New Mountain Finance Corporation (NMFC) is a publicly traded business development company (BDC) listed on the NASDAQ Global Market. Founded in 2010 and headquartered in New York City, NMFC operates as an externally managed investment vehicle, with its investment advisor being New Mountain Capital, a firm founded by Steven Klinsky ...New Mountain Finance Corporation (NMFC) is a publicly traded business development company (BDC) listed on the NASDAQ Global Market. Founded in 2010 and headquartered in New York City, NMFC operates as an externally managed investment vehicle, with its investment advisor being New Mountain Capital, a firm founded by Steven Klinsky in 1999. The company's mission is to generate attractive risk-adjusted returns by providing capital to high-quality, defensive growth businesses in the U.S. middle market. NMFC's investment strategy emphasizes direct lending, where it originates and invests in first and second lien debt, unsecured notes, mezzanine securities, and occasionally equity interests. It targets companies with EBITDA typically ranging from $10 million to $200 million, and commits between $10 million and $125 million per transaction. The firm focuses on sectors such as healthcare, education, energy, technology, and business services, aiming to build a diversified portfolio of investments. As of recent data, NMFC manages a portfolio of approximately $2.3 billion across 113 portfolio companies. Its largest shareholder group consists of employees, holding around 18% of shares outstanding, indicating strong insider alignment. Financially, NMFC has a market capitalization of about $732 million, with a stock price of $7.75. It pays a regular dividend, with a recent quarterly dividend of $1.21 per share, reflecting its income-oriented approach. The company's revenue per share is $1.81, and it has a book value per share of $10.95. Despite a recent negative net profit margin, the firm focuses on generating cash flow, with operating cash flow per share at $11.23. Key executives include CEO John R. Kline, who has been with New Mountain since 2008, and founder Steven Klinsky, who serves as Chairman. NMFC aims to provide stable, income-generating investments while preserving capital, making it a suitable option for investors seeking exposure to the private credit market in a regulated format.
Operator: Thank you. Welcome to the New Mountain Finance Corporation's second quarter 2026 earnings call. Today's conference is being recorded. At this time, I would like to turn the conference over to John Kline, President and CEO. Please go ahead.
John Kline: Thank you, and good morning, everyone. Welcome to New Mountain Finance Corporation's second quarter 2026 earnings call. On the line with me here today are Steve Klinsky, Chairman of NMFC and CEO of New Mountain Capital; Laura Holson, COO, Interim CFO, and Treasurer of NMFC. Steve is going to make some introductory remarks, but before he does, I'd like to ask Laura to make some important statements regarding today's call.
Laura Holson: Thanks, John. Good morning, everyone. Before we get into the presentation, I would like to advise everyone that today's call and webcast are being recorded. Please note that they are the property of New Mountain Finance Corporation and that any unauthorized broadcast in any form is strictly prohibited. Information about the audio replay of this call is available in our August 3rd earnings press release. I would also like to call your attention to the customary safe harbor disclosure in our press release and on Pages 2 and 3 of the slide presentation regarding forward-looking statements. Today's conference call and webcast may include forward-looking statements and projections, and we ask that you refer to our most recent filings with the SEC for important factors that could cause actual results to differ materially from those statements and projections. We do not undertake to update our forward-looking statements or projections unless required to by law. All materials referenced during today's call, including the earnings press release, earnings presentation, and Form 10-Q, are available on our website at www.newmountainfinance.com. At this time, I'd like to turn the call over to Steve Klinsky, NMFC's Chairman, who will give some highlights beginning on Page 6 of the slide presentation. Steve?
Steven Klinsky: Thanks, Laura. It's great to be able to address you all today, both as NMFC's Chairman and as a major fellow shareholder. Adjusted net investment income for the second quarter was $0.26 per share, covering our $0.25 per share dividend that was paid in cash on June 30th. Looking forward to Q3, we would like to announce a $0.25 dividend payable on September 30th to shareholders of record as of September 16th. Consistent with our historical practice, we project that net investment income will continue to cover the quarterly dividend in the upcoming quarters. Our net asset value per share of $10.89 declined $0.03 or just 30 basis points compared to Q1, reflecting stable credit performance across the portfolio. Notably, non-accruals at fair value improved meaningfully from 2.6% last quarter to 1.5%. During the quarter, we repurchased approximately $9 million of stock at approximately $8 per share, or about a 27% discount to book value. Year-to-date, we have …
