Market Overview

CIFC LLC Announces Second Quarter 2016 Results


NEW YORK, Aug. 15, 2016 (GLOBE NEWSWIRE) -- CIFC LLC (NASDAQ: CIFC) ("CIFC" or the "Company") today announced its results for the second quarter ended June 30, 2016.


  • GAAP net income (loss) for the six months was $22.1 million as compared to $6.5 million for the same period in the prior year. GAAP net income (loss) for the quarter was $17.6 million as compared to $1.1 million for the same period in the prior year.
  • Economic Net Income "ENI", a non-GAAP measure, for the six months was $27.6 million as compared to $22.6 million for the same period in the prior year. ENI for the quarter was $20.6 million as compared to $11.5 million for the same period in the prior year.
  • Fee Earning AUM was $13.6 billion as of June 30, 2016, as compared to $14.1 billion as of December 31, 2015 and $14.0 billion  as of June 30, 2015.

Executive Overview

The second quarter saw a strong recovery in risk assets. Both the U.S. high yield and leveraged loan markets performed strongly, driven by higher commodity prices and increased investor risk appetites. Our Credit Funds recorded strong inflows, pushing Credit Fund AUM to $1.4 billion across 15 co-mingled funds and separately managed accounts. Net investment income during the second quarter grew to $15.3 million. Incentive fees also recorded strong growth year-over-year, totaling $7.9 million in the second quarter. For the first six months of the year, net investment income and incentive fees stood at $20.2 million and $12.1 million, respectively.

The new issue CLO market continued to be challenging throughout the second quarter. As loan prices rallied, CLO liabilities lagged. As a result, prospective new issue CLO equity returns were largely uncompetitive compared to secondary market opportunities. Total issuance during the first six months of the year was limited to just 62 CLOs compared to 114 CLOs in the first half of 2015. During the month of July, we have seen a strong rally in CLO liabilities leading to a surge in issuance. We expect to see higher CLO new issue volumes in the second half of the year. Given the challenging market environment for new issue CLOs, CIFC chose not to sponsor a CLO during the first half of the year. We are currently managing two CLO warehouses which are expected to drive new issuance late in the third quarter and early in the fourth quarter.  We continue to be well positioned to meet our obligations for risk retention, due to be implemented in December 2016, with more than $200 million in cash and investments on our balance sheet.

Selected Financial Metrics
(In thousands, except per share data)

vs. 2Q'15
YTD'16YTD'15% Change
vs. YTD'15
Total net revenues (1)$47,248 $25,860  83%$86,986 $52,837  65%
Total expenses (1)$30,726 $17,470  76%$59,803 $37,133  61%
Income tax expense (benefit) - Current$1,343 $2,253  (40)%$1,306 $5,490  (76)%
Income tax expense (benefit) - Deferred$1,525 $7,575  (80)%$2,840 $7,425  (62)%
Net income (loss) attributable to CIFC LLC$17,585 $1,103  1,494%$22,089 $6,531  238%
Earnings (loss) per share - basic$0.73 $0.04  1,725%$0.89 $0.26  242%
Earnings (loss) per share - diluted$0.68 $0.04  1,600%$0.85 $0.25  240%
Distributions declared per share$0.25 $0.10  150%$0.59 $0.20  195%
Weighted average shares outstanding - basic24,096 25,302  (5)%24,725 25,291  (2)%
Weighted average shares outstanding - diluted25,761 26,432  (3)%25,963 26,504  (2)%

vs. 2Q'15
YTD'16YTD'15% Change
vs. YTD'15
Management Fees from CLOs13,737 13,979  (2)%27,679 28,939  (4)%
Management Fees from Non-CLO products1,485 977  52%2,671 1,838  45%
Total Management Fees15,222 14,956  2%30,350 30,777  (1)%
Incentive Fees7,861 4,066  93%12,144 8,066  51%
Net Investment Income15,290 5,742  166%20,182 11,850  70%
Total ENI Revenues38,373 24,764  55%62,676 50,693  24%
Employee compensation and benefits9,463 7,187  32%17,493 15,471  
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