New Mountain Finance Corporation Announces Financial Results for the Quarter Ended June 30, 2025 | NMFC Stock News

08/04/2025 - 04:37 PM Reports Second Quarter Net Investment Income of $0.32 per Share and Declares a Third Quarter Distribution of $0.32 per Share NEW YORK--(BUSINESS WIRE)--New Mountain Finance Corporation (NASDAQ: NMFC) (“New Mountain,” “New Mountain Finance” or the “Company”) today announced its financial results for the quarter ended June 30, 2025.Second Quarter and Recent Highlights1Net investment income of $34.5 million, or $0.32 per weighted average shareNet asset value of $12.21 per share compared to $12.45 per share as of March 31, 2025~95% of the portfolio is rated green on our internal heatmapIncreased senior oriented asset mix to 78%, compared to 75% as of June 30, 2024Received a third license from the Small Business Administration for the SBIC program in July 2025Repurchased $9.6 million of outstanding shares in the second quarterDeclared a third quarter 2025 distribution of $0.32 per share, payable on September 30, 2025, to holders of record as of September 16, 2025($ in millions, except per share data)Q2 2025Q2 2024Net Investment Income per Weighted Average Share$0.32$0.36Regular & Supplemental Dividends Paid per Share in Quarter$0.32$0.34Annualized Dividend Yield412.3%11.0%June 30, 2025March 31, 2025Investment Portfolio5$3,014.2$3,047.7NAV per Share$12.21$12.45Statutory Debt/Equity31.17x1.15xStatutory Debt/Equity (Net of Available Cash)31.13x1.09xManagement Comments on Second Quarter Performance“In Q2, NMFC once again delivered its dividend, despite tight credit spreads in the market generally,” said Steven B. Klinsky, NMFC Chairman and New Mountain Capital CEO. “We remain committed to maintaining credit discipline and serving our shareholders.”John R. Kline, NMFC CEO, added: “We continued to advance our strategic priorities for NMFC of both increasing the percentage of senior-oriented assets to nearly 80% and building more position diversification across the portfolio. Additionally, NMFC repurchased $9.6 million worth of shares in the quarter, demonstrating our belief that the stock is undervalued at current trading levels.”Portfolio and Investment Activity5As of June 30, 2025, the Company’s NAV1 was $1,305.9 million and its portfolio had a fair value of $3,014.2 million of investments in 124 portfolio companies, with a weighted average YTM at Cost6 of approximately 10.6%. For the three months ended June 30, 2025, the Company originated $122.2 million of investments2, offset by $141.4 million of repayments2 and $13.7 million of asset sales10.Portfolio and Asset QualityNMFC’s mandate is to primarily target businesses in the middle market that, consistent with New Mountain’s private equity platform, are high quality, defensive growth companies in industries that are well-researched by New Mountain. The Company’s focus is on defensive growth businesses that generally exhibit the following characteristics: (i) acyclicality, (ii) sustainable secular growth drivers, (iii) niche market dominance and high barriers to competitive entry, (iv) recurring revenue and strong free cash flow, (v) flexible cost structures and (vi) seasoned management teams.Portfolio Industry Composition based on Fair Value8SoftwareBusiness ServicesERP8.2 %Misc Services4.1 %Human Capital Management5.1 %Real Estate Services4.1 %Ecommerce & Logistics4.6 %Engineering & Consulting Services3.8 %Finance & Accounting4.4 %Insurance & Benefits Services2.6 %Governance, Risk & Compliance4.0 %Digital Transformation2.4 %IT Infrastructure & Security3.0 %MRO Services1.2 %Integrated Payments1.6 %Utility Services1.6 %Data & Information Services0.4 %Total Software30.9 %Total Business Services20.2 %HealthcareOther IndustriesHealthcare Services11.3 %Consumer Services7.2 %Healthcare Software3.4 %Education6.6 %Pharma Services1.8 %Financial Services5.1 %Tech-Enabled Healthcare0.9 %Distribution & Logistics4.5 %Healthcare Products0.2 %Packaging2.7 %Other5.2 %Total Healthcare17.6 %Total Other Industries31.3 %The Company monitors the performance and financial trends of its portfolio companies on at least a quarterly basis. The Company attempts to identify any developments within the portfolio company, the industry, or the macroeconomic environment that may alter any material element of the Company’s original investment strategy. As described more fully in the Company's Quarterly Report on Form 10-Q filed with the U.S. Securities and Exchange Commission, the portfolio monitoring procedures are designed to provide a simple, yet comprehensive analysis of the Company’s portfolio companies based on their operating performance and underlying business characteristics, which in turn forms the basis of its Risk Rating. The Risk Rating is expressed in categories of Green, Yellow, Orange and Red with Green reflecting an investment that is in-line with or above expectations and Red reflecting an investment performing materially below expectations.The following table shows the Risk Rating of the Company’s portfolio companies as of June 30, 2025:(in millions)As of June 30, 2025Risk RatingCostPercentFair ValuePercentWeighted Average MarkGreen7$2,888.492.4%$2,858.094.8%94.4%Yellow5128.44.1%89.43.0%69.5%Orange88.72.8%51.41.7%70.3%Red21.90.7%15.40.5%70.0%Total$3,127.4100.0%$3,014.2100.0%As of June 30, 2025, nearly all investments in the Company’s portfolio had a Green Risk Rating, with the exception of six portfolio companies that had a Yellow Risk Rating, seven portfolio companies that had an Orange Risk Rating and one portfolio company that had a Red Risk Rating.The following table shows the Company’s investment portfolio composition as of June 30, 2025:(in millions)Investment Portfolio CompositionJune 30, 2025Percent of TotalFirst Lien$1,967.365.3%Senior Loan Funds (SLP III & SLP IV) & NMNLC386.612.8%Second Lien5182.66.1%Subordinated108.03.6%Preferred Equity229.87.6%Common Equity and Other9139.84.6%Total$3,014.2100.0%Liquidity and Capital ResourcesAs of June 30, 2025, the Company had cash and cash equivalents of $57.4 million and total statutory debt outstanding of $1,526.2 million3. The Company's statutory debt to equity was 1.17x (or 1.13x net of available cash) as of June 30, 2025. Additionally, the Company had $262.5 million of SBA-guaranteed debentures outstanding as of June 30, 2025. As of June 30, 2025, the Company had $1,079.7 million of available capacity on its Holdings Credit Facility, NMFC Credit Facility and Unsecured Management Company Revolver.Second Quarter 2025 Conference CallNew Mountain Finance Corporation will host an earnings conference call and webcast at 10:00 am Eastern Time on Tuesday, August 5, 2025. To participate in the live earning conference call, please use the following dial-in numbers or visit the audio webcast link. To avoid any delays, please join at least fifteen minutes prior to the start of the call.United States: +1 (877) 443-9109International: +1 (412) 317-1082Live Audio WebcastA replay of the conference call can be accessed one hour after the end of the conference call through November 5, 2025. The full webcast replay will be available through August 5, 2026. To access the earnings webcast replay please visit the New Mountain Investor Relations website.United States: +1 (877) 344-7529International: +1 (412) 317-0088Access Code: 6995709For additional details related to the quarter ended June 30, 2025, please refer to the New Mountain Finance Corporation Quarterly Report on Form 10-Q filed with the SEC and the supplemental investor presentation which can be found on the Company's website at http://www.newmountainfinance.com._________________________(1)Excludes non-controlling interest in New Mountain Net Lease Corporation (“NMNLC”).(2)Originations exclude payment-in-kind (“PIK”); originations, repayments, and sales exclude revolvers, unfunded commitments, bridges, return of capital, and realized gains / losses.(3)Excludes the Company’s United States Small Business Administration (“SBA”) guaranteed debentures.(4)Dividend yield calculation uses the closing stock price of $10.42 on August 1, 2025 and $12.42 on July 29, 2024 and includes regular dividends for Q2 2025 and regular and supplemental dividends for Q2 2024.(5)Includes collateral for securities purchased under collateralized agreements to resell.(6)References to “YTM at Cost” assume the accruing investments, including secured collateralized agreements, in the Company's portfolio as of a certain date, the ‘‘Portfolio Date’’, are purchased at cost on that date and held until their respective maturities with no prepayments or losses and are exited at par at maturity. This calculation excludes the impact of existing leverage. YTM at Cost uses the Sterling Overnight Interbank Average Rate ("SONIA”), Euro Interbank Offered Rate ("EURIBOR") and Secured Overnight Financing Rate (“SOFR”) curves at each quarter’s respective end date. The actual yield to maturity may be higher or lower due to the future selection of SONIA, EURIBOR and SOFR contracts by the individual companies in the Company’s portfolio or other factors.(7)Includes investments held in NMNLC.(8)Excludes NMFC Senior Loan Program III LLC ("SLP III"), NMFC Senior Loan Program IV LLC ("SLP IV") and NMNLC.(9)Includes investments classified as structured finance obligations.(10)Office Ally sale closed in May 2025; NMFC’s investment was fully repaid upon closingNew Mountain Finance CorporationConsolidated Statements of Assets and Liabilities(in thousands, except shares and per share data)(unaudited)June 30, 2025December 31, 2024AssetsInvestments at fair valueNon-controlled/non-affiliated investments (cost of $2,268,989 and $2,298,083, respectively)$2,227,265$2,277,352Non-controlled/affiliated investments (cost of $128,280 and $124,254, respectively)102,983112,776Controlled investments (cost of $700,121 and $679,587, respectively)670,448700,896Total investments at fair value (cost of $3,097,390 and $3,101,924, respectively)3,000,6963,091,024Securities purchased under collateralized agreements to resell (cost of $30,000 and $30,000, respectively)13,50013,500Cash and cash equivalents57,39080,320Interest and dividend receivable43,15642,379Derivative asset at fair value5,718—Receivable from unsettled securities sold4,386—Receivable from affiliates413213Other assets34,45319,265Total assets$3,159,712$3,246,701LiabilitiesBorrowingsUnsecured Notes$989,987$978,503SBA-guaranteed debentures262,500300,0002022 Convertible Notes258,811260,091Holdings Credit Facility246,063294,363NMFC Credit Facility31,37227,944Deferred financing costs (net of accumulated amortization of $45,690 and $63,971, respectively)(21,103)(24,191)Net borrowings1,767,6301,836,710Payable for unsettled securities purchased29,562—Interest payable15,56117,109Payable to broker13,9003,230Management fee payable9,75910,467Incentive fee payable5,3848,625Deferred tax liability1,4531,410Derivative liability at fair value1,4247,423Other liabilities3,2032,436Total liabilities1,847,8761,887,410Commitments and contingenciesNet assetsPreferred stock, par value $0.01 per share, 2,000,000 shares authorized, none issued——Common stock, par value $0.01 per share, 200,000,000 shares authorized, 107,851,929 and 107,851,415 shares issued, respectively, and 106,926,713 and 107,851,415 shares outstanding, respectively1,0791,079Paid in capital in excess of par1,365,8381,365,852Treasury stock at cost, 925,216 and 0 shares held, respectively(9,642)—Accumulated undistributed earnings(51,416)(13,592)Total net assets of New Mountain Finance Corporation$1,305,859$1,353,339Non-controlling interest in New Mountain Net Lease Corporation5,9775,952Total net assets$1,311,836$1,359,291Total liabilities and net assets$3,159,712$3,246,701Number of shares outstanding106,926,713107,851,415Net asset value per share of New Mountain Finance Corporation$12.21$12.55New Mountain Finance CorporationConsolidated Statements of Operations(in thousands, except shares and per share data)(unaudited)Three Months EndedSix Months EndedJune 30, 2025June 30, 2024June 30, 2025June 30, 2024Investment incomeFrom non-controlled/non-affiliated investments:Interest income (excluding Payment-in-kind ("PIK") interest income)$53,584$57,583$105,697$113,820PIK interest income2,9314,4375,8449,120Dividend income5062,2841,0632,577Non-cash dividend income3,9724,7978,4069,481Other income8923,2912,2044,891From non-controlled/affiliated investments:Interest income (excluding PIK interest income)336376667744PIK interest income1,0578732,0441,709Non-cash dividend income2921,3741,9752,618Other income6262125125From controlled investments:Interest income (excluding PIK interest income)2,0221,3833,5072,744PIK interest income2,9003,7216,5887,856Dividend income12,18312,34024,38125,023Non-cash dividend income2,3781,5704,4493,066Other income3754972,2031,370Total investment income83,49094,588169,153185,144ExpensesInterest and other financing expenses31,13833,11362,51264,129Management fee9,75911,35119,99222,348Incentive fee7,9719,55016,21818,939Professional fees1,1001,1272,4892,194Administrative expenses1,1841,1082,2882,076Other general and administrative expenses331527847992Total expenses51,48356,776104,346110,678Less: management and incentive fees waived(2,586)(861)(4,408)(1,762)Net expenses48,89755,91599,938108,916Net investment income before income taxes34,59338,67369,21576,228Income tax expense (benefit)8234(11)235Net investment income34,58538,43969,22675,993Net realized (losses) gains:Non-controlled/non-affiliated investments13,390(34,966)12,316(46,824)Controlled investments(1)3,80038,8983,831Net change in unrealized appreciation (depreciation):Non-controlled/non-affiliated investments(29,012)32,895(24,806)56,055Non-controlled/affiliated investments(8,928)(4,080)(13,819)(26,543)Controlled investments(2,590)1,697(50,982)4,017Securities purchased under collateralized agreements to resell—(3,000)—(3,000)Foreign currency452129602106Provision for taxes(21)(130)(43)(767)Net realized and unrealized losses(26,710)(3,655)(37,834)(13,125)Net increase in net assets resulting from operations7,87534,78431,39262,868Less: Net increase in net assets resulting from operations related to non-controlling interest in New Mountain Net Lease Corporation(101)(313)(205)(989)Net increase in net assets resulting from operations related to New Mountain Finance Corporation$7,774$34,471$31,187$61,879Basic earnings per share$0.07$0.32$0.29$0.59Weighted average shares of common stock outstanding - basic107,750,160106,891,784107,800,508105,276,077Diluted earnings per share$0.07$0.31$0.29$0.56Weighted average shares of common stock outstanding - diluted126,733,459125,759,769126,792,855124,101,624Distributions declared and paid per share$0.32$0.34$0.64$0.70ABOUT NEW MOUNTAIN FINANCE CORPORATIONNew Mountain Finance Corporation (NASDAQ: NMFC) is focused on providing direct lending solutions to U.S. upper middle market companies backed by top private equity sponsors. Our investment objective is to generate current income and capital appreciation through the sourcing and origination of senior secured loans and select junior capital positions, to growing businesses in defensive industries that offer attractive risk-adjusted returns. Our differentiated investment approach leverages the deep sector knowledge and operating resources of New Mountain Capital, a global investment firm with over $55 billion of assets under management.ABOUT NEW MOUNTAIN CAPITALNew Mountain Capital ("NMC") is a New York-based investment firm that emphasizes business building and growth, rather than debt, as it pursues long-term capital appreciation. The firm currently manages private equity, credit and net lease investment strategies with over $55 billion in assets under management. New Mountain seeks out what it believes to be the highest quality growth leaders in carefully selected industry sectors and then works intensively with management to build the value of these companies. For more information on New Mountain Capital, please visit http://www.newmountaincapital.com.FORWARD-LOOKING STATEMENTSStatements included herein may contain “forward-looking statements”, which relate to our future operations, future performance or our financial condition. Forward-looking statements are not guarantees of future performance, condition or results and involve a number of risks and uncertainties, including changes in base interest rates and significant volatility on our business, portfolio companies, our industry and the global economy. Actual results and outcomes may differ materially from those anticipated in the forward-looking statements as a result of a variety of factors, including those described from time to time in our filings with the Securities and Exchange Commission or factors that are beyond our control. New Mountain Finance Corporation undertakes no obligation to publicly update or revise any forward-looking statements made herein, except as may be required by law. All forward-looking statements speak only as of the time of this press release.View source version on businesswire.com: https://www.businesswire.com/news/home/20250804936917/en/New Mountain Finance CorporationInvestor RelationsLaura C. Holson, Authorized RepresentativeNMFCIR@newmountaincapital.com(212) 220-3505Source: New Mountain Finance Corporation