Whitehorse Finance, Inc. · NASDAQ:WHF
Whitehorse Finance — Q3 2023 Earnings Presentation
24 slides from Whitehorse Finance's earnings presentation, Nov 9, 2023
Slide 1: WhiteHorse Finance, Inc. Earnings Presentation
WhiteHorse Finance, Inc. Earnings Presentation Quarter Ended September 30, 2023 NASDAQ: WHF (Common Stock) NASDAQ: WHFCL (7.875% Notes due 2028)
Slide 2: Important Information and Forward Looking Statements
Important Information and Forward Looking Statements References in this presentation to “WHF”, “WhiteHorse Finance”, “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 recomme
Slide 3: WhiteHorse Finance Snapshot
WhiteHorse Finance Snapshot Company: WhiteHorse Finance, Inc. Equity Ticker: NASDAQ: WHF Market Cap: $284.5MM(1) NAV / Share: $13.87(2) Portfolio Fair Value: $706.8MM Current Dividend Yield: 11.8%(1)(3); consistent quarterly dividends at or above $0.355 per share since 2012 IPO External Manager: Aff
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 (the “Investment Adviser”), an affiliate of H.
Slide 5: Overview of WhiteHorse Finance, Inc. (continued)
Overview of WhiteHorse Finance, Inc. (continued) Investment Strategy Summary Stats: Invested Capital since IPO: $2,514MM(1) Generate attractive risk-adjusted returns in all market conditions by originating and investing in senior secured loans to performing lower middle market companies and levera
Slide 6: Summary of Quarterly Results
Summary of Quarterly Results Total investments at fair value decreased to $706.8 million in Q3 2023 as compared with $728.4 million in Q2 2023. The Company made investments in two new portfolio companies for gross deployments of $8.4 million and made add-on investments totaling $12.2 million.
Slide 7: Quarterly Operating Highlights
Quarterly Operating Highlights Unaudited Quarterly Financials Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 (USD in MM, except per share data) Total Investment Income(1) $ 20.0 $ 21.6 $ 25.9 $ 26.2 $ 25.6 $ 25.9 Expenses Interest Expense 4.9 5.6 6.6 7.5 7.3 7.6 Base Management Fees 3.9 3.9 3.9 3.7
Slide 8: Quarterly Balance Sheet Highlights
Quarterly Balance Sheet Highlights Unaudited Quarterly Financials Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 (USD in MM, except per share data) Assets Investments at Fair Value $ 766.5 $ 764.6 $ 760.2 $ 749.2 $ 728.4 $ 706.8 Cash and Equivalents(1) 18.6 19.3 26.3 22.2 23.1 29.8 Other Assets 14.
Slide 9: Portfolio Highlights
Portfolio Highlights ($ in MM, except per share data) Portfolio Investment Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Total Fair Value of Investments $ 766.5 $ 764.6 $ 760.2 $ 749.2 $ 728.4 $ 706.8 Number of Portfolio Investments 105 107 115 116 116 109 Number of Portfolio Companies 68 68 72 70
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% 0.2% 0.4% 0.4% 0.9% 100.0% 3% 7% 9% 6% 7% 9% 3% 3% 13% 15% 21% 11% 4% 3% 3% 3% 3% 2% 80.0% 2% 33% 39% 60.0% 99.8% 99.9% 100.0% 100.0% 99.8% 99.6% 99.6% 99.1% 40
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. Broadline Retail Application Software Bulk Midco, LLC Sleep OpCo LLC Commodity Chemicals Office Services & Supplies ABB/Con-cise Op
Slide 12: Effective Yield & Dividend Coverage
Effective Yield & Dividend Coverage Debt Portfolio Effective Yield and Borrower Leverage(1) From IPO to September 30, 2023 15.5% 14.9% 13.6% 13.1% 13.2%13.4% 12.6% 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% 11.1% 11.3%11.4% 11.3%11.1% 11.4% 10.7% 10
Slide 13: Yield & Interest Rate Economic Analysis
Yield & Interest Rate Economic Analysis 13.4% 13.6% 14.0% 13.2% 12.6% 12.9% 13.1% 12.0% 11.4% 12.6% 10.4% 12.1% 9.9% 9.9% 9.9% 9.9% 9.6% 9.6% 9.5% 10.8% 10.0% 9.3% 9.1% 9.2% 10.0% 9.5% 9.4% 9.4% 9.4% 9.1% 9.1% 9.0% 8.0% 8.8% 8.6% 8.8% 7.1% 7.1% 7.1% 7.1% 6.8% 6.2% 6.1% 5.7% 5.7% 5.7% 5.7% 5.7% 5.9%
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 2022 Q1 2023 Q2 2023 Q3 2023 1 6.3% 2.3% 22.2% 15.4% 8.6% 12.3% 14.3% 19.5% 2 100.0% 92.4% 100.0% 90.3% 87.0% 83.9% 80.1% 83.3% 61.1% 74.7% 66.2% 60.9
Slide 15: Net Asset Value Trends
Net Asset Value Trends Net Asset Value Per Share $18.00 15.56 $16.00 15.43 15.55 15.30 14.81 14.45 15.16 15.35 15.23 15.23 15.10 15.00 15.04 $14.00 13.63 13.98 14.30 13.87 13.33 $12.00 $10.00 $8.00 $6.00 $4.00 $2.00 $0.00 Net Asset Value If No Special Dividends Were Paid Net Asset Value *As a supple
Slide 16: NAV Per Share Bridge
NAV Per Share Bridge Dividend Coverage: $0.10 Net Realized and Unrealized losses: ($0.23) Note: Numbers may not foot due to rounding. Core net investment income is a non-GAAP financial measure. The Company believes that core net investment income provides useful information to investors and manageme
Slide 17: Leverage Migration
Leverage Migration ($ in MM) 06/30/2023 Quarterly Change 09/30/2023 Outstanding Debt: Outstanding Debt: $428.6 ($25.5) $403.1 Driven by net paydowns and sales of portfolio investments NAV: NAV: $325.3 ($3.0) $322.3 Driven by net realized and unrealized losses Sources Uses Leverage Ratio: Leverage Ra
Slide 18: Funding Profile
Funding Profile Current Debt Outstanding (as of September 30, 2023) ($ in MM) Commitment Outstanding(1) Weighted Average Interest Rate Maturity $335.0 S+2.500% Revolving Credit Facility $208.6 2025 (Accordion Feature up to $375) payable quarterly 5.375% 5.375% 2025 Notes $40.0 $40.0 2025 payable sem
Slide 19: Appendix
Appendix fay WHITEHORSE 18 FINANCE
Slide 20: Regional Direct Origination Footprint
Regional Direct Origination Footprint Origination Footprint (as of September 30, 2023) Scope of H.I.G. WhiteHorse market coverage results in consistent investment activity levels regardless of market conditions Dedicated direct lending team of 67 investment and origination professionals Region
Slide 21: STRS JV Key Terms and Funding Profile
STRS JV Key Terms and Funding Profile ($ in MM) WHF and STRS Ohio have committed to provide up to $175 million in subordinated notes and equity to STRS JV, with STRS Ohio providing $60 million and WHF providing $115 million. WHF and STRS Ohio share voting control 50%/50%. Key Terms Equity owne
Slide 22: 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) Marlin DTC-LS Midco 2, LLC Source Code Holdings, LLC IT Consulting & Other Services Environmental & Facilities Services Meta Buyer LLC RCKC Acquisitions LLC Broadlin
Slide 23: 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 over 500 professionals dedicated to sourcing H.I.G.’s propri
Slide 24: 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 Co-Founder and Co-CEO of H.I.G. Capital Chief Executive Officer B. Riley FBR New York, NY Stuart Aronson