NEW YORK, Sept. 04, 2018 (GLOBE NEWSWIRE) -- CM Finance Inc (NASDAQ: CMFN) (“CMFN” or “the Company”) announced its financial results for its fiscal fourth quarter ended June 30, 2018.

HIGHLIGHTS

• The weighted average yield on debt investments, at cost, increased to 11.19%, an increase of 7 basis points compared to 11.12% as of March 31, 2018
• CMFN made five new investments in four portfolio companies during the quarter with a total cost of $37.9mm.  The weighted average yield of debt investments made in the quarter was 9.65% 
• Six investments were realized during the quarter, five fully realized and one partially realized, with a weighted average IRR of 19.95%
• Net asset value (“NAV”) per share increased by 0.2% to $12.57, compared to $12.55 as of March 31, 2018

Portfolio results, as of June 30, 2018:
Total assets		$314.5mm
Investment portfolio, at fair value		$293.6mm
Net assets		$171.5mm
Weighted average yield on debt investments, at cost		11.19%
Net asset value per share		$12.57
Portfolio activity in the current quarter:
Number of new investments		5
Total capital invested		$37.9mm
Proceeds from repayments, sales, and amortization		$46.9mm
Number of portfolio companies, end of period		25
Net investment income (NII)		$8.5mm
Net investment income per share		$0.62
Net increase in net assets from operations		$3.5mm
Net increase in net assets from operations per share		$0.26
Quarterly per share distribution paid on October 5, 2018		$0.25

Mr. Michael C. Mauer, the Company’s Chief Executive Officer, said, “The market continues to present good  opportunities, mostly on the first lien side in the current environment.  We saw some great realizations of previously stressed situations during the fourth quarter and were able to redeploy the proceeds into strong risk return investments during the first quarter.”

On August 23, 2018, the Company’s Board of Directors declared a distribution for the quarter ending September 30, 2018 of $0.25 per share, payable on October 5, 2018, to shareholders of record as of September 18, 2018. This represents a 10.93% yield on the Company’s $9.15 share price as of the close on August 31, 2018.  Distributions may include net investment income, capital gains and/or return of capital; however, the Company does not expect the distribution to be comprised of a return of capital.The tax status of distributions will be determined at the end of the taxable year.

Portfolio and Investment Activities

During the quarter, the Company made five new investments in four portfolio companies.  These five investments totaled $37.9.mm at cost and were made at a weighted average yield of 9.65%.  The Company also realized $46.9mm of repayments, sales, and amortization, primarily related to the sales of PR Wireless, Inc., U.S. Well Services, LLC Classes A and B and Dayton Superior Corporation, and the repayments of Bird Electric Enterprises, LLC and CareerBuilder, LLC. Realized and unrealized gains accounted for a decrease in the Company’s net investments of approximately $5.0mm, or $0.37 per share.  The total net increase in net assets resulting from operations for the quarter was $4.2mm, or $0.26 per share. 

As of June 30 2018, the Company’s investment portfolio consisted of investments in 25 portfolio companies, of which 52.1% were first lien investments, 43.3% were second lien investments, 0.2% were in unsecured debt investments, 4.2% were unitranche loans, and 0.2% were in equities, warrants and other positions.  The Company’s debt portfolio consisted of 95.8% floating rate investments and 4.2% fixed rate investments.  As of June 30, 2018, the Company had no investments on non-accrual status.

Capital Resources

As of June 30, 2018, the Company had $5.6mm in cash, $2.7mm in restricted cash and $32.2mm of capacity under its revolving credit facility with UBS AG, London Branch.

Share Repurchases

During the quarter, the Company repurchased 42,627 shares of common stock on the open market for $390,178 (including commissions).

Subsequent Events

On July 2, 2018, we closed the public offering of $30 million in aggregate principal amount of 6.125% notes due 2023 (the “Notes”). On July 12, 2018, the underwriters exercised their over-allotment option to purchase an additional $4.5 million in aggregate principal amount of the Notes. The total net proceeds to us from the Notes, including the exercise of the underwriters’ over-allotment option, after deducting underwriting discounts and commissions of approximately $1.0 million and estimated offering expenses of approximately $230,000, were approximately $33.2 million. 

Subsequent to quarter end, the Company made investments in 5 new portfolio companyies with a total cost of $34.1mm, and received $13.3mm in repayments and sale proceeds.

CM Finance Inc and Subsidiaries
Consolidated Statements of Assets and Liabilities
				June 30, 2018				June 30, 2017
Assets
Non-controlled, non-affiliated investments, at fair value (amortized cost of			$	293,592,013			$	254,907,171
	$302,647,282 and $ 270,467,740, respectively)
Derivatives, at fair value (cost of $0 and $0, respectively)				229,918				5,830,501
Cash				5,620,441				10,646,697
Cash, restricted				2,706,273				22,616,177
Receivable for investments sold				7,751,875				-
Interest receivable				4,011,450				1,627,774
Deferred offering costs				121,922				186,513
Other receivables				245,550				-
Prepaid expenses and other assets				255,139				219,045
	Total Assets		$	314,534,581			$	296,033,878
Liabilities
Notes payable:
	Term loan		$	102,000,000			$	102,000,000
	Revolving credit facility			17,823,000				-
	Deferred debt issuance costs			(1,953,771	)			(578,074	)
	Notes payable, net			117,869,229				101,421,926
Payable for investments purchased				12,569,450				12,490,000
Dividend payable				3,417,848				3,422,307
Deferred financing costs payable				2,071,167				620,500
Income-based incentive fees payable				2,294,678				274,073
Base management fees payable				1,319,853				1,132,391
Accrued provision for taxes				2,579,337				-
Derivatives, at fair value (cost $0 and $0, respectively)				229,918				5,830,501
Interest payable				303,153				205,027
Directors' fees payable				99,296				100,000
Allocation of administrative cost from advisor payable				-				85,000
Accrued expenses and other liabilities				257,986				504,041
	Total Liabilities			143,011,915				126,085,766
Commitments and Contingencies (Note 6)
Net Assets
Common stock, par value $0.001 per share (100,000,000 shares authorized,
	13,649,504 and 13,689,221 shares issued and outstanding, respectively)			13,649				13,689
Additional paid-in capital				198,700,999				199,066,123
Accumulated net realized loss				(21,087,280	)			(11,231,827	)
Undistributed (distributions in excess of) net investment income				2,950,567				(2,339,304	)
Net unrealized depreciation on investments				(9,055,269	)			(15,560,569	)
	Total Net Assets			171,522,666				169,948,112
	Total Liabilities and Net Assets		$	314,534,581			$	296,033,878
Net Asset Value Per Share			$	12.57			$	12.41

 

CM Finance Inc and Subsidiaries
Consolidated Statements of Operations
		For the three months ended June 30,												For the twelve months ended June 30,
		2018				2017				2016				2018				2017				2016
Investment Income:
Interest income		$	7,829,506			$	6,920,498			$	7,493,388			$	28,691,187			$	29,476,315			$	33,683,108
Payment in-kind interest income			272,386				237,065				-				2,609,037				423,632				960,603
Dividend income			8,750,239				-				-				9,005,887				-				-
Payment in-kind dividend income			-				-				-				333,333				-				-
Other fee income			90,060				36,476				321,395				152,308				1,112,250				936,211
	Total investment income		16,942,191				7,194,039				7,814,783				40,791,752				31,012,197				35,579,922
Expenses:
Interest expense			1,703,395				1,321,181				1,012,620				6,310,842				4,748,449				4,048,527
Base management fees			1,319,853				1,132,392				1,257,768				4,871,706				4,652,064				5,511,532
Income-based incentive fees			2,092,596				18,511				-				3,932,710				1,289,927				1,229,031
Provision for tax expense			2,579,337				-				-				2,579,337				-				-
Professional fees			315,091				114,462				356,769				1,063,528				806,810				1,039,802
Allocation of administrative costs from advisor			594,045				433,959				60,000				1,198,397				987,286				785,846
Amortization of deferred debt issuance costs			195,377				102,013				364,195				695,470				932,417				1,441,044
Insurance expense			80,643				90,923				91,916				351,923				345,697				367,327
Directors' fees			104,573				201,235				97,672				402,240				501,233				425,922
Custodian and administrator fees			46,844				130,578				111,858				295,032				480,269				442,598
Offering expense			-				-				-				186,513				-				-
Other expenses			(101,244	)			215,127				61,067				455,645				818,532				434,337
	Total expenses		8,930,510				3,760,381				3,413,865				22,343,343				15,562,684				15,725,966
Waiver of income-based incentive fees			(527,224	)			-				-				(527,224	)			(249,071	)			-
	Net expenses		8,403,286				3,760,381				3,413,865				21,816,119				15,313,613				15,725,966
	Net investment income		8,538,905				3,433,658				4,400,918				18,975,633				15,698,584				19,853,956
Net realized and unrealized gain/(loss) on investments:
Net realized gain (loss) from investments			(2,236,687	)			(2,708,549	)			1				(9,855,453	)			(11,809,335	)			283,276
Net change in unrealized appreciation (depreciatio) in value of investments			(2,762,636	)			4,007,279				(411,534	)			6,505,300				19,690,216				(29,482,002	)
	Total realized and unrealized gain (loss) on investments		(4,999,323	)			1,298,730				(411,533	)			(3,350,153	)			7,880,881				(29,198,726	)
Net increase (decrease) in net assets resulting from operations
		$	3,539,582			$	4,732,388			$	3,989,385			$	15,625,480			$	23,579,465			$	(9,344,770	)
Basic and diluted:
	Net investment income per share	$	0.62			$	0.25			$	0.32			$	1.39			$	1.15			$	1.45
	Earnings (loss) per share	$	0.26			$	0.35			$	0.29			$	1.14			$	1.72			$	(0.68	)
	Weighted average shares of common stock outstanding		13,687,517				13,689,170				13,679,532				13,689,823				13,686,288				13,674,197

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