×

CM Finance Inc Reports Results for its Fiscal Fourth Quarter ended June 30, 2017

NEW YORK, Sept. 06, 2017 (GLOBE NEWSWIRE) -- CM Finance Inc (NASDAQ:CMFN) (“CMFN” or “the Company”) announced its financial results for its fiscal fourth quarter ended June 30, 2017.

HIGHLIGHTS

  • Net asset value (“NAV”) per share increased by 0.7% to $12.41, compared to $12.32 as of March 31, 2017
  • CMFN made seven new investments, including investments in six new portfolio companies, during the quarter with a total cost of $53.2mm and a weighted average yield of 8.25%
  • Six investments were fully realized during the quarter with an average IRR of 10.91%
  • The weighted average yield on debt investments, at cost, increased to 9.73%, compared to 9.72% as of March 31, 2017

Portfolio results, as of June 30, 2017:
Total assets $296.0mm
Investment portfolio, at fair value $254.9mm
Net assets $169.9mm
Weighted average yield on debt investments, at cost 9.73%
Net asset value per share $12.41
Portfolio activity in the current quarter:
Number of new investments 7
Total capital invested $53.2mm
Proceeds from repayments, sales, and amortization $67.4mm
Number of portfolio companies, end of period 23
Net investment income (NII) $3.4mm
Net investment income per share $0.25
Net increase in net assets from operations $4.7mm
Net increase in net assets from operations per share $0.35
Quarterly per share distribution paid on July 6, 2017 $0.25

Mr. Michael C. Mauer, the Company’s Chief Executive Officer, said, “During the current period of tightening spreads, declining new issue credit metrics, and increasing uncertainty, we have focused our origination efforts on lower-risk secured opportunities. We are also pleased to have lowered the risk profile in the portfolio by increasing diversification, reducing our average position size, and exiting one of our most highly levered investments.”

On August 24, 2017, the Company’s Board of Directors declared a distribution for the quarter ending September 30, 2017 of $0.25 per share, payable on October 5, 2017, to shareholders of record as of September 8, 2017. This represents a 10.05% yield on our $9.95 share price as of the close on September 5.

Portfolio and Investment Activities
During the quarter, we made investments in seven companies, including six new portfolio companies. Five of our seven investments were in 1st lien term loans. These seven investments totaled $53.2mm at cost, and were made at a weighted average yield of 8.25%. We also realized $67.4mm of repayments, sales, and amortization, primarily related to the repayment of our loans to School Specialty, Telecommunications Management, AP Gaming, and Land Holdings, and our sale of North American Lifting Holdings. Realized and unrealized gains accounted for an increase in our net investments of approximately $1.3mm, or $0.09 per share. The total net increase in net assets resulting from operations for the quarter was $4.7mm, or $0.35 per share.

As of June 30, 2017, our investment portfolio consisted of investments in 23 portfolio companies, of which 49.9% were first lien investments, 49.7% were second lien investments and 0.4% were in equity investments. Our debt portfolio consisted of 95.2% floating rate investments. As of June 30, 2017, we had one loan on non-accrual status representing 3.0% of our portfolio at fair value.

Capital Resources
As of June 30, 2017, we had $10.6mm in cash, $22.6mm in restricted cash and $50.0mm of capacity under our revolving credit facility with Citibank.

Subsequent Events
Subsequent to quarter end, the Company invested $17.5mm in one new portfolio company and received $14.8mm in repayments and sales proceeds.

The Company’s investment in Bird Electric Enterprises, LLC was restructured on September 1, 2017, resulting in the elimination of $15 million of principal and replaced with 10 Class C Units. The Class C Units are a non-voting class of preferred equity with a $10mm liquidation preference that accretes at a 10% rate until such time as certain EBITDA targets are met, after which the units are paid a 10% cash dividend.

CM Finance Inc and subsidiaries
Consolidated Statements of Assets and Liabilities
June 30, 2017 June 30, 2016
Assets
Non-controlled, non-affiliated investments, at fair value (amortized cost of
$270,467,740 and $307,364,949, respectively)
$254,907,171 $272,114,164
Derivatives, at fair value (cost $0 and $0, respectively) 5,830,501 9,071,659
Cash 10,646,697 18,433,066
Cash, restricted 22,616,177 18,023,466
Interest receivable 1,627,774 1,897,710
Deferred offering costs 186,513 186,513
Prepaid expenses and other assets 219,045 234,837
Total Assets$296,033,878 $319,961,415
Liabilities
Notes Payable:
Term loan$102,000,000 $102,000,000
Revolving credit facility 30,478,329
Deferred debt issuance costs (578,074) (1,510,491)
Notes Payable, net 101,421,926 130,967,838
Base management fees payable 1,132,391 1,257,768
Income-based incentive fees payable 274,073 275,540
Payable for investments purchased 12,490,000 8,828,750
Derivatives, at fair value (cost $0 and $0, respectively) 5,830,501 9,071,659
Dividend payable 3,422,307 4,809,778
Deferred financing costs payable 620,500 879,042
Interest payable 205,027 175,792
Directors' fees payable 100,000
Accrued expenses and other liabilities 589,041 945,365
Total Liabilities 126,085,766 157,211,532
Commitments and Contingencies (Note 6)
Net Assets
Common Stock, par value $0.001 per share (100,000,000 shares authorized, 13,689,221
and 13,679,686 shares issued and outstanding, respectively)
13,689 13,680
Additional paid-in capital 199,066,123 199,722,997
Accumulated net realized loss (11,231,827)
Distributions in excess of net investment income (2,339,304) (1,736,009)
Net unrealized depreciation on investments (15,560,569) (35,250,785)
Total Net Assets 169,948,112 162,749,883
Total Liabilities and Net Assets$
296,033,878 $319,961,415
Net Asset Value Per Share$12.41 $11.90


CM Finance Inc and subsidiaries
Consolidated Statements of Operations
Three months ended June 30, Twelve months ended June 30,
2017 2016 2015 2017 2016 2015
Investment Income:
Interest income$6,920,498 $7,493,388 $11,259,339 $29,476,315 $33,683,108 $35,165,863
Payment in-kind interest income 237,065 218,174 423,632 960,603 1,121,036
Other fee income 36,476 321,395 42,332 1,112,250 936,211 630,206
Total investment income 7,194,039 7,814,783 11,519,845 31,012,197 35,579,922 36,917,105
Expenses:
Base management fees 1,132,392 1,257,768 1,420,978 4,652,064 5,511,532 5,169,039
Income-based incentive fees 18,511 1,563,388 1,289,927 1,229,031 4,711,675
Interest expense 1,321,181 1,012,620 988,886 4,748,449 4,048,527 3,527,014
Allocation of administrative costs from advisor 433,959 60,000 209,241 987,286 785,846 591,233
Amortization of deferred debt issuance costs 102,013 364,195 340,590 932,417 1,441,044 1,194,662
Professional fees 114,462 356,769 380,330 806,810 1,039,802 1,214,546
Directors' fees 201,235 97,672 108,005 501,233 425,922 426,255
Custodian and administrator fees 130,578 111,858 87,344 480,269 442,598 303,913
Insurance expense 90,923 91,916 85,266 345,697 367,327 396,885
Other expenses 215,127 61,067 84,110 818,532 434,337 338,835
Total expenses 3,760,381 3,413,865 5,268,138 15,562,684 15,725,966 17,874,057
Waiver of income-based incentive fees (249,071) (1,174,655)
Net expenses 3,760,381 3,413,865 5,268,138 15,313,613 15,725,966 16,699,402
Net investment income 3,433,658 4,400,918 6,251,707 15,698,584 19,853,956 20,217,703
Net realized and unrealized gains (losses) on investment transactions:
Net realized gains (losses) on investments (2,708,549) 1 4,326,004 (11,809,335) 283,276 3,012,575
Net change in unrealized appreciation (depreciation) on investments 4,007,279 (411,534) (5,911,675) 19,690,216 (29,482,002) (7,796,990)
Net realized and unrealized gains (losses) 1,298,730 (411,533) (1,585,671) 7,880,881 (29,198,726) (4,784,415)
Net increase (decrease) in net assets resulting from operations $4,732,388 $3,989,385 $4,666,036 $23,579,465 $(9,344,770) $15,433,288
Basic and diluted:
Net investment income per share$0.25 $0.32 $0.46 $1.15 $1.45 $1.48
Earnings (loss) per share$0.35 $0.29 $0.34 $1.72 $(0.68) $1.13
Weighted Average Shares of Common Stock Outstanding 13,689,170 13,679,532 13,667,254 13,686,288 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 $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 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@cmipllc.com Phone: 212-257-5199

Source:CM Finance