New Mountain Finance Corporation · NASDAQ:NMFC
New Mountain Finance — Q1 2025 Earnings Presentation
38 slides from New Mountain Finance's earnings presentation, May 6, 2025
Slide 1: Earnings Presentation Q1 2025
Earnings Presentation Q1 2025 May 6, 2025 14
Slide 2: Important Notices and Safe Harbor Statement
Important Notices and Safe Harbor Statement This presentation contains forward looking statements, which are not guarantees of future performance, conditions or results, and involve substantial risks and uncertainties, including the current conflict between Russia and Ukraine, conflict in the Middle
Slide 3: Important Notices and Safe Harbor Statement (cont.)
Important Notices and Safe Harbor Statement (cont.) Yield to Maturity (“YTM”) at Cost assumes that the accruing investments in our portfolio as of each 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.
Slide 4: Today's Presenters
Today’s Presenters Steven B. Klinsky John R. Kline Laura C. Holson Kris Corbett Founder & Chairman President & CEO COO CFO Years at 25 16 15 1 4
Slide 5: Chairman's Overview
Chairman’s Overview ▪ Q1 2025 adjusted net investment income (“NII”) of $0.32 covered our dividend of $0.32 per share (1) – Permanently waived $1.5 million of incentive fees in connection with the dividend protection program ▪ March 31, 2025 net asset value (“NAV”) of $12.45 per share compared to $1
Slide 6: Key Highlights
Key Highlights Financial Highlights Quarter Ended 3/31/2024 6/30/2024 9/30/2024 12/31/2024 3/31/2025 Adjusted NII Per Share(1) $0.36 $0.36 $0.34 $0.32 $0.32 NAV Per Share $12.77 $12.74 $12.62 $12.55 $12.45 Dividends Per Share(2) $0.34 $0.34 $0.33 $0.32 $0.32 (3) Pro Forma Statutory Debt / Equity 1.0
Slide 7: New Mountain Capital Overview
New Mountain Capital Overview New Mountain Capital (“NMC”) was founded in 1999 to focus on “defensive growth” business building and deep fundamental research $55bn+ ~280 ~165 0 7bps Employees & Senior Investment Private Equity Bankruptcies Average Net Realized Loss Rate Assets Under Management(1) Ad
Slide 8: Differentiated, Defensive Growth Approach to Lending
Differentiated, Defensive Growth Approach to Lending Why NMFC? ACYCLICAL SECTORS(4) “Defensive Growth” Strategy Where NMC has deep expertise • Focused on investing in strong businesses in acyclical sectors Other ERP • Achieving superior risk-adjusted returns despite Packaging 6% 8% Human Capital eco
Slide 9: Global Tariff Exposure
Global Tariff Exposure We believe NMFC’s defensive growth strategy inherently limits exposure to global tariffs, with only one company, or <1% of portfolio fair value, meaningfully exposed to global tariffs, compared to 13% on average amongst peers(1) JP Morgan Leveraged Loan Index Cliffwater Direct
Slide 10: NMFC by the Numbers
NMFC by the Numbers New Mountain Finance Superior Credit Quality Attractive Return Profile $3.0bn 96.5% 13% Green Annualized Div. Portfolio Size(1) Portfolio Risk Rating Yield(4) 16 Year Operating History 43% Avg. Loan to Value(2) ~10% Annual Return Since IPO(5) Baa3 / 7bps Stable Average realized l
Slide 11: Progress on NMFC Strategic Priorities
Progress on NMFC Strategic Priorities Strategic Focus Target Q1 2025 Progress ▪ Maintain or increase senior assets 77% senior assets in Q1, up from 75% in Q4(2) Assets ▪ Diversify top positions Reduced size of two top 10 – Target 1.5% - 2.0% maximum position(1) positions during the quarter: UniTek:
Slide 12: Summary of Changes in Portfolio
Summary of Changes in Portfolio(1) Q4 2024 Risk Ratings Q1 2025 Risk Ratings (FMV as of 12/31/2024) (FMV as of 3/31/2025) 1.2% 1.2% 2.3% 2.3% No positions improved in Rating No positions worsened in Rating 96.5% 96.5% Weighted Average Risk Rating Mark(2) Green 96% Yellow 66% Orange 64% Red N/A(3) 1
Slide 13: NMFC Portfolio – Risk Ratings
NMFC Portfolio – Risk Ratings (FMV as of 3/31/2025) ($ in millions / company count) $39 / 3 $37 / 5 Business Services $20 / 2 Education $18 / 1 Business Characteristics(2) (A = Best; C = Worst) Software $19 / 1 Healthcare $14 / 2 C National HME $3 / 1 Sierra Hamilton $2 / 1 $121 / 4 $638 / 20 $32 /
Slide 14: Q1 2025 NMFC NAV Update
Q1 2025 NMFC NAV Update Q1 2025 NAV declined $0.10 per share (or 0.8%) compared to the prior quarter $12.55 $0.09 ($0.16) $0.00 $12.45 ($0.03) Net $0.07 NAV Per Share Decrease Company $ / Share Office Ally + $0.07 HelpSystems + $0.02 UniTek – $0.05 Edmentum – $0.04 Permian – $0.03 Other – $0.04 12/3
Slide 15: Credit Performance Track Record
Credit Performance Track Record ▪ No new non-accruals in Q1 2025; non-accruals represent just 1.2% of total portfolio FMV ▪ UniTek no longer on non-accrual following the transaction completed in February ▪ $10.2 billion of cumulative investments since IPO have generated net realized losses of just $
Slide 16: Total Value Generated for Shareholders
Cumulative Performance Since IPO(1) ($ in millions) Since IPO in 2011, NMFC has distributed ~$1.4 billion to shareholders while creating ~$1.3 billion of total value $1,271 $1,400 NMFC has generated $1,398 million of Adj. NII, $29 million of net realized losses and $1,200 $98 million of net unrealiz
Slide 17: Credit Market Conditions
Credit Market Conditions Direct Lending continues to provide attractive returns… …with low LTVs and significant cushions Debt Direct Lending vs. Broadly Syndicated Spreads(1) Equity 800 15.6x(3) 700 600 43% 10.1x 500 178 bps Premium 49% 400 57% 300 51% 200 (2) 2018 2019 2020 2021 2022 2023 2024 US L
Slide 18: Positively Exposed to Elevated Base Rates
Positively Exposed to Elevated Base Rates Elevated base rates provide a sustained uplift to core earnings power Asset Mix Liability Mix Pro Forma Liability Mix(3) (Aggregate par value of ($1,811 million drawn as of 3/31/2025)(2) (See footnote disclosure) $2,559 million as of 3/31/2025)(1) Fixed 15%
Slide 19: Q1 2025 Portfolio Activity
Q1 2025 Portfolio Activity Portfolio Originations(1) ($ in millions) Amount Type of Company Industry ($'s Invested) Investment Spread SmartSheet Software - Finance & Accounting $55.0 First Lien S + 6.50% Bonterra Software - ERP 15.0 First Lien S + 5.00% eResearch Healthcare - Pharma Services 11.4 Fi
Slide 20: Portfolio Mix by Type
Portfolio Mix by Type (Fair Value as of 3/31/2025)(1) ~77% of the portfolio is senior in nature, up from ~69% in the prior year period Common Equity & Other Positions(3) Common Equity & Other Positions(3) Preferred 8% Subordinated 6% Company FMV 4% UniTek $66.7 Edmentum 59.1 2nd Lien 6%First Benevis
Slide 21: Q1 2025 Investment Activity Roll
Q1 2025 Investment Activity Roll YTM at Cost(1) / Purchase(2) 15.4% 11.0% 10.8% 10.7% 9.8% 12/31/2024 12/31/2024 Q1 Originations Q1 Sales / 3/31/2025 PF for 3/31/2025 Repayments Base Rate Changes(3) Cost ($m)(4) $3,131.9 $3,131.9 $120.8 $186.7 $3,122.9 1 Assumes that investments are purchased at cos
Slide 22: Portfolio Company EBITDA and Credit Statistics
Portfolio Company EBITDA and Credit Statistics (Dollars in millions) Portfolio Weighted Average EBITDA(1) $200 $189 $179 $180 $184 $180 $170 $160 $140 $120 $100 $80 $60 $40 $20 $0 Q1-24 Q2-24 Q3-24 Q4-24 Q1-25 Portfolio Credit Statistics(2)(3) 10.0x 9.0x 8.0x 7.0x 6.3x 6.3x 6.3x 6.2x 6.3x 6.0x 5.0x
Slide 23: Diverse Portfolio
Diverse Portfolio (By Fair Value as of 3/31/2025)(1) Top 10 portfolio companies(2) represent $784.6 million, or 25.7%, of consolidated investments Benevis 4.7% Edmentum 3.0% Alliance Animal Health 2.7% Dealer Tire 2.6% Office Ally Office Ally sale announced in 2.5% April 2025; NMFC holdings UniTek w
Slide 24: Balance Sheet Highlights
Balance Sheet Highlights Quarter Ended ($ in millions, except per share data) 3/31/2024 6/30/2024 9/30/2024 12/31/2024 3/31/2025 Assets Portfolio $3,086.5 $3,227.3 $3,278.8 $3,104.5 $3,047.7 Cash & Equivalents 107.5 119.6 61.9 80.3 85.5 (1) Other Assets 61.6 76.7 73.6 61.9 63.5 Total Assets $3,255.6
Slide 25: Income Statement Highlights
Income Statement Highlights Quarter Ended ($ in millions, except per share data) 3/31/2024 6/30/2024 9/30/2024 12/31/2024 3/31/2025 Investment Income Interest income $67.6 $68.4 $72.9 $67.3 $61.5 Dividend income 20.2 22.1 20.4 21.1 20.8 Other income 2.5 3.8 2.2 2.7 3.2 Total investment income $90.3
Slide 26: Investment Income Detail
Investment Income Detail ▪ Our investment income continues to be predominantly paid in cash and generated by stable and predictable sources ▪ 97%+ of Q1 2025 non-cash interest and dividend income is generated by positions with a Green risk rating – 82% is generated by positions that included PIK fro
Slide 27: Dividend Summary and Coverage
Dividend Summary and Coverage ▪ Declared a Q2 dividend of $0.32 per share (payable in June 2025) ▪ Investment Adviser has pledged to reduce its incentive fee if and as needed through 2026 to support the $0.32 per share quarterly dividend(1) 123% 105% 108% 104% 103% 102% 100% 99% 99% 100% 99% 98% 99%
Slide 28: NMFC Capital Structure Snapshot
NMFC Capital Structure Snapshot Focus on maintaining healthy unsecured debt mix, liquidity, and asset coverage 1.09x 83% 187% Asset Coverage Statutory Leverage(1) Unsecured Debt(2) Ratio(3) 2.1x 5.0x 207% Coverage of unfunded Fixed Charge Asset Coverage for investments through Coverage(4) Unsecured
Slide 29: NMFC Leverage Profile
NMFC Leverage Profile Callable / matures in the near-term (As of 3/31/2025, Outstanding Percentage of $ in millions) / Facility Size Interest Rate(1) Maturity Outstanding NMFC Credit Facility(2) $29(3) / $639 Base Rate + 1.90%(4) September 2029(4) 1.6% Corporate Revolving Credit Facilities $29 / $63
Slide 30: Leverage Maturity Schedule
Leverage Maturity Schedule (As of 3/31/2025, $ in millions) Floating vs Fixed Debt Mix Debt Type Outstanding Debt Max Facility Size Fixed 50% 31% $846 Floating 50% 69% $19 $709 $18 $300 $200 $488 $13 $466 $111 $75 $116 $326 $100 $67 $527 $145 $380 $350 $300 $30 $259 $115 2025 2026 2027 2028 2029 203
Slide 31: Broad Industry Analyst Coverage
Broad Industry Analyst Coverage Bank of America Securities Janney Montgomery Scott J.P. Morgan – Fixed Income Keefe, Bruyette & Woods Derek Hewett John Rowan Kabir Caprihan Paul Johnson Raymond James Oppenheimer & Co. Wells Fargo Securities Robert Dodd Mitchel Penn Finian O’Shea 341
Slide 32: Appendix
NIM] NEW MOUNTAIN FINANCE CORPORATION Appendix
Slide 33: Appendix A: UniTek Transaction
Appendix A: UniTek Transaction ▪ In February 2025, NMFC and affiliates sold a $90 million stake in UniTek Global Services ▪ As part of the transaction, the warrants were exercised, converting into ~50% of each tranche junior to the first lien (1) ($ in millions, amounts represent NMFC's face value u
Slide 34: Appendix B: Credit Performance
Appendix B: Credit Performance (2) (2) (2) NMFC Leverage Ratio NMFC Leverage Ratio NMFC Leverage Ratio Variance Variance Variance (1) (1) (1) Company / Asset Type (Vintage) Purchase Current + / (-) Company / Asset Type (Vintage) Purchase Current + / (-) Company / Asset Type (Vintage) Purchase Curren
Slide 35: Appendix C: NMFC Income Reconciliation
Appendix C: NMFC Income Reconciliation (in millions, except per share data) Year Ended YTD (unaudited) IPO - 12/31/17 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 3/31/2025 GAAP net investment income ("NII") $490.5 $106.0 $117.2 $117.3 $118.8 $119.6 $159.9 $146.0 $34.6 Non-controll
Slide 36: Appendix D: Performance Since IPO Detail
Appendix D: Performance Since IPO Detail IPO - (1) ($ in millions) 12/31/2017 2018 2019 2020 2020 2022 2023 2024 YTD 2025 Regular & Supplemental Dividend(2) $475.1 $103.4 $117.4 $120.1 $116.5 $122.4 $154.8 $147.2 $34.5 Cumulative Regular & Supplemental Dividend 475.1 578.5 695.9 816.0 932.5 1,054.9
Slide 37: Appendix E: Capital Structure Philosophy
Appendix E: Capital Structure Philosophy Committed to consistently accessing Unsecured Debt Markets Unsecured ▪ NMFC has issued multiple series of unsecured debt: $200mm in 2021, $275mm in 2022, $175mm in 2023 Issuances and $600mm in 2024 ▪ Two Public IG bonds issued in 2024, with maturities in Octo
Slide 38: INIMIF]
INIMIF] New MountTAIN FINANCE CORPORATION