CM Finance Inc Reports Results for its Fiscal First Quarter ended September 30, 2016

NEW YORK, Nov. 09, 2016 (GLOBE NEWSWIRE) -- CM Finance Inc (NASDAQ:CMFN) (“CMFN” or “the Company”) today announced financial results for its fiscal first quarter ended September 30, 2016.


  • Our September 30, 2016, net asset value (“NAV”) per share was $11.86 compared to $11.90 as of June 30, 2016
  • Investment portfolio declined by $7.9mm, or 2.9%, from last quarter, to $264.2mm at fair value
  • The Company made five new investments during the quarter, including three new portfolio company investments, with a total cost of $24.3mm and a weighted average yield of 10.17%
  • Three investments were fully realized during the quarter with an average IRR of 13.21%
  • The weighted average yield on debt investments, at cost, was 10.02% compared to 9.80% at June 30, 2016
  • The Board of Directors declared regular quarterly dividend distributions of $0.3516 and $0.25 per share for the quarters ending December 31, 2016 and March 31, 2017, payable on January 5, 2017 and April 6, 2017, to shareholders of record as of December 16, 2016 and March 17, 2017, respectively

Portfolio results, as of September 30, 2016:
Total assets $304.3mm
Investment portfolio, at fair value $264.2mm
Net assets $162.2mm
Weighted average yield on debt investments, at cost 10.02%
Net asset value per share $11.86
Portfolio activity in the current quarter:
Number of new investments 5
Total capital invested $24.3mm
Proceeds from repayments, sales, and amortization $33.2mm
Number of portfolio companies, end of period 22
Net investment income $3.9mm
Net investment income per share $0.29
Net increase in net assets from operations $4.3mm
Net increase in net assets from operations per share $0.31
Distribution declared per share (paid October 6, 2016) $0.3516

Mr. Michael C. Mauer, the Company’s Chief Executive Officer, said, “We continue to diversify our portfolio and remain focused on originating secured lending opportunities, both in the primary and secondary markets. We are also pleased to have concluded the financial restructuring of AAR, allowing us to reduce the percentage of our portfolio on non-accrual.”

On November 3, 2016, the Company’s Board of Directors declared a distribution for the quarter ended December 31, 2016 of $0.3516 per share, payable on January 5, 2017, to shareholders of record as of December 16, 2016. In addition, the Company’s Board of Directors also declared a distribution for the quarter ended March 31, 2017, of $0.25 per share, payable on April 6, 2017, to shareholders of record as of March 17, 2017.

Mr. Mauer said, “We are committed to paying an attractive, sustainable distribution to our shareholders. Our Board of Directors supports us in this aim, and we have done an extensive review over the past quarter. Our objective in setting the March 31, 2017 distribution is to ensure that our distribution policy going forward is consistent with our ability to generate NII without reducing our investment quality by reaching for yield, or changing our focus from secured lending opportunities. With that in mind, we have taken the proactive step of reducing our distribution level for the first calendar quarter of 2017 to $0.25 per share.”

The Company reported net investment income of $3.9mm, or $0.29 per share, and net realized and unrealized gains of $0.3mm, or $0.02 per share, for the quarter. The total net increase in net assets resulting from operations for the quarter was $4.3mm, or $0.31 per share. At September 30, 2016, the Company’s NAV per share was $11.86.

Portfolio and Investment Activities
During the quarter, we made investments in five companies, including three new portfolio companies. These investments totaled $24.3mm, at cost, and were made at a weighted average yield of 10.17%. We realized $33.2mm of repayments, sales and amortization. The increase in our net investments after taking into account realized and unrealized gains was approximately $0.3mm (at fair value).

As of September 30, 2016, our investment portfolio of $264.2mm (at fair value) consisted of investments in 22 portfolio companies, of which 63.1% were first lien investments and 36.8% were second lien investments. At September 30, 2016, our average portfolio company investment was $12.0mm at fair value. At September 30, 2016, we had two loans on non-accrual status representing 4.5% of our portfolio at fair value.

As of September 30, 2016 and June 30, 2016, 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 10.02% and 9.80%, respectively.

Capital Resources

As of September 30, 2016, we had $12.6mm in cash, $16.1mm in restricted cash and $35.5mm of capacity under our revolving credit facility. Our net assets totaled $162.2mm.

Subsequent Events

Subsequent to quarter end, the Company invested $14.5mm in new and existing portfolio companies and received repayment or sales proceeds of $23.0mm.

CM Finance Inc and subsidiaries
Consolidated Statements of Assets and Liabilities
September 30, 2016
June 30, 2016
Non-controlled, non-affiliated investments, at fair value (amortized cost of $291,083,122 and $307,364,949, respectively)$264,194,780 $ 272,114,164
Derivatives, at fair value (cost $0 and $0, respectively)8,859,132 9,071,659
Cash12,559,961 18,433,066
Cash, restricted16,129,989 18,023,466
Interest receivable2,327,586 1,897,710
Deferred offering costs186,513 186,513
Prepaid expenses and other assets90,368 234,837
Total Assets$304,348,329 $ 319,961,415
Notes Payable:
Term loan$102,000,000 $ 102,000,000
Revolving credit facility14,500,000 30,478,329
Deferred debt issuance costs(1,146,295) (1,510,491)
Notes Payable, net115,353,705 130,967,838
Base management fees payable1,211,535 1,257,768
Income-based incentive fees payable275,540 275,540
Payable for investments purchased9,700,000 8,828,750
Derivatives, at fair value (cost $0 and $0, respectively)8,859,132 9,071,659
Distributions payable4,810,208 4,809,778
Deferred financing costs payable879,042 879,042
Interest payable170,166 175,792
Accrued expenses and other liabilities833,485 945,365
Total Liabilities 142,092,813 157,211,532
Commitments and Contingencies (Note 6)
Net Assets
Common Stock, par value $0.001 per share (100,000,000 shares authorized, 13,680,910 and 13,679,686 shares issued and outstanding, respectively) 13,681 13,680
Additional paid-in capital199,733,880 199,722,997
Accumulated net realized loss(8,028,289)
Distributions in excess of net investment income(2,575,414) (1,736,009)
Net unrealized depreciation on investments(26,888,342) (35,250,785)
Total Net Assets 162,255,516 162,749,883
Total Liabilities and Net Assets$304,348,329 $ 319,961,415
Net Asset Value Per Share$11.86 $ 11.90

CM Finance Inc and subsidiaries
Consolidated Statements of Operations (Unaudited)
For the three months ended
September 30,
2016 2015
Investment Income:
Interest income $7,368,382 $9,595,613
Payment in-kind interest income 239,239
Other fee income 216,467 33,742
Total investment income 7,584,849 9,868,594
Base management fees 1,211,535 1,452,157
Income-based incentive fees 1,229,032
Interest expense 991,390 984,988
Amortization of deferred debt issuance costs 364,196 348,459
Allocation of administrative costs from advisor 268,242 276,951
Professional fees 194,589 292,334
Custodian and administrator fees 108,689 86,644
Directors' fees 100,000 114,750
Insurance expense 92,560 86,203
Other expenses 282,845 128,556
Total expenses 3,614,046 5,000,074
Net expenses 3,614,046 5,000,074
Net investment income 3,970,803 4,868,520
Net realized and unrealized gains (losses) on investment transactions:
Net realized gains (losses) on investments (8,028,289) 195,320
Net change in unrealized appreciation (depreciation) on investments 8,362,443 (4,895,677)
Net realized and unrealized gains (losses) 334,154 (4,700,357)
Net increase in net assets resulting from operations $4,304,957 $168,163
Basic and diluted:
Net investment income per share $0.29 $0.36
Earnings per share $0.31 $0.01
Weighted Average Shares of Common Stock Outstanding 13,680,817 13,668,193
Distributions declared per common share $0.3516 $0.7769

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 $50mm and earnings before interest, taxes, depreciation and amortization of at least $15mm. The Company’s investment activities are managed by its investment adviser, CM Investment Partners LLC. To learn more about CM Finance Inc, please visit

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: Phone: 212-257-5199

Source:CM Finance