WhiteHorse Finance Inc Reports Q3 Earnings and Declares Increased Dividend
WhiteHorse Finance Inc (NASDAQ:WHF) announces a 25% year-over-year increase in core net investment income for Q3 2023.
The company declares an increased quarterly distribution of $0.385 per share, payable in January 2024.
Management reports a strong pipeline and cautious approach amidst a weakening economy.
Base management fee rate reduction approved by the board, effective January 2024.
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On November 9, 2023, WhiteHorse Finance Inc (NASDAQ:WHF) released its earnings results for the third quarter ended September 30, 2023. The company reported a significant 25% increase in core net investment income compared to the third quarter of 2022, indicating robust growth in its earnings power. In light of this performance, the board of directors approved an increase in the quarterly distribution to $0.385 per share, marking the second increase since the start of the year. The distribution is set to be paid on January 3, 2024, to stockholders of record as of December 20, 2023.
Financial Performance Overview
WhiteHorse Finance's total investment income saw a modest rise of 1.1% to $25,868 thousand for the quarter, while total expenses, including excise tax, increased slightly by 0.3% to $15,055 thousand. The company's net investment income and core net investment income per share both improved by 2.1%, reaching $0.465. Despite marking down certain assets, the majority of the portfolio is positioned to service debt effectively in the rising interest rate environment.
Portfolio and Balance Sheet Strength
The total investments at fair value decreased by 3.0% to $706,790 thousand as of September 30, 2023, from the previous quarter. The net asset value per share also saw a slight decrease of 0.9% to $13.87. However, the company's STRS JV total investments at fair value decreased by 3.6%, indicating a broader impact on investment valuations.
Management's Strategic Outlook
CEO Stuart Aronson expressed satisfaction with the company's performance and the strength of its pipeline, which allows for conservative deal selection. Despite a weakening economy, WhiteHorse Finance remains focused on credits with compelling risk-return characteristics. The company benefits from its three-tier sourcing architecture and affiliation with H.I.G. Capital, enhancing its position in the lower middle markets.
Cost Management Initiatives
In a strategic move to optimize costs, the board of directors approved a permanent reduction in the base management fee rate from 2.00% to 1.75% per annum, effective January 1, 2024. This demonstrates the company's commitment to enhancing shareholder value through prudent expense management.
Investor Relations and Conference Call
WhiteHorse Finance will host a conference call to discuss the third quarter results, providing investors with further insights into the company's performance and strategic direction. The call is scheduled for 2:00 p.m. ET on November 9, 2023, and will be accessible via the investor relations section of the company's website.
In summary, WhiteHorse Finance Inc (NASDAQ:WHF) has demonstrated a solid financial performance in the third quarter of 2023, with an increased core net investment income and a higher quarterly distribution to shareholders. The company's strategic initiatives and cautious approach in a challenging economic environment position it well for continued success.
Explore the complete 8-K earnings release (here) from WhiteHorse Finance Inc for further details.
This article first appeared on GuruFocus.
