Core Viewpoint - WhiteHorse Finance reported its financial results for the quarter ended June 30, 2024, highlighting a distribution of $0.385 per share and a cautious investment strategy amid market challenges [1][2]. Financial Performance - Total investment income for the quarter was $23.482 million, a decrease of 7.8% from $25.475 million in the previous quarter [3]. - Total expenses were $14.190 million, down 3.2% from $14.660 million [3]. - Net investment income was $9.292 million, reflecting a 14.1% decline from $10.815 million [3]. - Core net investment income per share decreased to $0.400 from $0.465, a drop of 14.0% [3]. - The company declared a distribution of $0.385 per share, consistent with the previous quarter [3][7]. Investment Portfolio - As of June 30, 2024, the fair value of the investment portfolio was $660.0 million, down 5.4% from $697.9 million [4]. - The portfolio consisted of 125 positions across 72 companies, with a weighted average effective yield of 11.7% on income-producing debt investments [4]. - The average debt investment size was $5.8 million, with 79.2% in first lien secured loans [4]. Investment Activity - During the quarter, WhiteHorse Finance invested $47.4 million in seven new portfolio companies and added $8.4 million to existing companies [5]. - Proceeds from sales and repayments totaled approximately $71.7 million, driven by full repayments from several companies [5]. - The company transferred assets totaling $22.0 million to STRS JV in exchange for cash proceeds [6]. Market Strategy - The CEO noted a cautious stance focusing on credits with positive free cash flow and limited cyclicality, despite aggressive lending market conditions [2]. - The company continues to see opportunities in less competitive areas of the market, maintaining a high pipeline level due to its sourcing model [2].

The market expects WhiteHorse Finance (WHF) to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended June 2024. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be relea ...

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. WHF has a P/S ratio of 2.75. This compares to its industry's average P/S of 3.68. Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors ...

If you are unable to access the live teleconference, a replay will be available beginning approximately two hours after the call's completion through August 15, 2024. The teleconference replay can be accessed by dialing 800- 925-9941 or +1 402-220-5395 for international callers. A webcast replay will also be available on the investor relations portion of the Company's website at www.whitehorsefinance.com. Forward-Looking Statements Joyson Thomas WhiteHorse Finance, Inc. 305-379-2322 [email protected] SOURCE ...

| --- | --- | |------------------------------------------------------------------------------|-------| | | | | | | | | | | | | | WhiteHorse Finance, Inc. Earnings Presentation Quarter Ended March 31, 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 information and v ...

WhiteHorse Finance (NASDAQ:WHF) Q1 2024 Earnings Conference Call May 8, 2024 10:00 AM ET Company Participants Robert Brinberg - Rose & Company Stuart Aronson - CEO Joyson Thomas - CFO Conference Call Participants Mickey Schleien - Ladenburg Bryce Rowe - B. Riley Erik Zwick - Hovde Group Sean-Paul Adams - Raymond James Operator Good morning. My name is Mike, and I will be your conference operator today. At this time, I would like to welcome everyone to the WhiteHorse Finance First Quarter 2024 Earnings Confe ...

Part I. Financial Information [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents WhiteHorse Finance, Inc.'s unaudited consolidated financial statements for Q1 2024, detailing financial position, operational results, cash flows, and investment portfolio [Consolidated Statements of Assets and Liabilities](index=3&type=section&id=Consolidated%20Statements%20of%20Assets%20and%20Liabilities) Total assets increased to $735.0 million, while total net assets decreased to $313.8 million, resulting in a NAV per share decline to $13.50 as of March 31, 2024 Consolidated Statements of Assets and Liabilities Highlights (in thousands, except per share data) | Metric | March 31, 2024 (Unaudited) | December 31, 2023 | | :--- | :--- | :--- | | **Total Investments, at fair value** | **$697,869** | **$696,168** | | Total Assets | $735,049 | $730,751 | | Total Liabilities | $421,257 | $413,979 | | **Total Net Assets** | **$313,792** | **$316,772** | | **Net Asset Value per share** | **$13.50** | **$13.63** | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) For Q1 2024, total investment income decreased to $25.5 million, while net investment income slightly increased to $10.8 million, but net assets from operations fell to $6.0 million due to higher losses Consolidated Statements of Operations Summary (in thousands, except per share data) | Metric | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :--- | :--- | :--- | | Total Investment Income | $25,475 | $26,164 | | Total Expenses | $14,368 | $15,210 | | **Net Investment Income after excise tax** | **$10,815** | **$10,704** | | Net Realized and Unrealized Gains (Losses) | $(4,846) | $(3,198) | | **Net Increase in Net Assets from Operations** | **$5,969** | **$7,506** | | **Basic and Diluted Earnings per Share** | **$0.26** | **$0.32** | | Dividends Declared per Share | $0.39 | $0.43 | [Consolidated Statements of Changes in Net Assets](index=5&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Net%20Assets) Net assets decreased by $3.0 million to $313.8 million for Q1 2024, primarily due to $8.9 million in distributions offsetting the $6.0 million net increase from operations Changes in Net Assets for the Three Months Ended March 31, 2024 (in thousands) | Description | Amount | | :--- | :--- | | Balance as of December 31, 2023 | $316,772 | | Net Increase in Net Assets from Operations | $5,969 | | Distributions Declared | $(8,949) | | **Balance as of March 31, 2024** | **$313,792** | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities significantly decreased to $1.6 million in Q1 2024, leading to a $3.6 million net decrease in cash, ending the period with $20.9 million Consolidated Cash Flows Summary (in thousands) | Cash Flow Activity | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $1,600 | $21,762 | | Net Cash from Financing Activities | $(5,169) | $(25,766) | | **Net Change in Cash** | **$(3,586)** | **$(4,016)** | | Cash at Beginning of Period | $24,487 | $26,264 | | **Cash at End of Period** | **$20,901** | **$22,248** | [Consolidated Schedules of Investments](index=8&type=section&id=Consolidated%20Schedules%20of%20Investments) The investment portfolio's fair value was $697.9 million as of March 31, 2024, primarily composed of first lien secured loans and diversified across various industries Portfolio Composition by Investment Type (as of March 31, 2024, in thousands) | Investment Type | Amortized Cost | Fair Value | | :--- | :--- | :--- | | First lien secured loans | $584,209 | $562,269 | | Second lien secured loans | $4,946 | $4,948 | | Unsecured loans | $1,238 | $1,239 | | Subordinated Note to STRS JV | $84,416 | $84,416 | | Equity (excluding STRS JV) | $44,981 | $22,389 | | Equity in STRS JV | $21,104 | $22,608 | | **Total** | **$740,894** | **$697,869** | Top 5 Industry Concentrations by Fair Value (as of March 31, 2024, in thousands) | Industry | Fair Value | % of Portfolio (ex-STRS JV) | | :--- | :--- | :--- | | Broadline Retail | $36,355 | 6.2% | | Application Software | $33,226 | 5.6% | | Commodity Chemicals | $30,720 | 5.2% | | Air Freight & Logistics | $27,938 | 4.7% | | Home Furnishings | $28,030 | 4.7% | [Notes to the Consolidated Financial Statements (Unaudited)](index=24&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements%20(Unaudited)) This section details the company's accounting policies, fair value measurements, investment portfolio, borrowings, related party transactions, and financial highlights - The company's investment objective is to generate returns by originating and investing in senior secured loans to performing lower middle market companies[65](index=65&type=chunk) - The company's investment activities are managed by H.I.G. WhiteHorse Advisers, LLC, and it has elected to be treated as a Regulated Investment Company (RIC) for tax purposes[65](index=65&type=chunk)[66](index=66&type=chunk) - The company co-manages a joint venture, WHF STRS Ohio Senior Loan Fund, LLC ("STRS JV"), with the State Teachers Retirement System of Ohio. As of March 31, 2024, STRS JV had total assets of **$327.9 million**[138](index=138&type=chunk)[141](index=141&type=chunk) - Effective January 1, 2024, the base management fee was reduced from **2.00%** to **1.75%** on consolidated gross assets, with a lower rate of **1.25%** on assets exceeding **200%** leverage[238](index=238&type=chunk)[239](index=239&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=66&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition, operational results, liquidity, capital resources, and portfolio performance for Q1 2024, including critical accounting policies [Consolidated Results of Operations](index=70&type=section&id=Consolidated%20Results%20of%20Operations) Net investment income slightly increased to $10.8 million in Q1 2024 due to lower expenses, despite a decrease in total investment income, while net assets from operations declined to $6.0 million Comparison of Consolidated Results of Operations (in thousands) | | Three months ended March 31, 2024 | Three months ended March 31, 2023 | Variance | | :--- | :--- | :--- | :--- | | Total investment income | $25,475 | $26,164 | $(689) | | Total expenses | $14,660 | $15,460 | $(800) | | **Net investment income** | **$10,815** | **$10,704** | **$111** | | Net realized/unrealized gains (losses) | $(4,846) | $(3,198) | $(1,648) | | **Net increase in net assets** | **$5,969** | **$7,506** | **$(1,537)** | - Base management fees decreased by **$0.6 million** YoY due to a reduction in the fee rate from **2.00%** to **1.75%**, effective January 1, 2024[314](index=314&type=chunk) [Financial Condition, Liquidity and Capital Resources](index=73&type=section&id=Financial%20Condition,%20Liquidity%20and%20Capital%20Resources) As of March 31, 2024, the company maintained **$20.9 million** in cash and **$135.0 million** available under its credit facility, with an asset coverage ratio of **179.5%** - As of March 31, 2024, the company had cash and cash equivalents of **$20.9 million** and **$135.0 million** available under its Credit Facility[331](index=331&type=chunk) - The company's asset coverage ratio for borrowed amounts was **179.5%** as of March 31, 2024, exceeding the required minimum of **150%**[213](index=213&type=chunk) Total Borrowings Outstanding (as of March 31, 2024, in thousands) | Facility | Principal Amount Outstanding | Amortized Cost | Available | | :--- | :--- | :--- | :--- | | JPM Credit Facility | $199,974 | $198,597 | $135,026 | | 5.375% 2025 Notes | $40,000 | $39,793 | $0 | | 5.375% 2026 Notes | $10,000 | $9,922 | $0 | | 4.000% 2026 Notes | $75,000 | $74,077 | $0 | | 5.625% 2027 Notes | $10,000 | $9,908 | $0 | | 4.250% 2028 Notes | $25,000 | $24,758 | $0 | | 7.875% 2028 Notes | $34,500 | $33,277 | $0 | | **Total Debt** | **$394,474** | **$390,332** | **$135,026** | [Portfolio Investments and Yield](index=79&type=section&id=Portfolio%20Investments%20and%20Yield) The investment portfolio, valued at $697.9 million with a **12.1%** weighted average yield, shows **77.6%** of investments meeting or exceeding expectations as of March 31, 2024 Investment Performance Rating (as of March 31, 2024, in millions) | Rating | Fair Value | Percentage of Total Portfolio | | :--- | :--- | :--- | | 1 | $99.7 | 14.3% | | 2 | $441.9 | 63.3% | | 3 | $127.9 | 18.3% | | 4 | $19.9 | 2.9% | | 5 | $8.5 | 1.2% | | **Total** | **$697.9** | **100.0%** | - The weighted average effective yield on the total portfolio was **12.1%** as of March 31, 2024[371](index=371&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=86&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is interest rate exposure, with a 100 basis point rate increase projected to raise annual net assets by **$4.5 million**, and it manages foreign currency risk with contracts Annualized Impact of Hypothetical Base Rate Changes (in thousands) | Basis Point Change | Increase (Decrease) in Interest Income | Increase (Decrease) in Interest Expense | Net Increase (Decrease) | | :--- | :--- | :--- | :--- | | +300 | $19,453 | $5,999 | $13,454 | | +200 | $12,969 | $3,999 | $8,970 | | +100 | $6,484 | $2,000 | $4,484 | | -100 | $(6,484) | $(2,000) | $(4,484) | | -200 | $(12,969) | $(3,999) | $(8,970) | | -300 | $(19,369) | $(5,999) | $(13,370) | - The company utilizes forward foreign currency exchange contracts to protect against fluctuations in exchange rates[422](index=422&type=chunk) [Item 4. Controls and Procedures](index=88&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2024, with no material changes to internal controls over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2024[423](index=423&type=chunk) Part II. Other Information [Item 1. Legal Proceedings & Other Items](index=88&type=section&id=Item%201.%20Legal%20Proceedings%20%26%20Other%20Items) This section confirms no material legal proceedings, unregistered equity sales, or defaults on senior securities for the reporting period - The company is not a party to any material legal proceedings[424](index=424&type=chunk) - There were no unregistered sales of equity securities, defaults upon senior securities, or other material information to report under Item 5[426](index=426&type=chunk)[427](index=427&type=chunk)[429](index=429&type=chunk) [Item 1A. Risk Factors](index=88&type=section&id=Item%201A.%20Risk%20Factors) The company refers to previously disclosed risk factors, confirming no material changes or additions during the current reporting period - There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K[425](index=425&type=chunk) [Item 6. Exhibits](index=89&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including the Investment Advisory Agreement and required CEO/CFO certifications - Exhibits filed include CEO and CFO certifications pursuant to Sarbanes-Oxley Act Sections 302 and 906[432](index=432&type=chunk)

Exhibit 99.1 WhiteHorse Finance, Inc. Announces First Quarter 2024 Earnings Results and Declares Quarterly Distribution of $0.385 Per Share NEW YORK, May 8, 2024 /PRNewswire/ -- WhiteHorse Finance, Inc. ("WhiteHorse Finance" or the "Company") (Nasdaq: WHF) today announced its financial results for the quarter ended March 31, 2024. In addition, the Company's board of directors has declared a distribution of $0.385 per share with respect to the quarter ended March 31, 2024. The distributions will be payable o ...

Investment Advisory Agreement - The Investment Advisory Agreement was amended and restated on November 1, 2023, and will remain in effect annually if approved by the board of directors or a majority of outstanding voting securities[89]. - The board of directors unanimously approved the amendment based on factors including the quality of advisory services and comparative fee structures with similar companies[91]. - The investment advisory fee rates were deemed reasonable in relation to the services provided, with expectations for similar reviews in future amendments[93]. - The Investment Advisory Agreement allows for termination by either party with a 60-day written notice, ensuring flexibility in management relationships[89]. - The board of directors considered the anticipated profitability of the relationship with the Investment Adviser as a key factor in their decision-making process[92]. Administrative Services - WhiteHorse Administration provides essential administrative services, including financial record maintenance and NAV determination, under an agreement renewed on November 1, 2023[94]. - The company may receive fees for managerial assistance provided to portfolio companies through WhiteHorse Administration[108]. Investment Strategy and Compliance - The company may invest up to 100% of its assets in privately negotiated transactions, potentially classifying it as an "underwriter" under the Securities Act[102]. - The company has claimed an exclusion from the definition of "commodity pool operator," affirming this status through the fiscal year ending December 31, 2024[103]. - The company must ensure that qualifying assets represent at least 70% of total assets to comply with the 1940 Act[105]. - The company intends to continue qualifying as a RIC by distributing at least 90% of its investment company taxable income annually[130]. - The company must qualify as a RIC and satisfy the Annual Distribution Requirement to maintain its tax status[134]. - At least 90% of the company's gross income must derive from specific sources, including dividends and interest, to meet the 90% Income Test[134]. - The company is required to diversify its holdings, ensuring that no more than 25% of its assets are invested in securities of a single issuer[135]. - The company must distribute dividends to avoid a 4% nondeductible U.S. federal excise tax on undistributed income[132]. Financial Risks and Market Conditions - Rising interest rates are expected to increase the company's interest income, as most of its portfolio bears interest at variable rates[211]. - The company is exposed to risks from inflation, which has increased costs for its portfolio companies, potentially affecting their ability to pay interest and principal[216]. - The company engages in hedging transactions to mitigate risks associated with currency and interest rate fluctuations[217]. - The company may face tax implications if it fails to qualify as a RIC, including being taxed at regular corporate rates[147]. - The company’s portfolio primarily consists of fixed and floating rate investments, which are subject to market price fluctuations[213]. - The company may experience fluctuations in quarterly results due to various factors, including interest rates and default rates on securities[251]. - Economic downturns could lead to increased non-performing assets and decreased portfolio value, adversely affecting revenues and net income[290]. Portfolio Composition and Investment Risks - The company primarily invests in below investment grade securities, which are viewed as speculative investments due to concerns regarding the issuer's capacity to pay interest and repay principal[271]. - The company’s portfolio may be concentrated in a limited number of portfolio companies and industries, increasing the risk of significant loss if any of these companies defaults[282]. - The company invests in "unitranche" senior secured loans, which combine senior secured and subordinated financing, generally in a first-lien position, providing a blended yield between senior secured and subordinated debt[273]. - The company may hold debt securities and loans of leveraged companies that could enter bankruptcy proceedings, posing significant risks to investment returns[285]. - The company’s investments in mezzanine loans are generally subordinated to senior loans and may involve above-average risk and volatility[275]. - Portfolio companies may face financial distress, leading to uncertainty regarding the satisfaction of distressed debt, which could result in losses for the company[288]. - Rising interest rates may hinder portfolio companies' ability to repay loans, increasing the risk of defaults and negatively impacting the company's financial condition[289]. Regulatory and Compliance Challenges - Changes in laws or regulations may require the company to alter its business strategy, potentially incurring significant compliance costs[252]. - The company incurs significant expenditures to comply with Section 404 of the Sarbanes-Oxley Act, which may negatively impact financial performance and ability to make distributions[267]. - The company is restricted from participating in certain transactions with affiliates without prior approval, limiting investment opportunities[238]. - The company has adopted compliance policies to prevent violations of federal securities laws and reviews them annually[112]. Debt and Financing - The company must meet a borrowing base test of less than or equal to 60% and a market value test of at least 167.5% to make new borrowings under the Credit Facility[322]. - An event of default under the Credit Facility could prevent the company from making distributions to stockholders, adversely affecting its ability to maintain RIC status[323]. - The Private Notes and Public Notes are unsecured and effectively subordinated to any secured indebtedness incurred by the company or its subsidiaries[327]. - The company may not receive cash from WhiteHorse Credit if it does not generate sufficient cash to make distributions, impacting its ability to distribute to stockholders[319]. - The Credit Facility restricts the portfolio manager's ability to purchase and sell investments, potentially impairing performance[324]. - The company may lose management control of WhiteHorse Credit if an event of default occurs, which could lead to performance issues[325]. Valuation and Conflicts of Interest - The valuation process for non-publicly traded securities may create conflicts of interest, as the Investment Adviser determines fair value[232]. - The fair value of portfolio investments is based on unobservable inputs and significant management judgment, which may lead to material differences from actual realizable values[245]. - The company may face conflicts of interest due to arrangements with H.I.G. Capital and the Investment Committee, which may not align with stockholder interests[222]. - The allocation policy for investment opportunities will be periodically approved by the Investment Adviser and reviewed by independent directors[239]. Indenture and Note Risks - The indenture for the 4.000% 2026 Notes offers limited protection, allowing the company to incur additional indebtedness without restrictions[333]. - The company may face risks related to credit or market value deterioration in its portfolio companies, which could harm operating results[318]. - The 7.875% 2028 Notes indenture offers limited protection and does not restrict the company from incurring additional debt or engaging in corporate transactions[339]. - Upon a change in control, holders of Private Notes may require prepayment at 100% of the aggregate principal amount plus accrued interest, which could adversely affect the company's financial condition[344]. - The company may choose to prepay Private Notes when prevailing interest rates are low, specifically on or after set prepayment dates[345].

WhiteHorse Finance (NASDAQ:WHF) Q4 2023 Results Conference Call February 29, 2024 1:00 PM ET Company Participants Jacob Moeller - Rose & Company Stuart Aronson - Chief Executive Officer Joyson Thomas - Chief Financial Officer Conference Call Participants Mickey Schleien - Ladenburg Bryce Rowe - B. Riley Erik Zwick - Hovde Group Melissa Wedel - JPMorgan Operator Good afternoon. My name is Angela, and I will be your conference operator today. At this time, I would like to welcome everyone to the WhiteHorse Fi ...