What is the market's earnings forecast for WhiteHorse Finance next quarter?

What is the revenue and EPS growth rate for WhiteHorse Finance year over year?

What factors drove the changes in WhiteHorse Finance's revenue and profit?

What were the key takeaways from WhiteHorse Finance's earnings call?

What is WhiteHorse Finance's gross profit margin?

What guidance did WhiteHorse Finance's management provide for the next earnings period?

What does WhiteHorse Finance do and what are its main business segments?

What were the key takeaways from WhiteHorse Finance’s earnings call?

- **Base Distribution Reset**: $0.25 per share (8.8% yield) to align with reduced market spreads and interest rates.
- **Fee Waiver**: 17.5% incentive fee for 2 quarters, freeing up $0.1 million in Q3 NII.
- **Share Buyback**: $15 million program to capitalize on 40% discount to NAV.
- **Portfolio Challenges**: $6.7 million markdowns in Q3, with 2.7% of debt on nonaccrual (vs. 4.9% in Q2).
- **Market Trends**: Mid-market sponsor spreads at SOFR +450-500bp, nonsponsor at SOFR +600bp+. Focus on lower-leverage nonsponsor deals.
- **JV Growth**: STRS JV yield 10.3%, fair value $341.5 million, supporting BDC's 1.07x net leverage.
- **Recovery Outlook**: Troubled assets expected to take 12-24 months to stabilize, with Sklar Brands on track for 2026 sale.
- **NAV Discount**: Trading at 40% discount, making buybacks accretive.


**【CEO Summary Section】**
- **Q3 2025 Results**: GAAP net investment income (NII) of $6.1 million ($0.263 per share), down from $6.6 million ($0.282 per share) in Q2. Base distribution reset to $0.25 per share (8.8% annualized yield) due to market spread compression and interest rate cuts.
- **Fee Waiver**: Incentive fee reduced to 17.5% from 20% for Q4 2025 and Q1 2026, with potential extension based on performance.
- **Share Buyback Program**: $15 million authorized to repurchase shares trading at a 40% discount to NAV.
- **Portfolio Activity**: Net repayments of $31.2 million, with 2 new originations and 2 add-ons. Marked down $6.7 million due to underperforming assets (e.g., Alvaria, Camarillo Fitness).
- **Market Outlook**: Mid-market sponsor spreads at SOFR +450-500bp, nonsponsor spreads at SOFR +600bp+. Focus on nonsponsor deals with lower leverage and higher risk-adjusted returns.

**【CFO Financial Commentary】**
- **Distribution Framework**: Supplemental distributions calculated as lesser of 50% of excess NII or $0.15 NAV decline over 2 quarters. Q3 base distribution of $0.25 payable in January 2026.
- **JV Performance**: STRS JV fair value $341.5 million (10.3% yield), generating $3.6 million in Q3 income. BDC's net effective debt-to-equity ratio 1.07x, below 1.22x in Q2.
- **Balance Sheet**: $45.9 million cash, $100 million undrawn credit facility. Asset coverage ratio 180.7%, above 150% regulatory minimum.
- **Special Distribution**: $0.035 per share for undistributed taxable income, payable December 2025.

**【Q&A Highlights】**
- **Dividend Sustainability**: CEO states $0.25 is a long-term base rate, aligned with interest rate projections and portfolio earnings power.
- **Asset Recovery**: Troubled assets (e.g., Alvaria, Camarillo) expected to remain nonaccrual for 12-24 months. Sklar Brands on track for 2026 sale.
- **Market Competition**: Mid-market sponsor deals priced aggressively due to large players entering lower mid-market. Nonsponsor deals less competitive, with 3-5x leverage.
- **Share Repurchases**: Management will prioritize buybacks at current discount, with $15 million allocation.


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