WhiteHorse Finance, Inc. Announces Fourth Quarter and Full Year 2020 Earnings Results and Declares Quarterly Distribution of $0.355 Per Share

March 2, 2021 8:00 AM EST

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NEW YORK, March 2, 2021 /PRNewswire/ -- WhiteHorse Finance, Inc. ("WhiteHorse Finance" or the "Company") (Nasdaq: WHF) today announced its financial results for the year ended December 31, 2020. Additionally, the Company announced that its board of directors has declared a distribution of $0.355 per share with respect to the quarter ending March 31, 2021. The distribution will be payable on April 5, 2021 to stockholders of record as of March 26, 2021.

Fourth Quarter 2020 Summary Highlights

  • Net Asset Value of $312.9 million, or $15.23 per share, compared to $15.23 per share in 2019
  • Investment portfolio(1) totaling $690.7 million
  • STRS JV investment portfolio totaling $174.6 million
  • Gross investment deployments(2) of $162.4 million for the fourth quarter, including new originations of $158.9 million and $3.5 million of fundings for add-ons to existing investments
  • Gross investment deployments(2) of $286.9 million for the year, including new originations of $261.3 million and $25.6 million of fundings for add-ons to existing investments
  • Net investment income of $6.9 million, or $0.335 per share, for the fourth quarter
  • Core net investment income of $7.1 million, or $0.348 per share(3), for the fourth quarter
  • Annual net investment income of $24.2 million, or $1.176 per share
  • Annual core net investment income of $25.7 million, or $1.249 per share(3)
  • Annual distributions of $1.545 per share, including special distributions of $0.125 per share

(1) Includes investments in WHF STRS Ohio Senior Loan Fund LLC ("STRS JV"), an unconsolidated joint venture, totaling $51.2 million, at fair value.

(2) Excludes investments made in STRS JV.

(3) 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.

Stuart Aronson, WhiteHorse Finance's Chief Executive Officer commented, "During the fourth quarter, we successfully originated 16 first lien loans financed partially through $60 million unsecured notes newly issued under the current favorable market conditions. Our fourth quarter origination volume set a new company record and enabled us to reach our target leverage of 1.25x. The year 2020 presented unprecedented challenges, but our business remained resilient and we finished the year stronger than ever which emphasizes the strength of our three-tiered sourcing approach and rigorous underwriting standards.  We will remain prudent as we continue to enhance value for our shareholders in this environment."

Portfolio and Investment Activity

As of December 31, 2020, the fair value of WhiteHorse Finance's investment portfolio was $690.7 million, compared with $589.7 million as of December 31, 2019. The portfolio at December 31, 2020 consisted of 99 positions across 67 companies with a weighted average effective yield of 9.9% on income-producing debt investments. The average debt investment size (excluding investments in STRS JV) was $7.3 million with the overall portfolio comprised of approximately 85.2% first lien secured loans, 4.0% second lien secured loans, 3.4% equity and 7.4% in investments in STRS JV.  Almost all loans were substantially variable-rate investments (primarily indexed to the London Interbank Offered Rate) with fixed rate securities representing only 0.2% of loans at fair value. Nearly all performing floating rate investments have interest rate floors.

During the three months ended December 31, 2020, WhiteHorse Finance made investments in 16 new portfolio companies totaling $158.9 million, added a total of $3.5 million to five existing portfolio companies and funded $1.2 million to revolver commitments. Proceeds from sales and repayments totaled approximately $39.1 million for the quarter ended December 31, 2020, driven by a full realization in Vessco Holdings, LLC, partial sales of Vero Parent, Inc. and payments received from Golden Pear Funding Assetco, LLC.

In addition to the transactions above, during the three months ended December 31, 2020, WhiteHorse Finance transferred assets comprised of four new portfolio companies and one existing portfolio company totaling $32.4 million to STRS JV in exchange for cash consideration.

During the year ended December 31, 2020, WhiteHorse Finance invested $261.3 million across 26 new portfolio companies. The Company also invested $25.6 million in existing portfolio companies. Gross proceeds from sales and repayments (exclusive of asset transfers to STRS JV) totaled approximately $119.0 million for the year.

In addition to the transactions above, during the year ended December 31, 2020, WhiteHorse Finance transferred assets totaling $98.8 million in exchange for a net investment in STRS JV of $18.4 million as well as cash proceeds of $80.4 million. As of December 31, 2020, the Company's investment in STRS JV was approximately $51.2 million, at fair value.

WHF STRS Ohio Senior Loan Fund LLC

As of December 31, 2020, STRS JV's portfolio totaled $174.6 million, consisted of 20 portfolio companies and had a weighted average effective yield of 7.9% on its portfolio.

Results of Operations

For the three months and year ended December 31, 2020, the Company's net investment income was approximately $6.9 million and $24.2 million, respectively, compared with approximately $7.7 million and $31.2 million for the same periods in the prior year, representing a decrease of approximately 10.4% and 22.4%, respectively. The decrease in net investment income for the year-over-year period was primarily attributable to lower non-recurring fee income, partially offset by higher investment income generated from STRS JV for the year ended December 31, 2020. The decrease in fee income during the quarter and year ended December 31, 2020 as compared with the same period in the prior year was primarily a result of fewer nonrecurring, fee-generating events.

For the three months and year ended December 31, 2020, core net investment income, a non-GAAP financial measure that excludes capital gains incentive fee accruals, the net effects of excise or other income taxes related to net realized gains and losses, and the associated costs of refinancing the Company's indebtedness, was $7.1 million and $25.7 million, respectively, compared with $7.9 million and $31.1 million for the same period in the prior year, representing a decrease of approximately 10.1% and 17.4%, respectively.

For the three months and year ended December 31, 2020, WhiteHorse Finance reported net realized and unrealized gains on investments and foreign currency transactions of $1.3 million and $7.5 million, respectively. This compares with a net realized and unrealized gain on investments and foreign currency transactions of $1.1 million and a net realized and unrealized loss on investments and foreign currency transactions of $0.4 million for the three months and year ended December 31, 2019, respectively. The increase for the year-over-year period was primarily attributable to unrealized gains generated on AG Kings Holdings, Inc., partially offset by unrealized losses recognized on positions in Grupo HIMA San Pablo, Inc., Honors Holdings, LLC as well as Lift Brands, Inc., in addition to realized gains generated from sales and equity realizations in Vessco Holdings, LLC, PMA Holdco, LLC, Fluent, LLC and Vero Parent, Inc.

WhiteHorse Finance reported a net increase in net assets resulting from operations of approximately $8.2 million and $31.7 million for the three months and year ended December 31, 2020, respectively, which compares with a net increase of $8.8 million and $30.8 million for the three months and year ended December 31, 2019, respectively.

WhiteHorse Finance's net asset value was $312.9 million, or $15.23 per share, as of December 31, 2020, as compared with $314.6 million, or $15.31 per share, as of September 30, 2020. As of December 31, 2019, WhiteHorse Finance's net asset value was $313.0 million, or $15.23 per share.

Liquidity and Capital Resources

As of December 31, 2020, WhiteHorse Finance had cash and cash equivalents of $15.9 million, as compared with $22.9 million as of September 30, 2020, inclusive of restricted cash. As of December 31, 2020, the Company also had $19.8 million of undrawn capacity under its revolving credit facility.

Distributions

The Company's board of directors has declared a distribution of $0.355 per share with respect to the quarter ending March 31, 2021. The distribution will be payable on April 5, 2021 to stockholders of record as of March 26, 2021. 

On November 9, 2020, the Company declared a distribution of $0.355 per share for the quarter ended December 31, 2020, consistent with distributions declared for the thirty-third consecutive quarter since the Company's initial public offering. The distribution was paid on January 5, 2021 to stockholders of record as of December 21, 2020. In addition, previously on October 9, 2020, the Company declared a special distribution of $0.125 per share, which was paid on December 10, 2020 to stockholders of record as of October 30, 2020.

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 fourth quarter and fiscal year-end results at 2:30 p.m. ET on Tuesday, March 2, 2021. 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 #1860839. 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 March 9, 2021. The teleconference replay can be accessed by dialing 404-537-3406 (domestic and international) and entering ID #1860839. 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 middle market 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 $43 billion of capital under management(4) 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.

 (4) 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 or other income taxes related to net realized gains and losses nor did the Company incur any costs with refinancing any of its indebtedness for the quarters and years ended December 31, 2020 and December 31, 2019.

The following table provides a reconciliation of net investment income to core net investment income for the three months ended December 31, 2020 and December 31, 2019 (in thousands, except per share data):

December 31, 2020

December 31, 2019

Amount

 Per Share

Amounts

Amount

 Per Share

Amounts

Net investment income

$

6,883

$

0.335

$

7,702

$

0.375

Net impact of costs associated with refinancing of indebtedness

-

-

-

-

Accrual for capital gains incentive fee

262

0.013

212

0.010

Net impact of excise tax expense related to net realized gains and losses

-

-

-

-

Core net investment income

$

7,145

$

0.348

$

7,914

$

0.385

The following table provides a reconciliation of net investment income to core net investment income for the years ended December 31, 2020 and December 31, 2019 (in thousands, except per share data):

December 31, 2020

December 31, 2019

Amount

 Per Share

Amounts

Amount

 Per Share

Amounts

Net investment income

$

24,157

$

1.176

$

31,196

$

1.518

Net impact of costs associated with refinancing of indebtedness

-

-

-

-

Accrual for capital gains incentive fee

1,505

0.073

(71)

(0.003)

Net impact of excise tax expense related to net realized gains and losses

-

-

-

-

Core net investment income

$

25,662

$

1.249

$

31,125

$

1.515

 

WHITEHORSE FINANCE, INC. CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (in thousands, except share and per share data)

December 31, 2020

December 31, 2019

Assets 

Investments, at fair value

Non-controlled/non-affiliate company investments

$

623,777

$

546,744

Non-controlled affiliate company investments

15,717

9,651

Controlled affiliate company investments

51,241

33,293

Total investments, at fair value (amortized cost $695,429 and $597,725, respectively)

690,735

589,688

Cash and cash equivalents

8,062

4,294

Restricted cash and cash equivalents

7,549

23,252

Restricted foreign currency (cost of $319)

333

Interest and dividend receivable

6,532

6,010

Amounts receivable on unsettled investment transactions

4,717

360

Prepaid expenses and other receivables

1,061

7,620

Total assets

$

718,989

$

631,224

Liabilities 

Debt

$

384,880

$

298,924

Distributions payable

7,294

7,294

Management fees payable

3,354

3,060

Incentive fees payable

6,117

5,230

Amounts payable on unsettled investment transactions

497

Interest payable

1,870

1,674

Accounts payable and accrued expenses

1,708

1,944

Advances received from unfunded credit facilities

372

143

Total liabilities

406,092

318,269

Commitments and contingencies

Net assets 

Common stock, 20,546,032 and 20,546,032 shares issued and outstanding, par

value $0.001 per share, respectively, and 100,000,000 shares authorized

21

21

Paid-in capital in excess of par

300,002

300,744

Accumulated undistributed (overdistributed) earnings

12,874

12,190

Total net assets

312,897

312,955

Total liabilities and total net assets 

$

718,989

$

631,224

Number of shares outstanding

20,546,032

20,546,032

Net asset value per share

$

15.23

$

15.23

 

WHITEHORSE FINANCE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share data)

Years ended December 31,

2020

2019

2018

Investment income 

From non-controlled/non-affiliate company investments

Interest income

$

54,039

$

56,566

$

56,208

Fee income

1,988

8,398

4,906

Dividend income

133

From non-controlled affiliate company investments

Dividend income

1,183

1,173

2,132

From controlled affiliate company investments

Interest income

2,595

936

Dividend income

1,761

Total investment income

61,699

67,073

63,246

Expenses 

Interest expense

13,125

13,468

11,599

Base management fees

12,464

11,300

10,511

Performance-based incentive fees

7,619

7,710

12,134

Administrative service fees

683

646

684

General and administrative expenses

2,909

2,337

2,646

Total expenses, before fees waived

36,800

35,461

37,574

Base management fees waived

(397)

(270)

Total expenses, net of fees waived

36,800

35,064

37,304

Net investment income before excise tax 

24,899

32,009

25,942

Excise tax

742

813

942

Net investment income after excise tax 

24,157

31,196

25,000

Realized and unrealized gains (losses) on investments and foreign

currency transactions

Net realized gains (losses)

Non-controlled/non-affiliate company investments

4,118

(409)

(216)

Non-controlled affiliate company investments

32,950

Foreign currency transactions

70

1

Foreign currency forward contracts

(25)

Net realized gains (losses)

4,163

(408)

32,734

Net change in unrealized appreciation (depreciation)

Non-controlled/non-affiliate company investments

4,685

388

(5,136)

Non-controlled affiliate company investments

(878)

(514)

4,703

Controlled affiliate company investments

(464)

363

Translation of assets and liabilities in foreign currencies

22

(184)

Net change in unrealized appreciation (depreciation)

3,365

53

(433)

Net realized and unrealized gains (losses) on investments and foreign currency transactions 

7,528

(355)

32,301

Net increase in net assets resulting from operations 

$

31,685

$

30,841

$

57,301

Per Common Share Data 

Basic and diluted earnings per common share

$

1.55

$

1.50

$

2.79

Dividends and distributions declared per common share

$

1.55

$

1.62

$

1.42

Basic and diluted weighted average common shares outstanding

20,546,032

20,546,032

20,538,971

 

WHITEHORSE FINANCE, INC. CONSOLIDATED SCHEDULE OF INVESTMENTS December  31, 2020 (in thousands)

Investment Type(1) 

Spread 

Above

Index(2) 

Interest 

Rate(3) 

Acquisition 

Date(10) 

Maturity 

Date

Principal/

Share

Amount

Amortized 

Cost

Fair 

Value(11) 

Fair Value 

As A

Percentage

of Net

Assets

North America

Debt Investments

Advertising 

Fluent, LLC

First Lien Secured Term Loan

L+ 7.00% 

(0.50% Floor)

7.50%

03/26/18

03/27/23

7,453

$

7,453

$

7,453

2.38%

SmartSign Holdings LLC

First Lien Secured Term Loan

L+ 7.50% 

(1.00% Floor)

8.50%

08/21/20

10/11/24

7,744

7,603

7,706

2.46

15,197

15,056

15,159

4.84

Agricultural & Farm Machinery 

Bad Boy Mowers Acquisition, LLC

First Lien Secured Term Loan

L+ 5.75% 

(1.00% Floor)

6.75%

12/19/19

12/06/25

9,294

9,062

9,201

2.94

Air Freight & Logistics 

Access USA Shipping, LLC

First Lien Secured Term Loan

L+ 8.00% 

(1.50% Floor)

9.50%

02/08/19

02/08/24

5,359

5,309

5,359

1.71

Application Software 

Connexity, Inc.

First Lien Secured Term Loan

L+ 8.50% 

(1.50% Floor)

10.00%

05/21/20

05/21/25

10,863

10,577

10,863

3.47

Newscycle Solutions, Inc.

First Lien Secured Term Loan

L+ 7.00% 

(1.00% Floor)

8.00%

06/14/19

12/29/22

3,245

3,209

3,194

1.02

First Lien Secured Revolving Loan(7) 

L+ 7.00% 

(1.00% Floor)

8.00%

06/14/19

12/29/22

181

179

177

0.06

TaxSlayer LLC 

First Lien Secured Term Loan

L+ 6.50% 

(1.00% Floor)

7.50%

12/31/20

12/31/26

14,452

14,163

14,163

4.53

First Lien Secured Revolving Loan(7) 

L+ 6.50% 

(1.00% Floor)

7.50%

12/31/20

12/31/26

28,741

28,128

28,397

9.08

Automotive Retail 

Team Car Care Holdings, LLC

First Lien Secured Term Loan(12) 

Base rate+ 8.00% 

(1.00% Floor)

9.00%

02/26/18

02/23/23

16,168

16,011

15,820

5.06

BW Gas & Convenience Holdings, LLC

First Lien Secured Term Loan

L+ 6.25% 

(0.00% Floor)

6.40%

11/15/19

11/18/24

6,319

6,121

6,319

2.02

22,487

22,132

22,139

7.08

Broadcasting 

Alpha Media, LLC

First Lien Secured Term Loan

P+7.50% 

(2.00% Floor)

10.75%

08/14/18

02/25/22

5,075

5,022

4,844

1.55

Building Products 

Drew Foam Companies Inc

First Lien Secured Term Loan

L+ 6.50% 

(1.00% Floor)

7.50%

12/15/20

11/24/25

10,078

9,878

9,879

3.16

First Lien Secured Revolving Loan(7) 

L+ 6.50% 

(1.00% Floor)

7.50%

12/15/20

11/05/25

332

325

325

0.10

LHS Borrower, LLC

First Lien Secured Term Loan

L+ 6.75% 

(1.00% Floor)

7.75%

09/30/20

09/30/25

9,689

9,483

9,543

3.05

First Lien Secured Revolving

Loan (7) 

L+ 6.75% 

(1.00% Floor)

7.75%

09/30/20

09/30/25

4

20,099

19,686

19,751

6.31

 

WHITEHORSE FINANCE, INC. CONSOLIDATED SCHEDULE OF INVESTMENTS December 31, 2020 (in thousands)

Investment Type(1) 

Spread 

Above

Index(2) 

Interest 

Rate(3) 

Acquisition 

Date(10) 

Maturity 

Date

Principal/

Share

Amount

Amortized 

Cost

Fair 

Value(11) 

Fair Value 

As A

Percentage

of Net

Assets

Cable & Satellite 

Bulk Midco, LLC

First Lien Secured Term Loan(15) 

L+ 7.19% 

(1.00% Floor)

8.19%

06/08/18

06/08/23

15,000

$

14,890

$

14,250

4.55%

Communications Equipment 

Ribbon Communications Operating Company, Inc.

First Lien Secured Term Loan(5) 

L+ 7.50% 

(0.00% Floor)

7.65%

08/14/20

03/03/26

12,438

12,002

12,313

3.94%

Sorenson Communications, LLC

First Lien Secured Term Loan

L+ 6.50% 

(0.00% Floor)

6.75%

03/15/19

04/29/24

3,462

3,393

3,457

1.10

15,900

15,395

15,770

5.04

Construction & Engineering 

Atlas Intermediate Holdings LLC

First Lien Secured Term Loan

L+ 6.25% 

(1.00% Floor)

7.25%

05/26/20

02/13/26

15,073

14,259

14,922

4.77

Road Safety Services, Inc.

First Lien Secured Term Loan

L+ 6.00% 

(1.00% Floor)

7.00%

12/31/20

09/18/23

4,550

4,459

4,461

1.43

First Lien Secured Revolving 

Loan(7) 

L+ 6.00% 

(1.00% Floor)

7.00%

12/31/20

09/18/23

17

0.01

Tensar Corp.

First Lien Secured Term Loan

L+ 6.75% 

(1.00% Floor)

7.75%

11/20/20

08/20/25

7,000

6,829

6,829

2.18

26,623

25,547

26,229

8.39

Construction Materials 

Claridge Products and Equipment, LLC

First Lien Secured Term Loan

L+ 6.50%

7.50%

12/30/20

12/29/25

8,000

7,840

7,840

2.51

(1.00% Floor)

First Lien Secured Revolving 

Loan(7) 

L+ 6.50% 

(1.00% Floor)

7.50%

12/30/20

12/29/25

8,000

7,840

7,840

2.51

Consumer Finance 

Maxitransfers Blocker Corp

First Lien Secured Term Loan

L+ 9.00% 

(1.00% Floor)

10.00%

10/07/20

10/07/25

8,869

8,668

8,668

2.77

First Lien Secured Revolving Loan(4) 

L+ 9.00% 

(1.00% Floor)

10.00%

10/07/20

10/07/25

1,038

1,014

1,014

0.32

9,907

9,682

9,682

3.09

Data Processing & Outsourced Services 

Escalon Services Inc

First Lien Secured Term Loan

P+12.50% 

(0.75% Floor)

15.75% 

(1.50% PIK)

12/04/20

12/04/25

8,000

7,295

7,763

2.48

FPT Operating Company, LLC/

TLabs Operating Company, LLC

First Lien Secured Term Loan

L+ 8.25% 

(1.00% Floor)

9.25% 

(0.50% PIK)

12/23/16

06/07/24

24,467

24,225

23,460

7.50

Geo Logic Systems Ltd.(5) 

First Lien Secured Term Loan(13) 

C +6.25% 

(1.00% Floor)

7.25%

12/19/19

12/19/24

6,709

5,035

5,164

1.65

First Lien Secured Revolving Loan(7)(13) 

C +6.25% 

(1.00% Floor)

7.25%

12/19/19

12/19/24

(2)

39,176

36,555

36,385

11.63

WHITEHORSE FINANCE, INC. CONSOLIDATED SCHEDULE OF INVESTMENTS December 31, 2020 (in thousands)

Investment Type(1) 

Spread 

Above

Index(2) 

Interest 

Rate(3) 

Acquisition 

Date(10) 

Maturity 

Date

Principal/

Share

Amount

Amortized 

Cost

Fair 

Value(11) 

Fair Value 

As A

Percentage

of Net

Assets

Department Stores 

Mills Fleet Farm Group, LLC

First Lien Secured Term Loan

L+ 6.00% 

(1.00% Floor)

7.00%

10/24/18

10/24/24

13,543

$

13,292

$

13,272

4.24%

Distributors 

Crown Brands, LLC

Second Lien Secured Term

Loan(20) 

L+ 10.50% 

(1.50% Floor)

12.00%

12/15/20

01/08/26

4,526

4,420

3,621

1.16

Second Lien Secured Delayed Draw Loan(20) 

L+ 10.50% 

(1.50% Floor)

12.00%

12/15/20

01/08/26

671

671

537

0.17

5,197

5,091

4,158

1.33

Diversified Chemicals 

Sklar Holdings, Inc.

First Lien Secured Term Loan

L+ 6.00% 

(1.00% Floor)

7.00%

11/13/19

05/13/23

8,882

8,718

8,834

2.82

Diversified Support Services 

ImageOne Industries, LLC

First Lien Secured Term Loan

L+ 10.00% 

(1.00% Floor)

11.00% 

(4.00% PIK)

01/11/18

01/11/23

6,564

6,422

6,564

2.10

First Lien Secured Revolving Loan(4)(7) 

L+ 10.00% 

(1.00% Floor)

11.00% 

(4.00% PIK)

07/22/19

12/12/22

379

379

379

0.12

NNA Services, LLC

First Lien Secured Term Loan

L+ 7.00% 

(1.50% Floor)

8.50%

10/16/18

10/16/23

13,353

13,178

13,284

4.25

20,296

19,979

20,227

6.47

Education Services 

EducationDynamics, LLC

First Lien Secured Term Loan

L+ 7.75% 

(1.00% Floor)

8.75%

11/26/19

11/26/24

13,649

13,428

13,612

4.35

Food Retail 

AG Kings Holdings, Inc.

First Lien Secured Term Loan(4)(8) 

P+ 11.00% 

(0.75% Floor)

16.25% 

(2.00% PIK)

8/10/16

08/10/21

21,755

8,612

7,600

2.43

Superpriority Secured Debtor-In-Possession Term Loan(4)(18) 

L+ 10.00% 

(1.00% Floor)

11.00%

08/26/20

02/08/21

14,222

5,663

14,222

4.55

35,977

14,275

21,822

6.98

Health Care Facilities 

Epiphany Dermatology 

First Lien Secured Term Loan

L+ 7.50% 

(1.00% Floor)

8.50%

12/04/20

12/01/25

3,500

3,414

3,414

1.09

First Lien Secured Revolving 

Loan(7) 

L+ 7.50% 

(1.00% Floor)

8.50%

12/04/20

12/01/25

First Lien Secured Delayed Draw Loan(7) 

L+ 7.50% 

(1.00% Floor)

8.50%

12/04/20

12/01/25

Grupo HIMA San Pablo, Inc.

First Lien Secured Term Loan A

L+ 9.00%

9.22%

05/15/19

04/30/19

3,855

3,855

2,613

0.84

First Lien Secured Term Loan B

L+ 9.00% 

(1.50% Floor)

10.50%

02/01/13

04/30/19

13,511

13,511

9,161

2.93

Second Lien Secured Term Loan(8) 

N/A 

15.75%

(2.00% PIK)

02/01/13

07/31/18

1,028

1,024

21,894

21,804

15,188

4.86

Health Care Services 

CHS Therapy, LLC

First Lien Secured Term Loan A

L+ 7.75% 

(1.50% Floor)

9.25%

06/14/19

06/14/24

7,422

7,325

7,422

2.37

First Lien Secured Term Loan C

L+ 7.75% 

(1.50% Floor)

9.25%

10/07/20

06/14/24

912

895

895

0.29

WHITEHORSE FINANCE, INC. CONSOLIDATED SCHEDULE OF INVESTMENTS December 31, 2020 (in thousands)

Investment Type(1) 

Spread 

Above

Index(2) 

Interest 

Rate(3) 

Acquisition 

Date(10) 

Maturity 

Date

Principal/

Share

Amount

Amortized 

Cost

Fair 

Value(11) 

Fair Value 

As A

Percentage

of Net

Assets

Ivy Rehab Holdings LLC

First Lien Secured Term Loan

L+ 6.75% 

(1.00% Floor)

7.75%

12/04/20

12/04/24

8,855

$

8,682

$

8,682

2.77%

First Lien Secured Revolving 

Loan(7) 

L+ 6.75% 

(1.00% Floor)

7.75%

12/04/20

12/04/25

First Lien Secured Delayed Draw Loan(7) 

L+ 6.75%

(1.00% Floor)

7.75%

12/04/20

12/04/25

Lab Logistics, LLC

First Lien Secured Term Loan

L+ 7.25% 

(1.00% Floor)

8.25%

10/16/19

11/19/25

709

693

694

0.22

First Lien Secured Delayed Draw Loan

L+ 7.25% 

(1.00% Floor)

8.25%

10/16/19

09/25/23

5,236

5,209

5,236

1.67

PG Dental New Jersey Parent, LLC

First Lien Secured Term Loan

L+ 7.75% 

(1.00% Floor)

8.75%

11/25/20

11/25/25

16,170

15,813

15,814

5.05

First Lien Secured Revolving 

Loan (7) 

L+ 7.75% 

(1.00% Floor)

8.75%

11/25/20

11/25/25

39,304

38,617

38,743

12.37

Home Furnishings 

Sure Fit Home Products, LLC

First Lien Secured Term Loan(8) 

L+ 9.75% 

(1.00% Floor)

10.75%

10/26/18

07/13/22

5,229

5,111

4,019

1.28

Interactive Media & Services 

What If Media Group, LLC

First Lien Secured Term Loan

L+ 6.50% 

(1.00% Floor)

7.50%

10/02/19

10/02/24

12,594

12,405

12,594

4.02

Internet & Direct Marketing Retail 

BBQ Buyer, LLC

First Lien Secured Term Loan

L+ 8.00% 

(1.50% Floor)

9.50%

08/28/20

08/28/25

10,669

10,421

10,563

3.38

First Lien Secured Revolving 

Loan(7) 

L+ 8.00% 

(1.50% Floor)

9.50%

08/28/20

02/28/21

8

Luxury Brand Holdings, Inc.

First Lien Secured Term Loan

L+ 7.00% 

(1.00% Floor)

8.00%

12/04/20

06/04/26

6,000

5,882

5,882

1.88

Potpourri Group, Inc.

First Lien Secured Term Loan

L+ 8.25% 

(1.50% Floor)

9.75%

07/03/19

07/03/24

18,390

18,099

18,238

5.83

35,059

34,402

34,691

11.09

Investment Banking & brokerage 

JVMC Holdings Corp. (f/k/a RJO Holdings Corp)

First Lien Secured Term Loan

L+ 7.25% 

(1.00% Floor)

8.25%

02/28/19

02/28/24

13,598

13,512

13,598

4.35

IT Consulting & Other Services 

AST-Applications Software Technology

LLC

First Lien Secured Term Loan

L+ 8.00% 

(1.00% Floor)

9.00% 

(1.00% PIK)

01/10/17

01/10/23

4,019

3,988

4,019

1.28

RCKC Acquisitions LLC

(dba KSM Consulting LLC)

First Lien Secured Term Loan

L+ 6.25% 

(1.00% Floor)

7.25%

12/31/20

12/31/26

11,378

11,150

11,150

3.56

First Lien Secured Revolving 

Loan(7) 

L+ 6.25% 

(1.00% Floor)

7.25%

12/31/20

12/31/26

First Lien Secured Delayed Draw Loan(7) 

L+ 6.25% 

(1.00% Floor)

7.25%

12/31/20

12/31/22

15,397

15,138

15,169

4.84

WHITEHORSE FINANCE, INC. CONSOLIDATED SCHEDULE OF INVESTMENTS December 31, 2020 (in thousands)

Investment Type(1) 

Spread 

Above

Index(2) 

Interest 

Rate(3) 

Acquisition 

Date(10) 

Maturity 

Date

Principal/

Share

Amount

Amortized 

Cost

Fair 

Value(11) 

Fair Value 

As A

Percentage

of Net

Assets

Leisure Facilities 

Honors Holdings, LLC

First Lien Secured Term Loan(16) 

L+ 7.97% 

(1.00% Floor)

8.97% 

(0.50% PIK)

09/06/19

09/06/24

9,427

$

9,278

$

8,296

2.65%

First Lien Secured Delayed Draw Loan(16) 

L+ 7.61% 

(1.00% Floor)

8.61% 

(0.50% PIK)

09/06/19

09/06/24

4,643

4,597

4,086

1.31

Lift Brands, Inc. (aka Snap Fitness Holdings, Inc) 

First Lien Secured Term Loan A

L+ 3.25% 

(1.00% Floor)

4.25%

06/29/20

06/29/25

5,659

5,580

5,569

1.78

First Lien Secured Term Loan B

N/A 

9.50%

(9.50% PIK)

06/29/20

06/29/25

1,164

1,138

1,133

0.36

First Lien Secured Term Loan C(9) 

N/A 

9.50%

(9.50% PIK)

06/29/20

NA

1,268

1,265

1,265

0.40

22,161

21,858

20,349

6.50

Office Services & Supplies 

Empire Office, Inc.

First Lien Secured Term Loan

L+ 6.75% 

(1.50% Floor)

8.25%

04/12/19

04/12/24

10,736

10,595

10,489

3.35

Packaged Foods & Meats 

Lenny & Larry's, LLC

First Lien Secured Term Loan(17) 

L+ 7.94% 

(1.00% Floor)

8.94% 

(1.17% PIK)

05/15/18

05/15/23

11,304

11,200

10,811

3.46

Personal Products 

Inspired Beauty Brands, Inc.

First Lien Secured Term Loan

L+ 7.00% 

(1.00% Floor)

8.00%

12/30/20

12/31/25

11,500

11,270

11,270

3.60

First Lien Secured Revolving 

Loan(7) 

L+ 7.00% 

(1.00% Floor)

8.00%

12/30/20

12/31/25

11,500

11,270

11,270

3.60

Property & Casualty Insurance 

Policy Services Company, LLC(5) 

First Lien Secured Term Loan

L+ 6.00% 

(1.00% Floor)

7.00%

03/06/20

05/31/24

6,240

5,987

6,115

1.95

Research & Consulting Services 

Comniscient Technologies LLC

First Lien Secured Term Loan

L+ 7.50% 

(1.00% Floor)

8.50%

10/13/20

10/13/25

6,962

6,830

6,830

2.18

First Lien Secured Revolving 

Loan(7) 

L+ 7.50% 

(1.00% Floor)

8.50%

10/13/20

10/13/25

Nelson Worldwide, LLC

First Lien Secured Term Loan

L+ 9.25% 

(1.00% Floor)

10.25%

01/09/18

01/09/23

11,593

11,477

11,362

3.63

ALM Media, LLC

First Lien Secured Term Loan

L+ 6.50% 

(1.00% Floor)

7.50%

11/25/19

11/25/24

14,962

14,728

14,439

4.61

33,517

33,035

32,631

10.42

Restaurants 

LS GFG Holdings Inc.

First Lien Secured Term Loan

L+ 7.00% 

(1.00% Floor)

8.00% 

(1.00% PIK)

11/30/18

11/19/25

11,240

10,442

9,779

3.13

Specialized Consumer Services 

True Blue Car Wash, LLC

First Lien Secured Term Loan

L+ 7.12% 

(1.00% Floor)

8.12%

10/17/19

10/17/24

4,349

4,283

4,349

1.39

First Lien Secured Delayed Draw Loan

L+ 7.12% 

(1.00% Floor)

8.12%

10/17/19

10/17/24

2,014

1,997

2,014

0.64

6,363

6,280

6,363

2.03

WHITEHORSE FINANCE, INC. CONSOLIDATED SCHEDULE OF INVESTMENTS December 31, 2020 (in thousands)

Investment Type(1) 

Spread 

Above

Index(2) 

Interest 

Rate(3) 

Acquisition 

Date(10) 

Maturity 

Date

Principal/

Share

Amount

Amortized 

Cost

Fair 

Value(11) 

Fair Value 

As A

Percentage

of Net

Assets

Specialized Finance 

Golden Pear Funding Assetco, 

LLC(5) 

Second Lien Secured Term Loan

L+ 10.50% 

(1.00% Floor)

11.50%

09/20/18

03/20/24

10,938

$

10,810

$

10,938

3.50%

Oasis Legal Finance, LLC(5) 

Second Lien Secured Term Loan

L+ 10.75% 

(1.00% Floor)

11.75%

09/09/16

03/09/22

12,500

12,446

12,500

3.99

WHF STRS Ohio Senior Loan Fund LLC

Subordinated Note(4)(5)(7)(9)(14) 

L+ 6.50%

6.65%

07/19/19

N/A

41,073

41,073

41,073

13.13

64,511

64,329

64,511

20.62

Specialty Chemicals 

Flexitallic Group SAS

First Lien Secured Term Loan

L+ 6.50% 

(1.00% Floor)

7.50%

10/28/19

10/29/26

11,632

11,389

10,818

3.46

Systems Software 

Vero Parent, Inc.

First Lien Secured Term Loan

L+ 6.00% 

(1.00% Floor)

7.00%

11/06/19

08/16/24

7,074

6,613

7,074

2.26

Technology Hardware, Storage & Peripherals 

Source Code Midco, LLC

First Lien Secured Term Loan

L+ 8.25% 

(1.00% Floor)

9.25%

05/04/18

05/04/23

22,322

22,022

22,322

7.13

Telestream Holdings Corporation

First Lien Secured Term Loan

L+ 8.75% 

(1.00% Floor)

9.75%

10/15/20

10/15/25

14,037

13,608

13,769

4.40

First Lien Secured Revolving 

Loan(7) 

L+ 8.75% 

(1.00% Floor)

9.75%

10/15/20

10/15/25

15

36,359

35,630

36,106

11.54

Total Debt Investments

694,114

658,704

657,249

210.03

Equity Investments

Asset Management & Custody Banks 

Arcole Holding Corp. Shares(4)(5)(6)(19) 

N/A

N/A

10/01/20

N/A

6,944

6,448

2.06

Data Processing & Outsourced Services 

Escalon Services Inc Warrants(4) 

N/A

N/A

12/04/20

N/A

709

476

476

0.15

Diversified Support Services 

Quest Events, LLC Preferred Units(4) 

N/A

N/A

12/28/18

12/08/25

317

317

ImageOne Industries, LLC Common A

Units(4) 

N/A

N/A

09/20/19

N/A

225

14

542

317

14

Health Care Services 

Lab Logistics Preferred Units(4) 

N/A

N/A

10/29/19

N/A

2

857

857

0.27

Internet & Direct Marketing Retail 

BBQ Buyer, LLC Shares(4) 

N/A

N/A

08/28/20

N/A

1,100

1,100

1,265

0.40

Ross-Simons Topco, LP Preferred Units(4) 

N/A

N/A

12/04/20

N/A

600

600

600

0.19

1,700

1,700

1,865

0.59

IT Consulting & Other Services 

Keras Holdings, LLC

Shares(dba KSM Consulting LLC)(4) 

N/A

N/A

12/31/20

N/A

496

496

496

0.16

Leisure Facilities 

Lift Brands, Inc. (aka Snap Fitness Holdings, Inc.) Class A Common Stock(4) 

N/A

N/A

06/29/20

N/A

2

1,955

282

0.09

Lift Brands, Inc. (aka Snap Fitness Holdings, Inc.) Warrants(4) 

N/A

N/A

06/29/20

06/28/28

1

793

114

0.04

WHITEHORSE FINANCE, INC. CONSOLIDATED SCHEDULE OF INVESTMENTS December 31, 2020 (in thousands)

Investment Type(1) 

Spread 

Above

Index(2) 

Interest 

Rate(3) 

Acquisition 

Date(10) 

Maturity 

Date

Principal/

Share

Amount

Amortized 

Cost

Fair 

Value(11) 

Fair Value 

As A

Percentage

of Net

Assets

3

2,748

396

0.13

Other Diversified Financial Services 

RCS Creditor Trust Class B Units(4)(6) 

N/A

N/A

10/01/17

N/A

143

$

$

—%

SFS Global Holding Company Warrants(4) 

N/A

N/A

06/28/18

12/28/25

Sigue Corporation Warrants(4) 

N/A

N/A

06/28/18

12/28/25

22

2,890

3,498

1.12

165

2,890

3,498

1.12

Specialized Finance 

NMFC Senior Loan Program I LLC Units(4)(5)(6) 

N/A

N/A

08/13/14

08/31/22

10,000

10,029

9,269

2.96

WHF STRS Ohio Senior Loan Fund LLC Interests(4)(5)(7)(14) 

N/A

N/A

07/19/19

N/A

10,268

10,268

10,167

3.25

20,268

20,297

19,436

6.21

Total Equity Investments

23,885

36,725

33,486

10.69

Total Investments 

717,999

$

695,429

$

690,735

220.72%

 

WHITEHORSE FINANCE, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, 2020

(in thousands)

(1) Except as otherwise noted, all investments are non-controlled/non-affiliate investments as defined by the Investment Company Act of 1940, as amended (the "1940 Act"), and provide collateral for the Company's credit facility.

(2) The investments bear interest at a rate that may be determined by reference to the London Interbank Offered Rate ("LIBOR" or "L"), which resets monthly, quarterly or semiannually, the Canadian Dollar Offered Rate ("CDOR" or "C") or the U.S. Prime Rate as published by the Wall Street Journal ("Prime" or "P"). The one, three and six-month LIBOR were 0.1%, 0.2% and 0.3%, respectively, as of December 31, 2020. The Prime was 3.25% as of December 31, 2020. The CDOR was 0.5% as of December 31, 2020.

(3) The interest rate is the "all-in-rate" including the current index and spread, the fixed rate, and the payment-in-kind ("PIK") interest rate, as the case may be.

(4) The investment or a portion of the investment does not provide collateral for the Company's credit facility.

(5) Not a qualifying asset under Section 55(a) of the 1940 Act. Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of total assets. Qualifying assets represented 84% of total assets as of the date of the consolidated schedule of investments.

(6) Investment is a non-controlled/affiliate investment as defined by the 1940 Act.

(7) The investment has an unfunded commitment in addition to any amounts presented in the consolidated schedule of investments as of December 31, 2020.

(8) The investment is on non-accrual status.

(9) Security is perpetual with no defined maturity date.

(10) Except as otherwise noted, all of the Company's portfolio company investments, which as of the date of the consolidated schedule of investments represented 221% of the Company's net assets or 96% of the Company's total assets, are subject to legal restrictions on sales.

(11) The fair value of each investment was determined using significant unobservable inputs.

(12) The investment was comprised of two contracts, which were indexed to different base rates, L and P, respectively. The Spread Above Index and Interest Rate presented represent the weighted average of both contracts.

(13) Principal amount is denominated in Canadian dollars.

(14) Investment is a controlled affiliate investment as defined by the 1940 Act. On January 14, 2019, the Company entered into an agreement with State Teachers Retirement System of Ohio, a public pension fund established under Ohio law ("STRS Ohio"), to create WHF STRS Ohio Senior Loan Fund, LLC ("STRS JV"), a joint venture, which invests primarily in senior secured first and second lien term loans.

(15) In addition to the interest earned based on the stated interest rate of this security, the Company is entitled to receive an additional interest amount of 2.75% on its "last out" tranche of the portfolio company's senior term debt, which was previously syndicated into "first out" and "last out" tranches, whereby the "first out" tranche will have priority as to the "last out" tranche with respect to payments of principal, interest and any other amounts due thereunder.

(16) In addition to the interest earned based on the stated interest rate of this security, the Company is entitled to receive an additional interest amount of 3.50% on its "last out" tranche of the portfolio company's senior term debt, which was previously syndicated into "first out" and "last out" tranches, whereby the "first out" tranche will have priority as to the "last out" tranche with respect to payments of principal, interest and any other amounts due thereunder.

(17) In addition to the interest earned based on the stated interest rate of this security, the Company is entitled to receive an additional interest amount of 3.00% on its "last out" tranche of the portfolio company's senior term debt, which was previously syndicated into "first out" and "last out" tranches, whereby the "first out" tranche will have priority as to the "last out" tranche with respect to payments of principal, interest and any other amounts due thereunder.

(18) In August 2020, in conjunction with the AG Kings Holdings, Inc. bankruptcy, the Company converted approximately $14.2 million of its existing first lien secured term loan into a new superpriority secured debtor-in-possession term loan.

(19) On October 1, 2020, as part of a restructuring agreement between the Company and Arcole Acquisition Corp, the Company's investments in first lien secured term loans to Arcole Acquisition Corp were converted into common shares of Arcole Holding Corp.

(20) At the option of the issuer, interest can be paid in cash or cash and PIK. The issuer may elect to pay up to 2.00% PIK.

Contacts

Stuart AronsonWhiteHorse Finance, Inc.212-506-0500saronson@higwhitehorse.com

or

Joyson ThomasWhiteHorse Finance, Inc.305-379-2322jthomas@higwhitehorse.com

or

Sean Silva Prosek Partners646-818-9122 ssilva@prosek.com

 

Cision View original content:http://www.prnewswire.com/news-releases/whitehorse-finance-inc-announces-fourth-quarter-and-full-year-2020-earnings-results-and-declares-quarterly-distribution-of-0-355-per-share-301238460.html

SOURCE WhiteHorse Finance, Inc.



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