NEW YORK, Feb. 08, 2016 (GLOBE NEWSWIRE) -- CM Finance Inc (Nasdaq:CMFN) (“CMFN” or “the Company”) today announced financial results for its fiscal second quarter ended December 31, 2015.
HIGHLIGHTS
- Increased quarterly distribution 1.4% to $0.3516 per share
- Decline in NAV per share to $12.17 from $13.65 per share at September 30, 2015
- Investment portfolio declined by $28.6 million, or 8.9%, from last quarter, to $292.8 million at fair value primarily due to decline in fair value of $21.8 million
- Weighted average yield of debt portfolio, at cost, of 10.31% compared to 11.02% at September 30 , 2015
- One debt investment made during the quarter with a yield, at cost, of 10.5%
- Declared a regular quarterly distribution of $0.3516 per share for the quarter ending March 31, 2016, payable on April 7, 2016, to shareholders of record as of March 18, 2016.
| Portfolio results, as of December 31, 2015: | |||
| Total Assets | $ | 333.7 | mm |
| Investment portfolio, at fair value | $ | 292.8 | mm |
| Net Assets | $ | 166.4 | mm |
| Weighted Average yield on debt investments, at cost | 10.31 | % | |
| Net Asset Value per share | $ | 12.17 | |
| Portfolio activity in the current quarter: | |||
| Number of new investments | 1 | ||
| Total capital invested | $ | 10.0 | mm |
| Proceeds from repayments, sales, and amortization | $ | 18.2 | mm |
| Number of portfolio companies, end of period | 22 | ||
| Net investment income | $ | 6.3 | mm |
| Net investment income per share | $ | 0.46 | |
| Net decrease in net assets from operations | $ | 15.4 | mm |
| Net decrease in net assets from operations per share | $ | 1.13 | |
| Distribution declared per share (paid January 5, 2016) | $ | 0.3469 | |
Mr. Michael C. Mauer, the Company’s Chief Executive Officer, said, “Volatility in the global credit, equity and commodity markets was the theme in the latter part of 2015 and has continued into early 2016. Given that backdrop, we have been cautious in the deployment of our capital, and continue to focus on directly originated credit opportunities.”
On February 2, 2016, the Company’s Board of Directors declared a distribution for the quarter ended March 31, 2016 of $0.3516 per share payable on April 7, 2016 to shareholders of record as of March 18, 2016.
The Company reported net investment income of $6.3 million, or $0.46 per share, and net realized and unrealized losses of $21.8 million, or $1.59 per share, for the quarter. The total net decrease in net assets resulting from operations for the quarter was $15.4 million, or $1.13 per share. At December 31, 2015, the Company’s net asset value (NAV) per share was $12.17.
Portfolio and Investment Activities
During the quarter, we added one new investment of $10.0 million to a new portfolio company and realized $18.2 million of repayments, sales proceeds and amortization. The decrease in our net investments after taking into account realized and unrealized gains was approximately $28.6 million (at fair value). Our new portfolio company investment during the quarter has a yield of 10.5%.
At December 31, 2015, our investment portfolio of $292.8 million (at fair value) consisted of investments in 22 portfolio companies, of which 50.7% were first lien investments, 46.1% were second lien investments, 3.1% were unsecured investments and 0.1% were equity and warrant positions. At December 31, 2015, our average portfolio company investment at fair value was $13.3 million. At December 31, 2015, we had one loan, or 2.6% of our portfolio, at fair value, on non-accrual status.
As of December 31, 2015 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 10.31% and 10.91%, respectively.
Capital Resources
As of December 31, 2015, we had $16.4 million in cash, $9.7 million in restricted cash, and $5.6 million of capacity under our revolving credit facility. Our net assets totaled $166.4 million.
Subsequent Events
Subsequent to quarter end, there were no significant investments and sales/repayments.
| CM Finance Inc and subsidiaries | |||||||||
| Consolidated Statement of Assets and Liabilities | |||||||||
| December 31, 2015 (unaudited) | June 30, 2015 | ||||||||
| Assets | |||||||||
| Non-controlled, non-affiliated investments, at fair value (amortized cost of $325,256,635 and $336,092,639 respectively) | $ | 292,773,149 | $ | 330,323,856 | |||||
| Derivatives, at fair value (cost $0 and $0, respectively) | 12,081,994 | 1,845,768 | |||||||
| Cash | 16,419,289 | 21,535,492 | |||||||
| Cash, restricted | 9,678,911 | 3,433,704 | |||||||
| Interest receivable | 2,554,627 | 2,900,804 | |||||||
| Deferred offering costs | 186,513 | 186,513 | |||||||
| Prepaid expenses and other assets | 54,035 | 232,704 | |||||||
| Total Assets | $ | 333,748,518 | $ | 360,458,841 | |||||
| Liabilities | |||||||||
| Notes Payable: | |||||||||
| Term loan | $ | 102,000,000 | $ | 102,000,000 | |||||
| Revolving credit facility | 44,391,680 | 48,847,459 | |||||||
| Deferred debt issuance costs | (2,238,881 | ) | (2,331,035 | ) | |||||
| Notes Payable, net | 144,152,799 | 148,516,424 | |||||||
| Payable for investments purchased | 112,523 | 2,988,655 | |||||||
| Distributions payable | 4,742,575 | 4,741,174 | |||||||
| Derivatives, at fair value (cost $0 and $0, respectively) | 12,081,994 | 1,845,768 | |||||||
| Base management fees payable | 2,897,155 | 1,420,978 | |||||||
| Income-based incentive fees payable | 1,503,698 | 1,723,260 | |||||||
| Deferred financing costs payable | 879,042 | 1,525,000 | |||||||
| Interest payable | 186,364 | 168,658 | |||||||
| Accrued expenses and other liabilities | 787,205 | 578,075 | |||||||
| Total Liabilities | 167,343,355 | 163,507,992 | |||||||
| Net Assets | |||||||||
| Common Stock, par value $0.001 per share (100,000,000 shares authorized, 13,671,302 and 13,667,267 shares issued and outstanding) | 13,671 | 13,667 | |||||||
| Additional paid-in capital | 199,463,837 | 199,418,478 | |||||||
| Accumulated net realized gain | (364,336 | ) | 3,700,400 | ||||||
| Accumulated distributions in excess of net investment income | (224,523 | ) | (412,913 | ) | |||||
| Net unrealized appreciation on investments | (32,483,486 | ) | (5,768,783 | ) | |||||
| Total Net Assets | 166,405,163 | 196,950,849 | |||||||
| Total Liabilities and Net Assets | $ | 333,748,518 | $ | 360,458,841 | |||||
| Net Asset Value Per Share | $ | 12.17 | $ | 14.41 | |||||
| CM Finance Inc and subsidiaries | ||||||||||||||||
| Consolidated Statement of Operations (Unaudited) | ||||||||||||||||
| For the three months ended December 31, | For the six months ended December 31, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Investment Income: | ||||||||||||||||
| Income: | ||||||||||||||||
| Interest income | $ | 8,707,519 | $ | 8,888,600 | $ | 18,303,132 | $ | 15,820,606 | ||||||||
| Payment in-kind interest income | 721,364 | 162,832 | 960,603 | 723,852 | ||||||||||||
| Other fee income | 529,819 | 155,919 | 563,561 | 523,762 | ||||||||||||
| Total investment income | 9,958,702 | 9,207,351 | 19,827,296 | 17,068,220 | ||||||||||||
| Expenses: | ||||||||||||||||
| Interest expense | 1,007,104 | 895,438 | 1,992,092 | 1,614,314 | ||||||||||||
| Amortization of deferred debt issuance costs | 364,195 | 340,590 | 712,654 | 513,482 | ||||||||||||
| Base management fees | 1,444,998 | 1,270,688 | 2,897,155 | 2,378,141 | ||||||||||||
| Income-based incentive fees | - | 1,160,012 | 1,229,032 | 2,129,470 | ||||||||||||
| Capital gains incentive fees | - | 764,821 | 222,682 | 902,870 | ||||||||||||
| Custodian and administrator fees | 136,038 | 81,467 | 211,500 | 170,157 | ||||||||||||
| Directors' fees | 96,750 | 96,750 | 464,768 | 211,500 | ||||||||||||
| Professional fees | 172,434 | 397,008 | 438,131 | 607,231 | ||||||||||||
| Allocation of administrative costs from advisor | 161,180 | 153,418 | 188,646 | 344,838 | ||||||||||||
| Insurance expense | 102,443 | 110,747 | 287,031 | 221,493 | ||||||||||||
| Other expenses | 158,475 | 60,777 | 207,467 | |||||||||||||
| Total expenses | 3,643,617 | 5,331,716 | 8,643,691 | 9,300,963 | ||||||||||||
| Waiver of income-based incentive fees | - | - | - | (582,829 | ) | |||||||||||
| Waiver of capital gains incentive fees | - | (736,865 | ) | - | (874,914 | ) | ||||||||||
| Net expenses | 3,643,617 | 4,594,851 | 8,643,691 | 7,843,220 | ||||||||||||
| Net investment income | $ | 6,315,085 | $ | 4,612,500 | $ | 11,183,605 | $ | 9,225,000 | ||||||||
| Net realized and unrealized losses on investment transactions: | ||||||||||||||||
| Net realized gains (losses) on investments | 106,604 | 1,044,073 | 301,924 | 920,475 | ||||||||||||
| Net change in unrealized (depreciation) / appreciation on investments | (21,819,026 | ) | 2,427,371 | (26,714,703 | ) | 2,531,909 | ||||||||||
| Net realized and unrealized losses | (21,712,422 | ) | 3,471,444 | (26,412,779 | ) | 3,452,384 | ||||||||||
| Net increase in net assets resulting from operations | ($ | 15,397,337 | ) | $ | 8,083,944 | ($ | 15,229,174 | ) | $ | 12,677,384 | ||||||
| Basic and diluted: | ||||||||||||||||
| Net investment income per share | $ | 0.46 | $ | 0.34 | $ | 0.82 | $ | 0.68 | ||||||||
| Earnings per share | $ | (1.13 | ) | $ | 0.59 | $ | (1.11 | ) | $ | 0.93 | ||||||
| Weighted Average Shares of Common Stock Outstanding | 13,671,273 | 13,666,666 | 13,669,733 | 13,666,666 | ||||||||||||
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.
