New Mountain Finance Corporation Announces Financial Results for the Quarter and Year Ended December 31, 2023

Reports Net Investment Income of $0.40 per Share

Declares a First Quarter Regular Distribution of $0.32 per Share and a Supplemental Distribution of $0.04 per Share

NEW YORK--(BUSINESS WIRE) — February 26, 2024 -- New Mountain Finance Corporation (NASDAQ: NMFC) (“New Mountain,” “NMFC,” “New Mountain Finance” or the “Company”) today announced its financial results for the quarter and year ended December 31, 2023. In line with preliminary estimates reported on January 18, 2024, the Company reported fourth quarter net investment income ("NII") of $0.40 per weighted average share and net asset value (“NAV”) per share of $12.87, compared to $13.06 on September 30, 2023, a decline of 0.7% excluding the impact of the $0.10 special dividend paid on December 29, 2023. The Company also announced that its Board of Directors declared a first quarter regular distribution of $0.32 per share and a supplemental distribution of $0.04, which will be payable on March 29, 2024 to holders of record as of March 15, 2024.
Selected Financial Highlights
(in thousands, except per share data)December 31, 2023
Investment Portfolio1
$3,027,822 
Total Assets$3,159,214 
Total Statutory Debt2
$1,507,836 
NAV3
$1,319,951 
NAV per Share$12.87 
Net Investment Income per Weighted Average Share$0.40 
Regular Fourth Quarter Distribution Paid per Share$0.32 
Supplemental Fourth Quarter Distribution Declared per Share$0.04 
Statutory Debt/Equity1.14x
Statutory Debt/Equity (net of available cash)1.10x
Management Comments on Fourth Quarter Performance
“Our fourth quarter results reflect another successful quarter for 2023,” said Steven B. Klinsky, NMFC Chairman. “New Mountain continues to benefit from our disciplined, defensive growth strategy that is focused on end markets that perform well in all economic cycles.”

John R. Kline, CEO, commented, “New Mountain closed out the fourth quarter with year-over-year earnings growth, outpacing its regular dividend for the fourth consecutive quarter. Additionally, NMFC distributed a $0.10 special dividend at the end of 2023 as a result of our team’s ability to monetize the Haven Midstream equity investment. Our focus on defensive growth sectors of the economy remains a competitive advantage, and we believe NMFC remains well positioned to execute while continuing to deliver strong and stable dividends to our shareholders.”
Portfolio and Investment Activity1
As of December 31, 2023, the Company’s NAV3 was $1,320.0 million and its portfolio had a fair value of $3,027.8 million in 111 portfolio companies, with a weighted average YTM at Cost4 of approximately 10.9%. For the three months ended December 31, 2023, the Company generated $142.5 million of originations5, and had $11.1 million of asset sales and cash repayments5 of $245.8 million.

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Consolidated Results of Operations6
Quarterly Results
The Company’s total investment income for the three months ended December 31, 2023 and 2022 was $92.8 million and $73.9 million, respectively. The Company’s total net expenses, after income tax expense, for the three months ended December 31, 2023 and 2022 were $52.1 million and $48.9 million, respectively. The Company's NII for the three months ended December 31, 2023 and 2022 was $40.7 million and $25.0 million, respectively. The Company's NII per share for the three months ended December 31, 2023 and 2022 was $0.40 and $0.258, respectively. For the three months ended December 31, 2023 and 2022, the Company recorded $13.5 million and $10.2 million, respectively, of net realized and unrealized losses.
Annual Results
The Company’s total investment income for the years ended December 31, 2023 and 2022 was $373.8 million and $293.4 million, respectively. The Company’s total net expenses, after income tax expense, for the years ended December 31, 2023 and 2022 were $214.9 million and $174.9 million, respectively. For the years ended December 31, 2023 and 2022, the Company recorded $23.6 million and $43.8 million, respectively, of net realized and unrealized losses.

Liquidity and Capital Resources
As of December 31, 2023, the Company had cash and cash equivalents of $70.1 million and total statutory debt outstanding of $1,507.8 million2. The Company's statutory debt to equity was 1.14x as of December 31, 2023. Additionally, the Company had $300.0 million of SBA-guaranteed debentures outstanding as of December 31, 2023. For the year ended December 31, 2023, the Company sold 1,621,833 shares of common stock under its equity distribution agreement. For the same period, the Company received total accumulated net proceeds of approximately $21.2 million, net of offering expenses, from these sales.
Portfolio and Asset Quality1
The Company monitors the performance and financial trends of its portfolio companies on at least a quarterly basis. The Company attempts to identify any developments within the portfolio company, the industry or the macroeconomic environment that may alter any material element of the Company’s original investment strategy. As described more fully in the Company's Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission, the portfolio monitoring procedures are designed to provide a simple, yet comprehensive analysis of the Company’s portfolio companies based on their operating performance and underlying business characteristics, which in turn forms the basis of its Risk Rating. The Risk Rating is expressed in categories of Red, Orange, Yellow and Green with Red reflecting an investment performing materially below expectations and Green reflecting an investment that is in-line with or above expectations.

The following table shows the Risk Rating of the Company’s portfolio companies as of December 31, 2023:

(in millions)December 31, 2023
Risk RatingCostPercentFair ValuePercent
Red$39.7 1.3 %$4.6 0.2 %
Orange73.1 2.4 %42.5 1.4 %
Yellow1
157.6 5.1 %118.5 3.9 %
Green7
2,797.8 91.2 %2,862.2 94.5 %
 Total$3,068.2 100.0 %$3,027.8 100.0 %
As of December 31, 2023, all investments in the Company’s portfolio had a Green Risk Rating with the exception of six portfolio companies that had a Yellow Risk Rating, four portfolio companies that had an Orange Risk Rating and three portfolio companies that had a Red Risk Rating.


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The following table shows the Company’s investment portfolio composition as of December 31, 2023:
(in thousands)
Investment Portfolio CompositionDecember 31, 2023Percent of Total
First Lien$1,683,952 55.6 %
Second Lien1
441,013 14.6 %
Subordinated90,948 3.0 %
Preferred Equity208,459 6.9 %
Investment Fund252,400 8.3 %
Common Equity and Other7
351,050 11.6 %
Total$3,027,822 100.0 %
Recent Developments
On January 25, 2024, the Company caused notices to be issued to holders of the Company's 2019A Unsecured Notes regarding the exercise of the Company's option to repay all of the Company's $116.5 million in aggregate principal amount of issued and outstanding 2019A Unsecured Notes, which was repaid on February 5, 2024.
On January 30, 2024, the Company’s Board of Directors declared a regular first quarter 2024 distribution of $0.32 per share and a supplemental distribution related to fourth quarter earnings of $0.04 per share, each payable on March 29, 2024 to holders of record as of March 15, 2024.
On February 1, 2024, the Company issued $300.0 million in aggregate principal amount of its 6.875% notes due 2029 (the "2029 Unsecured Notes") for net proceeds of $293.9 million after deducting underwriting commissions of $3.0 million. Offering costs incurred were approximately $0.9 million. Interest on the 2029 Unsecured Notes will be paid semi-annually in arrears on February 1 and August 1 at a rate of 6.875% per year, beginning on August 1, 2024, to holders of record as of the close of business on January 15 or July 15 (whether or not a business day), as the case may be, immediately preceding the relevant interest payment date. The 2029 Unsecured Notes may be redeemed in whole or in part at the Company’s option at any time prior to January 1, 2029, at par plus a “make-whole” premium, and thereafter at par, plus accrued interest.

(1)Includes collateral for securities purchased under collateralized agreements to resell.
(2)Excludes the Company’s United States Small Business Administration (“SBA”) guaranteed debentures.
(3)Excludes non-controlling interest in New Mountain Net Lease Corporation (“NMNLC”).
(4)References to “YTM at Cost” assume the accruing investments, including secured collateralized agreements, in the Company's portfolio as of a certain
date, the ‘‘Portfolio 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. This calculation excludes the impact of existing leverage. YTM at Cost uses the London Interbank Offered Rate (“LIBOR”), Sterling
Overnight Interbank Average Rate ("SONIA”), Euro Interbank Offered Rate ("EURIBOR") and Secured Overnight Financing Rate (“SOFR”) curves at
each quarter’s respective end date. The actual yield to maturity may be higher or lower due to the future selection of SONIA, EURIBOR and SOFR
contracts by the individual companies in the Company’s portfolio or other factors.
(5)Originations exclude payment-in-kind (“PIK”); originations, repayments, and sales excludes revolvers, unfunded commitments, bridges, return of capital, and realized gains / losses.
(6)Excludes net income related to non-controlling interests in NMNLC. For the quarter ended December 31, 2023 and 2022, $0.2 million and $0.2 million, respectively, of dividend income is excluded from investment income, $0.0 million and $0.0 million, respectively, of net direct and indirect professional, administrative, other general and administrative is excluded from net expenses, and $0.0 million and $(0.2) million, respectively, of realized and unrealized gains and (losses), is excluded from net realized and unrealized gains and losses. For the years ended December 31, 2023 and 2022, $1.0 million and $1.2 million, respectively, of dividend income is excluded from investment income, $0.0 million and $0.1 million, respectively, of net direct and indirect professional, administrative, other general and administrative is excluded from net expenses, and $0.2 million and $1.3 million, respectively, of realized and unrealized losses, is excluded from net realized and unrealized gains and losses.
(7)Includes investment held in NMNLC.
(8)Adjusted net investment income per share for the three months ended December 31, 2022 was $0.35. Adjusted net investment income for the three months ended December 31, 2022 included $10.4 million of non-recurring interest, other income, other general and administrative expense and incentive fee adjustment related to National HME, Inc. and NHME Holdings Corp. and $0.1 million of accelerated deferred financing costs related to the tender offer on the 2018 Convertible Notes.


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Fourth Quarter 2023 Conference Call
New Mountain Finance Corporation will host an earnings conference call and webcast at 10:00 am Eastern Time on Tuesday, February 27, 2024. To participate in the live earning conference call, please use the following dial-in numbers or visit the audio webcast link. To avoid any delays, please join at least fifteen minutes prior to the start of the call.

•United States: +1 (877) 443-9109
•International: +1 (412) 317-1082
•Live Audio Webcast

A replay of the conference call can be accessed one hour after the end of the conference call through May 27, 2024. The full webcast replay will be available through February 27, 2025. To access the earnings webcast replay please visit the New Mountain Investor Relations website.

•United States: +1 (877) 344-7529
•International: +1 (412) 317-0088
•Access Code: 4449111

For additional details related to the quarter and year ended December 31, 2023, please refer to the New Mountain Finance Corporation Form 10-K filed with the SEC and the supplemental investor presentation which can be found on the Company's website at http://www.newmountainfinance.com.
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New Mountain Finance Corporation
Consolidated Statements of Assets and Liabilities
(in thousands, except shares and per share data)

 December 31, 2023December 31, 2022
Assets  
Investments at fair value  
Non-controlled/non-affiliated investments (cost of $2,283,490 and $2,523,522, respectively)
$2,209,867 $2,400,425 
Non-controlled/affiliated investments (cost of $107,895 and $85,971, respectively)
133,659 130,787 
Controlled investments (cost of $646,823 and $650,474, respectively)
667,796 690,035 
Total investments at fair value (cost of $3,038,208 and $3,259,967, respectively)
3,011,322 3,221,247 
Securities purchased under collateralized agreements to resell (cost of $30,000 and $30,000, respectively)
16,500 16,539 
Cash and cash equivalents70,090 71,190 
Interest and dividend receivable44,107 36,154 
Deferred tax asset594 — 
Receivable from affiliates82 — 
Other assets16,519 9,797 
Total assets$3,159,214 $3,354,927 
Liabilities  
Borrowings
     Holdings Credit Facility$515,063 $618,963 
     Unsecured Notes506,500 531,500 
     SBA-guaranteed debentures300,000 300,000 
Convertible Notes260,207 316,853 
     DB Credit Facility186,400 186,400 
     NMFC Credit Facility36,813 40,359 
        NMNLC Credit Facility II2,853 3,785 
     Deferred financing costs (net of accumulated amortization of $54,263 and $47,531, respectively)
(22,387)(17,199)
Net borrowings1,785,449 1,980,661 
Management fee payable10,116 10,524 
Incentive fee payable8,555 6,296 
Interest payable20,440 19,627 
Payable to affiliates— 78 
Deferred tax liability— 8,487 
Other liabilities2,931 3,063 
Total liabilities1,827,491 2,028,736 
Commitments and contingencies  
Net assets  
Preferred stock, par value $0.01 per share, 2,000,000 shares authorized, none issued
— — 
Common stock, par value $0.01 per share, 200,000,000 shares authorized, and 102,558,859 and 100,937,026 shares issued and outstanding, respectively
1,026 1,009 
Paid in capital in excess of par1,331,269 1,305,945 
Accumulated undistributed earnings(12,344)7,519 
Total net assets of New Mountain Finance Corporation$1,319,951 $1,314,473 
Non-controlling interest in New Mountain Net Lease Corporation11,772 11,718 
Total net assets$1,331,723 $1,326,191 
Total liabilities and net assets$3,159,214 $3,354,927 
Number of shares outstanding102,558,859 100,937,026 
Net asset value per share of New Mountain Finance Corporation$12.87 $13.02 

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New Mountain Finance Corporation
Consolidated Statements of Operations
(in thousands, except shares and per share data)

Year ended December 31,
202320222021
Investment income
From non-controlled/non-affiliated investments:
Interest income (excluding Payment-in-kind ("PIK") interest income)$249,851 $184,367 $159,189 
PIK interest income15,968 11,767 8,582 
Dividend income193 193 915 
Non-cash dividend income17,481 14,071 10,153 
Other income4,981 9,156 14,106 
From non-controlled/affiliated investments:
Interest income (excluding PIK interest income)1,951 1,062 1,579 
PIK interest income2,183 1,043 434 
Dividend income— — 288 
Non-cash dividend income4,625 4,109 4,835 
Other income251 250 345 
From controlled investments:
Interest income (excluding PIK interest income)5,386 9,438 5,470 
PIK interest income15,443 4,516 14,327 
Dividend income45,905 43,149 41,659 
Non-cash dividend income5,303 4,363 4,497 
Other income5,315 7,146 4,580 
Total investment income374,836 294,630 270,959 
Expenses
Interest and other financing expenses124,784 92,421 73,098 
Management fee45,610 46,617 52,960 
Incentive fee38,303 29,901 29,710 
Administrative expenses4,101 4,131 4,461 
Professional fees3,771 3,433 3,197 
Other general and administrative expenses2,068 2,338 1,923 
Total expenses218,637 178,841 165,349 
Less: management fee waived(4,117)(4,402)(13,104)
Less: expenses waived and reimbursed— (238)(244)
Net expenses214,520 174,201 152,001 
Net investment income before income taxes160,316 120,429 118,958 
Income tax expense418 825 118 
Net investment income159,898 119,604 118,840 
Net realized (losses) gains:
Non-controlled/non-affiliated investments(49,267)(737)(3,167)
Non-controlled/affiliated investments— — 8,338 
Controlled investments16,413 53,440 (9,035)
Foreign currency13 827 15 
Net change in unrealized appreciation (depreciation):
Non-controlled/non-affiliated investments47,956 (81,197)(23,466)
Non-controlled/affiliated investments(19,052)(9,156)66,505 
Controlled investments(18,588)6,219 49,347 
Securities purchased under collateralized agreements to resell(39)(4,883)— 
Foreign currency100 (1,115)(81)
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Provision for taxes(1,344)(8,474)(114)
Net realized and unrealized (losses) gains(23,808)(45,076)88,342 
Net increase in net assets resulting from operations136,090 74,528 207,182 
Less: Net (increase) decrease in net assets resulting from operations related to non-controlling interest in New Mountain Net Lease Corporation(747)204 (5,783)
Net increase in net assets resulting from operations related to New Mountain Finance Corporation$135,343 $74,732 $201,399 
Basic earnings per share$1.34 $0.75 $2.08 
Weighted average shares of common stock outstanding - basic101,118,302 100,202,847 96,952,959 
Diluted earnings per share$1.24 $0.74 $1.91 
Weighted average shares of common stock outstanding - diluted123,488,882 115,426,198 110,210,545 
Distributions declared and paid per share$1.49 $1.22 $1.20 

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ABOUT NEW MOUNTAIN FINANCE CORPORATION
New Mountain Finance Corporation (NASDAQ: NMFC) is a leading business development company (BDC) focused on providing
direct lending solutions to U.S. middle market companies backed by top private equity sponsors. Our portfolio consists primarily
of senior secured loans, and select junior capital positions, to growing businesses in defensive industries that offer attractive risk-adjusted returns. Our differentiated investment approach leverages the deep sector knowledge and operating resources of New
Mountain Capital, a global investment firm with approximately $50 billion of assets under management as of December 31, 2023.
ABOUT NEW MOUNTAIN CAPITAL
New Mountain Capital is a New York-based investment firm that emphasizes business building and growth, rather than debt, as it pursues long-term capital appreciation. The firm currently manages private equity, credit and net lease investment strategies with approximately $50 billion in assets under management. New Mountain seeks out what it believes to be the highest quality growth leaders in carefully selected industry sectors and then works intensively with management to build the value of these companies. For more information on New Mountain Capital, please visit http://www.newmountaincapital.com.
FORWARD-LOOKING STATEMENTS
Statements included herein may contain “forward-looking statements”, which relate to our future operations, future performance or our financial condition. Forward-looking statements are not guarantees of future performance, condition or results and involve a number of risks and uncertainties, including changes in base interest rates and significant volatility on our business, portfolio companies, our industry and the global economy. Actual results and outcomes may differ materially from those anticipated in the forward-looking statements as a result of a variety of factors, including those described from time to time in our filings with the Securities and Exchange Commission or factors that are beyond our control. New Mountain Finance Corporation undertakes no obligation to publicly update or revise any forward-looking statements made herein, except as may be required by law. All forward-looking statements speak only as of the time of this press release.
CONTACT
New Mountain Finance Corporation
Investor Relations
Laura C. Holson, Authorized Representative
NMFCIR@newmountaincapital.com
(212) 220-3505

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