NEW YORK, May 11, 2015 (GLOBE NEWSWIRE) -- CM Finance Inc (Nasdaq:CMFN) ("CMFN" or "the Company") today announced financial results for its fiscal third quarter ended March 31, 2015.
HIGHLIGHTS
- Decline in Net Asset Value per share to $14.42 from $14.90; change in fair value of Virgin America accounted for $0.43 per share
- Investment portfolio decreased by $4.3 million, or 1.4%, from last quarter, to $311.9 million, at fair value
- Yield, at cost, on debt portfolio of 11.20%
- Five debt investments made during the quarter with a weighted average yield, at cost, of 11.4%
- Declared distribution of $0.3469 per share for quarter ending June 30, 2015, a 2.7% increase over the 2014 quarterly dividend
| Portfolio results, as of March 31, 2015: | |
| Total Assets | $349.1 mm |
| Investment portfolio, at fair value | $311.9 mm |
| Net Assets | $197.0 mm |
| Weighted Average yield on debt investments, at cost | 11.20% |
| Weighted Average yield on debt investments, at fair value | 11.60% |
| Net Asset Value per share | $14.42 |
| Portfolio activity in the current quarter: | |
| Number of new investments | 5 |
| Total capital invested | $37.3 mm |
| Proceeds from repayments, sales, and amortization | $35.2 mm |
| Number of portfolio companies, end of period | 26 |
| Net investment income | $4.7 mm |
| Net investment income per share | $0.35 |
| Net decrease in net assets from operations | $1.9 mm |
| Net decrease in net assets from operations per share | $0.14 |
| Distribution declared per share (paid April 2, 2015) | $0.3469 |
Mr. Michael C. Mauer, the Company's Chief Executive Officer, said, "We are pleased with the performance of our debt portfolio during the quarter, and continue to believe that the middle market offers attractive investment opportunities. We improved our average yield, made add-on investments to the portfolio, and improved our positioning especially within the energy sector. While our portfolio's fair value declined by $4.4 million during the quarter, our investment in the common stock of Virgin America Inc. (ticker: VA) declined by $5.9 million, which was partially offset by the strength of our debt investments."
On May 6, 2015, the Company's Board of Directors declared a second calendar quarter distribution of $0.3469 per share payable on July 5, 2015 to shareholders of record as of June 18, 2015.
The Company reported net investment income of $4.74 million, or $0.35 per share, and net realized and unrealized losses of $6.65 million, or $0.487 per share, for the quarter. The total net decrease in net assets resulting from operations for the quarter was $1.9 million, or $0.14 per share. At March 31, 2015, the Company's net asset value (NAV) per share was $14.42.
Portfolio and Investment Activities
During the quarter, we continued to grow and diversify our investment portfolio. We added five new investments for $35.2 million, funded $2.1 million under one pre-existing commitment and realized $35.2 million of repayments, sales proceeds and amortization. Decline in net investments after taking into account realized and unrealized gains was approximately $4.4 million (at fair value). Two of our five new investments in the fiscal second quarter were to new portfolio companies. Our investments in new portfolio companies during the quarter averaged $4.3 million, and had a weighted average yield of 10.0%.
At March 31, 2015, our investment portfolio of $311.9 million (at fair value) consisted of investments in 26 portfolio companies, of which 48.5% were first lien investments, 45.7% were second lien investments, and 5.8% were equity and warrant positions. At March 31, 2015, our average portfolio company investment at fair value was $12.0 million. We had no nonperforming loans in the portfolio.
As of March 31, 2015 and June 30, 2014, respectively, 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 11.20% and 10.82%, respectively, and our weighted average total yield of debt and income producing securities at fair value (which includes interest income and amortization of fees and discounts) was 11.60% and 10.44%, respectively.
Capital Resources
As of March 31, 2015, we had $14.3 million in cash, $5.1 million in restricted cash, and $23.7 million of capacity under our revolving credit facility. Our net assets totaled $197.0 million.
Subsequent Events
Subsequent to quarter end, the Company invested $23.9 million in new and existing portfolio companies and received repayment or sales proceeds of $1.1 million.
| CM Finance Inc and subsidiaries | ||
| Consolidated Statement of Assets and Liabilities | ||
| March 31, 2015 | ||
| (unaudited) | June 30, 2014 | |
| Assets | ||
| Non-controlled, non-affiliated investments, at fair value (amortized cost of $311,741,018 and $271,682,258 respectively) | $311,883,910 | $273,710,465 |
| Derivatives, at fair value (cost $0 and $0, respectively) | 1,833,715 | 563,866 |
| Cash | 14,280,014 | 24,698,073 |
| Cash, restricted | 5,089,659 | 7,139,313 |
| Receivable for investments sold | 9,511,348 | -- |
| Interest receivable | 2,431,561 | 1,458,043 |
| Deferred debt issuance costs | 2,671,625 | 459,676 |
| Deferred offering costs | 186,513 | -- |
| Prepaid expenses and other assets | 1,183,216 | 730,562 |
| Total Assets | $349,071,561 | $308,759,998 |
| Liabilities | ||
| Notes Payable: | ||
| Term loan | $102,000,000 | $76,500,000 |
| Revolving credit facility | 26,292,558 | 9,091,314 |
| Payable for investments purchased | 13,012,500 | 16,660,000 |
| Distributions payable | 4,740,996 | 4,612,500 |
| Derivatives, at fair value (cost $0 and $0, respectively) | 1,833,715 | 563,866 |
| Base management fees payable | 1,369,920 | 313,237 |
| Income-based incentive fees payable | 548,286 | -- |
| Deferred financing costs payable | 1,525,000 | -- |
| Interest payable | 150,235 | 108,117 |
| Accrued expenses and other liabilities | 580,274 | 694,143 |
| Total Liabilities | 152,053,484 | 108,543,177 |
| Net Assets | ||
| Common Stock, par value $0.001 per share (100,000,000 shares authorized, 13,666,666 shares issued and outstanding) | 13,667 | 13,667 |
| Additional paid-in capital | 198,810,786 | 198,810,786 |
| Accumulated net realized gain | (1,313,429) | -- |
| Accumulated distributions in excess of net investment income | (635,839) | (635,839) |
| Net unrealized appreciation on investments | 142,892 | 2,028,207 |
| Total Net Assets | 197,018,077 | 200,216,821 |
| Total Liabilities and Net Assets | $349,071,561 | $308,759,998 |
| Net Asset Value Per Share | $14.42 | $14.65 |
| CM Finance Inc and subsidiaries | ||
| Consolidated Statement of Operations | ||
| For the three months | For the nine months | |
| ended March 31, 2015 | ended March 31, 2015 | |
| Investment Income: | ||
| Income: | ||
| Interest income | $8,085,913 | $23,906,519 |
| Payment in-kind interest income | 179,015 | 902,867 |
| Other fee income | 64,112 | 587,874 |
| Total investment income | 8,329,040 | 25,397,260 |
| Expenses: | ||
| Interest expense | 923,814 | 2,538,128 |
| Amortization of deferred debt issuance costs | 340,590 | 854,072 |
| Base management fees | 1,369,920 | 3,748,061 |
| Income-based incentive fees | 1,018,817 | 3,148,287 |
| Capital gains incentive fees | (902,870) | 0 |
| Custodian and administrator fees | 46,412 | 216,569 |
| Directors' fees | 106,750 | 318,250 |
| Professional fees | 226,985 | 834,216 |
| Allocation of administrative costs from advisor | 37,154 | 381,992 |
| Insurance expense | 90,126 | 311,619 |
| Other expenses | 47,258 | 254,725 |
| Total expenses | 3,304,956 | 12,605,919 |
| Waiver of income-based incentive fees | (591,826) | (1,174,655) |
| Waiver of capital gains incentive fees | 874,914 | 0 |
| Net expenses | 3,588,044 | 11,431,264 |
| Net investment income | $4,740,996 | $13,965,996 |
| Net realized and unrealized losses on investment transactions: | ||
| Net realized losses on investments | (2,233,904) | (1,313,429) |
| Net change in unrealized depreciation on investments | (4,417,224) | (1,885,315) |
| Net realized and unrealized losses | (6,651,128) | (3,198,744) |
| Net increase (decrease) in net assets resulting from operations | ($1,910,132) | $10,767,252 |
| CM Finance Inc: | ||
| Basic and diluted: | ||
| Net investment income per share | 0.35 | 1.02 |
| Earnings per share | (0.14) | 0.79 |
| Weighted Average Shares of Common Stock Outstanding | 13,666,666 | 13,666,666 |
| Distributions declared per common share | $0.3469 | $1.0219 |
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 million and earnings before interest, taxes, depreciation and amortization of at least $15 million. 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.