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Section 1: 10-Q (10-Q)

Document

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
ý      Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Quarter Ended June 30, 2018
o         Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Commission
File Number
 
Exact name of registrant as specified in its charter, address of principal executive
offices, telephone numbers and states or other jurisdictions of incorporation or organization
 
I.R.S. Employer
Identification Number
814-00832
 
New Mountain Finance Corporation
 
27-2978010
 
 
787 Seventh Avenue, 48th Floor
New York, New York 10019
Telephone: (212) 720-0300
State of Incorporation: Delaware
 
 
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer ý
 
Accelerated filer o
 
 
Non-accelerated filer o (Do not check if a smaller reporting company)
 
Smaller reporting company o
 
 
Emerging growth company o
 
 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý
Indicate the number of shares outstanding of each of the issuer’s classes of common stock.
Description
 
Shares as of August 7, 2018
Common stock, par value $0.01 per share
 
76,106,372
 


Table of Contents

FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2018
TABLE OF CONTENTS
 
PAGE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

2

Table of Contents

PART I. FINANCIAL INFORMATION
Item 1.
Financial Statements
New Mountain Finance Corporation
 
Consolidated Statements of Assets and Liabilities
(in thousands, except shares and per share data)
(unaudited)
 
June 30, 2018
 
December 31, 2017
Assets
 

 
 

Investments at fair value
 

 
 

Non-controlled/non-affiliated investments (cost of $1,579,140 and $1,438,889, respectively)
$
1,584,412

 
$
1,462,182

Non-controlled/affiliated investments (cost of $172,898 and $180,380, respectively)
184,376

 
178,076

Controlled investments (cost of $308,628 and $171,958, respectively)
329,230

 
185,402

Total investments at fair value (cost of $2,060,666 and $1,791,227, respectively)
2,098,018

 
1,825,660

Securities purchased under collateralized agreements to resell (cost of $30,000 and $30,000, respectively)
25,200

 
25,212

Cash and cash equivalents
33,948

 
34,936

Interest and dividend receivable
42,397

 
31,844

Receivable from affiliates
952

 
343

Other assets
5,426

 
10,023

Total assets
$
2,205,941

 
$
1,928,018

Liabilities
 

 
 

Borrowings
 
 
 
     Holdings Credit Facility
$
390,463

 
$
312,363

     Unsecured Notes
235,000

 
145,000

     SBA-guaranteed debentures
163,000

 
150,000

     Convertible Notes
155,357

 
155,412

     NMFC Credit Facility
150,000

 
122,500

     Deferred financing costs (net of accumulated amortization of $19,229 and $16,578, respectively)
(15,109
)
 
(15,777
)
Net borrowings
1,078,711

 
869,498

Payable for unsettled securities purchased
29,903

 

Management fee payable
22,240

 
7,065

Incentive fee payable
19,535

 
6,671

Interest payable
7,099

 
5,107

Payable to affiliates
2,488

 
863

Deferred tax liability
1,878

 
894

Other liabilities
11,441

 
2,945

Total liabilities
1,173,295

 
893,043

Commitments and contingencies (See Note 9)
 

 
 

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, 100,000,000 shares authorized, 76,106,372 and 75,935,903 shares issued and outstanding, respectively
761

 
759

Paid in capital in excess of par
1,055,796

 
1,053,468

Accumulated undistributed net investment income
38,986

 
39,165

Accumulated undistributed net realized losses on investments
(83,084
)
 
(76,681
)
Net unrealized appreciation (depreciation) (net of provision for taxes of $1,878 and $894, respectively)
20,187

 
18,264

Total net assets
$
1,032,646

 
$
1,034,975

Total liabilities and net assets
$
2,205,941

 
$
1,928,018

Number of shares outstanding
76,106,372

 
75,935,093

Net asset value per share
$
13.57

 
$
13.63


The accompanying notes are an integral part of these consolidated financial statements.
3

Table of Contents

New Mountain Finance Corporation
 
Consolidated Statements of Operations
(in thousands, except shares and per share data)
(unaudited)
 
Three Months Ended
 
Six Months Ended
 
June 30, 2018
 
June 30, 2017
 
June 30, 2018
 
June 30, 2017
Investment income
 
 
 
 
 
 
 
From non-controlled/non-affiliated investments:
 
 
 
 
 
 
 
Interest income
$
38,510

 
$
36,518

 
$
73,946

 
$
69,394

Dividend income

 
120

 
486

 
159

Non-cash dividend income
1,439

 
1

 
2,763

 
13

Other income
1,013

 
2,084

 
3,881

 
4,349

From non-controlled/affiliated investments:
 
 
 
 
 
 
 
Interest income
210

 
712

 
312

 
1,359

Dividend income
791

 
842

 
1,636

 
1,846

Non-cash dividend income
4,017

 
3,987

 
8,026

 
4,631

Other income
912

 
296

 
1,214

 
594

From controlled investments:
 
 
 
 
 
 
 
Interest income
1,370

 
409

 
2,571

 
884

Dividend income
4,591

 
3,867

 
8,830

 
8,080

Non-cash dividend income
1,508

 
853

 
2,962

 
1,674

Other income
237

 
330

 
860

 
343

Total investment income
54,598

 
50,019

 
107,487

 
93,326

Expenses
 
 
 
 
 
 
 
Incentive fee
6,430

 
6,449

 
12,864

 
11,857

Management fee
9,301

 
8,275

 
17,993

 
15,889

Interest and other financing expenses
12,824

 
9,045

 
24,114

 
17,421

Professional fees
708

 
722

 
1,402

 
1,572

Administrative expenses
822

 
662

 
1,761

 
1,370

Other general and administrative expenses
518

 
402

 
928

 
868

Total expenses
30,603

 
25,555

 
59,062

 
48,977

Less: management and incentive fees waived (See Note 5)
(1,495
)
 
(1,485
)
 
(2,817
)
 
(4,641
)
Less: expenses waived and reimbursed (See Note 5)
(276
)
 
(4
)
 
(276
)
 
(474
)
Net expenses
28,832

 
24,066

 
55,969

 
43,862

Net investment income before income taxes
25,766

 
25,953

 
51,518

 
49,464

Income tax expense
45

 
155

 
61

 
235

Net investment income
25,721

 
25,798

 
51,457

 
49,229

Net realized (losses) gains:
 
 
 
 
 
 
 
Non-controlled/non-affiliated investments
(6,609
)
 
(26,453
)
 
(6,403
)
 
(25,627
)
Net change in unrealized appreciation (depreciation):
 
 
 
 
 
 
 
Non-controlled/non-affiliated investments
(14,500
)
 
26,631

 
(18,021
)
 
34,610

Non-controlled/affiliated investments
8,270

 
(298
)
 
10,079

 
(594
)
Controlled investments
11,317

 
1,519

 
10,861

 
41

Securities purchased under collateralized agreements to resell

 
(33
)
 
(12
)
 
(833
)
(Provision) benefit for taxes
(1,066
)
 
164

 
(984
)
 
919

Net realized and unrealized gains (losses)
(2,588
)
 
1,530

 
(4,480
)
 
8,516

Net increase in net assets resulting from operations
$
23,133

 
$
27,328

 
$
46,977

 
$
57,745

Basic earnings per share
$
0.30

 
$
0.36

 
$
0.62

 
$
0.80

Weighted average shares of common stock outstanding - basic (See Note 11)
75,938,857

 
75,383,387

 
75,936,986

 
72,566,825

Diluted earnings per share
$
0.29

 
$
0.34

 
$
0.58

 
$
0.74

Weighted average shares of common stock outstanding - diluted (See Note 11)
85,762,984

 
85,207,514

 
85,761,113

 
82,390,952

Distributions declared and paid per share
$
0.34

 
$
0.34

 
$
0.68

 
$
0.68


The accompanying notes are an integral part of these consolidated financial statements.
4

Table of Contents

New Mountain Finance Corporation
 
Consolidated Statements of Changes in Net Assets
(in thousands, except shares and per share data)
(unaudited)
 
Six Months Ended
 
June 30, 2018
 
June 30, 2017
Increase (decrease) in net assets resulting from operations:
 
 
 
Net investment income
$
51,457

 
$
49,229

Net realized losses on investments
(6,403
)
 
(25,627
)
Net change in unrealized appreciation of investments
2,919

 
34,057

Net change in unrealized depreciation of securities purchased under collateralized agreements to resell
(12
)
 
(833
)
(Provision) benefit for taxes
(984
)
 
919

Net increase in net assets resulting from operations
46,977

 
57,745

Capital transactions
 
 
 
Net proceeds from shares sold

 
81,478

Deferred offering costs

 
(172
)
Distributions declared to stockholders from net investment income
(51,636
)
 
(49,398
)
Reinvestment of distributions
2,330

 
3,208

Other

 
(81
)
Total net (decrease) increase in net assets resulting from capital transactions
(49,306
)
 
35,035

Net (decrease) increase in net assets
(2,329
)
 
92,780

Net assets at the beginning of the period
1,034,975

 
938,562

Net assets at the end of the period
$
1,032,646

 
$
1,031,342

 
 
 
 
Capital share activity
 
 
 
Shares sold

 
5,750,000

Shares issued from the reinvestment of distributions
171,279

 
180,451

Shares reissued from repurchase program in connection with the reinvestment of distributions

 
37,573

Net increase in shares outstanding
171,279

 
5,968,024




The accompanying notes are an integral part of these consolidated financial statements.
5

Table of Contents

New Mountain Finance Corporation
 
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
 
Six Months Ended
 
June 30, 2018
 
June 30, 2017
Cash flows from operating activities
 
 
 
Net increase in net assets resulting from operations
$
46,977

 
$
57,745

Adjustments to reconcile net (increase) decrease in net assets resulting from operations to net cash provided by (used in) operating activities:
 
 
 
Net realized losses on investments
6,403

 
25,627

Net change in unrealized appreciation of investments
(2,919
)
 
(34,057
)
Net change in unrealized depreciation of securities purchased under collateralized agreements to resell
12

 
833

Amortization of purchase discount
(2,592
)
 
(2,495
)
Amortization of deferred financing costs
2,651

 
1,991

Amortization of premium on Convertible Notes
(55
)
 
(55
)
Non-cash investment income
(8,559
)
 
(3,864
)
(Increase) decrease in operating assets:
 
 
 
Purchase of investments and delayed draw facilities
(549,417
)
 
(607,755
)
Proceeds from sales and paydowns of investments
296,835

 
330,586

Cash received for purchase of undrawn portion of revolving credit or delayed draw facilities
588

 
189

Cash paid for purchase of drawn portion of revolving credit facilities
(11,631
)
 

Cash paid on drawn revolvers
(11,004
)
 
(7,344
)
Cash repayments on drawn revolvers
9,938

 
2,897

Interest and dividend receivable
(10,553
)
 
(6,822
)
Receivable from unsettled securities sold

 
990

Receivable from affiliates
(609
)
 
(32
)
Other assets
4,597

 
(1,543
)
Increase (decrease) in operating liabilities:
 
 
 
Payable for unsettled securities purchased
29,903

 
21,411

Management fee payable
15,175

 
7,196

Incentive fee payable
12,864

 
4,312

Interest payable
1,992

 
229

Payable to affiliates
1,625

 
525

Deferred tax liability
984

 
(919
)
Other liabilities
8,469

 
(845
)
Net cash flows used in operating activities
(158,326
)
 
(211,200
)
Cash flows from financing activities
 
 
 
Net proceeds from shares sold

 
81,478

Distributions paid
(49,306
)
 
(46,190
)
Offering costs paid
(40
)
 
(289
)
Proceeds from Holdings Credit Facility
152,500

 
278,200

Repayment of Holdings Credit Facility
(74,400
)
 
(283,000
)
Proceeds from Unsecured Notes
90,000

 
55,000

Proceeds from SBA-guaranteed debentures
13,000

 
5,000

Proceeds from NMFC Credit Facility
120,000

 
232,100

Repayment of NMFC Credit Facility
(92,500
)
 
(119,600
)
Deferred financing costs paid
(1,916
)
 
(1,009
)
Other

 
(81
)
Net cash flows provided by financing activities
157,338

 
201,609

Net decrease in cash and cash equivalents
(988
)
 
(9,591
)
Cash and cash equivalents at the beginning of the period
34,936

 
45,928

Cash and cash equivalents at the end of the period
$
33,948

 
$
36,337

Supplemental disclosure of cash flow information
 
 
 
Cash interest paid
$
18,871

 
$
14,567

Income taxes paid
216

 
175

Non-cash operating activities:
 
 
 
Non-cash activity on investments
$
1,346

 
$

Non-cash financing activities:
 
 
 
Value of shares issued in connection with the distribution reinvestment plan
$
2,330

 
$
2,648

Value of shares reissued from repurchase program in connection with the distribution reinvestment plan

 
560

Accrual for offering costs
904

 
1,095

Accrual for deferred financing costs
170

 
128



The accompanying notes are an integral part of these consolidated financial statements.
6

Table of Contents
New Mountain Finance Corporation
 
Consolidated Schedule of Investments
June 30, 2018
(in thousands, except shares)
(unaudited)

Portfolio Company, Location and Industry (1)
 
Type of Investment
 
Interest Rate(9)
 
Acquisition Date
 
Maturity / Expiration Date
 
 Principal
 Amount,
 Par Value
 or Shares
 
 Cost
 
 Fair
 Value
 
Percent of Net
Assets
Non-Controlled/Non-Affiliated Investments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Funded Debt Investments - Canada
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dentalcorp Perfect Smile ULC**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Healthcare Services
 
Second lien (3)
 
9.59% (L+ 7.50%/M)
 
6/1/2018
 
6/8/2026
 
$
18,000

 
$
17,820

 
$
17,820

 
1.73
 %
Total Funded Debt Investments - Canada
 
 
 
 
 
 
 
 
 
$
18,000

 
$
17,820

 
$
17,820

 
1.73
 %
Funded Debt Investments - United Kingdom
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shine Acquisition Co. S.à.r.l / Boing US Holdco Inc.**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer Services
 
Second lien (3)
 
9.86% (L + 7.50%/Q)
 
9/25/2017
 
10/3/2025
 
$
43,853

 
$
43,604

 
$
43,990

 
4.26
 %
Air Newco LLC**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
First lien (2)
 
6.78% (L + 4.75%/M)
 
5/25/2018
 
5/31/2024
 
20,176

 
20,125

 
20,276

 
1.96
 %
Total Funded Debt Investments - United Kingdom
 
 
 
 
 
 
 
 
 
$
64,029

 
$
63,729

 
$
64,266

 
6.22
 %
Funded Debt Investments - United States
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Benevis Holding Corp.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Healthcare Services
 
First lien (2)(10)
 
8.66% (L + 6.32%/Q)
 
3/15/2018
 
3/15/2024
 
$
58,676

 
$
58,676

 
$
58,676

 
 
 
 
First lien (3)(10)
 
8.66% (L + 6.32%/Q)
 
3/15/2018
 
3/15/2024
 
20,639

 
20,639

 
20,639

 
 
 
 
 
 
 
 
 
 
 
 
79,315

 
79,315

 
79,315

 
7.68
 %
Integro Parent Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
First lien (2)
 
8.06% (L + 5.75%/Q)
 
10/9/2015
 
10/31/2022
 
51,509

 
51,181

 
51,251

 
 
 
 
Second lien (3)
 
11.56% (L + 9.25%/Q)
 
10/9/2015
 
10/30/2023
 
10,000

 
9,925

 
9,950

 
 
 
 
 
 
 
 
 
 
 
 
61,509

 
61,106

 
61,201

 
5.93
 %
AmWINS Group, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
Second lien (3)
 
8.84% (L + 6.75%/M)
 
1/19/2017
 
1/25/2025
 
57,000

 
56,815

 
57,570

 
5.57
 %
Alegeus Technologies, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Healthcare Services
 
Second lien (3)(10)
 
10.83% (L + 8.50%/Q)
 
4/28/2017
 
10/30/2023
 
23,500

 
23,500

 
23,500

 
 
 
 
Second lien (4)(10)
 
10.83% (L + 8.50%/Q)
 
4/28/2017
 
10/30/2023
 
22,500

 
22,500

 
22,500

 
 
 
 
 
 
 
 
 
 
 
 
46,000

 
46,000

 
46,000

 
4.45
 %
Quest Software US Holdings Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
Second lien (2)
 
10.58% (L + 8.25%/Q)
 
5/17/2018
 
5/18/2026
 
43,697

 
43,263

 
43,806

 
4.24
 %
VetCor Professional Practices LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer Services
 
First lien (4)
 
10.25% (P + 5.25%/M)
 
5/15/2015
 
4/20/2021
 
19,013

 
18,914

 
19,013

 
 
 
 
First lien (2)
 
10.25% (P + 5.25%/M)
 
5/15/2015
 
4/20/2021
 
7,674

 
7,579

 
7,674

 
 
 
 
First lien (3)
 
10.25% (P + 5.25%/M)
 
2/24/2017
 
4/20/2021
 
5,975

 
5,877

 
5,975

 
 
 
 
First lien (4)
 
10.25% (P + 5.25%/M)
 
5/15/2015
 
4/20/2021
 
2,637

 
2,622

 
2,637

 
 
 
 
First lien (3)(11) - Drawn
 
10.25% (P + 5.25%/M)
 
6/24/2016
 
4/20/2021
 
1,877

 
1,862

 
1,877

 
 
 
 
First lien (2)
 
10.25% (P + 5.25%/M)
 
3/31/2016
 
4/20/2021
 
1,623

 
1,601

 
1,623

 
 
 
 
First lien (3)(11) - Drawn
 
10.25% (P + 5.25%/M)
 
12/29/2017
 
4/20/2021
 
1,395

 
1,381

 
1,395

 
 
 
 
First lien (4)
 
10.25% (P + 5.25%/M)
 
5/15/2015
 
4/20/2021
 
493

 
486

 
493

 
 
 
 
 
 
 
 
 
 
 
 
40,687

 
40,322

 
40,687

 
3.94
 %
Salient CRGT Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal Services
 
First lien (2)
 
7.84% (L + 5.75%/M)
 
1/6/2015
 
2/28/2022
 
39,616

 
39,206

 
40,210

 
3.89
 %

The accompanying notes are an integral part of these consolidated financial statements.
7

Table of Contents
New Mountain Finance Corporation
 
Consolidated Schedule of Investments (Continued)
June 30, 2018
(in thousands, except shares)
(unaudited)


Portfolio Company, Location and Industry (1)
 
Type of Investment
 
Interest Rate(9)
 
Acquisition Date
 
Maturity / Expiration Date
 
 Principal
 Amount,
 Par Value
 or Shares
 
 Cost
 
 Fair
 Value
 
Percent of Net
Assets
Tenawa Resource Holdings LLC (13)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tenawa Resource Management LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Energy
 
First lien (3)(10)
 
10.50% (Base + 8.00%/Q)
 
5/12/2014
 
10/30/2024
 
$
39,700

 
$
39,639

 
$
39,700

 
3.84
 %
NM GRC Holdco, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
First lien (2)(10)
 
7.83% (L + 5.50%/Q)
 
2/9/2018
 
2/9/2024
 
38,930

 
38,746

 
38,735

 
3.75
 %
Frontline Technologies Group Holdings, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Education
 
First lien (4)(10)
 
8.59% (L + 6.50%/M)
 
9/18/2017
 
9/18/2023
 
22,500

 
22,349

 
22,185

 
 
 
 
First lien (2)(10)
 
8.59% (L + 6.50%/M)
 
9/18/2017
 
9/18/2023
 
16,666

 
16,555

 
16,433

 
 
 
 
 
 
 
 
 
 
 
 
39,166

 
38,904

 
38,618

 
3.74
 %
Kronos Incorporated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
Second lien (2)
 
10.61% (L + 8.25%/Q)
 
10/26/2012
 
11/1/2024
 
36,000

 
35,533

 
37,305

 
3.61
 %
Valet Waste Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
First lien (2)(10)
 
8.34% (L + 6.25%/M)
 
9/24/2015
 
9/24/2021
 
29,175

 
28,958

 
29,175

 
 
 
 
First lien (2)(10)
 
8.34% (L + 6.25%/M)
 
7/27/2017
 
9/24/2021
 
3,713

 
3,683

 
3,713

 
 
 
 
First lien (3)(10)(11) - Drawn
 
9.09% (L + 7.00%/M)
 
9/24/2015
 
9/24/2021
 
1,350

 
1,333

 
1,350

 
 
 
 
 
 
 
 
 
 
 
 
34,238

 
33,974

 
34,238

 
3.32
 %
Navicure, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Healthcare Services
 
Second lien (3)
 
9.59% (L + 7.50%/M)
 
10/23/2017
 
10/31/2025
 
31,470

 
31,386

 
31,627

 
3.06
 %
Severin Acquisition, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
Second lien (3)(10)
 
11.11% (L + 8.75%/Q)
 
2/1/2017
 
7/29/2022
 
14,518

 
14,375

 
14,663

 
 
 
 
Second lien (4)(10)
 
11.11% (L + 8.75%/Q)
 
7/31/2015
 
7/29/2022
 
5,000

 
4,967

 
5,000

 
 
 
 
Second lien (4)(10)
 
11.11% (L + 8.75%/Q)
 
11/5/2015
 
7/29/2022
 
4,154

 
4,126

 
4,154

 
 
 
 
Second lien (4)(10)
 
11.61% (L + 9.25%/Q)
 
2/1/2016
 
7/29/2022
 
3,273

 
3,250

 
3,273

 
 
 
 
Second lien (3)(10)
 
11.36% (L + 9.00%/Q)
 
10/14/2016
 
7/29/2022
 
2,361

 
2,343

 
2,361

 
 
 
 
Second lien (3)(10)
 
11.61% (L + 9.25%/Q)
 
8/8/2016
 
7/29/2022
 
1,825

 
1,811

 
1,825

 
 
 
 
Second lien (4)(10)
 
11.61% (L + 9.25%/Q)
 
8/8/2016
 
7/29/2022
 
300

 
298

 
300

 
 
 
 
 
 
 
 
 
 
 
 
31,431

 
31,170

 
31,576

 
3.06
 %
TDG Group Holding Company
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer Services
 
First lien (2)(10)
 
7.83% (L + 5.50%/Q)
 
5/22/2018
 
5/31/2024
 
30,263

 
30,114

 
30,112

 
 
 
 
First lien (3)(10)(11) - Drawn
 
7.59% (L + 5.50%/M)
 
5/22/2018
 
5/31/2024
 
504

 
502

 
502

 
 
 
 
 
 
 
 
 
 
 
 
30,767

 
30,616

 
30,614

 
2.96
 %
Ansira Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
First lien (2)
 
7.86% (L + 5.75%/M)
 
12/19/2016
 
12/20/2022
 
25,790

 
25,688

 
25,725

 
 
 
 
First lien (3)
 
7.86% (L + 5.75%/M)
 
4/16/2018
 
12/20/2022
 
2,097

 
2,088

 
2,092

 
 
 
 
First lien (3)(11) - Drawn
 
7.73% (L + 5.75%/M)
 
12/19/2016
 
12/20/2022
 
826

 
823

 
824

 
 
 
 
 
 
 
 
 
 
 
 
28,713

 
28,599

 
28,641

 
2.77
 %
Wirepath LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Distribution & Logistics
 
First lien (2)
 
6.83% (L + 4.50%/Q)
 
7/31/2017
 
8/5/2024
 
27,592

 
27,468

 
27,747

 
2.69
 %
Trader Interactive, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
First lien (2)(10)
 
7.84% (L + 5.75%/M)
 
6/15/2017
 
6/17/2024
 
27,054

 
26,875

 
27,054

 
2.62
 %

The accompanying notes are an integral part of these consolidated financial statements.
8

Table of Contents
New Mountain Finance Corporation
 
Consolidated Schedule of Investments (Continued)
June 30, 2018
(in thousands, except shares)
(unaudited)


Portfolio Company, Location and Industry (1)
 
Type of Investment
 
Interest Rate(9)
 
Acquisition Date
 
Maturity / Expiration Date
 
 Principal
 Amount,
 Par Value
 or Shares
 
 Cost
 
 Fair
 Value
 
Percent of Net
Assets
SW Holdings, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
Second lien (4)(10)
 
11.08% (L + 8.75%/Q)
 
6/30/2015
 
12/30/2021
 
$
18,161

 
$
18,037

 
$
18,210

 
 
 
 
Second lien (3)(10)
 
11.08% (L + 8.75%/Q)
 
4/16/2018
 
12/30/2021
 
6,181

 
6,122

 
6,198

 
 
 
 
 
 
 
 
 
 
 
 
24,342

 
24,159

 
24,408

 
2.36
 %
Keystone Acquisition Corp.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Healthcare Services
 
First lien (2)
 
7.58% (L + 5.25%/Q)
 
5/10/2017
 
5/1/2024
 
19,850

 
19,677

 
19,838

 
 
 
 
Second lien (3)
 
11.58% (L + 9.25%/Q)
 
5/10/2017
 
5/1/2025
 
4,500

 
4,458

 
4,534

 
 
 
 
 
 
 
 
 
 
 
 
24,350

 
24,135

 
24,372

 
2.36
 %
iPipeline, Inc. (Internet Pipeline, Inc.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
First lien (4)(10)
 
9.35% (L + 7.25%/M)
 
8/4/2015
 
8/4/2022
 
17,451

 
17,337

 
17,451

 
 
 
 
First lien (4)(10)
 
8.34% (L + 6.25%/M)
 
6/16/2017
 
8/4/2022
 
4,554

 
4,535

 
4,554

 
 
 
 
First lien (2)(10)
 
8.34% (L + 6.25%/M)
 
9/25/2017
 
8/4/2022
 
1,155

 
1,150

 
1,155

 
 
 
 
First lien (4)(10)
 
8.34% (L + 6.25%/M)
 
9/25/2017
 
8/4/2022
 
508

 
506

 
508

 
 
 
 
 
 
 
 
 
 
 
 
23,668

 
23,528

 
23,668

 
2.29
 %
AAC Holding Corp.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Education
 
First lien (2)(10)
 
10.24% (L + 8.25%/M)
 
9/30/2015
 
9/30/2020
 
22,782

 
22,611

 
22,782

 
2.21
 %
EN Engineering, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
First lien (2)(10)
 
8.09% (L + 6.00%/M)
 
7/30/2015
 
6/30/2021
 
20,786

 
20,670

 
20,786

 
 
 
 
First lien (2)(10)
 
8.09% (L + 6.00%/M)
 
7/30/2015
 
6/30/2021
 
1,202

 
1,195

 
1,202

 
 
 
 
 
 
 
 
 
 
 
 
21,988

 
21,865

 
21,988

 
2.13
 %
Avatar Topco, Inc. (23)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EAB Global, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Education
 
Second lien (3)
 
10.00% (L + 7.50%/Q)
 
11/17/2017
 
11/17/2025
 
21,450

 
21,146

 
21,021

 
2.04
 %
Brave Parent Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
Second lien (5)
 
9.83% (L + 7.50%/Q)
 
4/17/2018
 
4/17/2026
 
20,231

 
20,132

 
20,332

 
1.97
 %
Help/Systems Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
Second lien (5)
 
9.84% (L + 7.75%/M)
 
3/23/2018
 
3/27/2026
 
20,231

 
20,132

 
20,244

 
1.96
 %
TWDiamondback Holdings Corp. (15)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diamondback Drugs of Delaware, L.L.C. (TWDiamondback II Holdings LLC)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Distribution & Logistics
 
First lien (4)(10)
 
10.84% (L + 8.75%/M)
 
11/19/2014
 
11/19/2019
 
17,891

 
17,891

 
17,891

 
 
 
 
First lien (3)(10)
 
10.84% (L + 8.75%/M)
 
11/19/2014
 
11/19/2019
 
1,491

 
1,491

 
1,491

 
 
 
 
First lien (4)(10)
 
10.84% (L + 8.75%/M)
 
11/19/2014
 
11/19/2019
 
418

 
418

 
418

 
 
 
 
 
 
 
 
 
 
 
 
19,800

 
19,800

 
19,800

 
1.92
 %
DiversiTech Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Distribution & Logistics
 
Second lien (3)
 
9.84% (L + 7.50%/Q)
 
5/18/2017
 
6/2/2025
 
19,500

 
19,324

 
19,793

 
1.92
 %
AgKnowledge Holdings Company, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
Second lien (2)(10)
 
10.35% (L + 8.25%/M)
 
7/23/2014
 
7/23/2020
 
18,500

 
18,425

 
18,500

 
1.79
 %
DCA Investment Holding, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Healthcare Services
 
First lien (2)(10)
 
7.58% (L + 5.25%/Q)
 
7/2/2015
 
7/2/2021
 
17,363

 
17,269

 
17,363

 
 
 
 
First lien (3)(10)(11) - Drawn
 
7.58% (L + 5.25%/Q)
 
12/20/2017
 
7/2/2021
 
505

 
387

 
505

 
 
 
 
 
 
 
 
 
 
 
 
17,868

 
17,656

 
17,868

 
1.73
 %
BackOffice Associates Holdings, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
First lien (2)(10)
 
9.60% (L + 7.50%/M)
 
8/25/2017
 
8/25/2023
 
18,445

 
18,302

 
17,578

 
1.70
 %

The accompanying notes are an integral part of these consolidated financial statements.
9

Table of Contents
New Mountain Finance Corporation
 
Consolidated Schedule of Investments (Continued)
June 30, 2018
(in thousands, except shares)
(unaudited)


Portfolio Company, Location and Industry (1)
 
Type of Investment
 
Interest Rate(9)
 
Acquisition Date
 
Maturity / Expiration Date
 
 Principal
 Amount,
 Par Value
 or Shares
 
 Cost
 
 Fair
 Value
 
Percent of Net
Assets
VF Holding Corp.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
Second lien (3)(10)
 
11.09% (L + 9.00%/M)
 
7/7/2016
 
6/28/2024
 
$
17,086

 
$
17,377

 
$
17,427

 
1.69
 %
TIBCO Software Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
Subordinated (3)
 
11.38%/S
 
11/24/2014
 
12/1/2021
 
15,000

 
14,744

 
16,219

 
1.57
 %
Hill International, Inc.**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
First lien (2)(10)
 
8.08% (L + 5.75%/Q)
 
6/21/2017
 
6/21/2023
 
15,642

 
15,575

 
15,642

 
1.52
 %
FR Arsenal Holdings II Corp.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
First lien (2)(10)
 
9.63% (L + 7.25%/Q)
 
9/29/2016
 
9/8/2022
 
15,278

 
15,156

 
15,306

 
1.48
 %
OEConnection LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
Second lien (3)
 
10.10% (L + 8.00%/M)
 
11/22/2017
 
11/22/2025
 
15,160

 
14,962

 
15,160

 
1.47
 %
Netsmart Inc. / Netsmart Technologies, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Healthcare Information Technology
 
Second lien (2)
 
11.57% (L + 9.50%/M)
 
4/18/2016
 
10/19/2023
 
15,000

 
14,705

 
15,075

 
1.46
 %
Xactly Corporation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
First lien (4)(10)
 
9.35% (L + 7.25%/M)
 
7/31/2017
 
7/29/2022
 
14,690

 
14,563

 
14,543

 
1.41
 %
Transcendia Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Packaging
 
Second lien (3)
 
10.09% (L + 8.00%/M)
 
6/28/2017
 
5/30/2025
 
14,500

 
14,318

 
14,391

 
1.39
 %
Peraton Holding Corp. (fka MHVC Acquisition Corp.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal Services
 
First lien (2)
 
7.59% (L + 5.25%/Q)
 
4/25/2017
 
4/29/2024
 
13,959

 
13,919

 
14,064

 
1.36
 %
NorthStar Financial Services Group, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
Second lien (5)
 
9.59% (L + 7.50%/M)
 
5/23/2018
 
5/25/2026
 
13,450

 
13,417

 
13,652

 
1.32
 %
TW-NHME Holdings Corp. (20)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
National HME, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Healthcare Services
 
Second lien (3)(10)