New Mountain Finance (NMFC) Q4 2024 earnings summary

Executive summary

• Q4 2024 adjusted net investment income was $0.32 per share, fully covering the dividend, with net asset value per share at $12.55, down from $12.62 last quarter.

• Portfolio credit quality remained strong, with 97% of assets rated green, no red-rated investments, and non-accruals at 1.2% of fair value.

• Q1 2025 dividend of $0.32 per share was declared, supported by recurring earnings and a dividend protection program through 2026.

• Partial exit from UniTek Global Services returned $42 million, valuing UniTek at $370 million, with a 31% ownership stake retained.

• Management and employees increased share ownership to 14% of total shares, up from 12% last quarter.

Financial highlights

• Total investment income for Q4 2024 was $91 million; annual investment income was $371 million.

• Adjusted net investment income per share was $0.32 for Q4, with annual adjusted NII at $146.7 million ($1.38 per share).

• Net asset value at quarter-end was $1.4 billion, or $12.55 per share.

• Total net expenses for Q4 were $57 million, down 9% year-over-year; annual expenses rose 4%.

• Portfolio yield increased to 11% in Q4, driven by higher base rates.

Outlook and guidance

• Management expects increased M&A activity in 2025, though the year started slower than anticipated.

• Adviser will reduce incentive fee as needed through 2026 to support the $0.32 per share quarterly dividend.

• Portfolio is positioned to benefit from elevated base rates, with 86% of assets floating rate.

• Focus on diversifying top positions, optimizing liabilities, and reducing PIK exposure.

• Plans to increase floating rate liabilities to 75% over the next 12 months.