Investment Income - For the fourth quarter ended December 31, 2024, total investment income was $21.0 million, a decrease of 8.1% from $22.9 million in the previous quarter[3]. - Net investment income for the fourth quarter was $8.0 million, down 12.9% from $9.2 million in the prior quarter, resulting in a net investment income per share of $0.343[3]. Investment Portfolio - The fair value of the investment portfolio decreased to $642.2 million as of December 31, 2024, down 1.9% from $654.3 million at the end of the previous quarter[4]. - The weighted average effective yield on income-producing debt investments in the portfolio was 12.5%[4]. - The portfolio consisted of 127 positions across 71 companies, with approximately 78.2% in first lien secured loans[4]. Company Investments - During the fourth quarter, WhiteHorse Finance made investments totaling $27.4 million in six new portfolio companies and added $8.0 million to existing companies[5]. - WhiteHorse Finance transferred assets totaling $13.7 million to STRS JV during the fourth quarter[6]. Distributions and Net Asset Value - The company declared a distribution of $0.385 per share for the fourth quarter, consistent with the previous quarter's distribution[7]. - The net asset value per share decreased to $12.31, down 3.6% from $12.77 in the prior quarter[3]. Realized and Unrealized Gains - Net realized losses for the fourth quarter were $12.3 million, while net unrealized appreciation was $8.2 million, reflecting a significant change from the previous quarter[3].

Core Viewpoint - WhiteHorse Finance, Inc. reported its financial results for Q4 and the year ended December 31, 2024, highlighting a distribution of $0.385 per share, despite facing challenges in its investment portfolio [1][2]. Financial Performance - Total investment income for Q4 2024 was $21.009 million, down from $22.851 million in Q3 2024, representing an 8.1% decrease [3]. - Total expenses, including excise tax, decreased by 4.9% to $13.032 million from $13.697 million [3]. - Net investment income for Q4 was $7.977 million, a decline of 12.9% from $9.154 million in Q3 [3]. - The net investment income per share decreased to $0.343 from $0.394, also a 12.9% drop [3]. - The company declared a special distribution of $0.245 per share during the same period [3][7]. Portfolio and Investment Activity - As of December 31, 2024, the fair value of the investment portfolio was $642.2 million, down from $654.3 million as of September 30, 2024, a decrease of 1.9% [4]. - The portfolio consisted of 127 positions across 71 companies, with a weighted average effective yield of 12.5% on income-producing debt investments [4]. - The average debt investment size was $5.5 million, with 78.2% in first lien secured loans [4]. - During Q4, the company invested $27.4 million in six new portfolio companies and added $8.0 million to existing companies [5]. - Proceeds from sales and repayments totaled approximately $32.5 million, driven by full repayments from several companies [5]. Distributions - The board declared a distribution of $0.385 per share for Q4 2024, payable on April 4, 2025, to stockholders of record as of March 21, 2025 [1][7]. - This distribution marks the forty-ninth consecutive quarter with distributions at or above $0.355 since the company's IPO [8].

Company Overview - WhiteHorse Finance, Inc. is a business development company that focuses on originating and investing in loans to privately held, lower middle market companies across various industries [4] - The investment activities of the company are managed by H.I.G. WhiteHorse Advisers, LLC, which is an affiliate of H.I.G. Capital, a global alternative asset manager with $67 billion of capital under management [4] Financial Results Announcement - WhiteHorse Finance will release its fourth quarter and full year financial results for the year ended December 31, 2024, on March 7, 2025 [1] - A conference call to discuss the financial results will take place on the same day at 2:00 p.m. ET [1] Teleconference Access - Investors can access the teleconference by dialing 800-267-6316 (domestic) or +1 203-518-9783 (international) approximately 10 minutes before the scheduled start time, referencing ID WHFQ424 [2] - A replay of the teleconference will be available starting two hours after the call's completion through March 14, 2025 [3]

Core Viewpoint - The article emphasizes the importance of value investing and highlights WhiteHorse Finance (WHF) as a strong candidate for value investors due to its favorable financial metrics and Zacks Rank [1][2][7]. Company Analysis - WhiteHorse Finance (WHF) currently holds a Zacks Rank of 2 (Buy) and an A grade for Value, indicating strong potential for value investors [4]. - WHF has a P/E ratio of 6.91, significantly lower than the industry average P/E of 9.70, suggesting it may be undervalued [4]. - The Forward P/E for WHF has fluctuated between 5.83 and 8.03 over the past year, with a median of 7.15 [4]. - The company has a P/B ratio of 0.79, compared to the industry average of 1.03, further indicating its undervaluation [5]. - WHF's P/B ratio has ranged from 0.75 to 0.98 in the past year, with a median of 0.91 [5]. - The P/S ratio for WHF stands at 2.42, which is lower than the industry average P/S of 3.75, reinforcing the notion of undervaluation [6]. Investment Outlook - The combination of WHF's strong earnings outlook and favorable valuation metrics positions it as an attractive value stock at the moment [7].

Core Viewpoint - The focus is on identifying undervalued stocks through fundamental analysis and valuation metrics, with WhiteHorse Finance (WHF) highlighted as a strong value stock opportunity [2][4][7] Group 1: Company Overview - WhiteHorse Finance (WHF) currently holds a Zacks Rank of 2 (Buy) and an A for Value, indicating strong potential for investors [4] - The stock has a Forward P/E ratio of 6.74, significantly lower than the industry average of 9.32, suggesting it may be undervalued [4] - Over the past year, WHF's Forward P/E has fluctuated between 5.83 and 8.03, with a median of 7.15, indicating relative stability [4] Group 2: Valuation Metrics - WHF's P/B ratio stands at 0.77, compared to the industry's average P/B of 0.99, further supporting the notion of undervaluation [5] - The stock's P/B has ranged from 0.75 to 0.98 over the past year, with a median of 0.91, reflecting its attractive valuation [5] - WHF has a P/S ratio of 2.36, which is lower than the industry's average P/S of 3.62, reinforcing its value proposition [6] Group 3: Investment Outlook - The combination of WHF's strong valuation metrics and positive earnings outlook positions it as an impressive value stock at the moment [7]

Financial Data and Key Metrics Changes - Q3 2024 GAAP net investment income and core NII was $9.2 million or $0.394 per share, slightly below Q2's $9.3 million or $0.40 per share [8][30] - NAV per share at the end of Q3 was $12.77, a 5.1% decrease from the prior quarter, impacted by net markdowns totaling $15.9 million [9] - Total value of the investment portfolio was $654.3 million, down from $660 million at the end of the previous quarter [14] Business Line Data and Key Metrics Changes - Gross capital deployments in Q3 were $51 million, with net deployments of $20.8 million after repayments and sales of $30.2 million [10] - The weighted average effective yield on income-producing debt investments was 13.1%, down from approximately 13.8% in Q2 2024 [15] - Non-accrual investments totaled 5.6% of the total debt portfolio, up from 3.6% in the prior quarter [20] Market Data and Key Metrics Changes - The lending market remains aggressive, with middle market pricing compressing down to spreads of SOFR 475 to SOFR 525 [21] - The non-sponsor market is viewed as more attractive, supporting leverage of only three to 4.5 times, with pricing between SOFR 600 to SOFR 800 [22][23] Company Strategy and Development Direction - The company is focusing on the non-sponsor market due to better risk-return profiles and less competition compared to the sponsor market [23][67] - There is an expectation that the ratio of non-sponsor deals in the portfolio will rise over the next quarters if current market conditions persist [67] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about the competitive environment, noting that many deals are being structured with excessive leverage [52][56] - There is skepticism regarding the yield curve and future interest rates, with management cautious about the sustainability of current market conditions [53][26] Other Important Information - The company declared a fourth quarter distribution of $0.385 per share, consistent with the prior quarter, and a special distribution of $0.245 per share [38][39] - The company has approximately $20.7 million in cash resources and $173 million of undrawn capacity under its revolving credit facility [36] Q&A Session Summary Question: Follow-up on the deal environment and portfolio deleveraging - Management indicated that while repayments are expected to be elevated, they do not foresee a decrease in leverage due to existing mandates [42][43] Question: Quality of investment income and PIK income - Management stated that they seek to minimize PIK income in new deals, focusing on cash income, and that most PIK in the portfolio relates to troubled accounts [46][48] Question: Competitive environment and sustainability - Management acknowledged that the current competitive environment is aggressive, with many deals being structured with high leverage, and expressed skepticism about the sustainability of such terms [51][56] Question: Strategy regarding American Crafts - Management confirmed that due to the loss of a major customer, they are exploring a sale of American Crafts rather than pursuing a turnaround, marking a shift from their typical strategy [60][61] Question: Non-sponsor market dynamics - Management highlighted that there is limited competition in the core mid-market and lower mid-market for non-sponsor deals, allowing for more favorable terms [68]

| --- | --- | |----------------------------------------------------------------------------------|-------| | | | | | | | | | | | | | WhiteHorse Finance, Inc. Earnings Presentation Quarter Ended September 30, 2024 | | | | | NASDAQ: WHF (Common Stock) NASDAQ: WHFCL (7.875% Notes due 2028) Important Information and Forward Looking Statements 1 References in this presentation to "WHF", "WhiteHorse Finance", "we", "us", "our" and "the Company" refer to WhiteHorse Finance, Inc. This presentation and the informati ...

Company Performance - WhiteHorse Finance (WHF) reported quarterly earnings of $0.39 per share, missing the Zacks Consensus Estimate of $0.42 per share, and down from $0.46 per share a year ago, representing an earnings surprise of -7.14% [1] - The company posted revenues of $22.85 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 0.95%, and down from $25.87 million year-over-year [2] - Over the last four quarters, WhiteHorse has surpassed consensus EPS estimates just once and topped consensus revenue estimates two times [2] Market Comparison - WhiteHorse shares have lost about 4.9% since the beginning of the year, while the S&P 500 has gained 24.3% [3] - The current consensus EPS estimate for the coming quarter is $0.41 on revenues of $23.34 million, and for the current fiscal year, it is $1.70 on revenues of $95.37 million [7] Industry Outlook - The Financial - SBIC & Commercial Industry, to which WhiteHorse belongs, is currently in the bottom 27% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5][6]

Financial Performance - For the quarter ended September 30, 2024, WhiteHorse Finance reported total investment income of $22.9 million, a decrease of 2.7% from $23.5 million in the previous quarter[3] - The net investment income for the same period was $9.2 million, down 1.5% from $9.3 million in the prior quarter, resulting in a net investment income per share of $0.394[3] - The fair value of the investment portfolio decreased to $654.3 million from $660.0 million, reflecting a decline of 0.9%[4] - Net realized gains for the quarter were $39, a significant improvement compared to a loss of $93 in the previous quarter[3] Investment Activity - The company made new investments totaling $49.0 million in seven new portfolio companies during the quarter[5] - The company transferred assets totaling $15.1 million to STRS JV in exchange for cash proceeds during the quarter[6] Portfolio Composition - The portfolio consisted of 129 positions across 73 companies, with a weighted average effective yield of 10.6% on income-producing debt investments[4] - The overall portfolio comprised approximately 79.0% first lien secured loans, indicating a strong focus on secured investments[4] Distribution - WhiteHorse Finance declared a quarterly distribution of $0.385 per share for the quarter ended September 30, 2024, payable on January 3, 2025[7] Market Strategy - WhiteHorse Finance continues to focus on segments of the lending market where it believes it has a competitive advantage, despite challenges in the broader lending market[2]

Core Points - WhiteHorse Finance, Inc. has declared a special distribution of $0.245 per share, payable on December 10, 2024, to stockholders of record as of October 31, 2024 [1] - The distributions are sourced from taxable earnings and may include a return of capital and/or capital gains, with specific tax characteristics reported on Form 1099-DIV [2] - The company will release its third quarter financial results for the period ended September 30, 2024, on November 7, 2024, followed by a conference call at 11:30 a.m. ET [3] Company Overview - WhiteHorse Finance is a business development company that invests in loans to privately held, lower middle market companies across various industries [6] - The investment activities of the company are managed by H.I.G. WhiteHorse Advisers, LLC, an affiliate of H.I.G. Capital, which manages over $65 billion in capital across multiple funds focused on small and mid-cap markets [6][8]