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.
- 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:|
|Investment portfolio, at fair value||$293.6mm|
|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.
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.
During the quarter, the Company repurchased 42,627 shares of common stock on the open market for $390,178 (including commissions).
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 $13.3mm in repayments and sale proceeds.
|CM Finance Inc and Subsidiaries|
|Consolidated Statements of Assets and Liabilities|
|June 30, 2018||June 30, 2017|
|Non-controlled, non-affiliated investments, at fair value (amortized cost of||$||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|
|Receivable for investments sold||7,751,875||-|
|Deferred offering costs||121,922||186,513|
|Prepaid expenses and other assets||255,139||219,045|
|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|
|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|
|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|
|Commitments and Contingencies (Note 6)|
|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||$||12.41|
|CM Finance Inc and Subsidiaries|
|Consolidated Statements of Operations|
|For the three months ended June 30,||For the twelve months ended June 30,|
|Payment in-kind interest income||272,386||237,065||-||2,609,037||423,632||960,603|
|Payment in-kind dividend income||-||-||-||333,333||-||-|
|Other fee income||90,060||36,476||321,395||152,308||1,112,250||936,211|
|Total investment income||16,942,191||7,194,039||7,814,783||40,791,752||31,012,197||35,579,922|
|Base management fees||1,319,853||1,132,392||1,257,768||4,871,706||4,652,064||5,511,532|
|Income-based incentive fees||2,092,596||18,511||-||3,932,710||1,289,927||1,229,031|
|Provision for tax expense||2,579,337||-||-||2,579,337||-||-|
|Allocation of administrative costs from advisor||594,045||433,959||60,000||1,198,397||987,286||785,846|
|Amortization of deferred debt issuance costs||195,377||102,013||364,195||695,470||932,417||1,441,044|
|Custodian and administrator fees||46,844||130,578||111,858||295,032||480,269||442,598|
|Waiver of income-based incentive fees||(527,224||)||-||-||(527,224||)||(249,071||)||-|
|Net investment income||8,538,905||3,433,658||4,400,918||18,975,633||15,698,584||19,853,956|
|Net realized and unrealized gain/(loss) on investments:|
|Net realized gain (loss) from investments||(2,236,687||)||(2,708,549||)||1||(9,855,453||)||(11,809,335||)||283,276|
|Net change in unrealized appreciation (depreciatio) in value of investments||(2,762,636||)||4,007,279||(411,534||)||6,505,300||19,690,216||(29,482,002||)|
|Total realized and unrealized gain (loss) on investments||(4,999,323||)||1,298,730||(411,533||)||(3,350,153||)||7,880,881||(29,198,726||)|
|Net increase (decrease) in net assets resulting from operations|
|Basic and diluted:|
|Net investment income per share||$||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.
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.
CM Finance Inc
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