 million, compared with $5.0 million and $17.0 million for the same periods in the prior year. The increase in core net investment income was primarily attributable to increases in the average earning investment balance and the weighted average effective yield over the same periods in the prior year.

 

 

For the three months and year ended December 31, 2015, WhiteHorse Finance reported realized and unrealized losses on investments of $18.7 and $23.6 million, respectively. This compares with realized and unrealized losses on investments of $1.3 million and realized and unrealized gains on investments of $2.6 million for the three months and year ended December 31, 2014, respectively. The increase in realized and unrealized losses on investments related primarily to the recognition of unrealized depreciation of $13.3 million on the Company’s investment in RCS Capital Corporation during the fourth quarter of 2015.

 

For the three months and year ended December 31, 2015, WhiteHorse Finance reported a net decrease in net assets of $14.8 million and $2.8 million, respectively, which compares with a net increase in net assets of $3.6 million and $19.5 million for the three months and year ended December 31, 2014.

 

WhiteHorse Finance’s NAV was $244.1 million, or $13.33 per share, as of December 31, 2015, as compared with $227.0 million, or $15.16 per share, reported as of December 31, 2014.

 

Liquidity and Capital Resources

 

As of December 31, 2015, WhiteHorse Finance had cash and cash equivalents of $22.8 million, as compared with $25.9 million as of September 30, 2015, inclusive of restricted cash. As of December 31, 2015, the Company had $98.0 million of undrawn capacity under its revolving credit facility.

 

Distributions

 

On November 23, 2015, the Company declared a distribution of $0.355 per share for the quarter ended December 31, 2015, consistent for the thirteenth consecutive quarter since the Company’s IPO. The distribution was payable on January 4, 2016 to shareholders of record as of December 21, 2015.

 

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 Thursday, March 3, 2016. 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#36543898. 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 10, 2016. The teleconference replay can be accessed by dialing 404-537-3406 (domestic and international) and entering ID#64841910. 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 small-cap companies across a broad range of industries. The Company's investment activities are managed by its investment adviser, H.I.G. WhiteHorse Advisers, LLC, an affiliate of H.I.G. Capital, L.L.C. (“H.I.G. Capital”). H.I.G. Capital is a leading global alternative asset manager with $19 billion of capital under management⁽²⁾ 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.

 

^{(2) Based on total capital commitments to funds managed by H.I.G. Capital and its affiliates.}

 

 

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.

 

Contacts

Jay Carvell

WhiteHorse Finance, Inc.

214-855-2999

jcarvell@higwhitehorse.com

 

Gerhard Lombard

WhiteHorse Finance, Inc.

214-855-2999

glombard@higwhitehorse.com

 

Brian Schaffer

Prosek Partners

212-279-3115

bschaffer@prosek.com

 

Source: WhiteHorse Finance, Inc.

 

(Financial Tables Follow)