Whitehorse Finance, Inc. · NASDAQ:WHF
Whitehorse Finance — Q1 2022 Earnings Presentation
25 slides from Whitehorse Finance's earnings presentation, May 10, 2022
Slide 1: WhiteHorse Finance, Inc. Earnings Presentation
WhiteHorse Finance, Inc. Earnings Presentation Quarter Ended March 31, 2022 NASDAQ: WHF (Common Stock)
Slide 2: Important Information and Forward Looking Statements
Important Information and Forward Looking Statements References in this presentation to “WHF”, “we”, “us”, “our” and “the Company” refer to WhiteHorse Finance, Inc. This presentation and the information and views included herein do not constitute investment advice, or a recommendation or an offer to
Slide 3: WhiteHorse Finance Snapshot
WhiteHorse Finance Snapshot Company: WhiteHorse Finance, Inc. (“WhiteHorse Finance” or the “Company”): Equity Ticker: NASDAQ: WHF Market Cap: $337.3MM(1) NAV / Share: $14.99 Portfolio Fair Value: $800.4MM Current Dividend Yield: 9.8%(1)(2); consistent quarterly dividends of $0.355 per share since 20
Slide 4: Overview of WhiteHorse Finance, Inc.
Overview of WhiteHorse Finance, Inc. WhiteHorse Finance, Inc. is a publicly listed Business Development Company (“BDC”) that completed its IPO in December 2012 WhiteHorse Finance’s investment activities are managed by H.I.G. WhiteHorse Advisers, LLC, an affiliate of H.I.G. Capital, a leading glo
Slide 5: Overview of WhiteHorse Finance, Inc. (continued)
Overview of WhiteHorse Finance, Inc. (continued) Investment Strategy Summary Stats: Invested Capital since IPO: $2,371MM(1) Generate attractive risk-adjusted return in all market conditions by originating and investing in senior secured loans to performing lower middle market companies and leverag
Slide 6: Summary of Quarterly Results
Summary of Quarterly Results Total investments at fair value decreased to $800.4 million in Q1 2022 as compared to $$819.2 million in Q4 2021. The Company made investments in six new portfolio companies for gross deployments of $69.5 million and made add-on investments totaling $14.1 million.
Slide 7: Quarterly Operating Highlights
Quarterly Operating Highlights Unaudited Quarterly Financials Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 (USD in MM, expect per share data) Total Investment Income (1) $ 16.8 $ 18.0 $ 17.3 $ 18.4 $ 18.5 $ 20.0 Expenses Interest Expense 3.5 3.8 3.8 3.8 5.1 4.8 Base Management Fees 3.4 3.3 3.4 3.
Slide 8: Quarterly Balance Sheet Highlights
Quarterly Balance Sheet Highlights Unaudited Quarterly Financials Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 (USD in MM, expect per share data) Assets Investments at Fair Value $ 690.7 $ 617.0 $ 670.5 $ 687.1 $ 819.2 $ 800.4 Cash and Equivalents(1) 15.9 24.5 17.8 16.6 22.5 21.3 Other Assets 12.
Slide 9: Portfolio Highlights
Portfolio Highlights ($ in MM, except per share data) Portfolio Investment Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Total Fair Value of Investments $ 690.7 $ 617.0 $ 670.5 $ 687.1 $ 819.2 $ 800.4 Number of Portfolio Investments 99 90 97 99 127 111 Number of Portfolio Companies 67 62 67 65 76
Slide 10: Portfolio Trends
Portfolio Trends Historical Portfolio Trends % Floating and % Fixed (Based on Fair Value) % Instrument Type (Based on Fair Value) 2.9% 0.2% 0.1% 0.2% 0.4% 5% 7% 9% 3% 6% 7% 9% 100.0% 0.4% 3% 13% 3% 3% 21% 11% 4% 3% 3% 3% 80.0% 43% 33% 39% 60.0% 97.1% 99.8% 99.9% 100.0% 100.0% 99.8% 99.6% 99.6% 81% 8
Slide 11: Borrower and Industry Diversity
Borrower and Industry Diversity Composition by Borrower (Based on Fair Value) Composition by Industry(1) (Based on Fair Value) STRS JV Future Payment Technologies, L.P. Health Care Services Data Processing & Outsourced Services Internet & Direct Marketing Retail Specialized Consumer Services ABB Opt
Slide 12: Effective Yield & Dividend Coverage
Effective Yield & Dividend Coverage Debt Portfolio Effective Yield and Borrower Leverage(1) From IPO to March 31, 2022 15.5% 14.9% 13.1% 11.8% 11.7% 11.7% 11.6% 11.8% 11.9% 11.9% 12.1% 11.8% 11.8% 11.9% 11.9% 11.9% 12.0% 12.0% 11.9% 11.9% 11.7% 11.3% 11.1% 11.3% 11.4% 11.1% 10.7% 10.4% 9.9% 9.6% 9.9
Slide 13: Yield & Interest Rate Economic Analysis
Yield & Interest Rate Economic Analysis 12.0% 11.9% 11.9% 11.7% 12.0% 11.3% 11.1% 10.4% 11.5% 11.4% 11.5% 11.4% 9.9% 9.9% 9.9% 9.6% 9.6% 9.5% 10.0% 11.0% 10.7% 9.3% 9.1% 9.2% 10.0% 9.5% 9.4% 9.4% 8.0% 9.1% 9.1% 9.0% 8.8% 6.8% 7.1% 8.6% 8.8% 6.7% 6.2% 6.1% 6.0% 5.7% 5.7% 5.7% 5.7% 5.7% 5.7% 5.7% 5.5%
Slide 14: Investment Performance Ratings
Investment Performance Ratings Investment Performance Ratings (% of Portfolio at Fair Value) Rating 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Q1 2022 1 6.3% 2.3% 22.2% 15.4% 11.6% 2 100.0% 92.4% 100.0% 90.3% 87.0% 83.9% 80.1% 83.3% 61.1% 74.7% 78.5% 3 7.6% 7.9% 13.0% 16.1% 13.6% 13.1% 15.0%
Slide 15: Net Asset Value Trends
Net Asset Value Trends Net Asset Value Per Share $16.00 15.56 15.55 15.43 15.45 $15.50 15.30 15.23 15.35 15.16 15.23 15.10 $15.00 14.99 15.00 15.04 $14.50 $14.00 13.98 13.63 $13.50 13.33 $13.00 Net Asset Value if No Special Dividends Were Paid* Net Asset Value *As a supplement to GAAP financial meas
Slide 16: NAV Per Share Bridge
NAV Per Share Bridge Dividend Coverage: ($0.02) Net Realized and Unrealized losses: ($0.12) Note: Numbers may not foot due to rounding. Core net investment income is a non-GAAP financial measure. The Company believes that core net investment income provides useful information to investors and manage
Slide 17: Leverage Migration
Leverage Migration ($ in MM) 12/31/2021 Quarterly Change 3/31/2022 Outstanding Debt: Outstanding Debt: $481.6 ($7.8) $473.8 Driven by paydowns and sales of portfolio investments NAV: NAV: $349.8 ($1.9) $347.9 Driven by net realized and unrealized losses Leverage Ratio: Sources Uses Leverage Ratio: 1
Slide 18: Funding Profile
Funding Profile Current Debt Outstanding (as of March 31, 2022) ($ in MM) Commitment Outstanding(1) Weighted Average Interest Rate Maturity $335.0 L+2.350% Revolving Credit Facility(3) $283.8 2025 (Accordion Feature up to $375) payable quarterly 6.00% 6.000% 2023 Notes $30.0 $30.0 payable semi-annua
Slide 19: Appendix
Appendix Pay WWEITTEHORSE 18 FINANCE
Slide 20: COVID-19 Portfolio Exposure as of March 31, 2022
COVID-19 Portfolio Exposure as of March 31, 2022 ($ in MM) WhiteHorse Finance, Inc. STRS JV Post-Covid Origination 36.1% Post-Covid Origination 5.3% STRS JV 12.6% Low Low 5.9% High 31.8% 0.4% High 2.1% Moderate Moderate 0.6% 14.0% Low/Moderate 0.4% Low/Moderate 3.4% WHF Fair Value % of FV STRS JV Fa
Slide 21: Regional Direct Origination Footprint
Regional Direct Origination Footprint Origination Footprint (as of March 31, 2022) Scope of H.I.G. WhiteHorse market coverage results in consistent investment activity levels regardless of market conditions Dedicated direct lending team of over 60 investment and origination professionals Regio
Slide 22: STRS JV Key Terms and Funding Profile
STRS JV Key Terms and Funding Profile ($ in MM) WHF and STRS Ohio have committed to provide up to $150 million in subordinated notes and equity to STRS JV, with STRS Ohio providing $50 million and WHF providing $100 million. WHF and STRS Ohio share voting control 50%/50%. Key Terms Equity owne
Slide 23: STRS JV Borrower and Industry Diversity
STRS JV Borrower and Industry Diversity Composition by Borrower (Based on Fair Value) Composition by Industry(1) (Based on Fair Value) Packaged Foods & Meats IT Consulting & Other Services Marlin DTC-LS Midco 2, LLC Geo Logic Systems Ltd. Technology Hardware, Storage & Peripherals Industrial Machine
Slide 24: Origination Pipeline Funnel
Origination Pipeline Funnel(1) Three tier sourcing platform, generating meaningful investable opportunities for WhiteHorse Finance 20+ person business development Over 60 WhiteHorse deal team seeks opportunities from Deals being sourced by professionals dedicated to sourcing H.I.G.’s proprietary dat
Slide 25: Corporate Data
Corporate Data Board of Directors Investment Committee Corporate Officers Research Coverage Corporate Counsel John Bolduc Sami Mnaymneh Stuart Aronson Bryce Rowe Dechert LLP Chairman of the Board Founder and Co‐CEO of H.I.G. Capital Chief Executive Officer Hovde Group New York, NY Stuart Aronson Ant