WhiteHorse Finance, Inc. Announces First Quarter 2017 Earnings Results

NEW YORK, May 5, 2017 /PRNewswire/ -- WhiteHorse Finance, Inc. ("WhiteHorse Finance" or the "Company") (NASDAQ: WHF) today announced its financial results for the quarter ended March 31, 2017.

First Quarter 2017 Summary Highlights

• New investments of $43.9 million
• Net investment income of $6.5 million
• First quarter net investment income of $0.356 per share
• First quarter distribution of $0.355 per share

Stuart Aronson, WhiteHorse Finance's Chief Executive Officer commented, "This was a solid quarter for WhiteHorse Finance, with strong net interest income and modest gains in our NAV. The leadership of our firm remains committed to conservative investing in senior secured assets with a goal of earning our dividend each year and protecting NAV. The pipeline for the second quarter is strong, with the majority of the pipeline comprised of sponsor deals with low leverage and expected double digit returns."

Portfolio and Investment Activity

As of March 31, 2017, the fair value of WhiteHorse Finance's investment portfolio was $431.7 million, compared with $411.7 million as of December 31, 2016. The portfolio at March 31, 2017 consisted of 39 positions across 30 companies with an average investment size of $11.1 million and a weighted average effective yield of 11.8%, remaining relatively flat as compared to last quarter.  The majority of the portfolio was comprised of senior secured loans, and these loans were substantially all variable-rate investments (primarily indexed to LIBOR), which should continue to position the portfolio well for a potential rising interest rate environment.

During the three months ended March 31, 2017, WhiteHorse Finance made investments in four new portfolio companies totaling $43.9 million. Gross proceeds from sales and repayments totaled $30.2 million for the quarter. The Company continued to be highly selective with the deployment of capital into new investments.

Results of Operations

For the three months ended March 31, 2017, net investment income was approximately $6.5 million, compared with approximately $6.8 million for the same period in the prior year, representing a decrease of 4.4%. The decrease in net investment income was primarily attributable to an increase in interest expense resulting from higher interest rates and higher borrowing balances on the Company's line of credit facility as compared to the same period in the prior year. Over the past 9 quarters, cumulative core net investment income, a non-GAAP financial measure, exceeded distributions to stockholders.⁽¹⁾

For the three months ended March 31, 2017, WhiteHorse Finance reported realized and unrealized gains on investments of $3.1 million. This compares with realized and unrealized losses on investments of ($1.2) million for the three months ended March 31, 2016. The increase in realized and unrealized gains on investments was primarily attributable to fair value adjustments and the reversal of prior unrealized losses upon the full repayment on the Company's investment in ProPetro Services, Inc.

WhiteHorse Finance reported a net increase in net assets of $9.6 million for the three months ended March 31, 2017, which compares with a net increase of $5.5 million for the three months ended March 31, 2016.

WhiteHorse Finance's NAV was $252.5 million, or $13.80 per share, as of March 31, 2017, as compared with $249.4 million, or $13.63 per share, reported as of December 31, 2016.

Liquidity and Capital Resources

As of March 31, 2017, WhiteHorse Finance had cash and cash equivalents of $20.1 million, as compared with $28.9 million as of December 31, 2016, inclusive of restricted cash. As of March 31, 2017, the Company had $23.7 million of undrawn capacity under its revolving credit facility.

Distributions

On March 17, 2017, the Company declared a distribution of $0.355 per share for the quarter ended March 31, 2017, consistent for the eighteenth consecutive quarter since the Company's IPO. The distribution was paid on April 3, 2017 to shareholders of record as of March 27, 2017.

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 Securities and Exchange Commission.

Conference Call

WhiteHorse Finance will host a conference call to discuss its first quarter results at 10:00 am ET on Friday, May 5, 2017. To access the teleconference, please dial 706-758-9224 (domestic and international) approximately 10 minutes before the teleconference's scheduled start time and reference ID #99156801. Investors may also access the call on the investor relations portion of the Company's website at www.whitehorsefinance.com.

If you are unable to access the live teleconference, a replay will be available beginning approximately two hours after the call's completion through May 12, 2017. The teleconference replay can be accessed by dialing 404-537-3406 (domestic and international) and entering ID #99156801. A webcast replay will also be available on the investor relations portion of the Company's website at www.whitehorsefinance.com.

About WhiteHorse Finance, Inc.

WhiteHorse Finance is a business development company that originates and invests in loans to privately held lower mid-cap companies across a broad range of industries. The Company's investment activities are managed by H.I.G. WhiteHorse Advisers, LLC, an affiliate of H.I.G. Capital, LLC, ("H.I.G. Capital"). H.I.G. Capital is a leading global alternative asset manager with $21 billion of capital under management⁽²⁾ across a number of funds focused on the small and mid-cap markets. For more information about H.I.G. Capital, please visit http://www.higcapital.com. For more information about the Company, please visit http://www.whitehorsefinance.com.

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 Securities and Exchange Commission. The Company undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release.