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 $ 293,592,013 $ 254,907,171 cost of $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 2,579,337 - taxes 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, 13,649 13,689 respectively) Additional paid-in 198,700,999 199,066,123 capital 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 $ 12.57 $ 12.41 Share

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

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.

ContactsCM Finance IncInvestor Relations Email: investorrelations@cmipllc.comPhone: 212-257-5199