Whitehorse Finance, Inc. · NASDAQ:WHF
Whitehorse Finance — Q1 2021 Earnings Presentation
25 slides from Whitehorse Finance's earnings presentation, May 10, 2021
Slide 1: WhiteHorse Finance, Inc. Earnings Presentation
WhiteHorse Finance, Inc. Earnings Presentation Quarter Ended March 31, 2021 NASDAQ: WHF (Common Stock) NASDAQ: WHFBZ (6.50% Notes due 2025)
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: $320.3MM(1) NAV / Share: $15.27 Portfolio Fair Value: $617.0MM Current Dividend Yield: 9.1%(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: $1,936MM(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 $617.0 million in Q1 2021 as compared to $690.7 million in Q4 2020. ▪ The Company made investments in five new portfolio companies for gross deployments of $45.9 million as well as funded add-on investments totaling $11.8 mi
Slide 7: Quarterly Operating Highlights
Quarterly Operating Highlights Unaudited Quarterly Financials Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 (USD in MM, expect per share data) (1) Total Investment Income $ 17.4 $ 14.5 $ 13.8 $ 16.5 $ 16.8 $ 18.0 Expenses Interest Expenses 3.7 3.7 3.2 2.8 3.5 3.8 (2) Base Management Fees 3.1 3.1 2.9 3.1 3.4 3
Slide 8: Quarterly Balance Sheet Highlights
Quarterly Balance Sheet Highlights Unaudited Quarterly Financials Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 (USD in MM, expect per share data) Assets Investments at Fair Value $ 589.7 $ 557.1 $ 547.4 $ 595.3 $ 690.7 $ 617.0 (1) Cash and Equivalents 27.5 28.1 20.9 22.9 15.9 24.5 Other Assets 14.0 6.7 6.6 7
Slide 9: Portfolio Highlights
Portfolio Highlights ($ in MM, except per share data) Portfolio Investm ent Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Total Fair Value of Investments $ 589.7 $ 557.1 $ 547.4 $ 595.3 $ 690.7 $ 617.0 Number of Portfolio Investments 66 65 68 73 99 90 Number of Portfolio Companies 51 52 53 54 67 6
Slide 10: Portfolio Trends
Portfolio Trends Historical Portfolio Trends % Floating and % Fixed (Based on Fair Value) % Instrument Type (Based on Fair Value) 0.2% 0.1% 5% 5% 7% 9% 3% 6% 7% 9% 3.9% 2.9% 0.2% 0.4% 3% 100.0% 3% 4% 21% 11% 4% 2% 80.0% 40% 43% 33% 39% 60.0% 96.1% 97.1% 99.8% 99.9% 100.0% 100.0% 99.8% 99.6% 40.0% 81
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) Health Care Services Internet & Direct Marketing Retail STRS JV Future Payment Technologies, L.P. Data Processing & Outsourced Services Technology Hardware, Storage & Periph
Slide 12: Effective Yield & Dividend Coverage
Effective Yield & Dividend Coverage Debt Portfolio Effective Yield and Borrower Leverage(1) From IPO to March 31, 2021 15.5% 14.9% 13.1% 12.1% 11.8% 11.8% 11.9% 11.9% 11.9% 12.0% 12.0% 11.9% 11.9% 11.8% 11.7% 11.7% 11.6% 11.8% 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 14.0% 11.9% 11.9% 11.9% 12.0% 12.0% 11.9% 11.9% 11.7% 12.0% 11.3% 11.1% 10.4% 11.5% 11.5% 9.9% 9.9% 9.9% 11.4% 11.5% 11.5% 11.4% 11.5% 11.4% 9.6% 9.6% 10.0% 11.0% 10.7% 10.0% 7.5% 7.5% 7.8% 9.5% 9.4% 9.4% 8.0% 7.2% 7.1% 9.1% 9.1% 6.8% 6.7% 6.0% 6.2% 6.1% 5.7%
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 Q1 2021 1 6.3% 2.3% 22.2% 21.9% 2 100.0% 92.4% 100.0% 90.3% 87.0% 83.9% 80.1% 83.3% 61.1% 62.4% 3 7.6% 7.9% 13.0% 16.1% 13.6% 13.1% 15.0% 14.1% 4 0.0% 0.0%
Slide 15: Net Asset Value Trends
Net Asset Value Trends Net Asset Value Per Share $16.00 $15.59 $15.55 $15.43 $15.50 15.30 15.23 15.35 15.27 15.16 15.23 $15.00 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 measures, the
Slide 16: NAV Per Share Bridge
NAV Per Share Bridge Dividend Coverage: $0.02 Net Realized and Unrealized Gains: $0.03 Note: Numbers may not foot due to rounding. Core net investment income is a non-GAAP financial measure. The Company believes that core net investment income provides useful information to investors and management
Slide 17: Leverage Migration
Leverage Migration ($ in MM) 12/31/2020 QtQ Change 03/31/2021 Outstanding Debt: Outstanding Debt: $390.2 ($50.6) $339.6 Driven by paydowns and sales of portfolio investments NAV: NAV: $312.9 +$1.4 $314.3 Driven by higher accelerated accretion income due to higher repayment activity Leverage Ratio: L
Slide 18: Funding Profile
Funding Profile ($ in MM) Current Debt Outstanding (as of March 31, 2021) Weighted Average Interest ($ in MM) Commitment Outstanding(1) Maturity Additional Information Rate $285.0 L+2.50% Revolving Credit Facility $214.6 2024 ($65 Accordion Feature) payable quarterly 6.00% 2023 Private Notes $30.0 $
Slide 19: Appendix
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Slide 20: COVID-19 Portfolio Exposure 1Q21
COVID-19 Portfolio Exposure 1Q21 ($ in MM) WhiteHorse Finance, Inc. STRS JV Low, 62.6% Low, 6.4% STRS JV, 9.0% High, 0.7% High, 8.1% Moderate, 16.6% Moderate, 0.8% Low/Moderate, 1.1% Low/Moderate, 3.6% WHF Fair Value % of FV STRS JV Fair Value % of FV Very High $ - 0.0% Very High $ - 0.0% High 50.2
Slide 21: Regional Direct Origination Footprint
Regional Direct Origination Footprint Origination Footprint (March 31, 2021) ▪ Scope of H.I.G. WhiteHorse market coverage results in consistent investment activity levels regardless of market conditions ▪ Dedicated direct lending team of over 50 investment and origination professionals ▪ Regional fo
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 $125 million in subordinated notes and equity to STRS JV, with STRS Ohio providing $50 million and WHF providing $75 million. ▪ WHF and STRS Ohio share voting control 50%/50%. Key Terms ▪ Equity owner
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 Construction & Engineering Marlin DTC-LS Midco 2, LLC (Clarus) SFP Holding, Inc. (Summit) Building Products Internet & Direct Marketing Retail
Slide 24: Origination Pipeline Funnel
Origination Pipeline Funnel(1) Three tier sourcing platform, generating meaningful investable opportunities for WhiteHorse Finance 24 person business development Over 50 WhiteHorse deal team seeks opportunities from Deals being sourced by professionals dedicated to sourcing H.I.G.’s proprietary data
Slide 25: Corporate Data
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 Stuart A