WhiteHorse Finance (NASDAQ:WHF) Announces Earnings Results, Misses Expectations By $0.02 EPS

WhiteHorse Finance (NASDAQ:WHF - Get Free Report) issued its quarterly earnings data on Thursday. The investment management company reported $0.26 earnings per share for the quarter, missing the consensus estimate of $0.28 by ($0.02), Zacks reports. The company had revenue of $15.90 million for the quarter, compared to the consensus estimate of $16.35 million. WhiteHorse Finance had a net margin of 13.46% and a return on equity of 9.33%.

Here are the key takeaways from WhiteHorse Finance's conference call:

• Net realized and unrealized losses totaled approximately $6.3 million (≈$0.284 per share), driven by the three previously-flagged credits (Honors Holdings, Outward Hound, Lumen LATAM), reducing NAV to $11.47 (down ~1.8%) and lowering core NII to $0.253 per share.
• Management accelerated share repurchases (≈412k shares in Q1 at a weighted average of $7.31, plus ~210k post-quarter), which were accretive ~$0.08 in Q1 and ~$0.31 cumulative to NAV; a 10b5-1 plan and insider purchases signal continued buyback support while shares trade at ~35% discount to NAV.
• Portfolio remains heavily first-lien senior secured (≈98.8%) but non-accruals rose to 3.6% (Honors, New Cycle, Outward Hound, PlayMonster); weighted average effective yields slipped to 10.8% on debt and 8.7% overall, while the STRS JV carries $327.1 million at ~9.9% yield and generates low‑teens ROE.
• The board declared the Q2 base distribution at $0.25 per share (Q1 included a $0.01 supplemental), and the advisor extended a temporary incentive fee waiver (reducing the incentive fee to 17.5% for Q2) to help support distributable earnings.

WhiteHorse Finance Stock Performance

Shares of WHF opened at $7.68 on Friday. WhiteHorse Finance has a 12-month low of $6.07 and a 12-month high of $9.66. The company has a current ratio of 1.25, a quick ratio of 1.25 and a debt-to-equity ratio of 1.25. The company has a market cap of $170.73 million, a PE ratio of 18.73 and a beta of 0.41. The stock has a 50-day moving average price of $7.32 and a 200-day moving average price of $7.11.

WhiteHorse Finance Dividend Announcement

The firm also recently disclosed a quarterly dividend, which will be paid on Monday, July 6th. Investors of record on Thursday, May 21st will be paid a dividend of $0.25 per share. The ex-dividend date of this dividend is Thursday, May 21st. This represents a $1.00 annualized dividend and a yield of 13.0%. WhiteHorse Finance's dividend payout ratio (DPR) is currently 161.29%.

Insider Activity at WhiteHorse Finance

In related news, Director John Bolduc bought 8,392 shares of the company's stock in a transaction on Thursday, March 5th. The stock was acquired at an average cost of $7.12 per share, for a total transaction of $59,751.04. Following the completion of the transaction, the director directly owned 267,894 shares in the company, valued at $1,907,405.28. This trade represents a 3.23% increase in their position. The transaction was disclosed in a legal filing with the SEC, which is available through this link. Also, CEO Stuart D. Aronson purchased 8,000 shares of the business's stock in a transaction on Monday, March 23rd. The stock was bought at an average cost of $6.95 per share, with a total value of $55,600.00. Following the purchase, the chief executive officer owned 80,000 shares in the company, valued at approximately $556,000. This represents a 11.11% increase in their ownership of the stock. Additional details regarding this purchase are available in the official SEC disclosure. Over the last 90 days, insiders purchased 47,448 shares of company stock worth $337,673. 2.50% of the stock is owned by company insiders.

Institutional Trading of WhiteHorse Finance

Hedge funds have recently made changes to their positions in the stock. Marshall Wace LLP purchased a new position in WhiteHorse Finance in the second quarter worth $368,000. Bank of America Corp DE raised its position in WhiteHorse Finance by 92.0% during the second quarter. Bank of America Corp DE now owns 185,004 shares of the investment management company's stock valued at $1,613,000 after purchasing an additional 88,659 shares in the last quarter. Oxford Asset Management LLP purchased a new stake in WhiteHorse Finance during the second quarter valued at about $105,000. Two Sigma Investments LP lifted its stake in WhiteHorse Finance by 27.5% during the third quarter. Two Sigma Investments LP now owns 231,140 shares of the investment management company's stock worth $1,599,000 after purchasing an additional 49,893 shares during the last quarter. Finally, Citadel Advisors LLC lifted its stake in WhiteHorse Finance by 190.8% during the third quarter. Citadel Advisors LLC now owns 21,418 shares of the investment management company's stock worth $148,000 after purchasing an additional 45,018 shares during the last quarter. 13.20% of the stock is owned by institutional investors.

Key WhiteHorse Finance News

Here are the key news stories impacting WhiteHorse Finance this week:

• Positive Sentiment: The board declared a quarterly distribution of $0.25 per share, reinforcing WhiteHorse Finance’s income-focused appeal for investors. Article Title
• Positive Sentiment: Management appears to be supporting the stock through buybacks even as it works through credit-related challenges, which can help offset earnings softness. Article Title
• Neutral Sentiment: The company’s Q1 earnings call and transcript give investors more detail on management’s outlook, portfolio quality, and capital allocation priorities. Article Title
• Negative Sentiment: Q1 results missed expectations, with earnings of about $0.25-$0.26 per share versus the $0.28 consensus, and revenue of $15.9 million below estimates, which likely pressured sentiment. Article Title
• Negative Sentiment: TipRanks described the quarter as “softer,” indicating earnings weakness and credit-related headwinds remain a concern despite the maintained payout. Article Title

Wall Street Analyst Weigh In

Separately, Weiss Ratings restated a "sell (d+)" rating on shares of WhiteHorse Finance in a research note on Monday, April 20th. Three investment analysts have rated the stock with a Hold rating and two have given a Sell rating to the company's stock. According to MarketBeat, the stock currently has a consensus rating of "Reduce" and an average price target of $7.75.

WhiteHorse Finance Company Profile

WhiteHorse Finance Corporation NASDAQ: WHF is a closed-end management investment company organized as a business development company under the Investment Company Act of 1940. The firm's primary objective is to generate current income and, to a lesser extent, capital appreciation by making debt and equity investments in privately held middle-market companies. WhiteHorse Finance seeks to partner with established businesses across a range of industries, providing flexible financing solutions designed to support growth initiatives, acquisitions and recapitalizations.

The company's investment portfolio predominantly comprises senior secured loans, second-lien debt, subordinated debt and select equity interests.