{"id":756109,"date":"2023-05-08T16:32:41","date_gmt":"2023-05-08T20:32:41","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/new-mountain-finance-corporation-announces-first-quarter-financial-results\/"},"modified":"2023-05-08T16:32:41","modified_gmt":"2023-05-08T20:32:41","slug":"new-mountain-finance-corporation-announces-first-quarter-financial-results","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/new-mountain-finance-corporation-announces-first-quarter-financial-results\/","title":{"rendered":"New Mountain Finance Corporation Announces First Quarter Financial Results"},"content":{"rendered":"

<\/p>\n

New Mountain Finance Corporation Announces First Quarter Financial Results<\/b><\/p>\n

\nReports Net Investment Income of $0.38 per share<\/p>\n

\nDeclares a Regular Second Quarter Distribution of $0.32 per Share and a Supplemental Distribution of $0.03 per Share<\/p>\n

NEW YORK–(BUSINESS WIRE<\/a>)–
\nNew Mountain Finance Corporation (NASDAQ: NMFC) (\u201cNew Mountain,\u201d \u201cNew Mountain Finance\u201d or the \u201cCompany\u201d) today announced its financial results for the quarter ended March 31, 2023. The Company reported first quarter net investment income (“NII”) of $0.38 per weighted average share and net asset value (\u201cNAV\u201d) per share of $13.14, compared to $13.02 on December 31, 2022. The Company also announced that its board of directors declared a second quarter regular distribution of $0.32 per share and a supplemental distribution of $0.03, which will be payable on June 30, 2023 to holders of record as of June 16, 2023.<\/p>\n

Selected Financial Highlights<\/i><\/b><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

(in thousands, except per share data)<\/i><\/b><\/p>\n<\/td>\n

\n\n

March 31, 2023<\/b><\/p>\n<\/td>\n<\/tr>\n

\n

\nInvestment Portfolio1<\/sup><\/p>\n<\/td>\n

\n\n

\n$<\/p>\n<\/td>\n

\n

\n3,286,865<\/p>\n<\/td>\n<\/tr>\n

\n

\nTotal Assets<\/p>\n<\/td>\n

\n\n

\n$<\/p>\n<\/td>\n

\n

\n3,378,935<\/p>\n<\/td>\n<\/tr>\n

\n

\nTotal Statutory Debt2<\/sup><\/p>\n<\/td>\n

\n\n

\n$<\/p>\n<\/td>\n

\n

\n1,710,767<\/p>\n<\/td>\n<\/tr>\n

\n

\nNAV3<\/sup><\/p>\n<\/td>\n

\n\n

\n$<\/p>\n<\/td>\n

\n

\n1,326,690<\/p>\n<\/td>\n<\/tr>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n\n

\n\u00a0<\/p>\n<\/td>\n<\/tr>\n

\n

\nNAV per Share<\/p>\n<\/td>\n

\n\n

\n$<\/p>\n<\/td>\n

\n

\n13.14<\/p>\n<\/td>\n<\/tr>\n

\n

\nNet Investment Income per Weighted Average Share<\/p>\n<\/td>\n

\n\n

\n$<\/p>\n<\/td>\n

\n

\n0.38<\/p>\n<\/td>\n<\/tr>\n

\n

\nDistribution Paid per Share<\/p>\n<\/td>\n

\n\n

\n$<\/p>\n<\/td>\n

\n

\n0.32<\/p>\n<\/td>\n<\/tr>\n

\n

\nStatutory Debt\/Equity<\/p>\n<\/td>\n

\n\n

\n1.29x<\/p>\n<\/td>\n<\/tr>\n

\n

\nStatutory Debt\/Equity (net of available cash)<\/p>\n<\/td>\n

\n\n

\n1.26x<\/p>\n<\/td>\n<\/tr>\n<\/table>\n

Management Comments on First Quarter Performance<\/b><\/p>\n

\n\u201cOur first quarter results reflect a very good start to 2023 with year-over-year net investment income per share growth of over 26%. Our credit performance remains strong even in a more difficult market environment,\u201d said Steven B. Klinsky, NMFC Chairman. \u201cNew Mountain Finance Corporation continues to benefit from our disciplined defensive growth investment focus and our knowledgeable and experienced team.”<\/p>\n

\nJohn R. Kline, CEO, commented: \u201cNMFC\u2019s net investment income per share again outpaced its regular quarterly dividend in the first quarter, resulting in a supplemental distribution of $0.03 per share in addition to our regular distribution of $0.32 per share. We remain focused on delivering stable enhanced yield to our shareholders through our base dividend and future variable supplemental dividend payments.”<\/p>\n

Portfolio and Investment Activity<\/b>1<\/sup><\/p>\n

\nAs of March 31, 2023, the Company\u2019s NAV was $1,326.7 million and its portfolio had a fair value of $3,286.9 million in 112 portfolio companies, with a weighted average YTM at Cost4<\/sup> of approximately 10.9%. For the three months ended March 31, 2023, the Company generated $76.7 million of originations5<\/sup>,and cash repayments5<\/sup> of $30.7 million.<\/p>\n

Consolidated Results of Operations<\/b>6<\/sup><\/p>\n

\nThe Company\u2019s total investment income for the three months ended March 31, 2023 and 2022 was $91.7 million and $68.6 million, respectively. The Company\u2019s total net expenses, after income tax expense, for the three months ended March 31, 2023 and 2022 were $53.6 million and $39.0 million, respectively. The Company’s NII for the three months ended March 31, 2023 and 2022 was $38.1 million and $29.6 million, respectively. The Company’s NII per share for the three months ended March 31, 2023 and 2022 was $0.38 and $0.30, respectively. For the three months ended March 31, 2023 and 2022, the Company recorded $6.4 million and $6.6 million, respectively, of net realized and unrealized gains.<\/p>\n

Liquidity and Capital Resources<\/b><\/p>\n

\nAs of March 31, 2023, the Company had cash and cash equivalents of $46.4 million and total statutory debt outstanding of $1,710.8 million2. <\/sup>The Company’s statutory debt to equity was 1.29x as of March 31, 2023. Additionally, the Company had $300.0 million of SBA-guaranteed debentures outstanding as of March 31, 2023.<\/p>\n

Portfolio and Asset Quality<\/b>1<\/sup><\/p>\n

\nThe 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\u2019s 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\u2019s 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 Red, Orange, Yellow and Green with Red reflecting an investment performing materially below expectations and Green reflecting an investment that is in-line with or above expectations.<\/p>\n

\nThe following table shows the Risk Rating of the Company\u2019s portfolio companies as of March 31, 2023:<\/p>\n\n\n\n\n\n\n\n\n
\n

(in millions)<\/b><\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

As of March 31, 2023<\/b><\/p>\n<\/td>\n<\/tr>\n

\n

Risk Rating<\/b><\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

Cost<\/b><\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

Percent<\/b><\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

Fair Value<\/b><\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

Percent<\/b><\/p>\n<\/td>\n<\/tr>\n

\n

\nRed<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n$<\/p>\n<\/td>\n

\n

\n62.3<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n1.9<\/p>\n<\/td>\n

\n

\n%<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n$<\/p>\n<\/td>\n

\n

\n17.6<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n0.5<\/p>\n<\/td>\n

\n

\n%<\/p>\n<\/td>\n<\/tr>\n

\n

\nOrange<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n60.1<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n1.8<\/p>\n<\/td>\n

\n

\n%<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n41.0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n1.3<\/p>\n<\/td>\n

\n

\n%<\/p>\n<\/td>\n<\/tr>\n

\n

\nYellow1<\/sup><\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n187.7<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n5.6<\/p>\n<\/td>\n

\n

\n%<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n138.7<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n4.2<\/p>\n<\/td>\n

\n

\n%<\/p>\n<\/td>\n<\/tr>\n

\n

\nGreen7<\/sup><\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n3,022.5<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n90.7<\/p>\n<\/td>\n

\n

\n%<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n3,089.6<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n94.0<\/p>\n<\/td>\n

\n

\n%<\/p>\n<\/td>\n<\/tr>\n

\n

\nTotal<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n$<\/p>\n<\/td>\n

\n

\n3,332.6<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n100.0<\/p>\n<\/td>\n

\n

\n%<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n$<\/p>\n<\/td>\n

\n

\n3,286.9<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n100.0<\/p>\n<\/td>\n

\n

\n%<\/p>\n<\/td>\n<\/tr>\n<\/table>\n

\nAs of March 31, 2023, all investments in the Company\u2019s portfolio had a Green Risk Rating with the exception of nine portfolio companies that had a Yellow Risk Rating, four portfolio companies that had an Orange Risk Rating and three portfolio companies that had a Red Risk Rating.<\/p>\n

\nThe following table shows the Company\u2019s investment portfolio composition as of March 31, 2023:<\/p>\n\n\n\n\n\n\n\n\n\n\n
\n

(in thousands, except per share data)<\/i><\/b><\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n<\/tr>\n

\n

Investment Portfolio Composition<\/b><\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

March 31, 2023<\/b><\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

Percent of Total<\/b><\/p>\n<\/td>\n<\/tr>\n

\n

\nFirst Lien<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n1,798,746<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n54.7<\/p>\n<\/td>\n

\n

\n%<\/p>\n<\/td>\n<\/tr>\n

\n

\nSecond Lien1<\/sup><\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n578,952<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n17.6<\/p>\n<\/td>\n

\n

\n%<\/p>\n<\/td>\n<\/tr>\n

\n

\nSubordinated<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n78,282<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n2.4<\/p>\n<\/td>\n

\n

\n%<\/p>\n<\/td>\n<\/tr>\n

\n

\nPreferred Equity<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n191,155<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n5.8<\/p>\n<\/td>\n

\n

\n%<\/p>\n<\/td>\n<\/tr>\n

\n

\nInvestment Fund<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n252,400<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n7.7<\/p>\n<\/td>\n

\n

\n%<\/p>\n<\/td>\n<\/tr>\n

\n

\nCommon Equity and Other7<\/sup><\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n387,330<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n11.8<\/p>\n<\/td>\n

\n

\n%<\/p>\n<\/td>\n<\/tr>\n

\n

\nTotal<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n$<\/p>\n<\/td>\n

\n

\n3,286,865<\/p>\n<\/td>\n

\n

\n\u00a0<\/p>\n<\/td>\n

\n

\n100.0<\/p>\n<\/td>\n

\n

\n%<\/p>\n<\/td>\n<\/tr>\n<\/table>\n

Recent Developments<\/b><\/p>\n

\nOn April 25, 2023, the Company\u2019s board of directors declared a regular second quarter 2023 distribution of $0.32 per share and a supplemental distribution related to Q1 earnings of $0.03 per share, each payable on June 30, 2023 to holders of record as of June 16, 2023.<\/p>\n

\nOn April 25, 2023, Alice W. Handy notified the Company’s board of directors that she was resigning as a director, effective immediately. In submitting her resignation, Ms. Handy did not express any disagreement on any matter relating to the Company’s operations, policies or practices. The Nominating and Corporate Governance Committee of the board of directors has been actively searching for Ms. Handy\u2019s successor in accordance with its policies and procedures, and expects to appoint a new director in the near future.<\/p>\n\n\n\n\n\n\n\n\n\n
_____________________________________<\/td>\n<\/tr>\n
(1)<\/td>\n\n

\n\u00a0<\/p>\n<\/td>\n

\n

\nIncludes collateral for securities purchased under collateralized agreements to resell.<\/p>\n<\/td>\n<\/tr>\n

(2)<\/td>\n\n

\n\u00a0<\/p>\n<\/td>\n

\n

\nExcludes the Company\u2019s United States Small Business Administration (\u201cSBA\u201d) guaranteed debentures.<\/p>\n<\/td>\n<\/tr>\n

(3)<\/td>\n\n

\n\u00a0<\/p>\n<\/td>\n

\n

\nExcludes non-controlling interest in New Mountain Net Lease Corporation (\u201cNMNLC\u201d).<\/p>\n<\/td>\n<\/tr>\n

(4)<\/td>\n\n

\n\u00a0<\/p>\n<\/td>\n

\n

\nReferences to \u201cYTM at Cost\u201d assume the accruing investments, including secured collateralized agreements, in the Company’s portfolio as of a certain date, the \u2018\u2018Portfolio Date\u2019\u2019, 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 (\u201cLIBOR\u201d), Sterling Overnight Interbank Average Rate (“SONIA\u201d), Euro Interbank Offered Rate (“EURIBOR”) and Secured Overnight Financing Rate (\u201cSOFR\u201d) curves at each quarter\u2019s respective end date. The actual yield to maturity may be higher or lower due to the future selection of LIBOR, SONIA, EURIBOR and SOFR contracts by the individual companies in the Company\u2019s portfolio or other factors.<\/p>\n<\/td>\n<\/tr>\n

(5)<\/td>\n\n

\n\u00a0<\/p>\n<\/td>\n

\n

\nOriginations exclude payment-in-kind (\u201cPIK\u201d); originations, repayments, and sales excludes revolvers, unfunded commitments, bridges, return of capital, and realized gains \/ losses.<\/p>\n<\/td>\n<\/tr>\n

(6)<\/td>\n\n

\n\u00a0<\/p>\n<\/td>\n

\n

\nExcludes net income related to non-controlling interests in NMNLC. For the quarter ended March 31, 2023 and 2022, $0.3 million and $0.4 million, respectively, of dividend income is excluded from investment income, $0.0 million and $0.1 million, respectively, of net direct and indirect professional, administrative, other general and administrative is excluded from net expenses, and $(0.0) million and $0.5 million, respectively, of unrealized losses and realized and unrealized gains, respectively, is excluded from net realized and unrealized gains.<\/p>\n<\/td>\n<\/tr>\n

(7)<\/td>\n\n

\n\u00a0<\/p>\n<\/td>\n

\n

\nIncludes investment held in NMNLC<\/p>\n<\/td>\n<\/tr>\n<\/table>\n

First Quarter 2023 Conference Call<\/b><\/p>\n

\nNew Mountain Finance Corporation will host an earnings conference call and webcast at 10:00 am Eastern Time on Tuesday, May 9, 2023. 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.<\/p>\n