Whitehorse Finance, Inc. · NASDAQ:WHF
Whitehorse Finance — Q4 2020 Earnings Presentation
25 slides from Whitehorse Finance's earnings presentation, Mar 2, 2021
Slide 1: Earnings Presentation Quarter Ended December 31, 2020
Earnings Presentation Quarter Ended December 31, 2020 WhiteHorse Finance, Inc. NASDAQ: WHF (Common Stock) NASDAQ: WHFBZ (6.50% Notes due 2025)
Slide 2: Forward Looking Statements
1 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 a n o ffer to enter into any transaction with the Company or a
Slide 3: WhiteHorse Finance Snapshot
2 WhiteHorse Finance Snapshot Company: WhiteHorse Finance, Inc. (“WhiteHorse Finance” or the “Company”) : Equity Ticker: NASDAQ: WHF Market Cap: $301.6MM (1) NAV / Share: $15.23 Portfolio Fair Value: $690.7MM Current Dividend Yield: 9.7% (1)(2) ; consistent quarterly dividends of $0.355 per share si
Slide 4: Overview of WhiteHorse Finance, Inc.
Overview of WhiteHorse Finance, Inc. 3 Portfolio at Fair Value ($MM) NAV + Cumulative Dividends per share Note: As of December 31 st of each respective year presented, unless otherwise noted. (1) Based on total capital commitments managed by H.I.G. Capital and affiliates. (2) Represents number of co
Slide 5: Overview of WhiteHorse Finance, Inc. (continued)
4 Overview of WhiteHorse Finance, Inc. (continued) Note: As of Dec ember 31, 2020 unless otherwise noted. (1) Reflects life - to - date since IPO, and may exclude follow - on transactions and investments in STRS JV made via asset transfers in - k ind. (2) Across 97 investments. Does not include inve
Slide 6: Summary of Quarterly Results
5 Summary of Quarterly Results Fiscal Quarter Highlights ▪ Total investments at fair value increased to $690.7 million in Q4 2020 as compared to $595.3 million in Q3 2020. ▪ The Company made investments in sixteen new portfolio companies for gross deployments of $158.9 million as well as funded add
Slide 7: Quarterly Operating Highlights
6 Quarterly Operating Highlights Note: N umbers may not foot due to rounding. (1) Total investment income includes investment income (e.g., interest and dividends) from investments in STRS JV. (2) Net of fee waivers, if any. (3) Core net investment income is a non - GAAP financial measure. The Compa
Slide 8: Quarterly Balance Sheet Highlights
7 Quarterly Balance Sheet Highlights Note: Numbers may not foot due to rounding (1) Includes Restricted Cash. (2) Calculated as Total Gross Debt Outstanding divided by Total Net Assets. (3) Net Leverage Ratio is defined as debt outstanding less cash, divided by total net assets. (4) Fundings, exits
Slide 9: Portfolio Highlights
Portfolio Highlights 8 Note: Not a guarantee of future performance or investment pace. (1) Does not include investments in STRS JV. (2) Calculated based on funded principal amounts of debt investments. ( 3) Weighted average effective yield is computed by dividing (a) annualized interest income (incl
Slide 10: Portfolio Trends
Portfolio Trends Historical Portfolio Trends 9 % Floating and % Fixed (Based on Fair Value) % Instrument Type (Based on Fair Value) % Sponsored / Non - Sponsored (Based on Fair Value) % Non Accruals (Based on Fair Value of Debt Investments) (1) Note: As of end of each year/quarter presented, unless
Slide 11: Borrower and Industry Diversity
10 Note: As of December 31, 2020, unless otherwise noted; percentages may not add up to 100% due to rounding. (1) Does not include investments in STRS JV. Industry classifications based on GICS. Composition by Borrower (Based on Fair Value) Composition by Industry (1) (Based on Fair Value) 100% of W
Slide 12: Effective Yield & Dividend Coverage
Effective Yield & Dividend Coverage Debt Portfolio Effective Yield and Borrower Leverage (1) From IPO to December 31, 2020 11 Core NII (2) to Dividend Coverage (3) Note: Amounts may not foot due to rounding. (1) Portfolio leverage is based on investment leverage at inception. (2) Core net investment
Slide 13: Yield & Interest Rate Economic Analysis
Yield & Interest Rate Economic Analysis 12 (1) Weighted average effective yield is computed by dividing (a) annualized interest income (including interest income resulting fro m the amortization of fees and discounts) by (b) the weighted average cost of investments. (2) Income yield is calculated as
Slide 14: Investment Performance Ratings
Investment Performance Ratings 13 Investment Performance Ratings (% of Portfolio at Fair Value) Rating 2012 2013 2014 2015 2016 2017 2018 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 1 6.3% 2.3% 2.2% 2.3% 14.4% 22.2% 2 100.0% 92.4% 100.0% 90.3% 87.0% 83.9% 80.1% 83.3% 65.3% 61.9% 62.1% 61.1% 3 7.6% 7.9% 13.
Slide 15: Net Asset Value Trends
Net Asset Value Trends 14 *As a supplement to GAAP financial measures, the Company has provided this non - GAAP measure. The Company believes that this non - GAAP financial measure is useful as it highlights the changes in NAV per share of common stock for each quarter excluding the impact of specia
Slide 16: NAV Per Share Bridge
NAV Per Share Bridge 15 Net Realized and Unrealized Gains : $0.06 Note: N umbers 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 management because it reflect
Slide 17: Leverage Migration
Leverage Migration 16 9/30/2020 QtQ Change 12/31/2020 Outstanding Debt: Outstanding Debt: $296.1 +$94.1 $390.2 Net borrowings to fund purchases NAV: NAV: $314.6 ($1.7) $312.9 Driven by special dividend Leverage Ratio: Leverage Ratio: 0.94x 1.25x Note: Numbers may not foot due to rounding. ($ in MM)
Slide 18: Current Debt Outstanding
Note: As of end of each quarter presented, unless otherwise noted. Not a guarantee of future performance or investment pace. (1) As of December 31, 2020 WHF had $5.4MM of deferred debt issuance costs. (2) Gross leverage excluding cash. 3 Current Debt Outstanding (as of Dece mber 31, 2020) ($ in MM)
Slide 19: WhiteHorse Finance
48 fay \WEILTEHORSE FINANCE
Slide 20: COVID - Portfolio Exposure 4Q20
19 COVID - 19 Portfolio Exposure 4Q20 WhiteHorse Finance, Inc. STRS JV Note: Fair values are as of December 31, 2020 and may not foot due to rounding; percentages may not add up to 100% due to rou ndi ng. (1) Categories of High, Moderate, Low/Moderate and Low can and will change over time as more da
Slide 21: Origination Footprint (December, 2020)
Origination Footprint ( Decem ber 31 , 2020) Regional Direct Origination Footprint ▪ Scope of H.I.G. WhiteHorse market coverage results in consistent investment activity levels regardless of market conditions ▪ Dedicated direct lending team of over 45 investment and origination professionals ▪ Regio
Slide 22: STRS JV Key Terms and Funding Profile
Note: As of end of each quarter presented, unless otherwise noted. Not a guarantee of future performance or investment pace. May not foot due to rounding. (1) As of Dec ember 31, 2020 STRS JV had $ 1.5 of deferred debt issuance costs. 3 ($ in MM) Commitment Outstanding (1) Weighted Average Interest
Slide 23: STRS JV Borrower and Industry Diversity
22 Note: As of December 31, 2020, unless otherwise noted; percentages may not add up to 100% due to rounding. (1) Industry classifications based on GICS. Composition by Borrower (Based on Fair Value) Composition by Industry (1) (Based on Fair Value) 100% of STRS JV loans are senior secured STRS JV B
Slide 24: Origination Pipeline Funnel
Origination Pipeline Funnel (1) 23 Note: Percentages may not add up to 100% due to rounding. (1) Origination Pipeline figures reflect 2014 through December 31, 2020. Three tier sourcing platform, generating meaningful investable opportunities for WhiteHorse Finance Over 45 WhiteHorse deal profession
Slide 25: Corporate Data
24 Corporate Data Board of Directors Investment Committee Corporate Officers Research Coverage Corporate Counsel John Bolduc Sami Mnaymneh Stuart Aronson Sarkis Sherbetchyan Dechert LLP Chairman of the Board Founder and Co-CEO of H.I.G. Capital Chief Executive Officer B. Riley FBR New York, NY Stuar