WhiteHorse Finance, Inc. Announces First Quarter 2022 Earnings Results and Declares Quarterly Distribution of $0.355 Per Share

Rhea-AI Summary

WhiteHorse Finance reported Q1 2022 financial results, highlighting a net asset value of $347.9 million or $14.99 per share. The investment portfolio stands at $800.4 million, with gross deployments of $83.6 million, marking a record for Q1. Net investment income reached $8.5 million, or $0.368 per share, an increase from the previous year. The company declared a distribution of $0.355 per share, payable on July 5, 2022. The organization’s floating rate debt strategy positions it well for a rising interest rate environment.

Positive

• Net investment income increased to $8.5 million, up 11.8% YoY.
• Declared a consistent distribution of $0.355 per share for Q2 2022.
• Investment portfolio remains strong at $800.4 million.
• Record gross investment deployments of $83.6 million in Q1 2022.

Negative

• Net realized and unrealized loss of $2.8 million, compared to a gain of $0.6 million in Q1 2021.
• Net asset value decreased from $349.8 million to $347.9 million.

NEW YORK, May 10, 2022 /PRNewswire/ -- WhiteHorse Finance, Inc. ("WhiteHorse Finance" or the "Company") (Nasdaq: WHF) today announced its financial results for the quarter ended March 31, 2022. In addition, the Company's board of directors has declared a distribution of $0.355 per share with respect to the quarter ending June 30, 2022. The distribution will be payable on July 5, 2022 to stockholders of record as of June 20, 2022.

First Quarter 2022 Summary Highlights

• Net Asset Value of $347.9 million, or $14.99 per share
• Investment portfolio⁽¹⁾ totaling $800.4 million
• STRS JV investment portfolio totaling $312.8 million
• Gross investment deployments⁽²⁾ of $83.6 million for the first quarter, including new originations of $69.5 million and $14.1 million of fundings for add-ons to existing investments
• Net investment income of $8.5 million, or $0.368 per share
• Core net investment income of $7.9 million, or $0.344 per share⁽³⁾
• First quarter distribution of $0.355 per share

Stuart Aronson, WhiteHorse Finance's Chief Executive Officer, commented, "This past quarter was another active period for capital deployments with WhiteHorse successfully deploying a total of $83.6 million, a record amount for any first quarter in our history. Following the exit from our position in Grupo HIMA and the restructuring of PlayMonster, we ended the quarter with no debt investment on non-accrual status, allowing us to focus all of our resources on managing our directly originated assets that make up the majority of our portfolio as well as sourcing future originations.  Importantly, we believe our investment portfolio is well-positioned to benefit from a rising interest rate environment as nearly 100% of our debt portfolio is comprised of floating rate debt investments.  We are likewise confident, given the modest leverage levels that we underwrite our loans to, that the majority of our portfolio companies will be able to service our debt in a rising interest rate environment.  The lending market remains active and competitive, and our pipeline for future deal flow remains strong due in part to our differentiated three-tiered sourcing approach and relationship with the leading H.I.G. platform. This has allowed us to adhere to our disciplined deal sourcing and rigorous underwriting standards to maintain and grow a healthy portfolio, generating robust cash flows to support our dividend and ultimately creating value for our shareholders."

Portfolio and Investment Activity

As of March 31, 2022, the fair value of WhiteHorse Finance's investment portfolio was $800.4 million, compared with $819.2 million as of December 31, 2021. The portfolio as of March 31, 2022 consisted of 111 positions across 68 companies with a weighted average effective yield of 9.2% on income-producing debt investments. The average debt investment size (excluding investments in STRS JV (as defined below)) was $7.7 million with the overall portfolio comprised of approximately 81.0% first lien secured loans, 3.0% second lien secured loans, 3.4% equity and 12.6% in investments in STRS JV. Almost all loans were variable rate investments (primarily indexed to the London Interbank Offered Rate or Secured Overnight Financing Rate) with fixed rate securities representing only 0.4% of loans at fair value. Nearly all performing floating rate investments have interest rate floors.

During the three months ended March 31, 2022, WhiteHorse Finance made investments in six new portfolio companies for a total of $69.5 million, added a total of $14.1 million to existing portfolio companies, and made net fundings of $1.8 million to revolver loans. Proceeds from sales and repayments totaled approximately $45.1 million for the three months ended March 31, 2022, driven by five full realizations in LHS Borrower, LLC, DCA Investment Holding, LLC, Epiphany Business Services, LLC, AST-Applications Software Technology LLC and Grupo HIMA San Pablo, Inc.

In addition to the transactions discussed above, during the three months ended March 31, 2022, WhiteHorse Finance transferred assets comprised of six new portfolio companies, five add-ons and the remaining portion of three previously transferred deals totaling $82.7 million to STRS JV in exchange for a net investment in STRS JV of $25.0 million as well as cash proceeds of $57.7 million.

WHF STRS Ohio Senior Loan Fund LLC

As of March 31, 2022, STRS JV's portfolio totaled $312.8 million, consisted of 33 portfolio companies and had a weighted average effective yield of 7.9% on its portfolio.

Results of Operations

For the three months ended March 31, 2022, the Company's net investment income was approximately $8.5 million, compared with approximately $7.6 million for the same period in the prior year, representing an increase of approximately 11.8%. The increase in net investment income for the year-over-year period was primarily attributable to higher investment income from interest income and STRS JV due to a larger portfolio size in both the Company and STRS JV. This was partially offset by higher interest expense incurred due to higher leverage balances. For the three months ended March 31, 2022, the Company's investment in STRS JV generated an annualized, gross investment yield of approximately 12.0%.

For the three months ended March 31, 2022, core net investment income⁽³⁾ was $7.9  million, or $0.344 per share, compared with $7.7 million, or $0.375 per share for the same period in the prior year.

For the three months ended March 31, 2022, WhiteHorse Finance reported a net realized and unrealized loss on investments and foreign currency transactions of $2.8 million. This compares with a net realized and unrealized gain on investments and foreign currency transactions of $0.6 million for the three months ended March 31, 2021. The decrease for the year-over-year period was primarily attributable to net losses generated from Grupo HIMA San Pablo, Inc. realization.

WhiteHorse Finance reported a net increase in net assets resulting from operations of approximately $5.7 million for the three months ended March 31, 2022, which compares with a net increase of $8.2 million the three months ended March 31, 2021.

WhiteHorse Finance's net asset value was $347.9 million, or $14.99 per share, as of March 31, 2022, compared with $349.8 million, or $15.10 per share, as of December 31, 2021.

Liquidity and Capital Resources

As of March 31, 2022, WhiteHorse Finance had cash and cash equivalents of $21.3 million, compared with $22.5 million as of December 31, 2021, inclusive of restricted cash. As of March 31, 2022, the Company also had $51.2 million of undrawn capacity under its revolving credit facility.

Distributions

The Company's Board of Directors has declared a distribution of $0.355 per share with respect to the quarter ending June 30, 2022. The distribution will be payable on July 5, 2022 to stockholders of record as of June 20, 2022.

On March 3, 2022, the Company declared a distribution of $0.355 per share for the quarter ended March 31, 2022, consistent with distributions declared for the thirty-eighth consecutive quarter since the Company's initial public offering. The distribution was paid on April 4, 2022 to stockholders of record as of March 25, 2022.

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 first quarter results for the period ended March 31, 2022 at 12:00 p.m. ET on Tuesday, May 10, 2022. To access the teleconference, please dial 866-518-6930 (domestic and international) approximately 10 minutes before the teleconference's scheduled start time and reference Conference ID #WHFQ122. 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 May 17, 2022. The teleconference replay can be accessed by dialing 800-938-2243 (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 over $47 billion of capital under management⁽⁴⁾ 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) Includes investments in WHF STRS Ohio Senior Loan Fund LLC ("STRS JV"), an unconsolidated joint venture, totaling $100.8 million, at fair value.

(2) Excludes investments made in STRS JV.

(3) "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.

(4) Based on total capital commitments managed 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 March 31, 2022 and March 31, 2021.

The following table provides a reconciliation of net investment income to core net investment income for the three months ended March 31, 2022 and March 31, 2021 (in thousands, except per share data):

		March 31, 2022								March 31, 2021
		Amount				Per Share				Amount				Per Share
						Amounts								Amounts
Net investment income		$	8,539			$	0.368			$	7,600			$	0.370
Net impact of costs associated with refinancing of indebtedness			-				-				-				-
Accrual for capital gains incentive fee			(566)				(0.024)				114				0.005
Net impact of excise tax expense related to net realized gains and losses			-				-				-				-
Core net investment income		$	7,973			$	0.344			$	7,714			$	0.375

 

WhiteHorse Finance, Inc. Consolidated Statements of Assets and Liabilities (in thousands, except share and per share data)
			March 31, 2022			December 31, 2021
			(Unaudited)
Assets
Investments, at fair value
Non-controlled/non-affiliate company investments		$	686,253		$	736,727
Non-controlled affiliate company investments			13,342			6,874
Controlled affiliate company investments			100,776			75,607
Total investments, at fair value (amortized cost $798,251 and $831,960, respectively)			800,371			819,208
Cash and cash equivalents			2,454			12,185
Restricted cash and cash equivalents			18,262			9,814
Restricted foreign currency (cost of $550 and $464, respectively)			556			469
Interest and dividend receivable			6,767			7,521
Amounts receivable on unsettled investment transactions			7,916			—
Escrow receivable			1,309			515
Prepaid expenses and other receivables			879			1,307
Receivable for common stock issued			247			—
Total assets		$	838,761		$	851,019
Liabilities
Debt		$	467,857		$	475,958
Distributions payable			8,234			8,222
Management fees payable			3,952			3,766
Incentive fees payable			5,445			7,958
Interest payable			3,548			2,087
Accounts payable and accrued expenses			1,136			2,438
Advances received from unfunded credit facilities			666			839
Unrealized depreciation on foreign currency forward contracts			4			—
Total liabilities			490,842			501,268
Commitments and contingencies
Net assets
Common stock, 23,211,413 and 23,162,667 shares issued and outstanding, par value $0.001 per share, respectively, and 100,000,000 shares authorized			23			23
Paid-in capital in excess of par			339,856			339,161
Accumulated earnings			8,040			10,567
Total net assets			347,919			349,751
Total liabilities and total net assets		$	838,761		$	851,019
Number of shares outstanding			23,211,413			23,162,667
Net asset value per share		$	14.99		$	15.10

 

WhiteHorse Finance, Inc. Consolidated Statements of Operations (Unaudited) (in thousands, except share and per share data)
			Three months ended March 31,
			2022			2021
Investment income
From non-controlled/non-affiliate company investments
Interest income		$	16,741		$	14,812
Fee income			462			771
Dividend income			89			44
From non-controlled affiliate company investments
Interest income			60			—
Dividend income			131			250
From controlled affiliate company investments
Interest income			1,127			719
Dividend income			1,424			1,374
Total investment income			20,034			17,970
Expenses
Interest expense			4,774			3,802
Base management fees			3,952			3,344
Performance-based incentive fees			1,427			2,042
Administrative service fees			171			171
General and administrative expenses			947			821
Total expenses			11,271			10,180
Net investment income before excise tax			8,763			7,790
Excise tax			224			190
Net investment income after excise tax			8,539			7,600
Realized and unrealized gains (losses) on investments and foreign currency transactions
Net realized gains (losses)
Non-controlled/non-affiliate company investments			(18,184)			8,160
Non-controlled affiliate company investments			—			—
Foreign currency transactions			(281)			1
Foreign currency forward contracts			—			—
Net realized gains (losses)			(18,465)			8,161
Net change in unrealized appreciation (depreciation)
Non-controlled/non-affiliate company investments			17,117			(6,975)
Non-controlled affiliate company investments			(1,621)			(434)
Controlled affiliate company investments			169			(120)
Translation of assets and liabilities in foreign currencies			(28)			(62)
Foreign currency forward contracts			(4)			(1)
Net change in unrealized appreciation (depreciation)			15,633			(7,592)
Net realized and unrealized gains (losses) on investments and foreign currency transactions			(2,832)			569
Net increase in net assets resulting from operations		$	5,707		$	8,169
Per Common Share Data
Basic and diluted earnings per common share		$	0.25		$	0.40
Dividends and distributions declared per common share		$	0.36		$	0.36
Basic and diluted weighted average common shares outstanding			23,190,656			20,551,565

 

WhiteHorse Finance, Inc. Consolidated Schedule of Investments (Unaudited) March 31, 2022 (in thousands)
Issuer		Investment Type(1)		Floor		Spread Above Index(2)		Interest Rate(3)		Acquisition Date(10)		Maturity Date		Principal/ Share Amount		Amortized Cost			Fair Value(11)			Fair Value As A Percentage of Net Assets
North America
Debt Investments
Asset Management & Custody Banks
JZ Capital Partners Ltd.(4)(5)		First Lien Secured Term Loan		1.00%		L+ 7.00%		8.00%		01/26/22		01/26/27		10,286		$	10,087		$	10,087		2.90	%
JZ Capital Partners Ltd.(4)(5)(7)		First Lien Secured Delayed Draw Loan		1.00%		L+ 7.00%		8.00%		01/26/22		01/26/27		—			—			—		—
																	10,087			10,087		2.90
Air Freight & Logistics
Access USA Shipping, LLC (d/b/a MyUS.com)		First Lien Secured Term Loan		1.50%		L+ 8.00%		9.50%		02/08/19		02/08/24		4,864			4,837			4,864		1.40
Motivational Marketing, LLC (d/b/a Motivational Fulfillment)		First Lien Secured Term Loan		1.00%		L+ 6.25%		7.25%		07/12/21		07/12/26		11,461			11,265			11,347		3.26
Motivational Marketing, LLC (d/b/a Motivational Fulfillment)(7)		First Lien Secured Revolving Loan		1.00%		L+ 6.25%		7.25%		07/12/21		07/12/26		—			—			8		—
																	16,102			16,219		4.66
Application Software
Atlas Purchaser, Inc. (d/b/a Aspect Software)		Second Lien Secured Term Loan		0.75%		L+ 9.00%		9.75%		05/03/21		05/07/29		15,000			14,600			14,850		4.26
Education Networks of America, Inc.		First Lien Secured Term Loan		1.00%		L+ 5.50%		6.50%		11/30/21		10/27/26		4,680			4,483			4,680		1.35
Naviga Inc. (f/k/a Newscycle Solutions, Inc.)		First Lien Secured Term Loan		1.00%		L+ 7.00%		8.01%		06/14/19		12/29/22		3,205			3,191			3,205		0.92
Naviga Inc. (f/k/a Newscycle Solutions, Inc.)(7)		First Lien Secured Revolving Loan		1.00%		L+ 7.00%		8.00%		06/14/19		12/29/22		169			168			169		0.05
																	22,442			22,904		6.58
Automotive Retail
Team Car Care Holdings, LLC (Heartland Auto)(12)		First Lien Secured Term Loan		1.00%		Base rate+ 7.98%		9.02%		02/16/18		06/28/24		15,055			14,973			14,980		4.31
																	14,973			14,980		4.31
Broadcasting
Coastal Television Broadcasting Group LLC		First Lien Secured Term Loan		1.00%		SF+ 6.50%		7.50%		12/30/21		12/30/26		8,191			8,035			8,035		2.31
Coastal Television Broadcasting Group LLC(7)		First Lien Secured Revolving Loan		1.00%		SF+ 6.50%		7.50%		12/30/21		12/30/26		—			—			—		—
																	8,035			8,035		2.31
Building Products
PFB Holdco, Inc. (d/b/a PFB Corporation)(13)		First Lien Secured Term Loan		1.00%		C+ 6.50%		7.50%		12/17/21		12/17/26		9,004			6,911			7,069		2.02
PFB Holdco, Inc. (d/b/a PFB Corporation)(7)(13)		First Lien Secured Revolving Loan		1.00%		C+ 6.50%		7.50%		12/17/21		12/17/26		—			—			—		—
PFB Holdco, Inc. (d/b/a PFB Corporation)		First Lien Secured Term Loan		1.00%		L+ 6.50%		7.50%		12/17/21		12/17/26		2,193			2,151			2,151		0.62
PFB Holdco, Inc. (d/b/a PFB Corporation)(7)		First Lien Secured Revolving Loan		1.00%		L+ 6.50%		7.50%		12/17/21		12/17/26		—			—			—		—
Trimlite Buyer LLC (d/b/a Trimlite LLC)(5)(13)		First Lien Secured Term Loan		1.00%		C+ 6.50%		7.71%		07/27/21		07/27/26		22,833			17,881			18,249		5.25
Trimlite Buyer LLC (d/b/a Trimlite LLC)(5)(7)		First Lien Secured Revolving Loan		1.00%		L+ 6.50%		7.50%		07/27/21		07/27/26		491			482			508		0.15
																	27,425			27,977		8.04
Cable & Satellite
Bulk Midco, LLC(15)		First Lien Secured Term Loan		1.00%		L+ 7.64%		9.13%		06/08/18		06/08/23		14,922			14,869			14,475		4.16
																	14,869			14,475		4.16
Commodity Chemicals
Flexitallic Group SAS		First Lien Secured Term Loan		1.00%		L+ 7.50%		8.51% (8.01% Cash + 0.50% PIK)		10/28/19		10/29/26		15,702			15,062			15,337		4.41
																	15,062			15,337		4.41
Construction & Engineering
Tensar Corporation		First Lien Secured Term Loan		1.00%		L+ 6.75%		7.76%		11/20/20		08/20/25		6,913			6,789			7,051		2.03
																	6,789			7,051		2.03
Construction Materials
Claridge Products and Equipment, LLC		First Lien Secured Term Loan		1.00%		L+ 6.50%		7.51%		12/30/20		12/29/25		7,621			7,506			7,468		2.14
Claridge Products and Equipment, LLC(7)(12)		First Lien Secured Revolving Loan		1.00%		Base rate+ 5.64%		9.21%		12/30/20		12/29/25		596			588			584		0.17
																	8,094			8,052		2.31
Consumer Finance
Maxitransfers Blocker Corp.		First Lien Secured Term Loan		1.00%		L+ 8.50%		9.51%		10/07/20		10/07/25		8,478			8,337			8,478		2.44
Maxitransfers Blocker Corp.(4)(7)		First Lien Secured Revolving Loan		1.00%		L+ 8.50%		9.51%		10/07/20		10/07/25		—			—			17		—
																	8,337			8,495		2.44
Data Processing & Outsourced Services
Escalon Services Inc.		First Lien Secured Term Loan		1.00%		L+ 10.30%		11.30% (10.60% Cash + 0.70% PIK)		12/04/20		12/04/25		17,259			16,471			16,991		4.88
Future Payment Technologies, L.P.		First Lien Secured Term Loan		1.00%		L+ 8.25%		9.25%		12/23/16		06/07/24		23,845			23,668			23,785		6.84
																	40,139			40,776		11.72
Department Stores
Mills Fleet Farm Group, LLC		First Lien Secured Term Loan		1.00%		L+ 6.25%		7.25%		10/24/18		10/24/24		13,538			13,342			13,538		3.89
																	13,342			13,538		3.89
Distributors
Crown Brands LLC(19)		Second Lien Secured Term Loan		1.50%		L+ 10.50%		12.00%		12/15/20		01/08/26		4,383			4,304			3,507		1.01
Crown Brands LLC(19)		Second Lien Secured Delayed Draw Loan		1.50%		L+ 10.50%		12.00%		12/15/20		01/08/26		651			651			521		0.15
																	4,955			4,028		1.16
Diversified Chemicals
Manchester Acquisition Sub LLC (d/b/a Draslovka Holding AS)		First Lien Secured Term Loan		0.75%		SF+ 5.75%		6.50%		11/16/21		11/16/26		7,980			7,582			7,712		2.22
Sklar Holdings, Inc. (d/b/a Starco)		First Lien Secured Term Loan		1.00%		L+ 9.75%		10.75% (8.75% Cash + 2.00% PIK)		11/13/19		05/13/23		7,390			7,307			7,020		2.02
																	14,889			14,732		4.24
Diversified Support Services
NNA Services, LLC		First Lien Secured Term Loan		1.00%		L+ 6.75%		7.76%		08/27/21		08/27/26		11,521			11,394			11,465		3.30
																	11,394			11,465		3.30
Education Services
EducationDynamics, LLC		First Lien Secured Term Loan		1.00%		L+ 7.00%		8.00% (7.50% Cash + 0.50% PIK)		09/15/21		09/15/26		13,251			13,015			13,004		3.73
EducationDynamics, LLC(4)(7)		First Lien Secured Delayed Draw Loan		1.00%		L+ 7.00%		8.00% (7.50% Cash + 0.50% PIK)		09/15/21		09/15/26		—			—			(1)		—
EducationDynamics, LLC(7)		First Lien Secured Revolving Loan		1.00%		P+ 5.50%		9.00%		09/15/21		09/15/26		240			236			235		0.07
EducationDynamics, LLC(4)		Subordinated Unsecured Term Loan		N/A		4.00%		4.00%		09/15/21		03/15/27		167			167			167		0.05
																	13,418			13,405		3.85
Electric Utilities
CleanChoice Energy, Inc. (d/b/a CleanChoice)		First Lien Secured Term Loan		1.00%		L+ 7.25%		8.25%		10/12/21		10/12/26		10,500			10,310			10,290		2.96
																	10,310			10,290		2.96
Environmental & Facilities Services
Industrial Specialty Services USA LLC		First Lien Secured Term Loan		1.00%		L+ 6.25%		7.26%		12/31/21		12/31/26		11,977			11,750			11,750		3.38
Industrial Specialty Services USA LLC(7)		First Lien Secured Revolving Loan		1.00%		L+ 6.25%		7.25%		12/31/21		12/31/26		709			696			696		0.20
RLJ Pro-Vac, Inc. (d/b/a Pro-Vac)		First Lien Secured Term Loan		1.00%		L+ 6.25%		7.26%		12/31/21		12/31/26		8,753			8,587			8,587		2.47
RLJ Pro-Vac, Inc. (d/b/a Pro-Vac)(7)		First Lien Secured Revolving Loan		1.00%		L+ 6.25%		7.26%		12/31/21		12/31/26		—			—			—		—
																	21,033			21,033		6.05
Health Care Facilities
Bridgepoint Healthcare, LLC		First Lien Secured Term Loan		1.00%		L+ 7.75%		8.75%		10/05/21		10/05/26		10,840			10,644			10,731		3.08
Bridgepoint Healthcare, LLC(7)		First Lien Secured Delayed Draw Loan		1.00%		L+ 7.75%		8.75%		10/05/21		10/05/26		—			—			6		—
Bridgepoint Healthcare, LLC(7)		First Lien Secured Revolving Loan		1.00%		L+ 7.75%		8.75%		10/05/21		10/05/26		—			—			13		—
																	10,644			10,750		3.08
Health Care Services
CHS Therapy, LLC		First Lien Secured Term Loan A		1.50%		L+ 9.00%		10.50% (10.00% Cash + 0.50% PIK)		06/14/19		06/14/24		7,203			7,143			7,203		2.07
CHS Therapy, LLC		First Lien Secured Term Loan C		1.50%		L+ 9.00%		10.50% (10.00% Cash + 0.50% PIK)		10/07/20		06/14/24		886			876			886		0.25
IvyRehab Intermediate II, LLC (d/b/a Ivy Rehab)		First Lien Secured Term Loan		1.00%		L+ 6.75%		7.75%		12/04/20		12/04/24		17,322			17,098			17,322		4.98
IvyRehab Intermediate II, LLC (d/b/a Ivy Rehab)(7)		First Lien Secured Delayed Draw Loan		1.00%		L+ 6.75%		7.75%		12/04/20		12/04/24		2,908			2,873			2,883		0.83
IvyRehab Intermediate II, LLC (d/b/a Ivy Rehab)(7)		First Lien Secured Revolving Loan		1.00%		P+ 5.75%		9.25%		12/04/20		12/04/24		142			140			147		0.04
Lab Logistics, LLC		First Lien Secured Term Loan		1.00%		L+ 7.25%		8.25%		10/16/19		09/25/23		1,153			1,139			1,153		0.33
Lab Logistics, LLC		First Lien Secured Delayed Draw Loan		1.00%		L+ 7.25%		8.25%		10/16/19		09/25/23		5,170			5,156			5,170		1.49
PG Dental New Jersey Parent, LLC		First Lien Secured Term Loan		1.00%		L+ 9.75%		10.75% (9.25% Cash + 1.50% PIK)		11/25/20		11/25/25		15,177			14,932			13,963		4.01
PG Dental New Jersey Parent, LLC		First Lien Secured Revolving Loan		1.00%		L+ 9.75%		10.75% (9.25% Cash + 1.50% PIK)		11/25/20		11/25/25		704			692			647		0.19
																	50,049			49,374		14.19
Health Care Supplies
ABB/Con-cise Optical Group LLC (d/b/a ABB Optical Group, LLC)		First Lien Secured Term Loan		0.75%		L+ 7.50%		8.26%		02/23/22		02/23/28		21,736			21,202			21,202		6.09
ABB/Con-cise Optical Group LLC (d/b/a ABB Optical Group, LLC)(7)		First Lien Secured Revolving Loan		0.75%		Base rate+ 6.83%		9.77%		02/23/22		02/23/28		838			817			817		0.23
																	22,019			22,019		6.32
Heavy Electrical Equipment
PPS CR Acquisition, Inc. (d/b/a Power Plant Services)		First Lien Secured Term Loan		1.00%		L+ 6.25%		7.26%		06/25/21		06/25/26		11,095			10,906			10,984		3.16
PPS CR Acquisition, Inc. (d/b/a Power Plant Services)(7)		First Lien Secured Revolving Loan		1.00%		L+ 6.25%		7.26%		06/25/21		06/25/24		104			103			118		0.03
																	11,009			11,102		3.19
Home Furnishings
Sleep OpCo LLC (d/b/a Brooklyn Bedding LLC)		First Lien Secured Term Loan		1.00%		L+ 6.50%		7.50%		10/12/21		10/12/26		19,984			19,622			19,739		5.67
Sleep OpCo LLC (d/b/a Brooklyn Bedding LLC)(7)		First Lien Secured Revolving Loan		1.00%		L+ 6.50%		7.50%		10/12/21		10/12/26		—			—			15		—
Sure Fit Home Products, LLC		First Lien Secured Term Loan		1.00%		L+ 9.75%		10.76%		04/12/21		07/13/23		4,877			4,807			4,146		1.19
																	24,429			23,900		6.86
Household Products
The Kyjen Company, LLC (d/b/a Outward Hound)		First Lien Secured Term Loan		1.00%		L+ 6.50%		7.50%		04/05/21		04/05/26		11,374			11,237			11,374		3.27
The Kyjen Company, LLC (d/b/a Outward Hound)(7)		First Lien Secured Revolving Loan		1.00%		L+ 6.50%		7.50%		04/05/21		04/05/26		258			255			266		0.08
																	11,492			11,640		3.35
Interactive Media & Services
What If Holdings, LLC (d/b/a What If Media Group, LLC)		First Lien Secured Term Loan		1.00%		L+ 6.50%		7.50%		10/02/19		10/02/24		18,725			18,509			18,725		5.38
																	18,509			18,725		5.38
Internet & Direct Marketing Retail
BBQ Buyer, LLC (d/b/a BBQ Guys)		First Lien Secured Term Loan		1.50%		L+ 10.00%		11.50% (9.50% Cash + 2.00% PIK)		08/28/20		08/28/25		12,654			12,435			12,527		3.60
BBQ Buyer, LLC (d/b/a BBQ Guys)(7)		First Lien Secured Delayed Draw Loan		1.50%		L+ 10.00%		11.50% (9.50% Cash + 2.00% PIK)		12/02/21		08/28/25		2,580			2,532			2,561		0.74
Luxury Brand Holdings, Inc. (d/b/a Ross-Simons, Inc.)		First Lien Secured Term Loan		1.00%		L+ 6.50%		7.50%		12/04/20		06/04/26		5,925			5,835			5,925		1.70
Potpourri Group, Inc.		First Lien Secured Term Loan		1.50%		L+ 8.25%		9.75%		07/03/19		07/03/24		17,034			16,861			17,034		4.90
																	37,663			38,047		10.94
Investment Banking & Brokerage
JVMC Holdings Corp. (fka RJO Holdings Corp)		First Lien Secured Term Loan		1.00%		L+ 7.00%		8.00%		02/28/19		02/28/24		12,512			12,464			12,512		3.60
																	12,464			12,512		3.60
IT Consulting & Other Services
ATSG, Inc.		First Lien Secured Term Loan		1.00%		L+ 6.50%		7.50%		11/12/21		11/12/26		13,965			13,707			13,713		3.94
																	13,707			13,713		3.94
Leisure Facilities
Honors Holdings, LLC (d/b/a Orange Theory)(16)		First Lien Secured Term Loan		1.00%		L+ 7.92%		8.92% (8.42% Cash + 0.50% PIK)		09/06/19		09/06/24		9,440			9,322			9,345		2.69
Honors Holdings, LLC (d/b/a Orange Theory)(16)		First Lien Secured Delayed Draw Loan		1.00%		L+ 7.63%		8.63% (8.05% Cash + 0.58% PIK)		09/06/19		09/06/24		4,649			4,613			4,603		1.32
Lift Brands, Inc. (d/b/a Snap Fitness)		First Lien Secured Term Loan A		1.00%		L+ 7.50%		8.50%		06/29/20		06/29/25		5,617			5,560			5,581		1.60
Lift Brands, Inc. (d/b/a Snap Fitness)		First Lien Secured Term Loan B		N/A		9.50%		9.50% (0.00% Cash + 9.50% PIK)		06/29/20		06/29/25		1,309			1,291			1,274		0.37
Snap Fitness Holdings, Inc. (d/b/a Lift Brands, Inc.)(9)		First Lien Secured Term Loan C		N/A		9.50%		9.50% (0.00% Cash + 9.50% PIK)		06/29/20		NA		1,268			1,265			1,227		0.35
																	22,051			22,030		6.33
Leisure Products
Playmonster Group LLC(6)(20)(22)		First Lien Secured Term Loan		1.00%		L+ 8.00%		9.00% (0.00% Cash + 9.00% PIK)		01/24/22		06/08/26		2,985			2,985			2,985		0.86
PlayMonster LLC(6)(7)		First Lien Secured Revolving Loan		0.25%		L+ 1.75%		2.10%		01/24/22		06/08/26		1,044			1,044			1,044		0.30
																	4,029			4,029		1.16
Life Sciences Tools & Services
LSCS Holdings, Inc. (d/b/a Eversana Life Science Services, LLC)		Second Lien Secured Term Loan		0.50%		L+ 8.00%		8.50%		11/23/21		12/16/29		5,000			4,928			4,902		1.41
																	4,928			4,902		1.41
Office Services & Supplies
American Crafts, LC		First Lien Secured Term Loan		1.00%		L+ 8.50%		9.50%		05/28/21		05/28/26		8,351			8,248			8,238		2.37
American Crafts, LC		First Lien Secured Delayed Draw Loan		1.00%		L+ 8.50%		9.50%		01/25/22		05/28/26		1,403			1,376			1,376		0.40
Empire Office, Inc.		First Lien Secured Term Loan		1.50%		L+ 6.50%		8.00%		04/12/19		04/12/24		12,443			12,313			12,350		3.55
Empire Office, Inc.(4)(7)		First Lien Secured Delayed Draw Loan		1.50%		L+ 6.50%		8.00%		08/17/21		04/12/24		—			—			(40)		(0.01)
																	21,937			21,924		6.31
Packaged Foods & Meats
Lenny & Larry's, LLC(17)		First Lien Secured Term Loan		1.00%		L+ 7.83%		8.83% (7.68% Cash + 1.15% PIK)		05/15/18		05/15/23		11,185			11,137			10,907		3.14
																	11,137			10,907		3.14
Personal Products
Inspired Beauty Brands, Inc.		First Lien Secured Term Loan		1.00%		L+ 7.00%		8.00%		12/30/20		12/30/25		12,117			11,935			12,117		3.48
Inspired Beauty Brands, Inc.(7)		First Lien Secured Revolving Loan		1.00%		L+ 7.00%		8.00%		12/30/20		12/30/25		—			—			8		—
																	11,935			12,125		3.48
Research & Consulting Services
Aeyon LLC		First Lien Secured Term Loan		1.00%		SF+ 8.88%		9.88%		02/10/22		02/10/27		8,978			8,803			8,801		2.53
ALM Media, LLC		First Lien Secured Term Loan		1.00%		L+ 6.50%		7.51%		11/25/19		11/25/24		13,978			13,830			13,838		3.98
Nelson Worldwide, LLC		First Lien Secured Term Loan		1.00%		L+ 10.25%		11.25% (10.25% Cash + 1.00% PIK)		01/09/18		01/09/23		9,719			9,682			9,547		2.74
																	32,315			32,186		9.25
Specialized Consumer Services
Camp Facility Services Holdings, LLC (d/b/a Camp Construction Services, Inc.)		First Lien Secured Term Loan		1.00%		L+ 6.50%		7.50%		11/16/21		11/16/27		12,968			12,722			12,729		3.66
Camp Facility Services Holdings, LLC (d/b/a Camp Construction Services, Inc.)(4)(7)		First Lien Secured Delayed Draw Loan		1.00%		L+ 6.50%		7.50%		11/16/21		11/16/27		—			—			2		—
HC Salon Holdings, Inc. (d/b/a Hair Cuttery)		First Lien Secured Term Loan		1.00%		L+ 8.00%		9.01%		09/30/21		09/30/26		11,608			11,399			11,384		3.27
HC Salon Holdings, Inc. (d/b/a Hair Cuttery)(7)		First Lien Secured Revolving Loan		1.00%		L+ 8.00%		9.01%		09/30/21		09/30/26		—			—			(1)		—
True Blue Car Wash, LLC		First Lien Secured Term Loan		1.00%		SF+ 6.88%		7.88%		10/17/19		10/17/24		10,101			9,984			10,018		2.88
True Blue Car Wash, LLC(7)		First Lien Secured Delayed Draw Loan		1.00%		SF+ 6.50%		7.50%		10/17/19		10/17/24		1,845			1,817			1,831		0.53
																	35,922			35,963		10.34
Specialized Finance
WHF STRS Ohio Senior Loan Fund LLC(4)(5)(9)(14)		Subordinated Note		N/A		L+ 6.50%		6.94%		07/19/19		N/A		80,000			80,000			80,000		22.99
																	80,000			80,000		22.99
Systems Software
Arcstor Midco, LLC (d/b/a Arcserve (USA), LLC		First Lien Secured Term Loan		1.00%		L+ 7.00%		8.01%		03/16/21		03/16/27		19,305			18,986			18,919		5.44
																	18,986			18,919		5.44
Technology Hardware, Storage & Peripherals
Telestream Holdings Corporation		First Lien Secured Term Loan		1.00%		L+ 8.75%		9.75%		10/15/20		10/15/25		15,041			14,699			15,041		4.32
Telestream Holdings Corporation(7)		First Lien Secured Revolving Loan		1.00%		L+ 8.75%		9.75%		10/15/20		10/15/25		—			—			30		0.01
																	14,699			15,071		4.33
Total Debt Investments																$	751,619		$	752,717		216.35	%
Equity Investments(23)
Advertising
Avision Holdings, LLC (d/b/a Avision Sales Group)(4)		Class A LLC Interests		N/A		N/A		N/A		12/15/21		N/A		200		$	250		$	208		0.06	%
																	250			208		0.06
Air Freight & Logistics
Motivational CIV, LLC (d/b/a Motivational Fulfillment)(4)		Class B Units		N/A		N/A		N/A		07/12/21		N/A		1,250			1,250			863		0.25
																	1,250			863		0.25
Building Products
PFB Holdco, Inc. (d/b/a PFB Corporation)(4)(13)		Class A Units		N/A		N/A		N/A		12/17/21		N/A		1			423			432		0.12
																	423			432		0.12
Data Processing & Outsourced Services
Escalon Services Inc.(4)		Warrants		N/A		N/A		N/A		12/04/20		N/A		709			476			1,644		0.47
																	476			1,644		0.47
Diversified Support Services
Quest Events, LLC(4)		Preferred Units		N/A		N/A		N/A		12/28/18		12/08/25		317			317			71		0.02
ImageOne Industries, LLC(4)		Common A Units		N/A		N/A		N/A		09/20/19		N/A		225			—			122		0.04
																	317			193		0.06
Education Services
Eddy Acquisitions, LLC (d/b/a EducationDynamics, LLC)(4)		Preferred Units		N/A		12.00%		12.00%		09/15/21		N/A		167			167			156		0.04
																	167			156		0.04
Environmental & Facilities Services
BPII-JL Group Holdings LP (d/b/a Juniper Landscaping Holdings LLC)(4)		Class A Units		N/A		N/A		N/A		12/29/21		N/A		83			825			825		0.24
																	825			825		0.24
Health Care Services
Lab Logistics, LLC(4)(21)		Preferred Units		N/A		14.00%		14.00% PIK		10/29/19		N/A		2			857			915		0.26
																	857			915		0.26
Industrial Machinery
BL Products Parent, LP (d/b/a Bishop Lifting Products, Inc.)(4)		Class A Units		N/A		N/A		N/A		02/01/22		N/A		667			667			667		0.19
																	667			667		0.19
Interactive Media & Services
What If Media Group, LLC(4)		Common Units		N/A		N/A		N/A		07/02/21		N/A		8			850			1,439		0.41
																	850			1,439		0.41
Internet & Direct Marketing Retail
BBQ Buyer, LLC (d/b/a BBQ Guys)(4)		Shares		N/A		N/A		N/A		08/28/20		N/A		1,100			1,100			2,266		0.65
Ross-Simons Topco, LP (d/b/a Ross-Simons, Inc.)(4)		Preferred Units		N/A		8.00%		8.00% PIK		12/04/20		N/A		600			514			1,246		0.36
																	1,614			3,512		1.01
Investment Banking & Brokerage
Arcole Holding Corporation(4)(5)(6)(18)		Shares		N/A		N/A		N/A		10/01/20		N/A		—			6,944			7,045		2.02
																	6,944			7,045		2.02
IT Consulting & Other Services
CX Holdco LLC (d/b/a Cennox Inc.)(4)		Common Units		N/A		N/A		N/A		05/04/21		N/A		972			972			1,584		0.46
Keras Holdings, LLC (d/b/a KSM Consulting, LLC)(4)		Shares		N/A		N/A		N/A		12/31/20		N/A		496			496			496		0.14
																	1,468			2,080		0.60
Leisure Facilities
Snap Fitness Holdings, Inc. (d/b/a Lift Brands, Inc.)(4)		Class A Common Stock		N/A		N/A		N/A		06/29/20		N/A		2			1,941			199		0.06
Snap Fitness Holdings, Inc. (d/b/a Lift Brands, Inc.)(4)		Warrants		N/A		N/A		N/A		06/29/20		06/28/28		1			793			81		0.02
																	2,734			280		0.08
Leisure Products
Playmonster Group Equity, Inc. (d/b/a PlayMonster LLC)(4)(6)(8)(22)		Preferred Stock		N/A		14.00%		14.00% PIK		01/24/22		N/A		36			3,600			2,268		0.66
Playmonster Group Equity, Inc. (d/b/a PlayMonster LLC)(4)(6)(22)		Common Stock		N/A		N/A		N/A		01/24/22		N/A		72			460			—		—
																	4,060			2,268		0.66
Other Diversified Financial Services
SFS Global Holding Company (d/b/a Sigue Corporation)(4)		Warrants		N/A		N/A		N/A		06/28/18		12/28/25		—			—			—		—
Sigue Corporation(4)		Warrants		N/A		N/A		N/A		06/28/18		12/28/25		22			2,890			3,490		1.00
																	2,890			3,490		1.00
Specialized Consumer Services
Camp Facility Services Parent, LLC (d/b/a Camp Construction Services, Inc.)(4)		Preferred Units		N/A		10.00%		10.00% PIK		11/16/21		N/A		15			840			861		0.26
																	840			861		0.26
Specialized Finance
WHF STRS Ohio Senior Loan Fund(4)(5)(14)		LLC Interests		N/A		N/A		N/A		07/19/19		N/A		20,000			20,000			20,776		5.97
																	20,000			20,776		5.97
Total Equity Investments																$	46,632		$	47,654		13.70	%
Total Investments																$	798,251		$	800,371		230.05	%

 

WhiteHorse Finance, Inc. Consolidated Schedule of Investments (Unaudited) March 31, 2022 (in thousands)
(1)	Except as otherwise noted, all investments are non-controlled/non-affiliate investments as defined 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, the Secured Overnight Financing Rate ("SOFR" or "SF"), the Canadian Dollar Offered Rate ("CDOR" or "C"), Canada Prime Rate ("CP") or the U.S. Prime Rate ("Prime" or "P"). The one, three and six-month USD LIBOR were 0.45%, 0.96% and 1.47%, respectively, as of March 31, 2022. The SOFR, CDOR, CP and Prime were 0.29%, 1.26%, 2.70% and 3.50%, respectively, as of March 31, 2022.
(3)	The interest rate is the "all-in-rate" including the current index and spread, the fixed 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 83.7% of total assets as of the date of the consolidated schedule of investments.
(6)	Investment is a non-controlled/affiliate investment as defined by the 1940 Act.
(7)	The investment has an unfunded commitment in addition to any amounts presented in the consolidated schedule of investments as of March 31, 2022.
(8)	Preferred equity investment is a non-income producing security.
(9)	Security is perpetual with no defined maturity date.
(10)	Except as otherwise noted, all of the Company's portfolio company investments, which as of the date of the consolidated schedule of investments represented 230.0% of the Company's net assets or 95.4% of the Company's total assets, are subject to legal restrictions on sales.
(11)	The fair value of each investment was determined using significant unobservable inputs.
(12)	The investment was comprised of two contracts, which were indexed to different base rates, L and P, respectively. The Floor, Spread Above Index and Interest Rate presented represent the weighted average of both contracts.
(13)	Principal amount is non-USD denominated and is based in Canadian dollars.
(14)	Investment is a controlled affiliate investment as defined by the 1940 Act. On January 14, 2019, the Company entered into an agreement with State Teachers Retirement System of Ohio, a public pension fund established under Ohio law ("STRS Ohio"), to create WHF STRS Ohio Senior Loan Fund, LLC ("STRS JV"), a joint venture, which invests primarily in senior secured first and second lien term loans.
(15)	In addition to the interest earned based on the stated interest rate of this security, the Company is entitled to receive an additional interest in the amount of 2.75% on its "last out" tranche of the portfolio company's senior term debt, which was previously syndicated into "first out" and "last out" tranches, whereby the "first out" tranche will have priority as to the "last out" tranche with respect to payments of principal, interest and any other amounts due thereunder.
(16)	In addition to the interest earned based on the stated interest rate of this security, the Company is entitled to receive an additional interest in the amount of 3.50% on its "last out" tranche of the portfolio company's senior term debt, which was previously syndicated into "first out" and "last out" tranches, whereby the "first out" tranche will have priority as to the "last out" tranche with respect to payments of principal, interest and any other amounts due thereunder.
(17)	In addition to the interest earned based on the stated interest rate of this security, the Company is entitled to receive an additional interest in the amount of 3.00% on its "last out" tranche of the portfolio company's senior term debt, which was previously syndicated into "first out" and "last out" tranches, whereby the "first out" tranche will have priority as to the "last out" tranche with respect to payments of principal, interest and any other amounts due thereunder.
(18)	On October 1, 2020, as part of a restructuring agreement between the Company and Arcole Acquisition Corp, the Company's investments in first lien secured term loans to Arcole Acquisition Corp were converted into common shares of Arcole Holding Corp.
(19)	At the option of the issuer, interest can be paid in cash or cash and PIK. The issuer may elect to pay up to 2.00% PIK.
(20)	At the option of the issuer, interest can be paid in cash or cash and PIK. The issuer may elect to pay up to 9.00% PIK.
(21)	Investment earns 14.00% that converts to PIK on an annual basis and is recorded in interest and dividend receivable in the consolidated statements of assets and liabilities.
(22)	On January 24, 2022, as part of a restructuring agreement between the Company and PlayMonster LLC, the Company's first lien secured term loan and delayed draw loan investments to PlayMonster LLC were converted into a new first lien secured term loan, preferred stock and common stock of Playmonster Group LLC.
(23)	Ownership of certain equity investments may occur through a holding company or partnership.

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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SOURCE WhiteHorse Finance, Inc.

FAQ

What are the Q1 2022 financial results for WHF?

For Q1 2022, WHF reported a net investment income of $8.5 million and a net asset value of $347.9 million.

When is the distribution payment for WHF shareholders?

The distribution of $0.355 per share will be paid on July 5, 2022, to shareholders of record as of June 20, 2022.

What is the investment portfolio size of WhiteHorse Finance as of March 31, 2022?

As of March 31, 2022, the investment portfolio totals $800.4 million.

How did WhiteHorse Finance perform compared to the same quarter last year?

Net investment income increased by 11.8% compared to Q1 2021, although the company experienced a net loss of $2.8 million in investments.

What strategies is WHF implementing to deal with rising interest rates?

WHF's portfolio primarily consists of floating rate debt, positioning it well to benefit from a rising interest rate environment.