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New Mountain Finance : Thu, August 05, 2021

08/04/2021 | 10:36pm EST

Q2 2021 Earnings Presentation

August 5, 2021

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 impact of COVID-19 and related changes in base interest rates and significant volatility on our business, portfolio companies, our industry, and the global economy. All forward-looking statements included in this presentation are made only as of the date hereof and are subject to change without notice. Actual outcomes and results could differ materially from those suggested by this presentation due to the impact of many factors beyond the control of New Mountain Finance Corporation ("NMFC"), including those listed in the "Risk Factors" section of our filings with the United States Securities and Exchange Commission ("SEC"). Any such forward-looking statements are made pursuant to the safe harbor provisions available under applicable securities laws and NMFC assumes no obligation to update or revise any such forward-looking statements unless required by law. Certain information discussed in this presentation (including information relating to portfolio companies) was derived from third party sources and has not been independently verified and, accordingly, NMFC makes no representation or warranty with respect to this information.

The following slides contain summaries of certain financial and statistical information about NMFC. The information contained in this presentation is summary information that is intended to be considered in the context of our SEC filings and other public announcements that we may make, by press release or otherwise, from time to time. We undertake no duty or obligation to publicly update or revise the information contained in this presentation unless required by law. In addition, information related to past performance, while helpful as an evaluative tool, is not necessarily indicative of future results, the achievement of which cannot be assured. You should not view the past performance of NMFC, or information about the market, as indicative of NMFC's future results. The performance data stated herein may have been due to extraordinary market conditions, which may not be duplicated in the future. Current performance may be lower or higher than the performance data quoted. This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities of NMFC.

Past performance is not indicative nor a guarantee of future returns, the realization of which is dependent on many factors, many of which are beyond the control of NMFC. There can be no assurances that future dividends will match or exceed historic ones, or that they will be made at all. Net returns give effect to all fees and expenses. Unless otherwise noted, information included herein is presented as of the date indicated on the cover page and may change at any time without notice. NMFC is subject to certain significant risks relating to our business and investment objective. For more detailed information on risks relating to NMFC, see the latest Form 10-K and subsequent quarterly reports filed on Form 10-Q.

Investment portfolio related activity, metrics and disclosures on slides 4, 6, 11, 16, 17, 18, 24, 25, 26, 27, 28, 30, 31, and 36 include the underlying collateral from securities purchased under collateralized agreements to resell and exclude the PPVA Black Elk (Equity) LLC investment. Figures shown herein are unaudited and may not add due to rounding.

This presentation contains non-GAAP financial information. NMFC's management uses this information in its internal analysis of results and believes that this information may be informative to investors in gauging the quality of NMFC's financial performance, identifying trends in our results and providing meaningful period-to-period comparisons. However, these non-GAAP measures should not be considered in isolation or as a substitute for or superior to any measures of financial performance calculated and presented in accordance with GAAP. Other companies may calculate this or similarly titled non-GAAP measures differently than we do.

The term Adjusted Net Investment Income as used throughout this presentation is not defined under GAAP and is not a measure of operating income, operating performance or liquidity presented in accordance with GAAP. In evaluating its business, NMFC considers and uses Adjusted Net Investment Income as a measure of its operating performance. Adjusted Net Investment Income is defined as net investment income adjusted to reflect income as if the cost basis of investments held at NMFC's IPO date had stepped-upto fair market value as of the IPO date. Under GAAP, NMFC's IPO did not step-upthe cost basis of the predecessor operating company's existing investments to fair market value. Since the total value of the predecessor operating company's investments at the time of the IPO was greater than the investments' cost basis, a larger amount of amortization of purchase or issue discount, and different amounts in realized gains and unrealized appreciation, may be recognized under GAAP in each period than if a step-uphad occurred. For purposes of the incentive fee calculation, NMFC adjusts income as if each investment was purchased at the date of the IPO (or stepped-upto fair market value). To view the reconciliation of Adjusted Net Investment Income, please see Appendix A at the end of this presentation.

The S&P 500 Stock Index (the "S&P 500") is an unmanaged index of 500 widely held, largecapitalization stocks from a broad variety of industries that is recognized by investors to be generally representative of the performance of the broad domestic economy. The S&P 500 Total Return Index reflects the reinvestment of all dividends and distributions. Please note an investor cannot invest directly in an index. References to the S&P 500 Total Return Index are for illustrative purposes only. The S&P 500 Financial Index comprises those companies included in the S&P 500 that are classified as members of the GICS financial sectors. The S&P 500 Total Return Index and the S&P Financials Index may not be the most appropriate comparison because the indices are unmanaged and significantly more diversified than NMFC. NMFC's investments and portfolio holdings are materially different from the companies represented in the indices. Additionally, due to the allocation differences between the indices and NMFC, NMFC may experience more investment volatility than the unmanaged S&P 500 Index and the S&P 500 Financial Index, which may have accounted for the results of the comparison.

Relevant credit benchmarks include the Credit Suisse Leveraged Loan Index, the Credit Suisse HY Index II and the BDC Index (together, the "Benchmarks"). The Credit Suisse Leveraged Loan Index is an unmanaged market value weighted index designed to represent the universe of U.S. dollar-denominated leveraged loan markets. The Credit Suisse HY Index II is an unmanaged index designed to mirror the investable universe of U.S. dollar-denominated high yield debt market. The loans and other investments held by NMFC may be materially different in composition and diversification as compared to the loans comprising each of the Benchmarks described above. The BDC Index is not a tracked index and includes the median of other business development companies that have been public for as long as NMFC, equal-weighted. The portfolio of loans and other investments held by the BDC Index and relevant Peer Group referenced herein may be materially different in composition and risk profile than that of NMFC.

The volatility of an index may be materially different from the performance attained by NMFC. In addition, NMFC's holdings may differ significantly from the securities that comprise the indices. You cannot

invest directly in an index.


Management Participants

Steven B. Klinsky

Chairman of the Board of Directors

Robert A. Hamwee

Chief Executive Officer and Director

John R. Kline

President, Chief Operating Officer, and Director

Shiraz Y. Kajee

Chief Financial Officer


Celebrating 10 Years as a Public Company

Thank you to all our shareholders, employees, research analysts, and financing providers.

With your support since our IPO on May 19, 2011, NMFC has been able to achieve the following:



Consistent Quarterly


Compounded Annual

of Originations across

Market Capitalization(1)



302 Companies(3)

We are excited to celebrate this milestone with all our partners and look forward to the next 10 years!

1 As of 6/30/2021

2 Since IPOthrough 8/2/2021


3 Since inception of predecessor entity in 10/2008 through 6/30/2021

Chairman's Overview

  • We believe our portfolio continues to be well positioned as a result of our defensive growth investment strategy, which focuses on acyclical, recurring, and predictable business models with long term viability, even in a recessionary environment
    • Since our May 6, 2021 earnings call, portfolio company Risk Ratings(1) have generally remained unchanged
  • Q2 2021 Net Investment Income ("NII") of $0.30 per weighted average share, in line with our guidance of $0.30
    • Q2 2021 regular dividend of $0.30 per share paid on June 30, 2021
  • No new borrowers were placed on non-accrual for Q2 2021
  • June 30, 2021 net asset value ("NAV") of $13.33 per share, an increase of $0.48 per share, or 3.7%, from the March 31,
    2021 NAV of $12.85 per share
  • Q3 2021 regular dividend of $0.30 per share announced, based on estimated NII of at least $0.30 per share, payable on September 30, 2021 to holders of record as of September 16, 2021
  • New Mountain employees continue to be the largest shareholder of the Company, with ownership of ~12%
  • Closed the extension of our NMFC credit facility on June 4, 2021
    • Extended the maturity to June 2026 and reduced applicable spread by 40 bps


1 Risk Rating assigned based on two metrics: COVID Exposure and Overall Company Strength. Please refer to page 8 for details

This is an excerpt of the original content. To continue reading it, access the original document here.


New Mountain Finance Corporation published this content on 05 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 August 2021 02:35:08 UTC.

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Financials (USD)
Sales 2021 269 M - -
Net income 2021 180 M - -
Net Debt 2021 - - -
P/E ratio 2021 7,49x
Yield 2021 8,82%
Capitalization 1 318 M 1 318 M -
Capi. / Sales 2021 4,90x
Capi. / Sales 2022 4,92x
Nbr of Employees -
Free-Float 89,8%
Duration : Period :
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Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus BUY
Number of Analysts 5
Last Close Price 13,60 $
Average target price 14,15 $
Spread / Average Target 4,04%
EPS Revisions
Managers and Directors
Robert A. Hamwee Chief Executive Officer & Director
John R. Kline President, Chief Operating Officer & Director
Shiraz Y. Kajee CFO, Treasurer & Principal Accounting Officer
Steven Bruce Klinsky Chairman
Karrie J. Jerry Secretary & Chief Compliance Officer