NEW YORK, Feb. 9, 2015 (GLOBE NEWSWIRE) -- CM Finance Inc (Nasdaq:CMFN) ("CMFN" or "the Company") today announced financial results for its fiscal second quarter ended December 31, 2014.
HIGHLIGHTS
- Increase in Net Asset Value per share to $14.90 from $14.65
- Investment portfolio increased by $17.5 million, or 6%, from last quarter, to $316.1 million, at fair value
- Yield, at cost, on debt portfolio of 10.97%
- Converted Virgin America positions in IPO to common shares with realized and unrealized gain of $0.6 million $10.6 million, respectively
- Six debt investments made during the quarter with a weighted average yield, at cost, of 11.9%
- Declared distribution of $0.3469 per share for quarter ending March 31, 2015, a 2.7% increase
| Portfolio results, as of December 30, 2014: | |
| Total Assets | $356.3 mm |
| Investment portfolio, at fair value | $316.1 mm |
| Net Assets | $203.7 mm |
| Weighted Average yield on debt investments, at cost | 10.97% |
| Weighted Average yield on debt investments, at fair value | 11.95% |
| Net Asset Value per share | $14.90 |
| Portfolio activity in the current quarter: | |
| Number of new investments | 6 |
| Total capital invested | $49.5 mm |
| Proceeds from repayments, sales, and amortization | $36.4 mm |
| Number of portfolio companies, end of period | 25 |
| Net investment income | $4.6 mm |
| Net investment income per share | $0.34 |
| Net increase in net assets from operations | $8.1 mm |
| Net increase in net assets from operations per share | $0.59 |
| Distribution declared per share (paid January 5, 2015) | $0.3375 |
Mr. Michael C. Mauer, the Company's Chief Executive Officer, said, "We are proud of all we accomplished in 2014. From our IPO in February through the end of the calendar year, we grew our portfolio from $172.6 million to $316.1 million, at fair value with 13 new investments, the dividend from $0.3375 to $0.3469 per quarter, and net asset value per share from $14.63 to $14.90. We will continue to focus on prudent underwriting in order to optimize our portfolio for risk/reward as we have the opportunity to redeploy our capital into new investments where we find appropriate yields and structures."
On January 28, 2015, the Company's Board of Directors declared a first calendar quarter distribution of $0.3469 per share payable on April 2, 2015 to shareholders of record as of March 18, 2015.
The Company reported net investment income of $4.6 million, or $0.34 per share, and net realized and unrealized gains of $3.5 million, or $0.25 per share, for the quarter. The total net increase in net assets for the quarter was $8.1 million, or $0.59 per share. At December 31, 2014, the Company's net asset value (NAV) per share was $14.90.
Portfolio and Investment Activities
During the quarter, we continued to grow and diversify our investment portfolio. We added six new investments for $49.5 million, and realized $36.4 million of repayments, sales proceeds and amortization. Growth in net investments after taking into account realized and unrealized gains was approximately $17.5 million (at fair value). Two of our six new investments in the fiscal second quarter were to new portfolio companies. Our investments in new portfolio companies during the quarter averaged $17.2 million, and had a weighted average yield of 11.7%.
At December 31, 2014, our investment portfolio of $316.1 million (at fair value) consisted of investments in 25 portfolio companies, of which 46.2% were first lien investments, 46.2% were second lien investments, and 7.6% were equity and warrant positions. At December 31, 2014, our average portfolio company investment at fair value was $12.6 million. We had no nonperforming loans in the portfolio.
As of December 31, 2014 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 10.97% 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 11.95% and 10.44%, respectively.
Capital Resources
As of December 31, 2014, we had $28.6 million in cash, $4.4 million in restricted cash, and $9.6 million of capacity under our revolving credit facility. Our net assets totaled $203.7 million.
Subsequent Events
Subsequent to quarter end, the Company invested $17.3 million in new and existing portfolio companies and received repayment or sales proceeds of $5.0 million.
| CM Finance Inc and subsidiaries | ||
| Consolidated Statement of Assets and Liabilities | ||
|
December 31, 2014 (unaudited) |
June 30, 2014 | |
| Assets | ||
| Non-controlled, non-affiliated investments, at fair value (amortized cost of $311,584,233 and $0, respectively) | $316,144,349 | $273,710,465 |
| Derivatives, at fair value (cost $0 and $0, respectively) | 1,656,215 | 563,866 |
| Cash | 28,555,637 | 24,698,073 |
| Cash, restricted | 4,393,159 | 7,139,313 |
| Interest receivable | 2,058,436 | 1,458,043 |
| Deferred debt issuance costs | 3,012,215 | 459,676 |
| Prepaid expenses and other assets | 506,854 | 730,562 |
| Total Assets | $356,326,865 | $308,759,998 |
| Liabilities | ||
| Notes Payable: | ||
| Term loan | $102,000,000 | $76,500,000 |
| Revolving credit facility | 39,440,713 | 9,091,314 |
| Payable for investments purchased | -- | 16,660,000 |
| Distributions payable | 4,612,500 | 4,612,500 |
| Derivatives, at fair value (cost $0 and $0, respectively) | 1,656,215 | 563,866 |
| Base management fees payable | 1,270,690 | 313,237 |
| Income-based incentive fees payable | 1,224,218 | -- |
| Capital gains-based incentive fees payable | 27,956 | -- |
| Deferred financing costs payable | 1,525,000 | -- |
| Interest payable | 168,962 | 108,117 |
| Accrued expenses and other liabilities | 731,406 | 694,143 |
| Total Liabilities | 152,657,660 | 108,543,177 |
| Net Assets | ||
| Common Stock, par value $0.001 per share (100,000,000 shares authorized, 13,666,666 and 0 shares issued and outstanding, respectively) | 13,667 | 13,667 |
| Additional paid-in capital | 198,810,786 | 198,810,786 |
| Accumulated net realized gain | 920,475 | 0 |
| Accumulated distributions in excess of net investment income | (635,839) | (635,839) |
| Net unrealized appreciation on investments | 4,560,116 | 2,028,207 |
| Total Net Assets | 203,669,205 | 200,216,821 |
| Total Liabilities and Net Assets | $356,326,865 | $308,759,998 |
| Net Asset Value Per Share | $14.90 | $14.65 |
| CM Finance Inc and subsidiaries | ||
| Consolidated Statement of Operations | ||
|
For the three months ended December 31, 2014 |
For the six months ended December 31, 2014 |
|
| Investment Income: | ||
| Interest income | $8,888,600 | $15,820,606 |
| Payment in-kind interest income | 162,832 | 723,852 |
| Other fee income | 114,506 | 451,074 |
| Royalty income | 41,413 | 72,688 |
| Total investment income | 9,207,351 | 17,068,220 |
| Expenses: | ||
| Interest expense | 895,438 | 1,614,314 |
| Amortization of deferred debt issuance costs | 340,590 | 513,482 |
| Base management fees | 1,270,688 | 2,378,141 |
| Income-based incentive fees | 1,160,012 | 2,129,470 |
| Capital gains incentive fees | 764,821 | 902,870 |
| Custodian and administrator fees | 81,467 | 170,157 |
| Directors' fees | 96,750 | 211,500 |
| Professional fees | 397,008 | 607,231 |
| Allocation of administrative costs from advisor | 153,418 | 344,838 |
| Insurance expense | 110,747 | 221,493 |
| Other expenses | 60,777 | 207,467 |
| Total expenses | 5,331,716 | 9,300,963 |
| Waiver of income-based incentive fees | -- | (582,829) |
| Waiver of capital gains incentive fees | (736,865) | (874,914) |
| Net expenses | 4,594,851 | 7,843,220 |
| Net investment income | $4,612,500 | $9,225,000 |
| Net realized and unrealized gains on investment transactions: | ||
| Net realized gains on investments | 1,044,073 | 920,475 |
| Net change in unrealized appreciation | 2,427,371 | 2,531,909 |
| Net realized and unrealized gains | 3,471,444 | 3,452,384 |
| Net increase in net assets resulting from operations | $8,083,944 | $12,677,384 |
| Basic and diluted: | ||
| Net investment income per share | 0.34 | 0.68 |
| Earnings per share | 0.59 | 0.93 |
| Weighted Average Shares of Common Stock Outstanding | 13,666,666 | 13,666,666 |
| Dividends declared per common share | 0.3375 | 0.6750 |
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.