Whitehorse Finance, Inc. · NASDAQ:WHF
Whitehorse Finance — Q3 2021 Earnings Presentation
25 slides from Whitehorse Finance's earnings presentation, Nov 9, 2021
Slide 1: WhiteHorse Finance, Inc. Earnings Presentation, Quarter Ended September 30, 2021
WhiteHorse Finance, Inc. Earnings Presentation Quarter Ended September 30, 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: $355.6MM(1) NAV / Share: $15.46 Portfolio Fair Value: $687.1MM Current Dividend Yield: 9.2%(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: $2,120MM(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 increased to $687.1 million in Q3 2021 as compared to $670.5 million in Q2 2021. The Company made investments in four new portfolio companies for gross deployments of $47.9 million, refinancings to three portfolio companies of $39.8 mi
Slide 7: Quarterly Operating Highlights
Quarterly Operating Highlights Unaudited Quarterly Financials Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 (USD in MM, expect per share data) Total Investment Income (1) $ 13.8 $ 16.5 $ 16.8 $ 18.0 $ 17.3 $ 18.4 Expenses Interest Expense 3.2 2.8 3.5 3.8 3.8 3.8 Base Management Fees 2.9 3.1 3.4 3.
Slide 8: Quarterly Balance Sheet Highlights
Quarterly Balance Sheet Highlights Unaudited Quarterly Financials Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 (USD in MM, expect per share data) Assets Investments at Fair Value $ 547.4 $ 595.3 $ 690.7 $ 617.0 $ 670.5 $ 687.1 Cash and Equivalents(1) 20.9 22.9 15.9 24.5 17.8 16.6 Other Assets 6.6
Slide 9: Portfolio Highlights
Portfolio Highlights ($ in MM, except per share data) Portfolio Investment Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Total Fair Value of Investments $ 547.4 $ 595.3 $ 690.7 $ 617.0 $ 670.5 $ 687.1 Number of Portfolio Investments 68 73 99 90 97 99 Number of Portfolio Companies 53 54 67 62 67 65
Slide 10: Portfolio Trends
Portfolio Trends Historical Portfolio Trends % Floating and % Fixed (Based on Fair Value) % Instrument Type (Based on Fair Value) 5% 5% 7% 9% 3% 6% 7% 3.9% 2.9% 0.2% 0.1% 0.2% 0.4% 3% 11% 100.0% 3% 3% 21% 11% 4% 4% 40% 43% 33% 80.0% 39% 60.0% 96.1% 97.1% 99.8% 99.9% 100.0% 100.0% 99.8% 99.6% 81% 85%
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, LP Building Products Data Processing & Outsourced Services What If Holdings, LLC
Slide 12: Effective Yield & Dividend Coverage
Effective Yield & Dividend Coverage Debt Portfolio Effective Yield and Borrower Leverage(1) From IPO to September 30, 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% 11.1% 11.3% 11.4% 11.3% 11.1% 10.7% 10.4% 9.9% 9.9%
Slide 13: Yield & Interest Rate Economic Analysis
Yield & Interest Rate Economic Analysis 11.9% 12.0% 12.0% 11.9% 11.9% 11.7% 12.0% 11.3% 11.1% 10.4% 11.5% 11.5% 11.5% 11.4% 11.5% 9.9% 9.9% 9.9% 11.4% 9.6% 9.6% 9.5% 10.0% 11.0% 9.3% 10.7% 10.0% 7.8% 9.5% 9.4% 9.4% 8.0% 7.2% 7.1% 9.1% 9.1% 9.0% 8.8% 6.8% 6.7% 6.2% 6.1% 6.0% 5.7% 5.7% 5.7% 5.7% 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 Q2 2021 Q3 2021 1 6.3% 2.3% 22.2% 21.9% 22.7% 21.6% 2 100.0% 92.4% 100.0% 90.3% 87.0% 83.9% 80.1% 83.3% 61.1% 62.4% 67.3% 67.3% 3 7.6% 7.9% 13.0% 1
Slide 15: Net Asset Value Trends
Net Asset Value Trends Net Asset Value Per Share $16.00 $15.78 $15.55 $15.43 $15.50 15.46 15.30 15.23 15.35 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: $0.01 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) 6/30/2021 Quarterly Change 9/30/2021 Outstanding Debt: Outstanding Debt: $363.5 $21.1 $384.6 Driven by net borrowings to fund new investments NAV: NAV: $319.6 +$4.1 $323.7 Driven by shares issued from DRIP and ATM offering Leverage Ratio: Leverage Ratio: Sources Uses 1.1
Slide 18: Funding Profile
Funding Profile Current Debt Outstanding (as of September 30, 2021) ($ in MM) Commitment Outstanding(1) Weighted Average Interest Rate Maturity Additional Information $285.0 L+2.35% Revolving Credit Facility $259.6 2025 ($65 Accordion Feature) payable quarterly 6.00% 2023 Private Notes $30.0 $30.0 p
Slide 19: Appendix
Appendix Pay WWEITTEHORSE 18 FINANCE
Slide 20: COVID-19 Portfolio Exposure as of September 30, 2021
COVID-19 Portfolio Exposure as of September 30, 2021 ($ in MM) WhiteHorse Finance, Inc. STRS JV Post‐Covid Origination 20.6% Low Low Post‐Covid 6.9% 45.7% Origination STRS JV 2.0% 10.5% High High 0.6% 5.7% Moderate Moderate 0.7% 14.2% Low/Moderate 0.3% Low/Moderate 3.3% WHF Fair Value % of FV STRS J
Slide 21: Regional Direct Origination Footprint
Regional Direct Origination Footprint Origination Footprint (as of September 30, 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 60 investment and origination professionals R
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) IT Consulting & Other Services Packaged Foods & Meats Cennox, Inc Geo Logic Systems Ltd Building Products Data Processing & Outsourced Services Marlin DTC-LS Midco 2
Slide 24: 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 professionals dedicated to sourcing H.I.G.’s proprietary dat
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