WhiteHorse Finance, Inc. (NASDAQ:WHF) Q3 2018 Earnings Conference Call Transcript
Nov 06, 2018 • 10:00 am ET
Good morning. My name is Lori, and I'll be your conference operator today. At this time, I would like to welcome everyone to the WhiteHorse Finance Third Quarter 2018 Earnings Conference Call.
Our hosts for today's call are Stuart Aronson, Chief Executive Officer; and Ed Giordano, Interim Chief Financial Officer. Today's call is being recorded and will be available for replay beginning at 1:00 p.m. Eastern. The replay dial-in number is (404) 537-3406 and the PIN number is 9978567. (Operator Instructions)
It is now my pleasure to turn the floor over to Sean Silva of Prosek Partners.
Thank you, Lori, and thank you, everyone, for joining us today to discuss WhiteHorse Finance's third quarter 2018 earnings results.
Before we begin, I would like to remind everyone that certain statements, which are not based on historical facts made during this call, including any statements relating to financial guidance, may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Because these forward-looking statements involve known and unknown risks and uncertainties, these are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. WhiteHorse Finance assumes no obligation or responsibility to update any forward-looking statements.
With that, allow me to introduce WhiteHorse Finance's Chief Executive Officer, Stuart Aronson. Stuart, you may begin.
Thank you, Sean. Good morning, and thank you for joining us today. As you're aware, we issued our press release this morning prior to market open, and I hope you've had a chance to review our results, which are also available on our website. I'm going to take you through our third quarter operating performance and then Ed will review our financial results, after which we're happy to take your questions.
During the third quarter, we continued our strong momentum, and I have a series of very positive items to share with you this morning. First, we increased NAV per share to $15.46, a 59% improvement from the second quarter of 2018 and an increase of $1.54 from the third quarter of 2017. Core net interest income was $0.349 per share, slightly below our quarterly dividend of $0.355, which we continue to expect to earn on an annualized basis. Core net interest income includes -- excludes two items that I will briefly summarize and which Ed will detail.
First, the sale of Aretec closed the day after the quarter ended. Given the high degree of visibility into closing of the transaction, we marked the asset at the end of the third quarter for the full value of the expected proceeds. In connection with this markup, we recognized an additional capital gains-based incentive fee accrual of approximately $3.1 million that is deducted from GAAP income.
Second, during the quarter, we incurred a one-time non-cash net refinancing cost associated with the redemption of our 6.5% baby bonds back in August. Ed will provide further detail on core versus GAAP net interest income. But first, I'll detail key highlights