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WhiteHorse Finance, Inc. Reports Third Quarter 2013 Earnings Results



  WhiteHorse Finance, Inc. Reports Third Quarter 2013 Earnings Results

Business Wire

NEW YORK -- November 12, 2013

WhiteHorse Finance, Inc. (“WhiteHorse Finance” or the "Company") (NASDAQ:WHF)
today reported its financial results for the quarter ended September 30, 2013.

Summary Highlights

  * New investments of $104.4 million in the first nine months of 2013, $31.0
    million in the third quarter
  * Net investment income of $6.3 million in the third quarter, an increase of
    29.5% over the prior quarter
  * Third quarter distribution of $0.355 per share

Jay Carvell, WhiteHorse Finance’s Chief Executive Officer commented, “During a
very busy quarter, we were pleased to make over $31 million of new
investments. Though we received a large repayment from Acella Pharmaceuticals,
we ended the quarter with a solid, more diversified portfolio that we feel is
indicative of our capabilities in the middle market credit space. We are
confident that we will continue to generate opportunities that allow for
growth and meet the objectives of our shareholders.”

Portfolio and Investment Activity

As of September 30, 2013, the fair value of WhiteHorse Finance’s investment
portfolio was $214.7 million. The portfolio consisted of 100% senior secured
loans. Additionally, WhiteHorse Finance’s portfolio consisted of 83.7%
variable-rate investments (indexed to LIBOR), which we believe positions our
portfolio well for a potential rising interest rate environment. The overall
portfolio consisted of 17 positions across 15 companies with an average
investment size of $12.6 million and a weighted average cash yield of 12.2%.

As of December 31, 2012, the fair value of WhiteHorse Finance’s investment
portfolio was $180.5 million.

For the three months ended September 30, 2013, WhiteHorse Finance invested
$31.0 million in new and existing portfolio companies, offset by net
repayments of $54.4 million. Net repayments consisted of gross repayments of
$98.3 million, less $43.9 million redeployed in new facilities in those same
companies as part of a refinancing. Gross repayments included $25.4 million
related to those refinancings, $6.5 million of scheduled repayments and $66.4
million of unscheduled repayments. On a gross basis, ignoring the impact of
refinancings, WhiteHorse Finance invested $74.8 million across nine companies.

For the nine months ended September 30, 2013, WhiteHorse Finance invested
$104.4 million in new and existing portfolio companies, offset by net
repayments of $69.2 million. Net repayments consisted of gross repayments of
$113.1 million, less $43.9 million redeployed in new facilities in those same
companies as part of a refinancing. Gross repayments included $25.4 million
related to those refinancings, $12.3 million of scheduled repayments and $75.4
million of unscheduled repayments. On a gross basis, ignoring the impact of
refinancings, WhiteHorse Finance invested $148.3 million in 14 companies.

Results of Operations

For the three and nine months ended September 30, 2013, WhiteHorse Finance
reported net investment income of $6.3 million and $15.1 million,
respectively. This represents an increase of 29.5% in net investment income
over the prior quarter.

For the three and nine months ended September 30, 2013, WhiteHorse Finance
reported unrealized depreciation of investments of $0.3 million and $2.4
million, respectively.

For the three and nine months ended September 30, 2013, WhiteHorse Finance
reported a net increase in net assets of $6.0 million and $12.7 million,
respectively.

The Company’s NAV was $226.0 million as of September 30, 2013, resulting in an
NAV per share of $15.09, as compared with $229.0 million, or $15.30 per share,
reported as of December 31, 2012.

Liquidity and Capital Resources

As of September 30, 2013, WhiteHorse Finance had cash and cash equivalents of
$132.4 million, compared with $187.8 million as of December 31, 2012,
inclusive of restricted cash. The decrease in cash on hand was primarily due
to a reduction of $51.3 million in outstanding borrowings under the Company’s
revolving credit facility.

As of September 30, 2013, the Company had no outstanding borrowings under its
$150.0 million revolving credit facility, $30 million of senior notes
outstanding and $55.0 million outstanding under its unsecured term loan.

Distributions

On August 22, 2013, the Company declared a distribution of $0.355 per share
for the quarter ended September 30, 2013. The distribution was payable on
October 3, 2013 to stockholders of record as of September 20, 2013. This marks
the fourth consecutive quarter that the Company has declared a distribution at
this rate.

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 second quarter
earnings results at 10:00 a.m. ET on Tuesday, November 12, 2013. 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# 77970231. Investors may also access the call on the investor
relations portion of the Company’s website at
http://phx.corporate-ir.net/phoenix.zhtml?c=251424&p=irol-IRHome.

If you are unable to access the live teleconference, a replay will be
available beginning approximately two hours after the call’s completion
through November 20, 2013. The teleconference replay can be accessed by
dialing 404-537-3406 (domestic and international) and entering ID# 77970231. A
webcast replay will also be available on the investor relations portion of the
Company’s website at
http://phx.corporate-ir.net/phoenix.zhtml?c=251424&p=irol-IRHome.

About WhiteHorse Finance, Inc.

WhiteHorse Finance, Inc. is a business development company that originates and
invests in loans to privately held small-cap companies across a broad range of
industries. The Company’s investment activities are managed by its investment
adviser, H.I.G. WhiteHorse Advisers, LLC, an affiliate of H.I.G. Capital,
L.L.C. (“H.I.G. Capital”). H.I.G. Capital is a leading global alternative
asset manager managing approximately $13 billion of capital as of September
30, 2013 across a number of funds focused on the small-cap market. 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.

                          (Financial Tables Follow)

 
WhiteHorse Finance, Inc.

Consolidated Statements of Assets and Liabilities

(in thousands, except share and per share data)
                                                          
                                    September 30, 2013     December 31, 2012
                                    (Unaudited)
Assets
Investments, at fair value (cost
$217,004 and $180,377,              $    214,669           $    180,488
respectively)
Cash and cash equivalents                62,254                 156,123
Restricted cash and cash                 70,106                 31,646
equivalents
Interest receivable                      1,998                  1,474
Deferred financing costs                 3,988                  3,184
Prepaid expenses and other               63                     367
receivables
Total assets                        $    353,078           $    373,282
                                                                              
Liabilities
Credit facility                     $    -                 $    51,250
Senior notes                             30,000                 -
Unsecured term loan                      55,000                 90,000
Distributions payable                    5,317                  1,616
Management fees payable                  3,171                  306
Payable for investments purchased        33,038                 -
Accounts payable and accrued             570                    1,061
expenses
Total liabilities                        127,096                144,233
                                                                              
Net assets
                                                                              
Common stock, 14,977,056 and
14,965,624 shares issued and             15                     15
outstanding, par value $0.001 per
share and 100,000,000 authorized
Paid-in capital in excess of par         228,646                228,466
Undistributed net investment             363                    1,164
income
Net realized losses on                   (71           )        (71          )
investments
Net unrealized depreciation on           (2,971        )        (525         )
investments
Total net assets                         225,982                229,049
Total liabilities and total net     $    353,078           $    373,282
assets
                                                                              
Number of shares outstanding             14,977,056             14,965,624
Net asset value per share           $    15.09             $    15.30
                                                                              

 
WhiteHorse Finance, Inc.

Consolidated Statements of Operations (Unaudited)

(in thousands, except share and per share data)
                                                  
                     Three months ended            Nine months ended
                     September 30,                 September 30,
                     2013             2012         2013             2012
Investment income
Interest income      $ 11,122         $ 10,213     $ 29,002         $ 28,862
Total investment       11,122           10,213       29,002           28,862
income
                                                                              
Expenses
Interest expense       1,403            -            4,070            -
Base management        1,201            -            3,522            -
fees
Performance-based      1,571            -            3,736            -
incentive fees
Administrative         142              -            920              -
service fees
Organization costs     -                -            -                96
General and
administrative         523              (97    )     1,613            291
expenses
Total expenses         4,840            (97    )     13,861           387
Net investment         6,282            10,310       15,141           28,475
income
                                                                              
Realized and
unrealized
(losses) gains on
investments
Net realized
losses on              -                (2,265 )     -                (2,265 )
investments
Net change in
unrealized
(depreciation)         (262       )     3,285        (2,446     )     5,375
appreciation on
investments
Net realized and
unrealized             (262       )     1,020        (2,446     )     3,110
(losses) gains on
investments
Net increase in
net assets           $ 6,020          $ 11,330     $ 12,695         $ 31,585
resulting from
operations
Per Common Share
Data
Basic and diluted
earnings per         $ 0.402            N/A        $ 0.848            N/A
common share ^(1)
Dividends and
distributions        $ 0.355            N/A        $ 1.065            N/A
declared per
common share ^(1)
Basic and diluted
weighted average       14,976,807       N/A          14,969,393       N/A
common shares
outstanding ^(1)
                                                                              
(1) For the three and nine months ended September 30, 2012, the Company did
not have common shares outstanding and therefore weighted average shares
outstanding information and per share data for this period are not provided.

Contact:

WhiteHorse Finance, Inc.
Alastair Merrick, 212-506-0500
amerrick@whitehorsefinance.com
or
Prosek Partners
Brian Schaffer, 212-279-3115
bschaffer@prosek.com
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