Whitehorse Finance, Inc. · NASDAQ:WHF
Whitehorse Finance — Investor Presentation (May 2018)
18 slides from Whitehorse Finance's investor presentation, May 17, 2018
Slide 1: Investor Presentation May 2018
Investor Presentation May 2018 WhiteHorse Finance, Inc. NASDAQ: WHF (Common Stock) NASDAQ: WHFBL (6.50% Senior Notes due 2020)
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 / Ticker: WhiteHorse Finance, Inc. / NASDAQ: WHF (“WhiteHorse Finance” or the “Company”) : Current Share Price: $13.90 (1) : Market Cap: $285.4MM (1 ) : Price / NAV: 0.97x (1 )(2) Portfolio Fair Value: $467.7MM (2 ) : Current Dividend Yield: 10.2% ( 1) ; consist
Slide 4: H.I.G. WhiteHorse Highlights
3 H.I.G. WhiteHorse Highlights Leading Lower Middle Market Position ▪ H.I.G. brings over 20 years of experience and ~$ 25Bn of capital committed (1) primarily across a number of synergistic lower middle market strategies Unique Deal Sourcing Infrastructure ▪ Robust direct origination platform has en
Slide 5: WhiteHorse Finance Overview
▪ Consistent, robust deal flow generated through H.I.G.’s proprietary sourcing network - Proprietary deal sourcing consisting of sponsored and non - sponsored opportunities - Experienced team able to underwrite more complex non - sponsored opportunities ▪ Over 3 ,000 opportunities reviewed and appro
Slide 6: H.I.G. Capital Overview
Note: As of March 31, 2018, unless otherwise noted (1) Based on total capital commitments managed by H.I.G. Capital and affiliates 5 H.I.G. Capital Overview ▪ Leading global alternative asset manager focused on the lower middle market , defined as companies with $50MM to $350MM of enterprise value −
Slide 7: Lower Middle Market Overview
6 Lower Middle Market Overview Unstructured and Inefficient Market ▪ Sourcing lower middle market lending opportunities requires access to an extensive network of relationships in local small - business communities (as opposed to the established investment banking sources for larger companies) Speci
Slide 8: Self-Originated Lower Middle Market vs Broadly Syndicated Market
7 Self - Originated Lower Middle Market Broadly Syndicated Market Value Add for Investors ▪ Proprietary deals with limited competition, resulting in above market risk - return dynamics ▪ Larger, more liquid investments; competition among a large number of participants often drives down yields Number
Slide 9: WhiteHorse Finance Performance Summary
WhiteHorse Finance Performance Summary Summary Stats: Invested Capital since IPO: $1,033MM (1) Number of Investments Made: ~83 (1) Average Investment Size: ~$9.7MM (2) All - in Yield : 12.0% (1) Average Net Debt / EBITDA of Portfolio Companies: ~ 3.2x (1)(3) Secured Debt as a % of Total Debt : 100%
Slide 10: WhiteHorse Finance Portfolio Investment Characteristics
9 WhiteHorse Finance Portfolio Investment Characteristics Note: As of March 31, 2018; based on fair value of investments; numbers may not foot due to rounding Produced an Average All - in Yield of 12.0% and an Average Leverage Multiple of 3.2x since 2013 Diligently Structured with Tight Covenants an
Slide 11: Attractive, High Quality Portfolio: Historical Portfolio Trends
Attractive, High Quality Portfolio Historical Portfolio Trends 10 % Floating / Fixed (Based on Fair Value ) % First Lien / % Second Lien (Based on Debt Investments) % Sponsored loans relative to total originations (1) Average Leverage through WHF’s Security (2) Note: As of end of each quarter presen
Slide 12: WhiteHorse Finance Differentiated Deal Flow
WhiteHorse Finance Differentiated Deal Flow As a result of its proprietary sourcing network, we believe the WhiteHorse Finance portfolio has generated higher yields at lower portfolio company leverage than the broader middle market Effective Yield From IPO to March 31, 2018 11 233.2 237.744 214.669
Slide 13: Origination Pipeline Funnel
Origination Pipeline Funnel (1) Closed Transactions 12 (1) Origination Pipeline figures reflect 2014 through March 31, 2018 Three tier sourcing platform, generating meaningful investable opportunities for WhiteHorse Finance Over 25 WhiteHorse deal professionals dedicated to sourcing and underwriting
Slide 14: Rigorous Credit Process
Rigorous Credit Process Institutionalized processes for evaluating, monitoring and, if necessary, working out credits Fundamental Analysis » Structured approach to deal evaluation » Assesses industry, company, management, and macro factors » Emphasizes cash flow and downside protection Investment Co
Slide 15: Appendix
i Appendix 14
Slide 16: Historical Quarterly Income Statement Highlights
Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) Total Investment Income 13.4$ 13.1$ 14.0$ 13.4$ 13.6$ 14.3$ 13.0$ 13.9$ 16.6$ Expenses Interest Expenses 1.9 2.0 2.1 2.3 2.4 2.6 2.4 2.4 2
Slide 17: Historical Quarterly Balance Sheet Highlights
16 Historical Quarterly Balance Sheet Highlights (USD amounts in millions, except per share data) Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) Assets Investments at Fair Value 417.2$
Slide 18: WhiteHorse Finance – Senior Team Bios
17 WhiteHorse Finance – Senior Team Bios Title Years of Experience Highlights John Bolduc ▪ Chairman of the Board ▪ Member of the Investment Committee 26 ▪ Leads H.I.G. Capital’s credit platform ▪ Previous experience at Bain & Company and Chemed Corporation Stuart Aronson ▪ Chief Executive Officer a
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