NEW YORK, May 12, 2025 /PRNewswire/ -- WhiteHorse Finance, Inc. ("WhiteHorse Finance" or the "Company") (Nasdaq: WHF) today announced its financial results for the first quarter ended March 31, 2025. In addition, the Company's board of directors has declared a distribution of $0.385 per share with respect to the quarter ended March 31, 2025. The distribution will be payable on July 3, 2025 to stockholders of record as of June 19, 2025.
Stuart Aronson, WhiteHorse Finance's Chief Executive Officer, commented, "Our first-quarter results continued to reflect company-specific challenges that obscure the underlying stability of our broader portfolio. While the BDC's earnings power has moderated relative to a year ago, we are actively addressing underperforming investments by leveraging the expertise of our dedicated restructuring team. Our deal pipeline is consistent with seasonal norms in terms of volume, though we are seeing fewer high-quality opportunities compared to this time last year. We continue to be active in the non-sponsor market and have expanded our origination capabilities to a 13th region. By maintaining our focus on credits with solid fundamentals, we believe we are well-positioned to navigate the current environment and support long-term value creation for our shareholders."
Summary Information as of March 31, 2025 and December 31, 2024 (unaudited):
Three Months Ended
Three Months Ended
Change
($ in thousands except per share data)
March 31, 2025
December 31, 2024
$
%
Total investment income
$
18,801
$
21,009
(2,208)
(10.5)
Total expenses, including excise tax
11,958
13,032
(1,074)
(8.2)
Net investment income and core net investment income(1)
6,843
7,977
(1,134)
(14.2)
Net investment income and core net investment income(1) per share
0.294
0.343
(0.049)
(14.3)
Distributions per share
0.385
0.385
—
—
Special distributions per share
—
0.245
(0.245)
NM
Net realized gains (losses)
(402)
(12,293)
11,891
NM
Net unrealized appreciation (depreciation)
(2,177)
8,217
(10,394)
NM
Net increase (decrease) in net assets resulting from operations
4,264
3,901
363
9.3
($ in thousands except per share data)
As of March 31, 2025
As of December 31, 2024
$
%
Total investments, at fair value(2)
$
650,999
$
642,213
8,786
1.4
STRS JV total investments, at fair value
310,160
294,957
15,203
5.2
Net asset value per share
12.11
12.31
(0.20)
(1.6)
Portfolio and Investment Activity
As of March 31, 2025, the fair value of WhiteHorse Finance's investment portfolio was $651.0 million, compared with $642.2 million as of December 31, 2024. The portfolio as of March 31, 2025 consisted of 134 positions across 74 companies with a weighted average effective yield of 12.1% on income-producing debt investments. The average debt investment size (excluding investments in STRS JV (as defined below)) was $5.2 million with the overall portfolio comprised of approximately 79.4% first lien secured loans, 0.5% second lien secured loans, 0.2% unsecured loans, 3.5% equity and 16.4% in investments in STRS JV. Almost all loans were variable rate investments (primarily indexed to the Secured Overnight Financing Rate) with fixed rate securities representing only 1.3% of loans at fair value. Nearly all performing floating rate investments have interest rate floors.
During the three months ended March 31, 2025, WhiteHorse Finance made investments in seven new portfolio companies for a total of $40.8 million, added a total of $4.7 million to existing portfolio companies and net fundings of $0.6 million to revolver loans. Proceeds from sales and repayments totaled approximately $19.4 million for the three months ended March 31, 2025, driven by full repayments from PLTFRM Companies, LLC and LSCS Holdings, Inc. (d/b/a Eversana Life Science Services, LLC).
In addition to the transactions discussed above, during the three months ended March 31, 2025, WhiteHorse Finance transferred assets comprised of three new and one existing portfolio companies, totaling $17.0 million to STRS JV in exchange for cash.
Distributions
The Company's board of directors has declared a distribution of $0.385 per share with respect to the quarter ended March 31, 2025. The distribution will be payable on July 3, 2025 to stockholders of record as of June 19, 2025.
On March 7, 2025, the Company declared a distribution of $0.385 per share for the fourth quarter ended December 31, 2024, with distributions declared at or above $0.355 for the fiftieth consecutive quarter since the Company's initial public offering. The distribution was paid on April 4, 2025 to stockholders of record as of March 21, 2025.
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, 2025, at 4:30 p.m. ET on Tuesday, May 13, 2025. To access the teleconference, please dial 800-267-6316 (domestic) or +1 203-518-9783 (international) approximately 10 minutes before the teleconference's scheduled start time and reference ID #WHFQ125. 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 May 20, 2025. The teleconference replay can be accessed by dialing 800-839-1246 or +1 402-220-0464 for international callers. 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 $69 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 $106.7 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 for the quarters ended March 31, 2025 and March 31, 2024.
The following table provides a reconciliation of net investment income to core net investment income for the three months ended March 31, 2025 and March 31, 2024 (in thousands, except per share data):
March 31, 2025
March 31, 2024
Amount
Per Share
Amount
Per Share
Amounts
Amounts
Net investment income
$
6,843
$
0.294
$
10,815
$
0.465
Net impact of costs associated with refinancing of indebtedness
-
-
-
-
Accrual for capital gains incentive fee
-
-
-
-
Net impact of excise tax expense related to net realized gains and losses
