New Mountain Finance Corporation Announces Financial Results for the Quarter and Year Ended December 31, 2023
Reports Net Investment Income of
Declares a First Quarter Regular Distribution of
Selected Financial Highlights
(in thousands, except per share data) |
|
|
Investment Portfolio1 |
$ |
3,027,822 |
Total Assets |
$ |
3,159,214 |
Total Statutory Debt2 |
$ |
1,507,836 |
NAV3 |
$ |
1,319,951 |
|
|
|
NAV per Share |
$ |
12.87 |
Net Investment Income per Weighted Average Share |
$ |
0.40 |
Regular Fourth Quarter Distribution Paid per Share |
$ |
0.32 |
Supplemental Fourth Quarter Distribution Declared per Share |
$ |
0.04 |
Statutory Debt/Equity |
1.14x |
|
Statutory Debt/Equity (net of available cash) |
1.10x |
Management Comments on Fourth Quarter Performance
“Our fourth quarter results reflect another successful quarter for 2023,” said
Portfolio and Investment Activity 1
As of
Consolidated Results of Operations 6
Quarterly Results
The Company’s total investment income for the three months ended
Annual Results
The Company’s total investment income for the years ended
Liquidity and Capital Resources
As of
Portfolio and Asset Quality 1
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 Annual Report on Form 10-K filed with the
The following table shows the Risk Rating of the Company’s portfolio companies as of
(in millions) |
|
||||||||||||
Risk Rating |
|
Cost |
|
Percent |
|
Fair Value |
|
Percent |
|||||
Red |
|
$ |
39.7 |
|
1.3 |
% |
|
$ |
4.6 |
|
0.2 |
% |
|
Orange |
|
|
73.1 |
|
2.4 |
% |
|
|
42.5 |
|
1.4 |
% |
|
Yellow1 |
|
|
157.6 |
|
5.1 |
% |
|
|
118.5 |
|
3.9 |
% |
|
Green7 |
|
|
2,797.8 |
|
91.2 |
% |
|
|
2,862.2 |
|
94.5 |
% |
|
Total |
|
$ |
3,068.2 |
|
100.0 |
% |
|
$ |
3,027.8 |
|
100.0 |
% |
As of
The following table shows the Company’s investment portfolio composition as of
(in thousands) |
|
|
|
|
||
Investment Portfolio Composition |
|
|
|
Percent of Total |
||
First Lien |
|
$ |
1,683,952 |
|
55.6 |
% |
Second Lien1 |
|
|
441,013 |
|
14.6 |
% |
Subordinated |
|
|
90,948 |
|
3.0 |
% |
Preferred Equity |
|
|
208,459 |
|
6.9 |
% |
Investment Fund |
|
|
252,400 |
|
8.3 |
% |
Common Equity and Other7 |
|
|
351,050 |
|
11.6 |
% |
Total |
|
$ |
3,027,822 |
|
100.0 |
% |
Recent Developments
On
On
On
___________________________________________ | |||
(1) |
Includes collateral for securities purchased under collateralized agreements to resell. |
||
(2) |
Excludes the Company’s |
||
(3) |
Excludes non-controlling interest in |
||
(4) |
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 London Interbank Offered Rate (“LIBOR”), 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. |
||
|
|||
(5) |
Originations exclude payment-in-kind (“PIK”); originations, repayments, and sales excludes revolvers, unfunded commitments, bridges, return of capital, and realized gains / losses. |
||
(6) |
Excludes net income related to non-controlling interests in NMNLC. For the quarter ended |
||
(7) |
Includes investment held in NMNLC. |
||
(8) |
Adjusted net investment income per share for the three months ended |
Fourth Quarter 2023 Conference Call
-
United States : +1 (877) 443-9109 - International: +1 (412) 317-1082
- Live Audio Webcast
A replay of the conference call can be accessed one hour after the end of the conference call through
-
United States : +1 (877) 344-7529 - International: +1 (412) 317-0088
- Access Code: 4449111
For additional details related to the quarter and year ended
Consolidated Statements of Assets and Liabilities (in thousands, except shares and per share data) |
|||||||
|
|
|
|
||||
Assets |
|
|
|
||||
Investments at fair value |
|
|
|
||||
Non-controlled/non-affiliated investments (cost of |
$ |
2,209,867 |
|
|
$ |
2,400,425 |
|
Non-controlled/affiliated investments (cost of |
|
133,659 |
|
|
|
130,787 |
|
Controlled investments (cost of |
|
667,796 |
|
|
|
690,035 |
|
Total investments at fair value (cost of |
|
3,011,322 |
|
|
|
3,221,247 |
|
Securities purchased under collateralized agreements to resell (cost of |
|
16,500 |
|
|
|
16,539 |
|
Cash and cash equivalents |
|
70,090 |
|
|
|
71,190 |
|
Interest and dividend receivable |
|
44,107 |
|
|
|
36,154 |
|
Deferred tax asset |
|
594 |
|
|
|
— |
|
Receivable from affiliates |
|
82 |
|
|
|
— |
|
Other assets |
|
16,519 |
|
|
|
9,797 |
|
Total assets |
$ |
3,159,214 |
|
|
$ |
3,354,927 |
|
Liabilities |
|
|
|
||||
Borrowings |
|
|
|
||||
Holdings Credit Facility |
$ |
515,063 |
|
|
$ |
618,963 |
|
Unsecured Notes |
|
506,500 |
|
|
|
531,500 |
|
SBA-guaranteed debentures |
|
300,000 |
|
|
|
300,000 |
|
Convertible Notes |
|
260,207 |
|
|
|
316,853 |
|
DB Credit Facility |
|
186,400 |
|
|
|
186,400 |
|
NMFC Credit Facility |
|
36,813 |
|
|
|
40,359 |
|
NMNLC Credit Facility II |
|
2,853 |
|
|
|
3,785 |
|
Deferred financing costs (net of accumulated amortization of |
|
(22,387 |
) |
|
|
(17,199 |
) |
Net borrowings |
|
1,785,449 |
|
|
|
1,980,661 |
|
Management fee payable |
|
10,116 |
|
|
|
10,524 |
|
Incentive fee payable |
|
8,555 |
|
|
|
6,296 |
|
Interest payable |
|
20,440 |
|
|
|
19,627 |
|
Payable to affiliates |
|
— |
|
|
|
78 |
|
Deferred tax liability |
|
— |
|
|
|
8,487 |
|
Other liabilities |
|
2,931 |
|
|
|
3,063 |
|
Total liabilities |
|
1,827,491 |
|
|
|
2,028,736 |
|
Commitments and contingencies |
|
|
|
||||
Net assets |
|
|
|
||||
Preferred stock, par value |
|
— |
|
|
|
— |
|
Common stock, par value |
|
1,026 |
|
|
|
1,009 |
|
Paid in capital in excess of par |
|
1,331,269 |
|
|
|
1,305,945 |
|
Accumulated undistributed earnings |
|
(12,344 |
) |
|
|
7,519 |
|
Total net assets of |
$ |
1,319,951 |
|
|
$ |
1,314,473 |
|
Non-controlling interest in |
|
11,772 |
|
|
|
11,718 |
|
Total net assets |
$ |
1,331,723 |
|
|
$ |
1,326,191 |
|
Total liabilities and net assets |
$ |
3,159,214 |
|
|
$ |
3,354,927 |
|
Number of shares outstanding |
|
102,558,859 |
|
|
|
100,937,026 |
|
Net asset value per share of |
$ |
12.87 |
|
|
$ |
13.02 |
|
Consolidated Statements of Operations (in thousands, except shares and per share data) |
|||||||||||
|
Year ended |
||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2021 |
|
Investment income |
|
|
|
|
|
||||||
From non-controlled/non-affiliated investments: |
|
|
|
|
|
||||||
Interest income (excluding Payment-in-kind ("PIK") interest income) |
$ |
249,851 |
|
|
$ |
184,367 |
|
|
$ |
159,189 |
|
PIK interest income |
|
15,968 |
|
|
|
11,767 |
|
|
|
8,582 |
|
Dividend income |
|
193 |
|
|
|
193 |
|
|
|
915 |
|
Non-cash dividend income |
|
17,481 |
|
|
|
14,071 |
|
|
|
10,153 |
|
Other income |
|
4,981 |
|
|
|
9,156 |
|
|
|
14,106 |
|
From non-controlled/affiliated investments: |
|
|
|
|
|
||||||
Interest income (excluding PIK interest income) |
|
1,951 |
|
|
|
1,062 |
|
|
|
1,579 |
|
PIK interest income |
|
2,183 |
|
|
|
1,043 |
|
|
|
434 |
|
Dividend income |
|
— |
|
|
|
— |
|
|
|
288 |
|
Non-cash dividend income |
|
4,625 |
|
|
|
4,109 |
|
|
|
4,835 |
|
Other income |
|
251 |
|
|
|
250 |
|
|
|
345 |
|
From controlled investments: |
|
|
|
|
|
||||||
Interest income (excluding PIK interest income) |
|
5,386 |
|
|
|
9,438 |
|
|
|
5,470 |
|
PIK interest income |
|
15,443 |
|
|
|
4,516 |
|
|
|
14,327 |
|
Dividend income |
|
45,905 |
|
|
|
43,149 |
|
|
|
41,659 |
|
Non-cash dividend income |
|
5,303 |
|
|
|
4,363 |
|
|
|
4,497 |
|
Other income |
|
5,315 |
|
|
|
7,146 |
|
|
|
4,580 |
|
Total investment income |
|
374,836 |
|
|
|
294,630 |
|
|
|
270,959 |
|
Expenses |
|
|
|
|
|
||||||
Interest and other financing expenses |
|
124,784 |
|
|
|
92,421 |
|
|
|
73,098 |
|
Management fee |
|
45,610 |
|
|
|
46,617 |
|
|
|
52,960 |
|
Incentive fee |
|
38,303 |
|
|
|
29,901 |
|
|
|
29,710 |
|
Administrative expenses |
|
4,101 |
|
|
|
4,131 |
|
|
|
4,461 |
|
Professional fees |
|
3,771 |
|
|
|
3,433 |
|
|
|
3,197 |
|
Other general and administrative expenses |
|
2,068 |
|
|
|
2,338 |
|
|
|
1,923 |
|
Total expenses |
|
218,637 |
|
|
|
178,841 |
|
|
|
165,349 |
|
Less: management fee waived |
|
(4,117 |
) |
|
|
(4,402 |
) |
|
|
(13,104 |
) |
Less: expenses waived and reimbursed |
|
— |
|
|
|
(238 |
) |
|
|
(244 |
) |
Net expenses |
|
214,520 |
|
|
|
174,201 |
|
|
|
152,001 |
|
Net investment income before income taxes |
|
160,316 |
|
|
|
120,429 |
|
|
|
118,958 |
|
Income tax expense |
|
418 |
|
|
|
825 |
|
|
|
118 |
|
Net investment income |
|
159,898 |
|
|
|
119,604 |
|
|
|
118,840 |
|
Net realized (losses) gains: |
|
|
|
|
|
||||||
Non-controlled/non-affiliated investments |
|
(49,267 |
) |
|
|
(737 |
) |
|
|
(3,167 |
) |
Non-controlled/affiliated investments |
|
— |
|
|
|
— |
|
|
|
8,338 |
|
Controlled investments |
|
16,413 |
|
|
|
53,440 |
|
|
|
(9,035 |
) |
Foreign currency |
|
13 |
|
|
|
827 |
|
|
|
15 |
|
Net change in unrealized appreciation (depreciation): |
|
|
|
|
|
||||||
Non-controlled/non-affiliated investments |
|
47,956 |
|
|
|
(81,197 |
) |
|
|
(23,466 |
) |
Non-controlled/affiliated investments |
|
(19,052 |
) |
|
|
(9,156 |
) |
|
|
66,505 |
|
Controlled investments |
|
(18,588 |
) |
|
|
6,219 |
|
|
|
49,347 |
|
Securities purchased under collateralized agreements to resell |
|
(39 |
) |
|
|
(4,883 |
) |
|
|
— |
|
Foreign currency |
|
100 |
|
|
|
(1,115 |
) |
|
|
(81 |
) |
Provision for taxes |
|
(1,344 |
) |
|
|
(8,474 |
) |
|
|
(114 |
) |
Net realized and unrealized (losses) gains |
|
(23,808 |
) |
|
|
(45,076 |
) |
|
|
88,342 |
|
Net increase in net assets resulting from operations |
|
136,090 |
|
|
|
74,528 |
|
|
|
207,182 |
|
Less: Net (increase) decrease in net assets resulting from operations related to non-controlling interest in |
|
(747 |
) |
|
|
204 |
|
|
|
(5,783 |
) |
Net increase in net assets resulting from operations related to |
$ |
135,343 |
|
|
$ |
74,732 |
|
|
$ |
201,399 |
|
Basic earnings per share |
$ |
1.34 |
|
|
$ |
0.75 |
|
|
$ |
2.08 |
|
Weighted average shares of common stock outstanding - basic |
|
101,118,302 |
|
|
|
100,202,847 |
|
|
|
96,952,959 |
|
Diluted earnings per share |
$ |
1.24 |
|
|
$ |
0.74 |
|
|
$ |
1.91 |
|
Weighted average shares of common stock outstanding - diluted |
|
123,488,882 |
|
|
|
115,426,198 |
|
|
|
110,210,545 |
|
Distributions declared and paid per share |
$ |
1.49 |
|
|
$ |
1.22 |
|
|
$ |
1.20 |
|
ABOUT
ABOUT
FORWARD-LOOKING STATEMENTS
Statements 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
View source version on businesswire.com: https://www.businesswire.com/news/home/20240226174936/en/
Investor Relations
NMFCIR@newmountaincapital.com
(212) 220-3505
Source: