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CM Finance Inc Reports Results for its Fiscal Fourth Quarter ended June 30, 2016

NEW YORK, Aug. 30, 2016 (GLOBE NEWSWIRE) -- CM Finance Inc (NASDAQ:CMFN) (“CMFN” or “the Company”) today announced financial results for its fiscal fourth quarter ended June 30, 2016.

HIGHLIGHTS

  • Decline in NAV per share to $11.90 per share from $11.96 per share as of March 31, 2016
  • Investment portfolio declined by $4.2 mm, or 1.6%, from last quarter, to $272.1 mm at fair value
  • Three new investments with a cost of $15.3 mm and an average yield of 10.60% were made during the quarter
  • Two investments were fully realized during the quarter
  • Weighted average yield of debt portfolio, at cost (without amortization), of 9.57% compared to 9.71% at March 31, 2016
  • Weighted average yield of debt portfolio, at cost (with amortization), of 9.80%(1) compared to 9.90% at March 31, 2016
  • Declared a regular quarterly distribution of $0.3516 per share for the quarter ending September 30, 2016, payable on October 6, 2016, to shareholders of record as of September 16, 2016

Portfolio results, as of June 30, 2016:
Total Assets $320.0 mm
Investment portfolio, at fair value $272.1 mm
Net Assets $162.7 mm
Weighted Average yield on debt investments, at cost 9.80% (1)
Net Asset Value per share $11.90
Portfolio activity in the current quarter:
Number of new investments 3
Total capital invested $15.3 mm
Proceeds from repayments, sales, and amortization $20.0 mm
Number of portfolio companies, end of period 22
Net investment income $4.4 mm
Net investment income per share $0.32
Net increase in net assets from operations $4.0 mm
Net increase in net assets from operations per share $0.29
Distribution declared per share (paid July 7, 2016) $0.3516

Mr. Michael C. Mauer, the Company’s Chief Executive Officer, said “We see opportunities in both the primary and secondary markets, especially in first and second lien debt. As patient investors with a long-term focus, we will continue to be patient in deploying our capital.”

On August 25, 2016, the Company’s Board of Directors declared a distribution for the quarter ended September 30, 2016 of $0.3516 per share payable on October 6, 2016 to shareholders of record as of September 16, 2016.

The Company reported net investment income of $4.4 mm, or $0.32 per share, and net realized and unrealized losses of $0.4 mm or $0.03 per share, for the quarter. The total net increase in net assets resulting from operations for the quarter was $4.0 mm, or $0.29 per share. At June 30, 2016, the Company’s net asset value (NAV) per share was $11.90.

Portfolio and Investment Activities

During the quarter, we realized $20.0 mm of repayments, sales proceeds and amortization. The decrease in our net investments after taking into account realized and unrealized gains was approximately $0.4 mm (at fair value).

At June 30, 2016, our investment portfolio of $272.1 mm (at fair value) consisted of investments in 22 portfolio companies, of which 57.7% were first lien investments and 42.2% were second lien investments. At June 30, 2016, our average portfolio company investment at fair value was $12.4 mm. At June 30, 2016, we had two loans on non-accrual status representing 6.2% of our portfolio at fair value.

As of June 30, 2016 and June 30, 2015, our weighted average total yield of debt and income producing securities at amortized cost (which includes interest income and amortization of fees and discounts) was 9.80% and 10.91%, respectively.

Capital Resources

As of June 30, 2016, we had $18.4 mm in cash, $18.0 mm in restricted cash and $19.5 mm of capacity under our revolving credit facility. Our net assets totaled $162.7 mm.

Subsequent Events

Subsequent to quarter end, the Company invested $13.2 mm in new and existing portfolio companies and received repayment or sales proceeds of $24.7 mm.

On August 25, 2016, the Company’s Board of Directors declared a regular distribution for the quarter ended September 30, 2016 of $0.3516 per share payable on October 6, 2016 to shareholders of record as of September 16, 2016.

CM Finance Inc and subsidiaries
Consolidated Statements of Assets and Liabilities
June 30, 2016 June 30, 2015
Assets
Non-controlled, non-affiliated investments, at fair value (amortized cost of $307,364,949 and $336,092,639, respectively)$ 272,114,164 $ 330,323,856
Derivatives, at fair value (cost $0 and $0, respectively) 9,071,659 1,845,768
Cash 18,433,066 21,535,492
Cash, restricted 18,023,466 3,433,704
Interest receivable 1,897,710 2,900,804
Deferred offering costs 186,513 186,513
Prepaid expenses and other assets 234,837 232,704
Total Assets$ 319,961,415 $ 360,458,841
Liabilities
Notes Payable:
Term loan$ 102,000,000 $ 102,000,000
Revolving credit facility 30,478,329 48,847,459
Deferred debt issuance costs (1,510,491) (2,331,035)
Notes Payable, net 130,967,838 148,516,424
Payable for investments purchased 8,828,750 2,988,655
Distributions payable 4,809,778 4,741,174
Derivatives, at fair value (cost $0 and $0, respectively) 9,071,659 1,845,768
Base management fees payable 1,257,768 1,420,978
Income-based incentive fees payable 275,540 1,723,260
Deferred financing costs payable 879,042 1,525,000
Interest payable 175,792 168,658
Accrued expenses and other liabilities 945,365 578,075
Total Liabilities 157,211,532 163,507,992
Commitments and Contingencies
Net Assets
Common Stock, par value $0.001 per share (100,000,000 shares authorized, 13,679,686 and 13,667,267 shares issued and outstanding, respectively) 13,680 13,667
Additional paid-in capital 199,722,997 199,418,478
Accumulated net realized (loss) gain 3,700,400
Distributions in excess of net investment income (1,736,009) (412,913)
Net unrealized depreciation on investments (35,250,785) (5,768,783)
Total Net Assets 162,749,883 196,950,849
Total Liabilities and Net Assets$ 319,961,415 $ 360,458,841
Net Asset Value Per Share$ 11.90 $ 14.41


CM Finance Inc and subsidiaries
Consolidated Statements of Operations
For the three months ended June 30, For the twelve months ended June 30,
2016 2015 2016 2015
Investment Income:
Interest income$ 7,493,388 $ 11,259,339 $ 33,683,108 $ 35,165,863
Payment in-kind interest income 218,174 960,603 1,121,036
Other fee income 321,395 42,332 936,211 630,206
Total investment income 7,814,783 11,519,845 35,579,922 36,917,105
Expenses:
Interest expense 1,012,620 988,886 4,048,527 3,527,014
Amortization of deferred debt issuance costs 364,195 340,590 1,441,044 1,194,662
Base management fees 1,257,768 1,420,978 5,511,532 5,169,039
Income-based incentive fees (1) 1,563,388 1,229,031 4,711,675
Custodian and administrator fees 111,858 87,344 442,598 303,913
Directors' fees 97,672 108,005 425,922 426,255
Professional fees 356,769 380,330 1,039,802 1,214,546
Allocation of administrative costs from advisor 60,000 209,241 785,846 591,233
Insurance expense 91,916 85,266 367,327 396,885
Other expenses 61,068 84,110 434,337 338,835
Total expenses 3,413,865 5,268,138 15,725,966 17,874,057
Waiver of income-based incentive fees (1,174,655)
Net expenses 3,413,865 5,268,138 15,725,966 16,699,402
Net investment income 4,400,918 6,251,707 19,853,956 20,217,703
Net realized and unrealized gains (losses) on investment transactions:
Net realized gains (losses) on investments 1 4,326,004 283,276 3,012,575
Net change in unrealized appreciation (depreciation) on investments (411,534) (5,911,675) (29,482,002) (7,796,990)
Net realized and unrealized losses (411,533) (1,585,671) (29,198,726) (4,784,415)
Net increase (decrease) in net assets resulting from operations$ 3,989,385 $ 4,666,036 $ (9,344,770) $ 15,433,288
Basic and diluted:
Net investment income per share$ 0.32 $ 0.46 $ 1.45 $ 1.48
Earnings (loss) per share$ 0.29 $ 0.34 $ (0.68) $ 1.13
Weighted Average Shares of Common Stock Outstanding 13,679,532 13,667,254 13,674,197 13,666,812

About CM Finance Inc

The Company is an externally-managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940. The Company’s investment objective is to maximize the total return to its stockholders in the form of current income and capital appreciation through debt and related equity investments by targeting investment opportunities with favorable risk-adjusted returns. The Company seeks to invest primarily in middle-market companies that have annual revenues of at least $50 mm and earnings before interest, taxes, depreciation and amortization of at least $15 mm. The Company’s investment activities are managed by its investment adviser, CM Investment Partners LLC. To learn more about CM Finance Inc, please visit www.cmfn-inc.com.

Forward-Looking Statements

Statements included herein may contain “forward-looking statements,” which relate to future performance or financial condition. 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 assumptions, risks and uncertainties, which change over time. Actual results may differ materially from those anticipated in any forward-looking statements as a result of a number of factors, including those described from time to time in filings by the Company with the Securities and Exchange Commission. The Company undertakes no duty to update any forward-looking statement made herein except as required by law. All forward-looking statements speak only as of the date of this press release.

Contacts CM Finance Inc Investor Relations Email: investorrelations@cmfn-inc.com Phone: 212-257-5199

Source:CM Finance