News Release
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WhiteHorse Finance, Inc. Announces First Quarter 2019 Earnings Results
First Quarter 2019 Summary Highlights
- Net Asset Value of
$315.0 million , or$15.33 per share - New investments of
$32.3 million - Net investment income of
$7.6 million , or$0.370 per share - Core net investment income of
$7.5 million , or$0.365 per share(1) - First quarter distribution of
$0.355 per share
(1) 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 (i) the net impact of costs associated with the refinancing of the Company's indebtedness, (ii) the accrual of the capital gains incentive fee attributable to net realized and unrealized gains and losses, and (iii) excise and other income taxes related to such net realized gains and losses (net of incentive fees). The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. Additional information on core net investment income and a reconciliation of core net investment income to its most directly comparable GAAP financial measure, net investment income, are set forth in Schedule 1 hereto. |
Portfolio and Investment Activity
As of
During the three months ended
Results of Operations
For the three months ended
For the three months ended
Liquidity and Capital Resources
As of
Distributions
On
Distributions are paid from taxable earnings and may include return of capital and/or capital gains. The specific tax characteristics of the distributions will be reported to stockholders on Form 1099-DIV after the end of the calendar year and in the Company's periodic reports filed with the
Conference Call
If you are unable to access the live teleconference, a replay will be available beginning approximately two hours after the call's completion through
About
WhiteHorse Finance is a business development company that originates and invests in loans to privately held, lower middle market companies across a broad range of industries. The Company's investment activities are managed by
Forward-Looking Statements
This press release may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in filings with the
(2) Based on total capital commitments managed by H.I.G. Capital and affiliates. |
SCHEDULE 1
As a supplement to GAAP financial measures, the Company has provided information relating to core net investment income, which is a non-GAAP measure. This measure is provided in addition to, but not as a substitute for, net investment income determined in accordance with GAAP. The Company's non-GAAP measures may differ from similar measures by other companies, even if similar terms are used to identify such measures. Core net investment income represents net investment income adjusted to exclude the net impact of costs associated with the refinancing of the Company's indebtedness, the accrual of the capital gains incentive fee attributable to net realized and unrealized gains and losses, and excise or other income taxes related to such net realized gains and losses (net of incentive fees). There were no excise and other income taxes related to net realized gains and losses for the quarter ended
The following table provides a reconciliation of net investment income to core net investment income for the three months ended
March 31, 2019 |
March 31, 2018 |
|||||||||||||||
Amount |
Per Share |
Amount |
Per Share |
|||||||||||||
Net investment income |
$ |
7,611 |
$ |
0.370 |
$ |
8,578 |
$ |
0.418 |
||||||||
Net impact of costs associated with refinancing of indebtedness |
- |
- |
- |
- |
||||||||||||
Accrual for capital gains incentive fee |
(121) |
(0.005) |
- |
- |
||||||||||||
Net impact of excise tax expense related to net realized gains and losses |
- |
- |
- |
- |
||||||||||||
Core net investment income |
$ |
7,490 |
$ |
0.365 |
$ |
8,578 |
$ |
0.418 |
WhiteHorse Finance, Inc. Consolidated Statements of Assets and Liabilities (in thousands, except share and per share data) |
||||||||
March 31, 2019 |
December 31, 2018 |
|||||||
(Unaudited) |
||||||||
Assets |
||||||||
Investments, at fair value |
||||||||
Non-controlled/non-affiliate company investments |
$ |
458,795 |
$ |
459,399 |
||||
Non-controlled affiliate company investments |
9,590 |
10,165 |
||||||
Total investments, at fair value (amortized cost $475,248 and $477,839, |
468,385 |
469,564 |
||||||
Cash and cash equivalents |
30,707 |
24,148 |
||||||
Restricted cash and cash equivalents |
6,186 |
9,584 |
||||||
Interest receivable |
6,833 |
4,616 |
||||||
Receivables from investments sold |
8,818 |
5,608 |
||||||
Prepaid expenses and other receivables |
583 |
575 |
||||||
Total assets |
$ |
521,512 |
$ |
514,095 |
||||
Liabilities |
||||||||
Debt |
$ |
176,197 |
$ |
175,953 |
||||
Management and incentive fees payable |
15,356 |
11,193 |
||||||
Distributions payable |
7,294 |
7,294 |
||||||
Payables for investments purchased |
5,093 |
445 |
||||||
Accounts payable and accrued expenses |
1,518 |
2,322 |
||||||
Interest payable |
983 |
1,562 |
||||||
Advances received from unfunded credit facilities |
64 |
30 |
||||||
Total liabilities |
206,505 |
198,799 |
||||||
Commitments and contingencies |
||||||||
Net assets |
||||||||
Common stock, 20,546,032 and 20,546,032 shares issued and outstanding, |
21 |
21 |
||||||
Paid-in capital in excess of par |
301,557 |
301,557 |
||||||
Accumulated undistributed earnings |
13,429 |
13,718 |
||||||
Total net assets |
315,007 |
315,296 |
||||||
Total liabilities and total net assets |
$ |
521,512 |
$ |
514,095 |
||||
Number of shares outstanding |
20,546,032 |
20,546,032 |
||||||
Net asset value per share |
$ |
15.33 |
$ |
15.35 |
WhiteHorse Finance, Inc. Consolidated Statements of Operations (Unaudited) (in thousands, except share and per share data) |
||||||||
Three months ended March 31, |
||||||||
2019 |
2018 |
|||||||
Investment income |
||||||||
From non-controlled/non-affiliate company investments |
||||||||
Interest income |
$ |
14,492 |
$ |
13,763 |
||||
Fee income |
1,157 |
2,192 |
||||||
From non-controlled affiliate company investments |
||||||||
Dividend income |
275 |
650 |
||||||
Total investment income |
15,924 |
16,605 |
||||||
Expenses |
||||||||
Interest expense |
3,073 |
2,565 |
||||||
Base management fees |
2,589 |
2,445 |
||||||
Performance-based incentive fees |
1,751 |
2,144 |
||||||
Administrative service fees |
158 |
175 |
||||||
General and administrative expenses |
682 |
698 |
||||||
Total expenses, before fees waived |
8,253 |
8,027 |
||||||
Base management fee waived |
(177) |
- |
||||||
Total expenses, net of fees waived |
8,076 |
8,027 |
||||||
Net investment income before excise tax |
7,848 |
8,578 |
||||||
Excise tax |
237 |
- |
||||||
Net investment income after excise tax |
7,611 |
8,578 |
||||||
Realized and unrealized gains (losses) on investments |
||||||||
Net realized losses |
||||||||
Non-controlled/non-affiliate company investments |
(2,018) |
- |
||||||
Net realized losses |
(2,018) |
- |
||||||
Net change in unrealized appreciation (depreciation) |
||||||||
Non-controlled/non-affiliate company investments |
1,988 |
(2,911) |
||||||
Non-controlled affiliate company investments |
(576) |
8,186 |
||||||
Net change in unrealized appreciation |
1,412 |
5,275 |
||||||
Net realized and unrealized losses on investments |
(606) |
5,275 |
||||||
Net increase in net assets resulting from operations |
$ |
7,005 |
$ |
13,853 |
||||
Per Common Share Data |
||||||||
Basic and diluted earnings per common share |
$ |
0.34 |
$ |
0.68 |
||||
Dividends and distributions declared per common share |
$ |
0.36 |
$ |
0.36 |
||||
Basic and diluted weighted average common shares outstanding |
20,546,032 |
20,531,948 |
WhiteHorse Finance, Inc. Consolidated Schedule of Investments (Unaudited) March 31, 2019 (in thousands) |
||||||||||||||||||||||||
Investment Type(1) |
Spread |
Interest |
Acquisition |
Maturity |
Principal/ |
Amortized |
Fair |
Fair Value |
||||||||||||||||
North America |
||||||||||||||||||||||||
Debt Investments |
||||||||||||||||||||||||
Advertising |
||||||||||||||||||||||||
Fluent, LLC |
||||||||||||||||||||||||
First Lien Secured Term Loan |
L+ 7.00% |
9.50% |
03/26/18 |
03/27/23 |
10,615 |
$ |
10,615 |
$ |
10,615 |
3.37 |
% |
|||||||||||||
(0.50% |
||||||||||||||||||||||||
Air Freight & Logistics |
||||||||||||||||||||||||
Access USA Shipping, LLC |
||||||||||||||||||||||||
First Lien Secured Term Loan |
L+ 8.00% |
10.50% |
02/08/19 |
02/08/24 |
5,833 |
5,748 |
5,742 |
1.82 |
||||||||||||||||
(1.50% |
||||||||||||||||||||||||
Automotive Retail |
||||||||||||||||||||||||
Team Car Care Holdings, LLC |
||||||||||||||||||||||||
First Lien Secured Term Loan(12) |
base rate+ |
10.51% |
02/26/18 |
02/23/23 |
17,068 |
16,768 |
16,727 |
5.31 |
||||||||||||||||
(1.00% |
||||||||||||||||||||||||
Broadcasting |
||||||||||||||||||||||||
Alpha Media, LLC |
||||||||||||||||||||||||
First Lien Secured Term Loan |
L+ 6.25% |
8.83% |
08/14/18 |
02/25/22 |
5,901 |
5,735 |
5,889 |
1.87 |
||||||||||||||||
(1.00% |
||||||||||||||||||||||||
Multicultural Radio Broadcasting, Inc. |
||||||||||||||||||||||||
First Lien Secured Term Loan |
L+ 8.00% |
10.50% |
12/28/17 |
12/28/22 |
17,412 |
17,151 |
17,272 |
5.48 |
||||||||||||||||
(1.00% |
||||||||||||||||||||||||
Rural Media Group, Inc. |
||||||||||||||||||||||||
First Lien Secured Term Loan |
L+ 7.86% |
10.60% |
12/29/17 |
12/29/22 |
6,955 |
6,851 |
6,847 |
2.17 |
||||||||||||||||
(1.00% |
||||||||||||||||||||||||
30,268 |
29,737 |
30,008 |
9.52 |
|||||||||||||||||||||
Cable & Satellite |
||||||||||||||||||||||||
Bulk Midco, LLC |
||||||||||||||||||||||||
First Lien Secured Term Loan |
L+ 7.33% |
9.93% |
06/08/18 |
06/08/23 |
15,000 |
14,811 |
14,700 |
4.67 |
||||||||||||||||
(1.00% |
||||||||||||||||||||||||
Communications Equipment |
||||||||||||||||||||||||
Sorenson Communications, LLC |
||||||||||||||||||||||||
First Lien Secured Term Loan |
L+ 6.50% |
9.05% |
03/15/19 |
03/15/24 |
5,250 |
5,093 |
5,092 |
1.62 |
||||||||||||||||
Data Processing & Outsourced Services |
||||||||||||||||||||||||
FPT Operating Company, LLC/ |
||||||||||||||||||||||||
TLabs Operating Company, LLC |
||||||||||||||||||||||||
First Lien Secured Term Loan |
L+ 8.25% |
10.74% |
12/23/16 |
12/23/21 |
25,229 |
24,957 |
24,548 |
7.79 |
||||||||||||||||
(1.00% |
||||||||||||||||||||||||
Department Stores |
||||||||||||||||||||||||
Mills Fleet Farm Group, LLC |
||||||||||||||||||||||||
First Lien Secured Term Loan |
L+ 6.25% |
8.75% |
10/24/18 |
10/24/24 |
14,963 |
14,684 |
14,670 |
4.66 |
||||||||||||||||
(1.00% |
||||||||||||||||||||||||
Distributors |
||||||||||||||||||||||||
Crown Brands, LLC |
||||||||||||||||||||||||
First Lien Secured Term Loan |
L+ 8.00% |
10.50% |
01/28/19 |
01/25/24 |
5,950 |
5,806 |
5,807 |
1.84 |
||||||||||||||||
(1.50% |
||||||||||||||||||||||||
First Lien Secured Delayed Draw Loan(7) |
L+ 8.00% |
10.50% |
01/28/19 |
01/25/24 |
- |
- |
- |
- |
||||||||||||||||
(1.50% |
||||||||||||||||||||||||
5,950 |
5,806 |
5,807 |
2 |
|||||||||||||||||||||
Diversified Support Services |
||||||||||||||||||||||||
Account Control Technology Holdings, Inc. |
||||||||||||||||||||||||
First Lien Secured Term Loan |
L+ 8.75% |
11.49% |
04/28/17 |
04/28/22 |
622 |
610 |
622 |
0.20 |
||||||||||||||||
(1.00% |
||||||||||||||||||||||||
ImageOne Industries, LLC |
||||||||||||||||||||||||
First Lien Secured Term Loan |
L+ 10.00% |
12.50% |
01/11/18 |
01/11/23 |
7,204 |
7,038 |
6,988 |
2.22 |
||||||||||||||||
(1.00% |
(2.00% |
|||||||||||||||||||||||
NNA Services, LLC |
||||||||||||||||||||||||
First Lien Secured Term Loan |
L+ 7.00% |
9.60% |
10/16/18 |
10/16/23 |
10,369 |
10,180 |
10,138 |
3.22 |
||||||||||||||||
(1.00% |
||||||||||||||||||||||||
Quest Events, LLC |
||||||||||||||||||||||||
First Lien Secured Term Loan |
L+ 6.00% |
8.60% |
12/28/18 |
12/28/24 |
10,915 |
10,706 |
10,697 |
3.40 |
||||||||||||||||
(1.00% |
||||||||||||||||||||||||
First Lien Secured Revolving Loan(7) |
L+ 6.00% |
8.60% |
12/28/18 |
12/28/24 |
- |
- |
- |
- |
||||||||||||||||
(1.00% |
||||||||||||||||||||||||
29,110 |
28,534 |
28,445 |
9.04 |
WhiteHorse Finance, Inc. Consolidated Schedule of Investments (Unaudited) - (continued) March 31, 2019 (in thousands) |
||||||||||||||||||||||||
Investment Type(1) |
Spread |
Interest |
Acquisition |
Maturity |
Principal/ |
Amortized |
Fair |
Fair Value |
||||||||||||||||
Food Retail |
||||||||||||||||||||||||
AG Kings Holdings, Inc. |
||||||||||||||||||||||||
First Lien Secured Term Loan |
L+ 11.95% |
14.55% |
08/10/16 |
08/10/21 |
13,046 |
$ |
12,780 |
$ |
11,089 |
3.52 |
% |
|||||||||||||
(1.00% |
(2.00% |
|||||||||||||||||||||||
Crews of California, Inc. |
||||||||||||||||||||||||
First Lien Secured Term Loan |
L+ 11.00% |
13.48% |
11/20/14 |
11/20/19 |
10,101 |
10,077 |
10,000 |
3.17 |
||||||||||||||||
(1.00% |
(1.00% |
|||||||||||||||||||||||
First Lien Secured Revolving Loan |
L+ 11.00% |
13.48% |
06/05/15 |
11/20/19 |
5,185 |
5,168 |
5,133 |
1.63 |
||||||||||||||||
(1.00% |
(1.00% |
|||||||||||||||||||||||
First Lien Secured Delayed Draw Loan |
L+ 11.00% |
13.48% |
03/27/15 |
11/20/19 |
2,901 |
2,892 |
2,872 |
0.91 |
||||||||||||||||
(1.00% |
(1.00% |
|||||||||||||||||||||||
31,233 |
30,917 |
29,094 |
9.23 |
|||||||||||||||||||||
Health Care Facilities |
||||||||||||||||||||||||
Grupo HIMA San Pablo, Inc. |
||||||||||||||||||||||||
First Lien Secured Term Loan |
L+ 9.00% |
11.75% |
04/01/18 |
05/31/19 |
13,881 |
13,881 |
12,215 |
3.88 |
||||||||||||||||
(1.50% |
||||||||||||||||||||||||
Second Lien Secured Term Loan(8) |
N/A |
15.75% |
02/01/13 |
07/31/18 |
1,028 |
1,024 |
103 |
0.03 |
||||||||||||||||
(2.00% |
||||||||||||||||||||||||
14,909 |
14,905 |
12,318 |
3.91 |
|||||||||||||||||||||
Health Care Services |
||||||||||||||||||||||||
PMA Holdco, LLC |
||||||||||||||||||||||||
First Lien Secured Term Loan |
L+ 7.50% |
10.10% |
06/28/18 |
06/28/23 |
14,781 |
14,514 |
14,540 |
4.62 |
||||||||||||||||
(1.00% |
||||||||||||||||||||||||
Home Furnishings |
||||||||||||||||||||||||
Sure Fit Home Products, LLC |
||||||||||||||||||||||||
First Lien Secured Term Loan |
L+ 9.50% |
12.11% |
10/26/18 |
07/13/22 |
5,460 |
5,363 |
5,371 |
1.71 |
||||||||||||||||
(1.00% |
||||||||||||||||||||||||
Human Resources & Employment Services |
||||||||||||||||||||||||
Pluto Acquisition Topco, LLC |
||||||||||||||||||||||||
First Lien Secured Term Loan |
L+ 6.56% |
9.30% |
01/31/19 |
01/31/24 |
12,543 |
12,300 |
12,292 |
3.90 |
||||||||||||||||
(1.00% |
||||||||||||||||||||||||
Internet Retail |
||||||||||||||||||||||||
Clarus Commerce, LLC |
||||||||||||||||||||||||
First Lien Secured Term Loan |
L+ 8.39% |
10.89% |
03/09/18 |
03/09/23 |
17,100 |
16,940 |
17,100 |
5.43 |
||||||||||||||||
(1.00% |
||||||||||||||||||||||||
Internet Services & Infrastructure |
||||||||||||||||||||||||
London Trust Media Incorporated |
||||||||||||||||||||||||
First Lien Secured Term Loan |
L+ 8.00% |
10.74% |
02/01/18 |
02/01/23 |
10,781 |
10,657 |
10,707 |
3.40 |
||||||||||||||||
(1.00% |
||||||||||||||||||||||||
StackPath, LLC & Highwinds Capital, Inc. |
||||||||||||||||||||||||
Second Lien Secured Term Loan |
L+ 9.50% |
12.33% |
02/03/17 |
02/02/24 |
18,567 |
18,256 |
15,218 |
4.83 |
||||||||||||||||
(1.00% |
(12.33% |
|||||||||||||||||||||||
29,348 |
28,913 |
25,925 |
8.23 |
|||||||||||||||||||||
Investment Banking & Brokerage |
||||||||||||||||||||||||
Arcole Acquisition Corp(5) |
||||||||||||||||||||||||
First Lien Secured Term Loan A |
L+ 7.25% |
9.88% |
11/29/18 |
11/30/23 |
7,493 |
7,364 |
7,380 |
2.34 |
||||||||||||||||
(1.00% |
||||||||||||||||||||||||
First Lien Secured Term Loan B |
L+ 14.50% |
17.13% |
11/29/18 |
11/30/23 |
1,854 |
1,822 |
1,826 |
0.58 |
||||||||||||||||
(1.00% |
(1.50% |
|||||||||||||||||||||||
JVMC Holdings Corp. |
||||||||||||||||||||||||
First Lien Secured Term Loan |
L+ 6.50% |
9.00% |
02/28/19 |
02/28/24 |
17,378 |
17,207 |
17,211 |
5.46 |
||||||||||||||||
(1.00% |
||||||||||||||||||||||||
First Lien Secured Delayed Draw Loan(7) |
L+ 6.50% |
9.00% |
02/28/19 |
02/28/24 |
- |
- |
- |
- |
||||||||||||||||
(1.00% |
||||||||||||||||||||||||
26,725 |
26,393 |
26,417 |
8.38 |
|||||||||||||||||||||
IT Consulting & Other Services |
||||||||||||||||||||||||
AST-Applications Software Technology LLC |
||||||||||||||||||||||||
First Lien Secured Term Loan |
L+ 8.00% |
10.50% |
01/10/17 |
01/10/23 |
4,225 |
4,163 |
4,098 |
1.30 |
||||||||||||||||
(1.00% |
(1.00% |
|||||||||||||||||||||||
Leisure Facilities |
||||||||||||||||||||||||
Planet Fit Indy 10 LLC |
||||||||||||||||||||||||
First Lien Incremental Term Loan |
L+ 7.25% |
9.86% |
11/30/17 |
03/07/22 |
12,890 |
12,673 |
12,822 |
4.07 |
||||||||||||||||
(1.00% |
||||||||||||||||||||||||
First Lien Initial Delayed Draw Loan |
L+ 7.25% |
9.96% |
11/30/17 |
03/07/22 |
6,167 |
6,149 |
6,134 |
1.95 |
||||||||||||||||
(1.00% |
||||||||||||||||||||||||
First Lien Initial Term Loan |
L+ 7.25% |
9.86% |
11/30/17 |
03/07/22 |
130 |
129 |
129 |
0.04 |
||||||||||||||||
(1.00% |
||||||||||||||||||||||||
Lift Brands, Inc. |
||||||||||||||||||||||||
First Lien Secured Term Loan |
L+ 7.00% |
9.60% |
04/16/18 |
04/16/23 |
10,831 |
10,647 |
10,523 |
3.34 |
||||||||||||||||
(1.00% |
||||||||||||||||||||||||
First Lien Secured Revolving Loan(7) |
P+ 6.00% |
11.50% |
04/16/18 |
04/16/23 |
203 |
200 |
191 |
0.06 |
||||||||||||||||
(1.00% |
||||||||||||||||||||||||
Honors Holdings, LLC |
||||||||||||||||||||||||
First Lien Secured Term Loan |
L+ 8.80% |
11.45% |
07/17/18 |
07/17/23 |