Reports First Quarter Adjusted Net Investment Income(1) of $0.32 per Share and Declares a Second Quarter Distribution of $0.25 per Share
NEW YORK--(BUSINESS WIRE)--May 04, 2026--
New Mountain Finance Corporation (NASDAQ: NMFC) ("New Mountain," "New Mountain Finance" or the "Company") today announced its financial results for the quarter ended March 31, 2026.
First Quarter and Recent Highlights(2)
-- Adjusted net investment income1 of $32.2 million, or $0.32 per weighted
average share
-- Net asset value of $10.92 per share compared to $11.52 per share as of
December 31, 2025; factoring in the Secondary Sale11, NAV per share as of
December 31, 2025 would have been $11.15
-- Declared a second quarter 2026 distribution of $0.25 per share, payable
on June 30, 2026, to holders of record as of June 16, 2026
-- Completed the previously announced Secondary Sale on March 10, 2026
-- Repurchased $66 million of NMFC shares year-to-date as of May 1, 2026,
at a weighted average purchase price of $8.01 per share; announcing
incremental $50 million of board authorization for additional share
repurchases bringing remaining capacity to $80 million
-- 91% of the portfolio is rated green on our internal heatmap
-- Reduced cost of debt from SOFR + 1.95% to SOFR + 1.85% on our Holdings
Credit Facility
($ in millions, except per share data) Q1 2026 Q1 2025
------------ ----------------
Net Investment Income per Weighted
Average Share $ 0.30 $ 0.32
Non-recurring Adjustments(1) 0.02 --
------- --------
Net Adjusted Investment Income(1) per
Weighted Average Share $ 0.32 $ 0.32
Regular Dividends Paid per Share in
Quarter $ 0.32 $ 0.32
Annualized Dividend Yield(3) 11.6% 12.8%
March 31, December 31,
2026 2025
------------ ----------------
Investment Portfolio(4) $2,319.1 $ 2,755.5
NAV per Share $ 10.92 $ 11.52
Statutory Debt/Equity(5) 1.12x 1.26x
Statutory Debt/Equity (Net of Available
Cash)(5) 1.08x 1.21x
Management Comments on First Quarter Performance
"In the first quarter, NMFC delivered stable earnings and completed the $470 million portfolio sale," said Steven B. Klinsky, NMFC's Chairman and New Mountain Capital CEO. "We are using the proceeds from the sale to de-lever the balance sheet, buy back stock at a significant discount to book value and reinvest into attractive new investments in the primary and secondary market."
John R. Kline, NMFC CEO, added: "NMFC continued to enhance the portfolio quality in the first quarter, materially reducing PIK exposure and improving diversification and asset mix. Excluding the impact from the portfolio sale, NMFC's book value declined modestly in the quarter, primarily reflecting broader market movements in software and technology-oriented loans impacting the BDC sector. We remain focused on further portfolio enhancements throughout the balance of the year."
Portfolio and Investment Activity(4)
As of March 31, 2026, the Company's NAV(2) was $1,043.5 million and its portfolio had a fair value of $2,319.1 million of investments in 115 portfolio companies, with a weighted average YTM at Cost(6) of approximately 11.1%. For the three months ended March 31, 2026, the Company originated $117.1 million of investments(7) , offset by $47.1 million of repayments(7) and $444.9 million of sales (primarily related to the Secondary Sale).
Portfolio and Asset Quality
NMFC's mandate is to primarily target businesses in the middle market that, consistent with New Mountain's private equity platform, are high quality, defensive growth companies in industries that are well-researched by New Mountain. The Company's focus is on defensive growth businesses that generally exhibit the following characteristics: (i) acyclicality, (ii) sustainable secular growth drivers, (iii) niche market dominance and high barriers to competitive entry, (iv) recurring revenue and strong free cash flow, (v) flexible cost structures and (vi) seasoned management teams.
Portfolio Industry Composition based on Fair Value(8)
Business Services Healthcare
Utility & Data Center
Services 6.8% Healthcare Services 9.0%
Healthcare IT
& Tech-Enabled
Real Estate Services 4.5% Services 6.5%
Insurance & Benefits
Services 3.7% Healthcare Products 3.2%
Misc Services 2.3% Pharma Services 1.8%
----
Compliance Services 1.8% Total Healthcare 20.5%
====
Digital Transformation 1.7%
Data & Information Financial Services &
Services 1.4% Technology
Field Services 1.3% Financial Services 3.7%
Engineering &
Consulting Services 0.9% Integrated Payments 2.0%
----
Total Business Services 24.4% Financial Technology 1.4%
==== ----
Total Financial Services
& Technology 7.1%
====
Software
ERP 7.1% Other Industries
IT Infrastructure &
Security 4.7% Consumer Services 7.2%
Finance & Accounting 4.4% Education 6.1%
Human Capital Distribution &
Management 2.3% Logistics 5.4%
Commerce & Supply
Chain 0.7% Packaging 4.2%
Governance, Risk &
Compliance 0.2% Other 5.7%
---- ----
Total Software 19.4% Total Other Industries 28.6%
==== ====
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 Quarterly Report on Form 10-Q 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 Green, Yellow, Orange and Red with Green reflecting an investment that is in-line with or above expectations and Red reflecting an investment performing materially below expectations.
The following table shows the Risk Rating of the Company's portfolio companies as of March 31, 2026:
(in millions) As of March 31, 2026
------------------------------------------------------
Weighted
Fair Average
Risk Rating Cost Percent Value Percent Mark
-------- --------- -------- --------- -----------
Green(9) $2,217.7 86.8% $2,117.0 91.4% 96.2%
Yellow(4) 177.0 6.9% 119.5 5.1% 67.6%
Orange 145.5 5.7% 72.5 3.1% 57.5%
Red 15.4 0.6% 10.1 0.4% 65.1%
------- ----- ------- ----- ---- ----
Total $2,555.6 100.0% $2,319.1 100.0%
======= ===== ======= =====
As of March 31, 2026, nearly all investments in the Company's portfolio had a Green Risk Rating, with the exception of eight portfolio companies that had a Yellow Risk Rating, nine portfolio companies that had an Orange Risk Rating and one portfolio company had a Red Risk Rating.
The following table shows the Company's investment portfolio composition as of March 31, 2026:
(in millions)
Investment Portfolio Composition March 31, 2026 Percent of Total
---------------- ------------------
First Lien $ 1,498.7 64.7%
Senior Loan Funds (SLP III & SLP IV)
& NMNLC 385.8 16.6%
Second Lien(4) 86.6 3.7%
Subordinated 93.4 4.0%
Preferred Equity 153.4 6.6%
Common Equity and Other(10) 101.1 4.4%
------------ ------------ ---
Total $ 2,319.1 100.0%
============ ============ ===
Liquidity and Capital Resources
As of March 31, 2026, the Company had cash and cash equivalents of $51.1 million and total statutory debt outstanding of $1,172.7 million(5) . The Company's statutory debt to equity was 1.12x (or 1.08x net of available cash) as of March 31, 2026. Additionally, the Company's wholly-owned SBIC subsidiaries had $169.3 million of SBA-guaranteed debentures outstanding as of March 31, 2026. As of March 31, 2026, the Company had $692.1 million of available capacity on its Holdings Credit Facility, NMFC Credit Facility and Unsecured Management Company Revolver.
First Quarter 2026 Conference Call
New Mountain Finance Corporation will host an earnings conference call and webcast at 10:00 am Eastern Time on Tuesday, May 5, 2026. 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 (646) 769-9200 -- International: (800) 330-6710 -- Access Code: 2743990 -- Live Audio Webcast
A replay of the conference call will be available for one year following the call. To access the earnings webcast replay please visit the New Mountain Investor Relations website.
For additional details related to the quarter ended March 31, 2026, please refer to the New Mountain Finance Corporation Quarterly Report on Form 10-Q filed with the SEC and the supplemental investor presentation which can be found on the Company's website at http://www.newmountainfinance.com.
(1) Adjusted net investment income for Q1 2026 includes $1.6 million of
accelerated deferred financing costs related to the commitment
decrease of the Holdings Credit Facility and the partial repayment of
the SBIC II SBA-guaranteed debentures for $1.5 million and $0.1
million, respectively.
(2) Excludes non-controlling interest in New Mountain Net Lease
Corporation ("NMNLC").
(3) The Q1 2026 dividend yield calculation uses the closing stock price of
$8.60 on May 1, 2026 and includes annualized dividends of $0.25 per
share, to be paid in Q2 2026. The Q1 2025 dividend yield calculation
uses the closing stock price of $9.97 on May 2, 2025 and includes
annualized dividends of $0.32 per share, which were paid in Q2 2025.
(4) Includes collateral for securities purchased under collateralized
agreements to resell.
(5) Excludes the Company's United States Small Business Administration
("SBA") guaranteed debentures.
(6) 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 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.
(7) Originations exclude payment-in-kind ("PIK"); originations,
repayments, and sales exclude revolvers, unfunded commitments,
bridges, return of capital, and realized gains / losses.
(8) Excludes NMFC Senior Loan Program III LLC ("SLP III"), NMFC Senior
Loan Program IV LLC ("SLP IV") and NMNLC.
(9) Includes investments held in NMNLC.
(10) Includes investments classified as structured finance obligations.
(11) On March 10, 2026, the Company completed the previously announced sale
of approximately $470.0 million of assets at 94% of the fair value of
such assets as of December 31, 2025.
New Mountain Finance Corporation
Consolidated Statements of Assets and Liabilities
(in thousands, except shares and per share data)
(unaudited)
March 31, December 31,
2026 2025
------------ ---------------
Assets
Investments at fair value
Non-controlled/non-affiliated
investments (cost of
$1,733,010 and $2,060,391,
respectively) $ 1,628,080 $ 2,002,306
Non-controlled/affiliated
investments (cost of $132,739
and $131,221, respectively) 65,699 60,702
Controlled investments (cost of
$659,897 and $720,503,
respectively) 619,600 679,005
---------- -----------
Total investments at fair value
(cost of $2,525,646 and
$2,912,115, respectively) 2,313,379 2,742,013
Securities purchased under
collateralized agreements to
resell (cost of $30,000 and
$30,000, respectively) 5,700 13,500
Cash and cash equivalents 51,130 80,718
Interest and dividend receivable 34,233 38,549
Derivative asset at fair value 2,958 5,647
Receivable from affiliates 441 381
Receivable from unsettled
securities sold -- 4,138
Other assets 19,376 17,907
---------- -----------
Total assets $ 2,427,217 $ 2,902,853
========== ===========
Liabilities
Borrowings
Unsecured Notes $ 787,704 $ 991,585
Holdings Credit Facility 354,446 420,063
SBA-guaranteed debentures 169,255 196,205
NMFC Credit Facility 30,545 81,074
Deferred financing costs (net
of accumulated amortization of
$48,735 and $45,302,
respectively) (15,310) (17,875)
---------- -----------
Net borrowings 1,326,640 1,671,052
Payable for unsettled securities
purchased 18,490 463
Payable to broker 10,080 14,630
Management fee payable 7,173 9,176
Interest payable 6,780 11,892
Derivative liability at fair value 1,936 366
Deferred tax liability 1,731 1,819
Incentive fee payable -- 3,018
Other liabilities 4,417 2,181
---------- -----------
Total liabilities 1,377,247 1,714,597
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, 107,851,929 and
107,851,929 shares issued,
respectively, and 95,575,151 and
102,638,388 shares outstanding,
respectively 1,079 1,079
Paid in capital in excess of par 1,354,726 1,354,726
Treasury stock at cost, 12,276,778
and 5,213,541 shares held,
respectively (108,549) (51,952)
Accumulated overdistributed
earnings (203,754) (121,676)
---------- -----------
Total net assets of New Mountain
Finance Corporation $ 1,043,502 $ 1,182,177
Non-controlling interest in New
Mountain Net Lease Corporation 6,468 6,079
---------- -----------
Total net assets $ 1,049,970 $ 1,188,256
---------- -----------
Total liabilities and net assets $ 2,427,217 $ 2,902,853
========== ===========
Number of shares outstanding 95,575,151 102,638,388
Net asset value per share of New
Mountain Finance Corporation $ 10.92 $ 11.52
New Mountain Finance Corporation
Consolidated Statements of Operations
(in thousands, except shares and per share data)
(unaudited)
Three Months Ended
------------------------------
March 31,
2026 March 31, 2025
------------- ---------------
Investment income
From non-controlled/non-affiliated
investments:
Interest income (excluding
Payment-in-kind ("PIK")
interest income) $ 39,249 $ 52,113
PIK interest income 2,363 2,913
Dividend income 1,805 557
Non-cash dividend income 1,357 4,434
Other income 1,346 1,312
From non-controlled/affiliated
investments:
Interest income (excluding PIK
interest income) 315 331
PIK interest income 1,188 987
Non-cash dividend income 740 1,683
Other income 63 63
From controlled investments:
Interest income (excluding PIK
interest income) 3,272 1,485
PIK interest income 1,586 3,688
Dividend income 11,911 12,198
Non-cash dividend income 3,224 2,071
Other income 375 1,828
----------- -----------
Total investment income 68,794 85,663
----------- -----------
Expenses
Interest and other financing
expenses 27,524 31,374
Management fee 8,154 10,233
Incentive fee 6,103 8,247
Professional fees 1,028 1,389
Administrative expenses 995 1,104
Other general and administrative
expenses 458 516
----------- -----------
Total expenses 44,262 52,863
Less: management and incentive fees
waived (6,103) (1,822)
----------- -----------
Net expenses 38,159 51,041
----------- -----------
Net investment income before income
taxes 30,635 34,622
Income tax benefit (expense) 4 (19)
----------- -----------
Net investment income 30,631 34,641
Net realized (losses) gains:
Non-controlled/non-affiliated
investments (26,292) (1,074)
Controlled investments (5,718) 38,899
Net change in unrealized
appreciation (depreciation):
Non-controlled/non-affiliated
investments (46,237) 4,206
Non-controlled/affiliated
investments 3,479 (4,891)
Controlled investments 1,201 (48,392)
Securities purchased under
collateralized agreements to
resell (7,800) --
Foreign currency (100) 150
Benefit (provision) for taxes 87 (22)
----------- -----------
Net realized and unrealized losses (81,380) (11,124)
----------- -----------
Net (decrease) increase in net
assets resulting from operations (50,749) 23,517
Less: Net increase in net assets
resulting from operations related
to non-controlling interest in New
Mountain Net Lease Corporation (179) (104)
----------- -----------
Net (decrease) increase in net
assets resulting from operations
related to New Mountain Finance
Corporation $ (50,928) $ 23,413
=========== ===========
Basic (loss) earnings per share $ (0.51) $ 0.22
Weighted average shares of common
stock outstanding - basic 100,476,895 107,851,415
Diluted (loss) earnings per share $ (0.51) $ 0.22
Weighted average shares of common
stock outstanding - diluted 100,476,895 126,852,911
Distributions declared and paid per
share $ 0.32 $ 0.32
ABOUT NEW MOUNTAIN FINANCE CORPORATION
New Mountain Finance Corporation (NASDAQ: NMFC) is focused on providing direct lending solutions to U.S. upper middle market companies backed by top private equity sponsors. Our investment objective is to generate current income and capital appreciation through the sourcing and origination 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 $60 billion of assets under management.
ABOUT NEW MOUNTAIN CAPITAL
New Mountain Capital ("NMC") 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 $60 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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260504896523/en/
CONTACT: New Mountain Finance Corporation
Investor Relations
Laura C. Holson, Authorized Representative
NMFCIR@newmountaincapital.com
(212) 220-3505
(END) Dow Jones Newswires
May 04, 2026 16:21 ET (20:21 GMT)