New Mountain Finance (NASDAQ:NMFC) Q2 2025 Earnings Call August 5, 2025 10:00 AM ET Company Participants John R. Kline - President, CEO & Director Kris Eric Corbett - CFO & Treasurer Laura C. Holson Boswerger - Chief Operating Officer Steven Bruce Klinsky - Founder, MD & CEO Conference Call Participants Finian Patrick O'Shea - Wells Fargo Securities, LLC, Research Division Robert James Dodd - Raymond James & Associates, Inc., Research Division Sean-Paul Aaron Adams - B. Riley Securities, Inc., Research Divi ...

Financial Data and Key Metrics Changes - Adjusted net investment income for the quarter was $0.32 per share, covering the $0.32 per share dividend paid on June 30 [5] - Net asset value per share declined by $0.24 to $12.21 compared to Q1 [5][16] - Total investment income for the quarter was $83 million, a 12% decrease over the prior year [29] Business Line Data and Key Metrics Changes - The portfolio loan-to-value ratio stands at 45%, with nearly 80% exposure to senior-oriented assets [6][25] - The average yield of NMFC's portfolio decreased slightly to 10.6% for Q2 [25] - In Q2, the company originated $122 million of assets, offset by $155 million of repayments and sales [18] Market Data and Key Metrics Changes - The company noted a stabilization in direct lending spreads, with most unitranche loans pricing at SOFR plus $4.75 to $5.25 [21] - Approximately 78% of investments are senior in nature, up from 75% in the prior year [24] - The weighted average EBITDA of portfolio companies increased slightly to $176 million [25] Company Strategy and Development Direction - The company focuses on improving the quality and diversity of its asset base and optimizing liabilities with low-cost floating rate debt [13] - NMFC is committed to its dividend protection program through 2026, which aims to stabilize dividends during tighter market conditions [7][48] - The company is actively working on refinancing its 7.5% convertible notes and 8.25% unsecured notes maturing in Q4 [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for deal flow to normalize as market conditions improve [8][20] - The company is focused on optimizing leverage and enhancing income quality, with expectations for increased portfolio activity in Q3 and Q4 [49] - Management acknowledged challenges in certain sectors, particularly in dental and consumer products, but remains positive about overall portfolio performance [15][60] Other Important Information - NMFC has repurchased approximately $16 million of shares year-to-date, with an additional $31 million of Board authorization remaining [9] - The company has maintained a strong credit performance with only $38 million or 1.2% of the portfolio on non-accrual [18] Q&A Session Summary Question: Concerns about healthcare names and industry headwinds - Management noted that while the dental downgrade was idiosyncratic, the sector has good secular tailwinds, but operational execution is critical [42][44] Question: Dividend protection program and future outlook - The dividend protection program is designed to provide visibility and support to shareholders, with management committed to maintaining it through 2026 [48][51] Question: Risks related to tariff exposure in consumer products - Management confirmed that the consumer products business had been flagged for tariff exposure, and while it was already underperforming, tariffs exacerbated the situation [56][60] Question: Trends in the education space and Edmentum's performance - Management indicated that Edmentum remains well-positioned to address learning loss post-COVID, despite some capital structure challenges [70][72]

Financial Performance - Q2 2025 adjusted net investment income ("NII") was $0.32 per share, covering the dividend of $0.32 per share[15] - June 30, 2025 net asset value ("NAV") was $12.21 per share, compared to $12.45 per share as of March 31, 2025[15] - The company repurchased approximately $16 million of NMFC shares year-to-date, including $10 million in Q2 at a weighted average purchase price of $10.42 per share[15] - Total dividends paid to shareholders is approximately $1.4 billion since IPO[27] Portfolio Composition and Risk - Approximately 95% of the portfolio is rated green on the company's heatmap, indicating strong credit quality[15] - Nearly 80% of the portfolio is senior in nature, including First Lien, SLPs, and Net Lease assets[15] - Realized Total Net Loss Rate for NMFC since IPO is 1bp[19] - Top 10 portfolio companies represent $759.4 million, or 25.2%, of consolidated investments[67] Investment Activity - Gross originations for Q2 2025 were $122.2 million, while repayments were $141.4 million and sales were $13.7 million, resulting in net less sales originations of $(32.9) million[17, 55] Leverage and Liquidity - Statutory leverage ratio is 1.13x debt to equity as of June 30, 2025[16] - The company has $1,789 million in outstanding debt with a weighted average interest rate of 6.04%[53, 82]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ý Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended June 30, 2025 o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | Commission | Exact name of registrant as specified in its charter, address of principal executive | I.R.S. Employer | | --- | --- | --- | | File Number | offices, telephone numbers and states or other j ...

NEW YORK--(BUSINESS WIRE) — August 4, 2025 -- 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. New Mountain Finance Corporation Announces Financial Results for the Quarter Ended June 30, 2025 Reports Second Quarter Net Investment Income of $0.32 per Share and Declares a Third Quarter Distribution of $0.32 per Share Second Quarter and Recent Highlights 1 | ($ in millions, except ...

Financial Data and Key Metrics Changes - Adjusted net investment income for the quarter was $0.32 per share, covering the $0.32 per share dividend paid on March 31 [6] - Net asset value per share declined by $0.10 to $12.45, indicating stable credit performance across the portfolio [6][18] - Total investment income for the quarter was $86 million, a 5% decrease compared to the prior year [29] - Total net expenses decreased by 4% to $51 million, including a fee waiver [29] Business Line Data and Key Metrics Changes - Over 96% of the portfolio is rated green, with no non-accruals reported [7][17] - The percentage of first lien assets is increasing while PIK income and second lien income are decreasing [7] - The average yield of the portfolio decreased to 10.7% due to lower yields on originations compared to repayments [25] Market Data and Key Metrics Changes - NMFC has only 2% exposure to sectors most at risk for tariffs, compared to 13% for peers [7][13] - The loan-to-value ratio stands at 43%, indicating a conservative lending approach [7][25] - The weighted average EBITDA of borrowers decreased to $170 million, reflecting the realization of larger companies during the quarter [25] Company Strategy and Development Direction - The company aims to continuously improve and has a strategic imperative to reduce non-yielding equity positions [10][24] - A stock repurchase program has been authorized to buy back up to $47 million of NMFC shares, indicating confidence in the stock's value [9] - The focus remains on defensive non-cyclical sectors, leveraging private equity expertise to enhance NMFC's performance [12][20] Management's Comments on Operating Environment and Future Outlook - Management noted a pause in M&A activity but sees direct lending as an attractive asset class with stable risk-adjusted returns [20] - The dividend protection program can provide up to $0.02 of extra support per quarter if necessary [8] - Management expressed optimism about refinancing opportunities and maintaining a strong balance sheet [32][68] Other Important Information - The company has raised a $15.4 billion private equity fund, one of the largest in the industry [9] - The current stock price reflects a 21% discount to book value, with a dividend yield of 13% [8] Q&A Session Summary Question: Inquiry about Unitech's complicated capital structure - Management acknowledged the complexity and provided details on cash invested and accrued PIK in Unitech, totaling a cost basis of $114 million [38][39] Question: Stability of income from Unitech going forward - Management confirmed that income is expected to remain stable, accruing primarily from the super senior preferred [42] Question: Market outlook on spreads and pricing - Management indicated that spreads have stabilized, with some incremental OID on new deals, driven by a lack of supply [50][51] Question: Sufficiency of dividend protection plan amid declining rate cycle - Management expressed confidence in having sufficient levers to cover dividends, including refinancing opportunities and strong portfolio activity [53][56] Question: PIK income expectations - Management indicated a target to reduce PIK income to the low teens, acknowledging current levels are higher than desired [66] Question: Duration of the dividend protection program - Management confirmed that the program is in place for the full years of 2025 and 2026 [69]

Financial Data and Key Metrics Changes - Adjusted net investment income for Q1 2025 was $0.32 per share, covering the $0.32 per share dividend paid on March 31 [5] - Net asset value per share declined to $12.45, a decrease of $0.10 or 80 basis points, indicating stable credit performance [5][18] - Total investment income for the quarter was $86 million, a 5% decrease compared to the prior year [29] Business Line Data and Key Metrics Changes - The percentage of first lien assets is increasing while PIK income and second lien income are decreasing [6] - PIK interest income represented only 8% of total investment income, down from 10% in the previous quarter [30] - The average yield of NMFC's portfolio decreased to 10.7% due to lower yields on originations compared to repayments [25] Market Data and Key Metrics Changes - NMFC has only 2% exposure to sectors most at risk for tariffs, compared to 13% for peers [6] - The loan-to-value ratio stands at 43%, indicating a conservative lending approach [6][25] - The weighted average EBITDA of borrowers decreased to $170 million, reflecting the realization of larger companies during the quarter [25] Company Strategy and Development Direction - NMFC aims to continuously improve its portfolio and has a strategic imperative to decrease non-yielding equity positions [10][24] - The company is focused on sectors with low exposure to tariffs and is actively refinancing lending lines at lower rates [6][12] - A stock repurchase program has been authorized to buy back up to $47 million of NMFC shares, indicating confidence in the company's valuation [9] Management's Comments on Operating Environment and Future Outlook - The management noted a pause in M&A activity but sees direct lending as an attractive asset class with stable risk-adjusted returns [20] - The dividend protection program can provide up to $0.02 of extra dividend support per quarter if necessary [7] - Management expressed optimism about the ability to optimize financing and refinance higher-cost debt in the future [60][70] Other Important Information - The company has successfully raised a $15.4 billion private equity fund, one of the largest in the industry [9] - NMFC's non-accruals remain low at $38 million, or 1.2% of the portfolio [19] - The company has a diversified portfolio across 119 companies, with the top 10 single name issuers accounting for 26% of total fair value [26] Q&A Session Summary Question: Inquiry about Unitech's complicated capital structure - Management explained the complexity of Unitech's capital structure and provided details on cash invested and accrued PIK [37][38] Question: Future expectations for Unitech's income - Management indicated that income from Unitech is expected to remain stable moving forward [43] Question: Market outlook on spreads and pricing - Management noted that spreads and pricing have stabilized, with some incremental changes observed [51] Question: Dividend protection plan's sufficiency - Management expressed confidence in having sufficient levers to cover dividends despite potential rate declines [54][60] Question: Duration of the dividend protection program - The dividend protection program is in place for the full year of 2025 and 2026 [72]

Financial Performance - Adjusted Net Investment Income (NII) for Q1 2025 was $0.32 per share, covering the dividend of $0.32 per share[14, 15] - Net Asset Value (NAV) as of March 31, 2025, was $12.45 per share, a decrease from $12.55 per share on December 31, 2024[14, 15] - The company permanently waived $1.5 million of incentive fees in connection with the dividend protection program[14] - The fair value of investments decreased to $3.0477 billion as of March 31, 2025, compared to $3.1045 billion as of December 31, 2024[16] Portfolio Composition and Risk - 96.5% of the portfolio is rated green on the company's heatmap, with no names rated red[14, 35] - The company's employees and senior advisors own approximately 13% of the company[14, 15] - Only <1% of the portfolio fair value is meaningfully exposed to global tariffs, compared to 13% on average amongst peers[25] - The company's portfolio consists of 93% first lien debt[65] Investment Activity - Gross originations for Q1 2025 were $120.8 million, while repayments totaled $160.4 million, resulting in net originations of -$39.5 million[16, 63] - The company repaid approximately $42 million, primarily from full redemption of UniTek's PIK 2nd Lien Term Loan and PIK Super Senior Preferred II[14] Leverage and Liquidity - Pro forma statutory debt to equity ratio is 1.09x as of March 31, 2025[15, 87]

分组1 - New Mountain Finance (NMFC) reported quarterly earnings of $0.32 per share, matching the Zacks Consensus Estimate, but down from $0.36 per share a year ago [1] - The company posted revenues of $85.66 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 1.32%, and down from $90.56 million year-over-year [2] - New Mountain shares have declined approximately 11.5% since the beginning of the year, compared to a 3.3% decline in the S&P 500 [3] 分组2 - The current consensus EPS estimate for the upcoming quarter is $0.32 on revenues of $86.51 million, and for the current fiscal year, it is $1.29 on revenues of $347.42 million [7] - The Financial - SBIC & Commercial Industry, to which New Mountain belongs, is currently ranked in the bottom 34% of over 250 Zacks industries, indicating potential underperformance compared to higher-ranked industries [8]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ý Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended March 31, 2025 o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | Commission | Exact name of registrant as specified in its charter, address of principal executive | I.R.S. Employer | | --- | --- | --- | | File Number | offices, telephone numbers and states or other ...