Whitehorse Finance, Inc. · NASDAQ:WHF
Whitehorse Finance — Q2 2024 Earnings Presentation
24 slides from Whitehorse Finance's earnings presentation, Aug 8, 2024
Slide 1: WhiteHorse Finance, Inc. Earnings Presentation
WhiteHorse Finance, Inc. Earnings Presentation Quarter Ended June 30, 2024 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: $272.9MM(1) NAV / Share: $13.45(2) Portfolio Fair Value: $660.0MM Current Dividend Yield: 13.1%(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: $2,661MM(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 $660.0 million in Q2 2024 as compared with $697.9 million in Q1 2024. The Company made gross investment deployments in seven new portfolio companies for a total of $47.4 million and made add-on investments to nine portfoli
Slide 7: Quarterly Operating Highlights
Quarterly Operating Highlights Unaudited Quarterly Financials Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 (USD in MM, except per share data) Total Investment Income(1) $ 26.2 $ 25.6 $ 25.9 $ 25.6 $ 25.5 $ 23.5 Expenses Interest Expense 7.5 7.3 7.6 7.5 7.4 7.1 Base Management Fees 3.7 3.7 3.7 3.6
Slide 8: Quarterly Balance Sheet Highlights
Quarterly Balance Sheet Highlights Unaudited Quarterly Financials Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 (USD in MM, except per share data) Assets Investments at Fair Value $ 749.2 $ 728.4 $ 706.8 $ 696.2 $ 697.9 $ 660.0 Cash and Equivalents(1) 22.2 23.1 29.8 24.5 20.9 21.8 Other Assets 9.6
Slide 9: Portfolio Highlights
Portfolio Highlights ($ in MM, except per share data) Portfolio Investment Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Total Fair Value of Investments $ 749.2 $ 728.4 $ 706.8 $ 696.2 $ 697.9 $ 660.0 Number of Portfolio Investments 116 116 109 116 120 125 Number of Portfolio Companies 70 70 69 72
Slide 10: Portfolio Trends
Portfolio Trends Historical Portfolio Trends % Floating and % Fixed (Based on Fair Value) % Instrument Type (Based on Fair Value) 0.1% 0.2% 0.4% 0.4% 0.9% 1.2% 100% 100.0% 9% 3% 6% 7% 3% 9% 3% 3% 15% 16% 21% 11% 4% 3% 80% 2% 2% 4% 80.0% 1% 39% 60.0% 60% 99.9% 100.0% 100.0% 99.8% 99.6% 99.6% 99.1% 98
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. Application Software Commodity Chemicals Sleep OpCo LLC ABB/Con-cise Optical Group LLC Data Processing & Outsourced Services Air Fr
Slide 12: Effective Yield & Dividend Coverage
Effective Yield & Dividend Coverage Debt Portfolio Effective Yield and Borrower Leverage(1) From IPO to June 30, 2024 15.5% 14.9% 13.6%13.7%13.7%13.8% 13.1% 13.2%13.4% 12.6% 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%10.7%11.3%11.4% 11.1% 11
Slide 13: Yield & Interest Rate Economic Analysis
Yield & Interest Rate Economic Analysis 16.0% 13.6% 13.7% 13.7% 13.8% 14.0% 13.4% 13.2% 12.6% 13.1% 13.2% 13.2% 13.2% 12.0% 11.4% 12.9% 12.6% 12.1% 9.9% 9.9% 9.9% 9.6% 9.5% 10.8% 10.0% 9.3% 9.2% 9.1% 9.4% 9.4% 9.4% 9.1% 9.0% 8.0% 8.8% 8.6% 8.8% 7.2% 7.4% 7.1% 7.1% 7.1% 7.1% 7.2% 6.8% 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 2021 2022 2023 Q1 2024 Q2 2024 1 6.3% 2.3% 22.2% 15.4% 8.6% 18.3% 14.3% 12.8% 2 100.0% 92.4% 100.0% 90.3% 87.0% 83.9% 80.1% 83.3% 61.1% 74.7% 66.2% 59.4% 6
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 15.35 15.23 15.23 15.10 14.21 15.00 15.16 15.04 13.63 14.03 $14.00 13.98 14.30 13.63 13.33 13.45 $12.00 $10.00 $8.00 $6.00 $4.00 $2.00 $0.00 Net Asset Value If No Special Dividends Were Paid *As a supplement
Slide 16: NAV Per Share Bridge
NAV Per Share Bridge Note: Numbers may not foot due to rounding. Core net investment income is a non-GAAP financial measure. The Company believes that core net investment income provides useful information to investors and management because it reflects the Company's financial performance excluding
Slide 17: Leverage Migration
Leverage Migration ($ in MM) 03/31/2024 Quarterly Change 06/30/2024 Outstanding Debt: Outstanding Debt: $394.5 ($31.9) $362.6 Driven by paydowns and sales of portfolio investments NAV: NAV: $313.8 ($1.1) $312.7 Driven by net realized and unrealized losses Leverage Ratio: Leverage Ratio: 1.26x 1.16x
Slide 18: Funding Profile
Funding Profile Current Debt Outstanding (as of June 30, 2024) ($ in MM) Commitment Outstanding(1) Weighted Average Interest Rate Maturity $335.0 S+2.500% Revolving Credit Facility $168.1 2025 (Accordion Feature up to $375) payable quarterly 5.375% 5.375% 2025 Notes $40.0 $40.0 2025 payable semi-ann
Slide 19: Appendix
Appendix fay WHITEHORSE 18 FINANCE
Slide 20: Regional Direct Origination Footprint
Regional Direct Origination Footprint Origination Footprint (as of June 30, 2024) Scope of H.I.G. WhiteHorse market coverage results in consistent investment activity levels regardless of market conditions Dedicated direct lending team of approximately 70 investment and origination professionals
Slide 21: STRS JV Key Terms and Funding Profile
STRS JV Key Terms and Funding Profile ($ 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 owners
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) IT Consulting & Other Services Environmental & Facilities Services Marlin DTC-LS Midco 2, LLC Source Code Holdings, LLC Diversified Support Services Broadline Retail
Slide 23: Origination Pipeline Funnel
Origination Pipeline Funnel(1) Three tier sourcing platform, generating meaningful investable opportunities for WhiteHorse Finance 20+ person business development Approximately 70 WhiteHorse deal team seeks opportunities from Deals being sourced by over 500 professionals dedicated to sourcing H.I.G.
Slide 24: Corporate Data
Corporate Data Board of Directors Investment Committee Corporate Executive Officers Research Coverage Corporate Counsel John Bolduc Sami Mnaymneh Stuart Aronson Bryce Rowe Dechert LLP Chairman of the Board Co-Founder, Co-Executive Chairman and Chief Executive Officer B. Riley FBR New York, NY CEO of