New Mountain Finance Corporation (NYSE: NMFC) (the "Company",
"we", "us" and "our") today announced its financial results for the
third quarter ended September 30, 2011 and reported Adjusted Net
Investment Income of New Mountain Finance Holdings, L.L.C. (the
“Operating Company”) of $0.29 per share. The Company also announced
that its Board of Directors declared a fourth quarter 2011 dividend
of $0.30 per share. The fourth quarter dividend will be payable on
December 30, 2011 to holders of record as of December 15, 2011 and
is in-line with the Operating Company’s estimated Adjusted Net
Investment Income per share for the quarter ended December 31,
2011.
Except where noted otherwise, all financial information shown
is that of the Operating Company. Also, please note that
share and unit are used interchangeably.
Selected Financial Highlights (in thousands, except per
share/unit data)
September
30, 2011 Investment Portfolio $ 604,334 Total Assets $
641,581 Net Asset Value (“NAV”) $ 411,921 NAV per Share/Unit
$ 13.32 Investment Portfolio Composition:
September 30,
2011 Percent of Total First Lien $ 383,083 63.4 % Second
Lien $ 192,152 31.8 % Subordinated $ 28,697 4.7 % Equity and Other
$ 402 0.1 % Total $ 604,334
Adjusted Three months
ended Three months ended September 30, 2011
Adjustments * September 30, 2011 Investment
Income $ 15,069 $ (1,190 ) $ 13,879 Net Investment Income $ 10,002
$ (1,190 ) $ 8,812 Net Realized and Unrealized Gain (Loss) $
(21,255 ) $ 1,190 $ (20,065 ) Net (Decrease) Increase in Capital
resulting from Operations $ (11,253 ) $ (11,253 ) Net
Investment Income per Share/Unit $ 0.29
The strength of the Operating Company’s unique investment
strategy – which focuses on acyclical “defensive growth” companies
that are well researched by New Mountain Capital, L.L.C., a leading
private equity firm – is underscored by continued strong credit
performance, including the fact that the Operating Company has zero
payment defaults, non-performing loans or performance losses since
its inception in October 2008.
“As managers of this enterprise and as significant shareholders
in our own right, we continue to be happy with the consistent
forward progress of earnings and dividends at New Mountain Finance
Corporation,” said Steven B. Klinsky, the Company’s Chairman.
“While our models are based on the assumption of credit losses, we
are pleased that no such losses have been incurred on any
investment made since the Company’s inception.”
“We are very pleased with both the pace and risk/reward profile
of our third quarter 2011 originations, and most importantly our
strategy of focusing on defensive growth industries and companies
that we know exceptionally well continues to result in very strong
credit performance,” commented Robert Hamwee, the Company’s Chief
Executive Officer and President.
Portfolio and Investment Activity
We are a holding company with no direct operations of our own,
and our sole asset is our ownership in the Operating Company. We
apply an investment company master-feeder structure whereby the
financial results of the Operating Company are allocated to us
based on our pro-rata ownership interest in the Operating
Company.
The Operating Company is externally managed by its Investment
Adviser, New Mountain Finance Advisers BDC, L.L.C. Both New
Mountain Finance Corporation and the Operating Company have elected
to be treated as business development companies under the
Investment Company Act of 1940, as amended.
As of September 30, 2011, the Operating Company’s net asset
value was $411.9 million and its portfolio had a fair value of
approximately $604.3 million in 50 portfolio companies, with a
weighted average Unadjusted and Adjusted Yield to Maturity(1) of
approximately 10.9% and 14.0%, respectively. For the three months
ended September 30, 2011, the Operating Company made approximately
$159.9 million of originations and commitments. The $159.9 million
includes $100.8 million of new investments in five portfolio
companies, $8.6 million of additional investments in three
portfolio companies existing as of June 30, 2011, and $50.5 million
of new commitments that were funded after quarter-end. For the
three months ended September 30, 2011, the Operating Company had
approximately $18.5 million of sales in four portfolio companies
and repayments of approximately $11.5 million.
(1)
“Adjusted Yield to Maturity’’ assumes that
the investments in the Operating Company’s portfolio are purchased
at fair value on September 30, 2011 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, except for the non-recourse debt of New Mountain Finance
SPV Funding, L.L.C. (“NMF SLF”). NMF SLF is treated as a fully
levered asset of the Operating Company, with NMF SLF’s net asset
value being included for yield calculation purposes. The actual
yield to maturity may be higher or lower due to the future
selection of LIBOR contracts by the individual companies in the
portfolio or other factors. References to “Unadjusted Yield to
Maturity” have the same assumptions as Adjusted Yield to Maturity
except that NMF SLF is not treated as a fully levered asset of the
Operating Company, but rather the assets themselves are
consolidated into the Operating Company.
Consolidated Results of Operations
The Operating Company’s total adjusted investment income for the
three months ended September 30, 2011 was approximately $13.9
million. For the three months ended September 30, 2011, total
adjusted investment income consisted of approximately $12.3 million
in cash interest income from investments, approximately $0.9
million in payment-in-kind interest income from investments, net
amortization of purchase premiums/discounts and origination fees of
approximately $0.5 million and approximately $0.2 million in other
income.
The Operating Company’s total net expenses for the three months
ended September 30, 2011 were approximately $5.1 million. Total net
expenses consisted of approximately $1.7 million of costs
associated with the Operating Company’s credit facilities and
approximately $2.6 million in management and incentive fees. The
Operating Company has capped its direct and indirect expenses for
the first year of operations at $3.0 million, resulting in
professional fees, administrative expense, and other general and
administrative expenses totaling $0.75 million for the quarter
ended September 30, 2011.
During the three months ended September 30, 2011, the Operating
Company recorded $6 thousand in adjusted net realized gain. During
the three months ended September 30, 2011, the Operating Company
recorded $20.1 million in adjusted net unrealized depreciation.
Liquidity and Capital Resources
As of September 30, 2011, the Operating Company had cash and
cash equivalents of approximately $18.4 million, approximately $6.8
million of unsettled securities and total debt outstanding of
approximately $224.5 million ($57.9 million of the $160.0 million
of total availability of the Operating Company’s credit facility
and approximately $166.6 million of the $175.0 million of total
availability of the NMF SLF’s credit facility).
On May 19, 2011, we priced our initial public offering of
7,272,727 shares of common stock at a public offering price of
$13.75 per share. Concurrently with the closing of the initial
public offering and at the public offering price of $13.75 per
share, we sold an additional 2,172,000 shares of our common stock
to certain executives and employees of, and other individuals
affiliated with, New Mountain Capital (defined as New Mountain
Capital Group, L.L.C. and its affiliates) in a separate private
placement. The total gross proceeds raised in the offering were
approximately $129.9 million.
Portfolio and Asset Quality
The Operating Company puts its largest emphasis on risk control
and credit performance. On a quarterly basis, or more frequently if
deemed necessary, the Operating Company formally rates each
portfolio investment on a scale of one to four. Each investment is
assigned an initial rating of a “2” under the assumption that the
investment is performing as expected. Any investment with
consistently declining performances would be downgraded from the
“2” rating to a “3” or a “4” rating, based on the deterioration of
the investment. An investment rating of a “4” would be moved to
non-accrual status, and the final development would be an actual
crystallization of a loss through a restructuring or impaired sale.
Since the inception of its credit business in October 2008, the
Operating Company has placed no investments on non-accrual status
and has sold no investments at a material loss.
Recent Developments
The Operating Company had approximately $56.2 million of
originations and commitments (excluding funding of commitments
already made in the third quarter) in the first 40 days of the
fourth quarter of 2011. This was offset by approximately $16.9
million of sales and $1.7 million of repayments during the same
period.
Conference Call
New Mountain Finance Corporation will host a conference call at
10 a.m. Eastern Time on Tuesday, November 15, 2011, to discuss our
third quarter 2011 financial results. All interested parties may
participate in the conference call by dialing 1 (866)-713-8564
approximately 15 minutes prior to the start of the call. Callers
from outside the United States should dial 1 (617)-597-5312.
Participants should reference New Mountain Finance Corporation and
the participant passcode of 86872142 when prompted. This conference
call will also be broadcast live over the Internet and can be
accessed by all interested parties through the investor relations
section of our website at
http://www.newmountainfinance.com/investor-relations. To listen to
the live call, please go to the Company's website at least 15
minutes prior to the start of the call to register and download any
necessary audio software. Following the call you may access a
replay of the event via audio webcast. We will be utilizing a
presentation during the conference call and we have posted the
presentation to the investor relations section of our website.
Financial Statements and Tables of the Operating
Company
New Mountain Finance Holdings, L.L.C.
Consolidated Statements of Assets, Liabilities and
Members’ Capital September 30, 2011
December 31, 2010 (unaudited) Assets
Investments at fair value (cost of
$606,704,749 and $414,308,823, respectively)
$
604,334,414
$
441,057,840
Cash and cash equivalents 18,438,567 10,744,082 Interest receivable
6,761,269 3,007,787 Receivable from unsettled securities sold
6,755,000 —
Deferred credit facility costs (net of
accumulated amortization of $610,866 and $69,909,
respectively)
3,766,729 1,880,120 Deferred offering costs — 3,528,110 Receivable
from affiliate 1,003,530 — Other assets 521,556 5,842
Total assets
$
641,581,065
$
460,223,781
Liabilities SLF Credit Facility 166,606,448
56,936,000 Holdings Credit Facility 57,903,125 59,696,938 Payable
for unsettled securities purchased — 94,462,500 Management fee
payable 1,930,140 — Incentive fee payable 700,610 — Interest
payable 1,229,640 813,192 Payable to affiliates — 2,531,319 Other
liabilities 1,289,898 3,856,571
Total
liabilities 229,659,861 218,296,520
Members’
Capital 411,921,204 241,927,261
Total
liabilities and members’ capital
$
641,581,065
$
460,223,781
Outstanding common membership units (a)
30,919,629
Capital per unit (a)
$
13.32
______________________
(a) Fund was not unitized as of
December 31, 2010.
New Mountain Finance Holdings, L.L.C.
Consolidated Statements of
Operations
Adjusted Three months ended Three
months ended to September 30, 2011 Adjustments
to September 30, 2011 Investment income
Interest income
$
14,860,750
$
(1,189,611
)
$
13,671,139
Other income 207,831 207,831 Total investment income
15,068,581 (1,189,611 ) 13,878,970 Interest and other credit
facility expenses 1,686,113 1,686,113 Management fee 1,930,140
1,930,140 Incentive fee 700,610 700,610
Professional fees (net of
reimbursable expenses of $816,530)
55,138 55,138
Administrative expenses (net of
reimbursable expenses of $218,396
314,250 314,250 Other general and administrative expenses 380,612
380,612 Total expenses 5,066,863 5,006,863
Net
Investment Income 10,001,718 (1,189,611 ) 8,812,107
Realized gain on investments 1,402,671 (1,396,525 ) 6,146
Net change in unrealized
(depreciation) appreciation of investments
(22,657,239 ) 2,586,136 (20,071,103 )
Net decrease
in capital resulting from operations
$
(11,252,850
)
$
(11,252,850
)
ABOUT NEW MOUNTAIN FINANCE CORPORATION
New Mountain Finance Corporation is a closed-end,
non-diversified and externally managed investment company that has
elected to be treated as a business development company under the
Investment Company Act of 1940, as amended. The Company used all of
the proceeds from its initial public offering as well as the
proceeds from its concurrent private placement to acquire common
membership units from New Mountain Finance Holdings, L.L.C. The
investment objective of New Mountain Finance Holdings, L.L.C. is to
generate current income and capital appreciation through the
sourcing and origination of debt securities at all levels of the
capital structure, including first and second lien debt, notes,
bonds and mezzanine securities. In some cases, investments may
include small equity interests. New Mountain Finance Holdings,
L.L.C.'s investment activities are managed by its Investment
Adviser, New Mountain Finance Advisers BDC, L.L.C., which is an
investment adviser registered under the Investment Advisers Act of
1940. More information about New Mountain Finance Corporation can
be found on the Company’s website at
http://www.newmountainfinance.com.
ABOUT NEW MOUNTAIN CAPITAL, L.L.C.
New Mountain Capital, L.L.C is a New York-based private equity
firm investing for long-term capital appreciation through direct
investments in growth equity transactions, leveraged acquisitions,
and management buyouts. The firm currently manages private and
public equity funds with approximately $9.0 billion in aggregate
capital commitments. New Mountain Capital, L.L.C. seeks out the
highest-quality defensive 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, L.L.C., please visit
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. 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, those contained in our recently
filed Form 10-Q and our Registration Statement on Form N-2 (filed
with the Securities and Exchange Commission on May 16, 2011) or
factors that are beyond our control. New Mountain Finance
Corporation undertakes no obligation to publically update or revise
any forward-looking statements made herein. All forward-looking
statements speak only as of the time of this press release.
New Mountain Finance (NYSE:NMFC)
Historical Stock Chart
From Apr 2024 to May 2024
New Mountain Finance (NYSE:NMFC)
Historical Stock Chart
From May 2023 to May 2024