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New Mountain Finance Corp

New Mountain Finance Corporation Announces Financial Results for the Quarter Ended March 31, 2025

Reports First Quarter Net Investment Income of $0.32 per Share and Declares a Second Quarter Distribution of $0.32 per Share

NEW YORK--(BUSINESS WIRE)--May 5, 2025-- New Mountain Finance Corporation (NASDAQ: NMFC) (“New Mountain,” “New Mountain Finance” or the “Company”) today announced its financial results for the quarter ended March 31, 2025.

First Quarter and Recent Highlights1

  • Net investment income of $34.5 million, or $0.32 per weighted average share
  • Net asset value of $12.45 per share compared to $12.55 per share as of December 31, 2024
  • Sustained strong credit performance with ~96.5% of the portfolio rated green
  • Reduced cost of debt from SOFR + 2.15% to SOFR + 1.95% on our Holdings Credit Facility
  • Increased senior oriented asset mix to 77%, compared to 75% as of December 31, 2024
  • Declared a second quarter 2025 distribution of $0.32 per share, payable on June 30, 2025, to holders of record as of June 16, 2025

($ in millions, except per share data)

 

Q1 2025

 

Q1 2024

Net Investment Income per Weighted Average Share

 

$

0.32

 

 

$

0.36

 

Regular & Supplemental Dividends Paid per Share in Quarter

 

$

0.32

 

 

$

0.36

 

Annualized Dividend Yield4

 

 

12.8

%

 

 

10.7

%

 

 

March 31, 2025

 

December 31, 2024

Investment Portfolio5

 

$

3,047.7

 

$

3,104.5

NAV per Share

 

$

12.45

 

$

12.55

Statutory Debt/Equity3

 

1.15x

 

1.15x

Statutory Debt/Equity (Net of Available Cash)3

 

1.09x

 

1.11x

Management Comments on First Quarter Performance

“New Mountain’s strategy of investing in defensive sectors positions NMFC for continued success in what has become a more volatile operating environment,” said Steven B. Klinsky, NMFC Chairman and New Mountain Capital CEO. “We believe that, relative to other credit funds, NMFC is notably well positioned for tariff and other political issues.”

John R. Kline, NMFC CEO, added: “NMFC maintained strong credit performance in Q1, with over 96% of the portfolio rated green. Looking ahead, we remain confident in NMFC’s ability to deliver consistent yield with an enhanced margin of safety. Additionally, we have made meaningful progress on our strategic priorities including PIK reduction, diversifying our top investments and reducing the cost of our liabilities.”

Portfolio and Investment Activity 5

As of March 31, 2025, the Company’s NAV1 was $1,342.2 million and its portfolio had a fair value of $3,047.7 million of investments in 119 portfolio companies, with a weighted average YTM at Cost6 of approximately 10.2%. For the three months ended March 31, 2025, the Company originated $120.8 million of investments2, offset by $160.4 million of repayments2 and $26.3 million of asset sales.

Portfolio and Asset Quality

NMFC’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 Value8

Software

 

Business Services

 

ERP

8.0 %

 

 

Misc Services

4.0 %

 

Human Capital Management

5.6 %

 

 

Real Estate Services

3.8 %

 

Finance & Accounting

4.7 %

 

 

Engineering & Consulting Services

3.4 %

 

Ecommerce & Logistics

4.6 %

 

 

Digital Transformation

2.1 %

 

Governance, Risk & Compliance

3.9 %

 

 

Insurance & Benefits Services

1.6 %

 

IT Infrastructure & Security

3.1 %

 

 

MRO Services

1.2 %

 

Integrated Payments

1.6 %

 

 

Utility Services

1.0 %

 

 

 

 

 

Data & Information Services

0.2 %

Total Software

31.5 %

 

Total Business Services

17.3 %

 

 

 

 

 

 

 

Healthcare

 

Other Industries

 

 

Healthcare Services

11.0 %

 

 

Consumer Services

7.1 %

 

Healthcare Software

6.3 %

 

 

Education

6.6 %

 

Pharma Services

1.5 %

 

 

Financial Services

4.7 %

 

Tech-Enabled Healthcare

0.8 %

 

 

Distribution & Logistics

4.5 %

 

Healthcare Products

0.2 %

 

 

Packaging

2.6 %

 

 

 

 

 

Other

5.9 %

Total Healthcare

19.8 %

 

Total Other Industries

31.4 %

 

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 March 31, 2025:

(in millions)

As of March 31, 2025

Risk Rating

 

Cost

 

Percent

 

Fair Value

 

Percent

 

Weighted Average Mark

Green7

 

$

2,942.2

 

94.3

%

 

$

2,939.1

 

96.5

%

 

96.4

%

Yellow5

 

 

107.6

 

3.4

%

 

 

71.4

 

2.3

%

 

66.3

%

Orange

 

 

73.1

 

2.3

%

 

 

37.2

 

1.2

%

 

64.3

%

Red

 

 

—

 

—

 

 

 

—

 

—

 

 

—

 

Total

 

$

3,122.9

 

100.0

%

 

$

3,047.7

 

100.0

%

 

 

As of March 31, 2025, all investments in the Company’s portfolio had a Green Risk Rating, with the exception of five portfolio companies that had a Yellow Risk Rating and six portfolio companies that had an Orange Risk Rating. As of March 31, 2025, there were no portfolio companies that had a Red Risk Rating.

The following table shows the Company’s investment portfolio composition as of March 31, 2025:

(in millions)

 

 

 

 

Investment Portfolio Composition

 

March 31, 2025

 

Percent of Total

First Lien

 

$

1,959.0

 

64.3

%

Senior Loan Funds (SLP III & SLP IV) & NMNLC

 

 

386.9

 

12.7

%

Second Lien5

 

 

187.1

 

6.1

%

Subordinated

 

 

104.9

 

3.4

%

Preferred Equity

 

 

243.3

 

8.0

%

Common Equity and Other9

 

 

166.4

 

5.5

%

Total

 

$

3,047.7

 

100.0

%

Liquidity and Capital Resources

As of March 31, 2025, the Company had cash and cash equivalents of $85.5 million and total statutory debt outstanding of $1,543.7 million3. The Company's statutory debt to equity was 1.15x (or 1.09x net of available cash) as of March 31, 2025. Additionally, the Company had $262.5 million of SBA-guaranteed debentures outstanding as of March 31, 2025. As of March 31, 2025, the Company had $1,168.8 million of available capacity on its Holdings Credit Facility, NMFC Credit Facility and Unsecured Management Company Revolver.

First Quarter 2025 Conference Call

New Mountain Finance Corporation will host an earnings conference call and webcast at 10:00 am Eastern Time on Tuesday, May 6, 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) 443-9109
  • 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 August 6, 2025. The full webcast replay will be available through May 6, 2026. To access the earnings webcast replay please visit the New Mountain Investor Relations website.

  • United States: +1 (877) 344-7529
  • International: +1 (412) 317-0088
  • Access Code: 7848158

For additional details related to the quarter ended March 31, 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 excludes 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 $9.97 on May 2, 2025 and $12.72 on April 29, 2024 and includes regular dividends for Q1 2025 and regular and supplemental dividends for Q1 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.

New Mountain Finance Corporation

Consolidated Statements of Assets and Liabilities

(in thousands, except shares and per share data)

(unaudited)

 

March 31, 2025

 

December 31, 2024

Assets

 

 

 

Investments at fair value

 

 

 

Non-controlled/non-affiliated investments (cost of $2,276,008 and $2,298,083, respectively)

$

2,260,728

 

 

$

2,277,352

 

Non-controlled/affiliated investments (cost of $126,927 and $124,254, respectively)

 

110,558

 

 

 

112,776

 

Controlled investments (cost of $690,008 and $679,587, respectively)

 

662,925

 

 

 

700,896

 

Total investments at fair value (cost of $3,092,943 and $3,101,924, respectively)

 

3,034,211

 

 

 

3,091,024

 

Securities purchased under collateralized agreements to resell (cost of $30,000 and $30,000, respectively)

 

13,500

 

 

 

13,500

 

Cash and cash equivalents

 

85,496

 

 

 

80,320

 

Interest and dividend receivable

 

41,239

 

 

 

42,379

 

Derivative asset at fair value

 

3,117

 

 

 

—

 

Receivable from affiliates

 

247

 

 

 

213

 

Other assets

 

18,841

 

 

 

19,265

 

Total assets

$

3,196,651

 

 

$

3,246,701

 

Liabilities

 

 

 

Borrowings

 

 

 

Unsecured Notes

$

985,227

 

 

$

978,503

 

Holdings Credit Facility

 

270,563

 

 

 

294,363

 

SBA-guaranteed debentures

 

262,500

 

 

 

300,000

 

2022 Convertible Notes

 

258,846

 

 

 

260,091

 

NMFC Credit Facility

 

29,059

 

 

 

27,944

 

Deferred financing costs (net of accumulated amortization of $66,182 and $63,971, respectively)

 

(23,343

)

 

 

(24,191

)

Net borrowings

 

1,782,852

 

 

 

1,836,710

 

Interest payable

 

18,437

 

 

 

17,109

 

Payable for unsettled securities purchased

 

12,022

 

 

 

—

 

Payable to broker

 

10,130

 

 

 

3,230

 

Management fee payable

 

9,945

 

 

 

10,467

 

Incentive fee payable

 

6,714

 

 

 

8,625

 

Derivative liability at fair value

 

3,368

 

 

 

7,423

 

Deferred tax liability

 

1,432

 

 

 

1,410

 

Other liabilities

 

3,573

 

 

 

2,436

 

Total liabilities

 

1,848,473

 

 

 

1,887,410

 

Commitments and contingencies

 

 

 

Net assets

 

 

 

Preferred 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, and 107,851,415 and 107,851,415 shares issued and outstanding, respectively

 

1,079

 

 

 

1,079

 

Paid in capital in excess of par

 

1,365,824

 

 

 

1,365,852

 

Accumulated undistributed earnings

 

(24,691

)

 

 

(13,592

)

Total net assets of New Mountain Finance Corporation

$

1,342,212

 

 

$

1,353,339

 

Non-controlling interest in New Mountain Net Lease Corporation

 

5,966

 

 

 

5,952

 

Total net assets

$

1,348,178

 

 

$

1,359,291

 

Total liabilities and net assets

$

3,196,651

 

 

$

3,246,701

 

Number of shares outstanding

 

107,851,415

 

 

 

107,851,415

 

Net asset value per share of New Mountain Finance Corporation

$

12.45

 

 

$

12.55

 

New Mountain Finance Corporation

Consolidated Statements of Operations

(in thousands, except shares and per share data)

(unaudited)

 

Three Months Ended

 

March 31, 2025

 

March 31, 2024

Investment income

 

 

 

From non-controlled/non-affiliated investments:

 

 

 

Interest income (excluding Payment-in-kind ("PIK") interest income)

$

52,113

 

 

$

56,237

 

PIK interest income

 

2,913

 

 

 

4,683

 

Dividend income

 

557

 

 

 

293

 

Non-cash dividend income

 

4,434

 

 

 

4,684

 

Other income

 

1,312

 

 

 

1,600

 

From non-controlled/affiliated investments:

 

 

 

Interest income (excluding PIK interest income)

 

331

 

 

 

368

 

PIK interest income

 

987

 

 

 

836

 

Non-cash dividend income

 

1,683

 

 

 

1,244

 

Other income

 

63

 

 

 

63

 

From controlled investments:

 

 

 

Interest income (excluding PIK interest income)

 

1,485

 

 

 

1,361

 

PIK interest income

 

3,688

 

 

 

4,135

 

Dividend income

 

12,198

 

 

 

12,683

 

Non-cash dividend income

 

2,071

 

 

 

1,496

 

Other income

 

1,828

 

 

 

873

 

Total investment income

 

85,663

 

 

 

90,556

 

Expenses

 

 

 

Interest and other financing expenses

 

31,374

 

 

 

31,016

 

Management fee

 

10,233

 

 

 

10,997

 

Incentive fee

 

8,247

 

 

 

9,389

 

Professional fees

 

1,389

 

 

 

1,067

 

Administrative expenses

 

1,104

 

 

 

968

 

Other general and administrative expenses

 

516

 

 

 

465

 

Total expenses

 

52,863

 

 

 

53,902

 

Less: management and incentive fees waived

 

(1,822

)

 

 

(901

)

Net expenses

 

51,041

 

 

 

53,001

 

Net investment income before income taxes

 

34,622

 

 

 

37,555

 

Income tax (benefit) expense

 

(19

)

 

 

1

 

Net investment income

 

34,641

 

 

 

37,554

 

Net realized (losses) gains:

 

 

 

Non-controlled/non-affiliated investments

 

(1,074

)

 

 

(11,858

)

Controlled investments

 

38,899

 

 

 

31

 

Net change in unrealized appreciation (depreciation):

 

 

 

Non-controlled/non-affiliated investments

 

4,206

 

 

 

23,160

 

Non-controlled/affiliated investments

 

(4,891

)

 

 

(22,463

)

Controlled investments

 

(48,392

)

 

 

2,320

 

Foreign currency

 

150

 

 

 

(23

)

Provision for taxes

 

(22

)

 

 

(637

)

Net realized and unrealized losses

 

(11,124

)

 

 

(9,470

)

Net increase in net assets resulting from operations

 

23,517

 

 

 

28,084

 

Less: Net increase in net assets resulting from operations related to non-controlling interest in New Mountain Net Lease Corporation

 

(104

)

 

 

(676

)

Net increase in net assets resulting from operations related to New Mountain Finance Corporation

$

23,413

 

 

$

27,408

 

Basic earnings per share

$

0.22

 

 

$

0.26

 

Weighted average shares of common stock outstanding - basic

 

107,851,415

 

 

 

103,660,370

 

Diluted earnings per share

$

0.22

 

 

$

0.26

 

Weighted average shares of common stock outstanding - diluted

 

126,852,911

 

 

 

122,443,478

 

Distributions declared and paid per share

$

0.32

 

 

$

0.36

 

ABOUT NEW MOUNTAIN FINANCE CORPORATION

New 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 CAPITAL

New 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 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 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.

New Mountain Finance Corporation
Investor Relations
Laura C. Holson, Authorized Representative
NMFCIR@newmountaincapital.com
(212) 220-3505

Source: New Mountain Finance Corporation