WhiteHorse Finance(US:WHF)2025-05-12 21:22Investment Income - Total investment income for Q1 2025 was $18.8 million, down from $25.5 million in Q1 2024, a decrease of $6.7 million[291]. - Net investment income for Q1 2025 was $6.8 million, compared to $10.8 million in Q1 2024, reflecting a decrease of $4.0 million[292]. - Interest income excluding payment-in-kind (PIK) for Q1 2025 was $13.9 million, down from $18.0 million in Q1 2024, a decline of $4.0 million[293]. - PIK income decreased to $691,000 in Q1 2025 from $2.0 million in Q1 2024, a decline of $1.3 million[294]. - Fee and dividend income for Q1 2025 was $496,000, down from $666,000 in Q1 2024, a decrease of $170,000[295]. - Interest and dividend income from STRS JV decreased to $3.7 million in Q1 2025 from $4.8 million in Q1 2024, a decline of $1.1 million[295]. Expenses and Net Assets - Total expenses for Q1 2025 were $12.0 million, down from $14.7 million in Q1 2024, a decrease of $2.7 million[291]. - Net increase in net assets resulting from operations for Q1 2025 was $4.3 million, compared to $6.0 million in Q1 2024, a decrease of $1.7 million[291]. - Total expenses for the three months ended March 31, 2025, were $11.958 million, a decrease of $2.702 million (18.4%) from $14.660 million in the same period of 2024[297]. - Interest expense decreased by $1.145 million (15.6%) to $6.185 million for the three months ended March 31, 2025, compared to $7.330 million in 2024, due to lower average borrowings and interest rates[297]. - Performance-based incentive fees fell by $0.993 million (36.7%) to $1.711 million for the three months ended March 31, 2025, from $2.704 million in 2024, attributed to lower net investment income[298]. Investment Portfolio - As of March 31, 2025, the investment portfolio had an aggregate fair value of $651.0 million, consisting of 134 positions in 74 companies[347]. - The weighted average effective yield of the portfolio was 9.6%, with income-producing debt investments yielding 12.1%[347]. - For the three months ended March 31, 2025, the company invested $47.2 million in new and existing portfolio companies, with repayments and sales totaling $37.5 million[350]. - The investment portfolio as of December 31, 2024, had a fair value of $642.2 million, with an average investment size of $4.3 million[348]. - The company actively monitors portfolio performance, with a risk rating system assessing investments on a scale of 1 to 5[353]. Cash and Assets - As of March 31, 2025, cash and cash equivalents totaled $19.6 million, including $8.2 million in restricted cash, compared to $27.8 million in total cash as of December 31, 2024[312]. - STRS JV had total assets of $323.5 million as of March 31, 2025, an increase from $309.1 million as of December 31, 2024[314]. - The company had commitments to fund approximately $31.9 million in revolving lines of credit to portfolio companies as of March 31, 2025, up from $26.4 million at the end of 2024[309]. - As of March 31, 2025, the total portfolio value was $310.16 million, an increase from $294.96 million as of December 31, 2024, representing a growth of approximately 5.3%[322]. Debt and Borrowings - The Credit Facility allows for borrowings up to $335.0 million, with an accordion feature to expand the limit to $375.0 million[330]. - As of March 31, 2025, there were $170.1 million in outstanding borrowings under the Credit Facility, with approximately $164.9 million available to be drawn[338]. - The 5.375% 2025 Notes have an aggregate principal amount of $40 million, maturing on October 20, 2025, with interest payable semiannually[340]. - The 4.000% 2026 Notes, totaling $75 million, were issued to fund investments and repay outstanding debt, maturing on December 15, 2026[344]. - The annual interest rate for the Credit Facility was reduced to 2.25% as of January 17, 2025[329]. Market Risks - The company is subject to financial market risks, particularly interest rate fluctuations, which could significantly impact net investment income and the value of common stock[392]. - A hypothetical 300 basis point increase in interest rates could lead to a net decrease in interest income of $16.582 million and an increase in interest expense of $5.104 million, resulting in a net decrease of $11.478 million[394]. - Nearly all performing floating rate investments in the portfolio have interest rate floors, limiting benefits from interest rate increases until they exceed these floors[395]. - The company may utilize hedging instruments to mitigate interest rate fluctuations, although this could limit participation in benefits from lower interest rates[398]. Currency Contracts - For the three months ended March 31, 2025, the realized gain on forward currency contracts was $22,000, compared to a loss of $28,000 in the same period of 2024[399]. - The unrealized depreciation on forward currency contracts for the three months ended March 31, 2025, was $(20,000), while there was an appreciation of $52,000 in 2024[399]. - The total net realized and unrealized gains on forward currency contracts for the three months ended March 31, 2025, amounted to $2,000, down from $24,000 in 2024[399].