New Mountain Finance Corporation (NASDAQ:NMFC) Q2 2024 Earnings Conference Call August 1, 2024 10:00 AM ET Company Participants John Kline - President, CEO & Director Kris Corbett - CFO & Treasurer Steven Klinsky - Chairman Laura Holson - COO Conference Call Participants Finian O'Shea - Wells Fargo Bryce Rowe - B. Riley Securities Robert Dodd - Raymond James Paul Johnston - KBW Operator Good day, and welcome to the New Mountain Finance Corporation Second Quarter 2024 Earnings Call. [Operator Instructions]. ...

New Mountain Finance (NMFC) came out with quarterly earnings of $0.36 per share, in line with the Zacks Consensus Estimate. This compares to earnings of $0.39 per share a year ago. These figures are adjusted for non-recurring items. A quarter ago, it was expected that this business development company would post earnings of $0.39 per share when it actually produced earnings of $0.36, delivering a surprise of -7.69%. Over the last four quarters, the company has surpassed consensus EPS estimates just once. Ne ...

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, 2024 o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 registrant as specified in its charter, address of principal executive and states or other jurisdictions of incorporation or organization New Mountain Finance Corporation 1633 Broadway, 48th Floor New Yor ...

Financial Performance - Net investment income for Q2 2024 was $38.2 million, or $0.36 per weighted average share, compared to $0.39 per share in Q2 2023[3]. - Net investment income for the three months ended June 30, 2024, was $38,439, a decrease of 3.7% from $39,928 for the same period in 2023[16]. - Total investment income for the three months ended June 30, 2024, was $94,588, slightly down from $95,492 in the prior year, reflecting a decrease of 1.0%[16]. - Basic earnings per share for the latest quarter were $0.32, a decrease from $0.35 in the previous quarter[17]. - Diluted earnings per share for the latest quarter were $0.31, down from $0.32 in the previous quarter[17]. - Distributions declared and paid per share were $0.34, compared to $0.35 in the previous quarter[17]. Asset and Investment Portfolio - As of June 30, 2024, the company's total investment portfolio was valued at $3,227.3 million, with a weighted average yield to maturity (YTM) at cost of approximately 11.1%[5]. - Total investments at fair value rose to $3,213,780, compared to $3,011,322, marking an increase of 6.7%[14]. - The investment portfolio composition included 63% in first lien loans, 12% in senior loan funds, and 9% in second lien loans as of June 30, 2024[9]. - The company reported a strong credit performance, with approximately 97.0% of the portfolio rated green, up from 96.5% at the end of Q1 2024[3]. Financial Position - The net asset value (NAV) per share decreased slightly to $12.74 as of June 30, 2024, from $12.77 as of March 31, 2024[3]. - The net asset value per share decreased to $12.74 from $12.87, a decline of 1.0%[14]. - Total assets increased to $3,423,618, up from $3,159,214, representing a growth of 8.3%[14]. - Total liabilities increased to $2,037,101, up from $1,827,491, reflecting a growth of 11.5%[14]. - The statutory debt to equity ratio was reported at 1.21x as of June 30, 2024, with total statutory debt outstanding of $1,659.5 million[10]. - The company had cash and cash equivalents of $119.6 million and $498.1 million of available capacity on its credit facilities as of June 30, 2024[10]. - Cash and cash equivalents increased to $119,607, up from $70,090, indicating a significant rise of 70.6%[14]. Management and Strategy - The company plans to permanently reduce the base management fee to 1.25% and amend the dividend protection program[3]. - New Mountain Finance Corporation focuses on providing direct lending solutions to U.S. middle market companies, primarily through senior secured loans[19]. - The firm manages approximately $55 billion in assets under management, emphasizing business building and growth[20]. - New Mountain Capital works intensively with management to build the value of portfolio companies[20]. Market Outlook and Risks - Forward-looking statements indicate potential risks including changes in base interest rates and market volatility[21]. - The company operates in defensive industries that offer attractive risk-adjusted returns[19]. Originations and Repayments - Total gross originations for the quarter were $437.3 million, with cash repayments of $299.1 million and asset sales of $5.5 million[5]. - Interest and other financing expenses for the three months ended June 30, 2024, were $33,113, an increase from $31,700 in the prior year[16]. - The number of shares outstanding increased to 107,851,415 from 102,558,859, representing a growth of 5.3%[14]. - Weighted average shares of common stock outstanding for basic earnings were 106,891,784, an increase from 100,937,026 in the previous quarter[17]. - Weighted average shares of common stock outstanding for diluted earnings were 125,759,769, a decrease from 127,016,910 in the previous quarter[17]. Realized Losses - Net realized losses from non-controlled/non-affiliated investments amounted to $(34,966) for the three months ended June 30, 2024, compared to $(7,314) in the same period last year[16].

Core Viewpoint - New Mountain Finance (NMFC) is anticipated to report a year-over-year decline in earnings due to lower revenues, which could significantly influence its near-term stock price depending on how actual results compare to consensus estimates [1][2]. Earnings Expectations - The earnings report is scheduled for July 31, 2024, with expectations of quarterly earnings at $0.36 per share, reflecting a year-over-year decrease of 7.7% [3][4]. - Revenues are projected to be $90.25 million, down 5.5% from the same quarter last year [4]. Estimate Revisions - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analysts' assessments [5]. - The Most Accurate Estimate for NMFC is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +0.56%, suggesting a bullish outlook from analysts [11]. Earnings Surprise Prediction - A positive Earnings ESP is a strong indicator of a potential earnings beat, especially when combined with a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold) [9]. - NMFC currently holds a Zacks Rank of 3, indicating a likelihood of beating the consensus EPS estimate [12][13]. Historical Performance - In the last reported quarter, NMFC was expected to post earnings of $0.39 per share but delivered $0.36, resulting in a surprise of -7.69% [14]. - Over the past four quarters, NMFC has only beaten consensus EPS estimates once [15]. Conclusion - NMFC is viewed as a compelling candidate for an earnings beat, but investors should consider additional factors before making investment decisions [18].

Financial Data and Key Metrics Changes - Adjusted net investment income for the quarter was $0.36 per share, exceeding the regular dividend of $0.32 per share [25][69] - Net asset value per share decreased slightly to $12.77, a decline of $0.10 compared to the previous quarter [25][66] - Total investment income was $90.3 million, a 2% decrease from the prior year [67] Business Line Data and Key Metrics Changes - The portfolio had approximately $3.1 billion in investments at fair value, with total assets of $3.3 billion and total liabilities of $1.9 billion [66] - The interest coverage ratio for the portfolio increased to 1.7x, indicating improved financial health among portfolio companies [55] Market Data and Key Metrics Changes - The average yield on the portfolio increased from 10.9% in Q4 to 11.1% in Q1, primarily due to a higher base rate environment [63] - Portfolio company leverage has decreased slightly, with an average loan-to-value of 43% [55] Company Strategy and Development Direction - The company focuses on defensive growth sectors such as software, business services, and healthcare, which are expected to perform well regardless of economic conditions [28][43] - The strategy emphasizes high conviction underwriting decisions based on extensive industry knowledge [47] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the medium and long-term outlook for M&A activity, driven by significant private equity dry powder and favorable financing markets [51] - The outlook for the remainder of 2024 in the sponsor-backed direct lending market is positive, with deal flow picking up but still below historical levels [33] Other Important Information - The company has a Dividend Protection Program in place to support the regular dividend if net investment income dips below $0.32 [7][42] - The company plans to issue a $300 million five-year investment grade bond to improve its capital structure [74] Q&A Session Summary Question: Can you elaborate on the potential incentive fee waivers? - The incentive fee waiver program is set to expire at the end of the year, but management plans to discuss extending it with the Board [78][79] Question: What is the outlook for Edmentum and its market performance? - Edmentum has experienced a slowdown post-COVID, but management is optimistic about its future performance as the market stabilizes [30][96] Question: How does the company view the current interest coverage ratio? - The increase in the interest coverage ratio is attributed to good performance from underlying portfolio companies and a positive mix from new deals [55][102]

New Mountain Finance (NMFC) came out with quarterly earnings of $0.36 per share, missing the Zacks Consensus Estimate of $0.39 per share. This compares to earnings of $0.38 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -7.69%. A quarter ago, it was expected that this business development company would post earnings of $0.39 per share when it actually produced earnings of $0.40, delivering a surprise of 2.56%.Over the last fo ...

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, 2024 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 ...

Financial Performance - Net Investment Income for Q1 2024 was $37.3 million, or $0.36 per weighted average share, compared to $0.38 per share in Q1 2023[3] - Net investment income for the three months ended March 31, 2024, was $37,554 thousand, slightly down from $38,388 thousand in the same period last year, a decrease of 2.17%[25] - Total investment income for the quarter was $90,556 thousand, a decrease from $91,953 thousand year-over-year, reflecting a decline of 1.52%[25] - Basic earnings per share decreased to $0.26 for the quarter, down from $0.44 in the prior year, a decline of 40.91%[27] - The net increase in net assets resulting from operations was $28,084 thousand, down from $44,812 thousand in the previous year, a decrease of 37.51%[25] Distributions - The Company declared a regular second quarter distribution of $0.32 per share and a supplemental distribution of $0.02 per share, payable on June 28, 2024[5] - Distributions declared and paid per share increased to $0.36, compared to $0.32 in the same quarter last year, an increase of 12.50%[27] Asset and Liability Management - The Company's Net Asset Value (NAV) per share decreased to $12.77 from $12.87 as of December 31, 2023, reflecting a 0.8% decline[5] - Total assets increased to $3,255,607 thousand as of March 31, 2024, up from $3,159,214 thousand at December 31, 2023, representing a growth of 3.04%[22] - Total liabilities rose to $1,886,424 thousand, compared to $1,827,491 thousand in the previous quarter, marking an increase of 3.22%[22] - The statutory debt to equity ratio improved from 1.14x as of December 31, 2023, to 1.08x as of March 31, 2024[5] Investment Portfolio - The investment portfolio had a fair value of $3,086.5 million as of March 31, 2024, with a weighted average Yield to Maturity (YTM) at Cost of approximately 11.1%[5] - The investment portfolio composition included 56.9% in First Lien, 14.0% in Second Lien, and 7.0% in Preferred Equity[12] - 96.5% of the portfolio was rated green on the risk rating scale, an improvement from 94.5% as of December 31, 2023[5] Cash and Financing Activities - The Company generated $191.8 million in originations during the quarter, partially offset by cash repayments of $144.9 million[5] - As of March 31, 2024, the Company had cash and cash equivalents of $107.5 million and total statutory debt outstanding of $1,471.0 million[13] - The Company sold 3,730,434 shares of common stock during the quarter, resulting in net proceeds of approximately $47.9 million[13] Non-Controlled Investments - Non-controlled/non-affiliated investments reported a net realized loss of $11,858 thousand for the quarter, compared to a loss of $1,308 thousand in the same period last year[25] Business Focus - The company focuses on providing direct lending solutions to U.S. middle market companies, primarily through senior secured loans, aiming for attractive risk-adjusted returns[28]

New Mountain Finance (NASDAQ:NMFC) Q4 2023 Results Conference Call February 27, 2024 10:00 AM ET Company Participants John Kline - President and CEO Kris Corbett - CFO and Treasurer of NMFC Steve Klinsky - Chairman, NMFC and CEO, New Mountain Capital Laura Holson - COO and Interim CFO Conference Call Participants Erik Zwick - Hovde Group Bryce Rowe - B. Riley Paul Johnson - KBW Operator Good day, and welcome to the New Mountain Finance Corporation's Fourth Quarter 2023 Earnings Conference Call. All particip ...