New Mountain Finance (NMFC) Q2 2024 earnings summary

Executive summary

• Q2 2024 adjusted net investment income was $0.36 per share, exceeding the $0.32 regular dividend and supporting a $0.02 supplemental dividend, with net investment income totaling $38.2–$38.4 million.

• Net asset value per share was $12.74 at June 30, 2024, reflecting a slight decline from the prior quarter and a total NAV of $1.37–$1.4 billion.

• Management announced a permanent reduction in the base management fee to 1.25% and extended the dividend protection program through 2026.

• Portfolio quality remained high, with 97% of assets rated green and a focus on defensive, non-cyclical sectors such as software, healthcare, and business services.

• New Mountain employees and senior advisors own approximately 12% of shares, aligning interests with shareholders.

Financial highlights

• Total investment income for Q2 2024 was $94.3–$94.6 million, down 1% year-over-year.

• Net expenses were $56.1 million, and net investment income per share was $0.36.

• Net increase in net assets from operations was $34.5–$34.8 million for Q2 2024.

• Fair value of investments was $3.21–$3.23 billion across 122–123 companies.

• Gross originations were $437.3 million, with net originations of $138.2 million after repayments.

Outlook and guidance

• Q3 2024 adjusted NII is expected to exceed the regular dividend, supporting at least a $0.01 supplemental dividend.

• Management remains confident in portfolio performance and risk-adjusted returns, with a positive outlook for M&A and direct lending activity.

• Recent amendments to credit facilities increased borrowing capacity and extended maturities, supporting future investment activity.