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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)    

ý

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2015

OR

o

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from:                             to                              

Commission File Number: 001-33723

Main Street Capital Corporation
(Exact name of registrant as specified in its charter)

Maryland
(State or other jurisdiction of
incorporation or organization)
  41-2230745
(I.R.S. Employer
Identification No.)

1300 Post Oak Boulevard, Suite 800
Houston, TX
(Address of principal executive offices)

 

77056
(Zip Code)

(713) 350-6000
(Registrant's telephone number including area code)

n/a
(Former name, former address and former fiscal year, if changed since last report)

        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 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), 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 (§232.405 of this chapter) 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 or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ý   Accelerated filer o   Non-accelerated filer o   Smaller reporting company 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

        The number of shares outstanding of the issuer's common stock as of May 7, 2015 was 49,845,284.

   



TABLE OF CONTENTS

PART I
FINANCIAL INFORMATION

Item 1.

 

Financial Statements

   

 

Consolidated Balance Sheets—March 31, 2015 (unaudited) and December 31, 2014

  1

 

Consolidated Statements of Operations (unaudited)—Three months ended March 31, 2015 and 2014

  2

 

Consolidated Statements of Changes in Net Assets (unaudited)—Three months ended March 31, 2015 and 2014

  3

 

Consolidated Statements of Cash Flows (unaudited)—Three months ended March 31, 2015 and 2014

  4

 

Consolidated Schedule of Investments (unaudited)—March 31, 2015

  5

 

Consolidated Schedule of Investments—March 31, 2015

  33

 

Notes to Consolidated Financial Statements (unaudited)

  59

Item 2.

 

Management's Discussion and Analysis of Financial Condition and Results of Operations

  96

Item 3.

 

Quantitative and Qualitative Disclosures about Market Risk

  121

Item 4.

 

Controls and Procedures

  122


PART II
OTHER INFORMATION

Item 1.

 

Legal Proceedings

 
123

Item 1A.

 

Risk Factors

  123

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

  123

Item 6.

 

Exhibits

  123

 

Signatures

  125

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Balance Sheets

(in thousands, except shares and per share amounts)

 
  March 31,
2015
  December 31,
2014
 
 
  (Unaudited)
   
 

ASSETS

             

Portfolio investments at fair value:

   
 
   
 
 

Control investments (cost: $349,766 and $342,847 as of March 31, 2015 and December 31, 2014, respectively)

  $ 489,328   $ 469,846  

Affiliate investments (cost: $267,123 and $266,243 as of March 31, 2015 and December 31, 2014, respectively)

    279,986     278,675  

Non-Control/Non-Affiliate investments (cost: $983,942 and $832,312 as of March 31, 2015 and December 31, 2014, respectively)

    968,009     814,809  

Total portfolio investments (cost: $1,600,831 and $1,441,402 as of March 31, 2015 and December 31, 2014, respectively)

    1,737,323     1,563,330  

Marketable securities and idle funds investments (cost: $11,235 and $10,604 as of March 31, 2015 and December 31, 2014, respectively)

    9,948     9,067  

Total investments (cost: $1,612,066 and $1,452,006 as of March 31, 2015 and December 31, 2014, respectively)

    1,747,271     1,572,397  

Cash and cash equivalents

   
22,015
   
60,432
 

Interest receivable and other assets

    25,009     23,273  

Receivable for securities sold

    22,749     23,133  

Deferred financing costs (net of accumulated amortization of $8,449 and $6,462 as of March 31, 2015 and December 31, 2014, respectively)

    13,925     14,550  

Total assets

  $ 1,830,969   $ 1,693,785  

LIABILITIES

             

Credit facility

 
$

164,000
 
$

218,000
 

SBIC debentures (par: $225,000 as of March 31, 2015 and December 31, 2014, par of $75,200 is recorded at a fair value of $73,674 and $72,981 as of March 31, 2015 and December 31, 2014, respectively)

    223,474     222,781  

4.50% Notes

    175,000     175,000  

6.125% Notes

    90,810     90,823  

Payable for securities purchased

    67,270     14,773  

Deferred tax liability, net

    8,546     9,214  

Dividend payable

    8,674     7,663  

Accounts payable and other liabilities

    3,693     10,701  

Interest payable

    5,609     4,848  

Total liabilities

    747,076     753,803  

Commitments and contingencies (Note M)

   
 
   
 
 

NET ASSETS

   
 
   
 
 

Common stock, $0.01 par value per share (150,000,000 shares authorized; 49,564,361 and 45,079,150 shares issued and outstanding as of March 31, 2015 and December 31, 2014, respectively)

   
496
   
451
 

Additional paid-in capital

    986,069     853,606  

Accumulated net investment income, net of cumulative dividends of $317,810 and $293,789 as of March 31, 2015 and December 31, 2014, respectively

    23,135     23,665  

Accumulated net realized gain from investments (accumulated net realized gain from investments of $38,201 before cumulative dividends of $62,897 as of March 31, 2015 and accumulated net realized gain from investments of $40,321 before cumulative dividends of $60,777 as of December 31, 2014)

    (22,576 )   (20,456 )

Net unrealized appreciation, net of income taxes

    96,769     82,716  

Total net assets

    1,083,893     939,982  

Total liabilities and net assets

  $ 1,830,969   $ 1,693,785  

NET ASSET VALUE PER SHARE

  $ 21.87   $ 20.85  

   

The accompanying notes are an integral part of these financial statements

1


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Operations

(in thousands, except per share amounts)

(Unaudited)

 
  Three Months Ended
March 31,
 
 
  2015   2014  

INVESTMENT INCOME:

             

Interest, fee and dividend income:

             

Control investments

  $ 11,335   $ 9,296  

Affiliate investments

    6,049     5,640  

Non-Control/Non-Affiliate investments

    19,421     15,633  

Interest, fee and dividend income

    36,805     30,569  

Interest, fee and dividend income from marketable securities and idle funds

    374     207  

Total investment income

    37,179     30,776  

EXPENSES:

             

Interest

    (7,796 )   (5,286 )

Compensation

    (3,494 )   (2,351 )

General and administrative

    (1,962 )   (1,838 )

Share-based compensation

    (1,263 )   (853 )

Expenses charged to the External Investment Manager

    827     291  

Total expenses

    (13,688 )   (10,037 )

NET INVESTMENT INCOME

    23,491     20,739  

NET REALIZED GAIN (LOSS):

   
 
   
 
 

Non-Control/Non-Affiliate investments

    (2,008 )   1,433  

Marketable securities and idle funds investments

    (112 )   10  

Total net realized gain (loss)

    (2,120 )   1,443  

NET REALIZED INCOME

    21,371     22,182  

NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION):

   
 
   
 
 

Portfolio investments

    14,204     6,857  

Marketable securities and idle funds investments

    251     1,049  

SBIC debentures

    (693 )   (1,189 )

Total net change in unrealized appreciation

    13,762     6,717  

INCOME TAXES:

             

Federal and state income, excise and other taxes

    (376 )   (667 )

Deferred taxes

    667     (998 )

Income tax benefit (provision)

    291     (1,665 )

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS

  $ 35,424   $ 27,234  

NET INVESTMENT INCOME PER SHARE—BASIC AND DILUTED

  $ 0.51   $ 0.52  

NET REALIZED INCOME PER SHARE—BASIC AND DILUTED

  $ 0.46   $ 0.56  

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS PER SHARE—BASIC AND DILUTED

  $ 0.77   $ 0.68  

DIVIDENDS PAID PER SHARE:

             

Regular monthly dividends

  $ 0.510   $ 0.500  

Supplemental dividends

         

Total dividends

  $ 0.510   $ 0.500  

WEIGHTED AVERAGE SHARES OUTSTANDING—BASIC AND DILUTED

    46,080,204     39,898,573  

   

The accompanying notes are an integral part of these financial statements

2


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Changes in Net Assets

(in thousands, except shares)

(Unaudited)

 
  Common Stock    
   
  Accumulated
Net Realized
Gain From
Investments,
Net of Dividends
  Net Unrealized
Appreciation from
Investments,
Net of Income
Taxes
   
 
 
   
  Accumulated
Net Investment
Income, Net
of Dividends
   
 
 
  Number
of Shares
  Par
Value
  Additional
Paid-In
Capital
  Total Net
Asset Value
 

Balances at December 31, 2013

    39,852,604   $ 398   $ 694,981   $ 22,778   $ (26,334 ) $ 100,710   $ 792,533  

Share-based compensation

   
   
   
853
   
   
   
   
853
 

Purchase of vested stock for employee payroll tax withholding

    (1,181 )       (40 )               (40 )

Dividend reinvestment

    93,328     1     3,225                 3,226  

Amortization of directors' deferred compensation

            68                 68  

Issuance of restricted stock

    397                          

Tax benefit related to vesting of restricted shares

            290                 290  

Dividends to stockholders

                (19,757 )           (19,757 )

Net increase resulting from operations

                20,739     1,443     5,052     27,234  

Balances at March 31, 2014

    39,945,148   $ 399   $ 699,377   $ 23,760   $ (24,891 ) $ 105,762   $ 804,407  

Balances at December 31, 2014

    45,079,150   $ 451   $ 853,606   $ 23,665   $ (20,456 ) $ 82,716   $ 939,982  

Public offering of common stock, net of offering costs

   
4,370,000
   
44
   
127,720
   
   
   
   
127,764
 

Share-based compensation

            1,263                 1,263  

Purchase of vested stock for employee payroll tax withholding

    (1,802 )       (53 )               (53 )

Dividend reinvestment

    116,330     1     3,464                 3,465  

Amortization of directors' deferred compensation

            69                 69  

Issuance of restricted stock

    683                          

Dividends to stockholders

                (24,021 )           (24,021 )

Net increase (loss) resulting from operations

                23,491     (2,120 )   14,053     35,424  

Balances at March 31, 2015

    49,564,361   $ 496   $ 986,069   $ 23,135   $ (22,576 ) $ 96,769   $ 1,083,893  

   

The accompanying notes are an integral part of these financial statements

3


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

 
  Three Months Ended
March 31,
 
 
  2015   2014  

CASH FLOWS FROM OPERATING ACTIVITIES

             

Net increase in net assets resulting from operations

  $ 35,424   $ 27,234  

Adjustments to reconcile net increase in net assets resulting from operations to net cash used in operating activities:

             

Investments in portfolio companies

    (256,046 )   (146,896 )

Proceeds from sales and repayments of debt investments in portfolio companies

    143,122     119,069  

Proceeds from sales and return of capital of equity investments in portfolio companies

    5,952     393  

Investments in marketable securities and idle funds investments

    (2,047 )   (2,105 )

Proceeds from sales and repayments of marketable securities and idle funds investments

    1,304     5,207  

Net change in unrealized appreciation

    (13,762 )   (6,717 )

Net realized (gain) loss

    2,120     (1,443 )

Accretion of unearned income

    (2,018 )   (2,611 )

Payment-in-kind interest

    (806 )   (1,655 )

Cumulative dividends

    (376 )   (369 )

Share-based compensation expense

    1,263     853  

Amortization of deferred financing costs

    629     380  

Deferred taxes

    (291 )   998  

Changes in other assets and liabilities:

             

Interest receivable and other assets

    (746 )   (2,557 )

Interest payable

    761     (390 )

Accounts payable and other liabilities

    (7,729 )   (6,258 )

Deferred fees and other

    627     133  

Net cash used in operating activities

    (92,619 )   (16,734 )

CASH FLOWS FROM FINANCING ACTIVITIES

   
 
   
 
 

Proceeds from public offering of common stock, net of offering costs

    127,764      

Dividends paid

    (19,545 )   (16,516 )

Proceeds from issuance of SBIC debentures

        24,800  

Proceeds from credit facility

    156,000     46,000  

Repayments on credit facility

    (210,000 )   (47,000 )

Payment of deferred loan costs and SBIC debenture fees

    (4 )   (849 )

Other

    (13 )   (40 )

Net cash provided by financing activities

    54,202     6,395  

Net decrease in cash and cash equivalents

    (38,417 )   (10,339 )

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

    60,432     34,701  

CASH AND CASH EQUIVALENTS AT END OF PERIOD

  $ 22,015   $ 24,362  

Supplemental cash flow disclosures:

             

Interest paid

  $ 6,406   $ 5,296  

Taxes paid

  $ 1,934   $ 2,657  

Non-cash financing activities:

             

Shares issued pursuant to the DRIP

  $ 3,465   $ 3,226  

   

The accompanying notes are an integral part of these financial statements

4


Table of Contents


MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

March 31, 2015

(in thousands)

(Unaudited)

Portfolio Company(1)
  Business Description
  Type of Investment(2)(3)
  Principal(4)
  Cost(4)
  Fair Value
 
   

Control Investments(5)

 

 

 

 

                   

                           

ASC Interests, LLC

 

Recreational and Educational Shooting Facility

 

 

                   

     

11% Secured Debt (Maturity—July 31, 2018)

    2,925     2,882     2,925  

     

Member Units (1,500 units)(8)

          1,500     2,140  

                  4,382     5,065  

                           

Bond-Coat, Inc.

 

Casing and Tubing Coating Services

 

 

                   

     

12% Secured Debt (Maturity—December 28, 2017)

    11,596     11,498     11,596  

     

Common Stock (57,508 shares)

          6,350     10,210  

                  17,848     21,806  

                           

Café Brazil, LLC

 

Casual Restaurant Group

 

 

                   

     

Member Units (1,233 units)(8)

          1,742     6,980  

                           

California Healthcare Medical Billing, Inc.

 

Outsourced Billing and Revenue Cycle Management

 

 

                   

     

9% Secured Debt (Maturity—October 17, 2016)

    8,612     8,495     8,612  

     

Warrants (466,947 equivalent shares)

          1,193     3,480  

     

Common Stock (207,789 shares)

          1,177     1,460  

                  10,865     13,552  

                           

CBT Nuggets, LLC

 

Produces and Sells IT Training Certification Videos

 

 

                   

     

Member Units (416 units)(8)

          1,300     29,950  

                           

Ceres Management, LLC (Lambs Tire & Automotive)

 

Aftermarket Automotive Services Chain

 

 

                   

     

14% Secured Debt (Maturity—May 31, 2018)

    3,827     3,827     3,827  

     

Class B Member Units (12% cumulative)(8)

          4,170     4,170  

     

Member Units (5,460 units)

          5,273     2,630  

     

9.5% Secured Debt (Lamb's Real Estate Investment I, LLC) (Maturity—October 1, 2025)

    955     955     955  

     

Member Units (Lamb's Real Estate Investment I, LLC) (1,000 units)(8)

          625     1,240  

                  14,850     12,822  

                           

CMS Minerals LLC

 

Oil & Gas Exploration & Production

 

 

                   

     

Preferred Member Units (458,461 units)(8)

          3,725     3,725  

                           

5


Table of Contents


MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

March 31, 2015

(in thousands)

(Unaudited)

Portfolio Company(1)
  Business Description
  Type of Investment(2)(3)
  Principal(4)
  Cost(4)
  Fair Value
 
   

Datacom, LLC

 

Technology and Telecommunications Provider

 

 

                   

     

10.5% Secured Debt (Maturity—May 31, 2019)

    11,205     11,108     11,108  

     

Preferred Member Units (6,453 units)

          6,030     6,030  

                  17,138     17,138  

                           

Garreco, LLC

 

Manufacturer and Supplier of Dental Products

 

 

                   

     

14% Secured Debt (Maturity—January 12, 2018)

    5,400     5,325     5,325  

     

Member Units (1,200 units)(8)

          1,200     1,470  

                  6,525     6,795  

                           

GRT Rubber Technologies LLC

 

Engineered Rubber Product Manufacturer

 

 

                   

     

LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.00%, Secured Debt (Maturity—December 19, 2019)(9)

    16,750     16,591     16,591  

     

Member Units (5,879 units)(8)

          13,065     13,065  

                  29,656     29,656  

                           

Gulf Manufacturing, LLC

 

Manufacturer of Specialty Fabricated Industrial Piping Products

 

 

                   

     

9% PIK Secured Debt (Ashland Capital IX, LLC) (Maturity—June 30, 2017)

    744     744     744  

     

Member Units (438 units)(8)

          2,980     16,540  

                  3,724     17,284  

                           

Harrison Hydra-Gen, Ltd.

 

Manufacturer of Hydraulic Generators

 

 

                   

     

12% Secured Debt (Maturity—June 4, 2015)

    5,010     4,974     5,010  

     

Preferred Stock (8% cumulative)(8)

          1,286     1,286  

     

Common Stock (107,456 shares)

          718     2,020  

                  6,978     8,316  

                           

Hawthorne Customs and Dispatch Services, LLC

 

Facilitator of Import Logistics, Brokerage, and Warehousing

 

 

                   

     

Member Units (500 units)(8)

          589     580  

     

Member Units (Wallisville Real Estate, LLC) (588,210 units)(8)

          1,215     2,220  

                  1,804     2,800  

                           

Hydratec, Inc.

 

Designer and Installer of Micro-Irrigation Systems

 

 

                   

     

Common Stock (7,095 shares)(8)

          7,095     13,720  

                           

6


Table of Contents


MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

March 31, 2015

(in thousands)

(Unaudited)

Portfolio Company(1)
  Business Description
  Type of Investment(2)(3)
  Principal(4)
  Cost(4)
  Fair Value
 
   

IDX Broker, LLC

 

Provider of Marketing and CRM Tools for the Real Estate Industry

 

 

                   

     

LIBOR Plus 6.50% (Floor 1.50%), Current Coupon 8.00%, Secured Debt (Maturity—November 18, 2018)(9)

    125     125     125  

     

12.5% Secured Debt (Maturity—November 18, 2018)

    11,350     11,267     11,350  

     

Member Units (5,400 units)

          5,606     6,027  

                  16,998     17,502  

                           

Impact Telecom, Inc.

 

Telecommunications Services Provider

 

 

                   

     

LIBOR Plus 6.50% (Floor 2.00%), Current Coupon 8.50%, Secured Debt (Maturity—May 31, 2018)(9)

    1,575     1,570     1,570  

     

13% Secured Debt (Maturity—May 31, 2018)

    22,500     15,698     15,698  

     

Warrants (5,516,667 equivalent shares)

          8,000     4,160  

                  25,268     21,428  

                           

Indianapolis Aviation Partners, LLC

 

Fixed Base Operator

 

 

                   

     

15% Secured Debt (Maturity—January 15, 2016)

    3,100     3,100     3,100  

     

Warrants (1,046 equivalent units)

          1,129     2,540  

                  4,229     5,640  

                           

Jensen Jewelers of Idaho, LLC

 

Retail Jewelry Store

 

 

                   

     

Prime Plus 6.75% (Floor 2.00%), Current Coupon 10.00%, Secured Debt (Maturity—November 14, 2016)(9)

    4,505     4,452     4,505  

     

Member Units (627 units)(8)

          811     3,580  

                  5,263     8,085  

                           

Lighting Unlimited, LLC

 

Commercial and Residential Lighting Products and Design Services

 

 

                   

     

8% Secured Debt (Maturity—August 22, 2015)

    1,514     1,514     1,514  

     

Preferred Equity (non-voting)

          434     434  

     

Warrants (71 equivalent units)

          54     40  

     

Member Units (700 units)(8)

          100     420  

                  2,102     2,408  

                           

Marine Shelters Holdings, LLC (LoneStar Marine Shelters)

 

Fabricator of Marine and Industrial Shelters

 

 

                   

     

12% Secured Debt (Maturity—December 28, 2017)

    10,250     10,122     10,122  

     

Preferred Member Units (2,669 units)

          3,750     3,750  

                  13,872     13,872  

                           

7


Table of Contents


MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

March 31, 2015

(in thousands)

(Unaudited)

Portfolio Company(1)
  Business Description
  Type of Investment(2)(3)
  Principal(4)
  Cost(4)
  Fair Value
 
   

Mid-Columbia Lumber Products, LLC

 

Manufacturer of Finger-Jointed Lumber Products

 

 

                   

     

10% Secured Debt (Maturity—December 18, 2017)

    1,750     1,750     1,750  

     

12% Secured Debt (Maturity—December 18, 2017)

    3,900     3,900     3,900  

     

Member Units (2,829 units)(8)

          1,244     7,550  

     

9.5% Secured Debt (Mid—Columbia Real Estate, LLC) (Maturity—May 13, 2025)

    915     915     915  

     

Member Units (Mid—Columbia Real Estate, LLC) (250 units)(8)

          250     550  

                  8,059     14,665  

                           

MSC Adviser I, LLC(16)

 

Third Party Investment Advisory Services

 

 

                   

     

Member Units (Fully diluted 100.0%)(8)

              24,840  

                           

Mystic Logistics, Inc

 

Logistics and Distribution Services Provider for Large Volume Mailers

 

 

                   

     

12% Secured Debt (Maturity—August 15, 2019)

    10,000     9,799     10,000  

     

Common Stock (5,873 shares)

          2,720     6,160  

                  12,519     16,160  

                           

NAPCO Precast, LLC

 

Precast Concrete Manufacturing

 

 

                   

     

Prime Plus 2.00% (Floor 7.00%), Current Coupon 9.00%, Secured Debt (Maturity—September 1, 2015)(9)

    625     619     625  

     

Prime Plus 2.00% (Floor 7.00%), Current Coupon 9.00%, Secured Debt (Maturity—February 1, 2016)(9)

    2,923     2,917     2,923  

     

18% Secured Debt (Maturity—February 1, 2016)

    4,468     4,446     4,468  

     

Member Units (2,955 units)(8)

          2,975     7,820  

                  10,957     15,836  

                           

NRI Clinical Research, LLC

 

Clinical Research Service Provider

 

 

                   

     

14% Secured Debt (Maturity—September 8, 2017)

    4,771     4,676     4,676  

     

Warrants (251,723 equivalent units)

          252     160  

     

Member Units (671,233 units)

          671     722  

                  5,599     5,558  

                           

NRP Jones, LLC

 

Manufacturer of Hoses, Fittings and Assemblies

 

 

                   

     

12% Secured Debt (Maturity—December 22, 2016)

    13,400     12,933     12,933  

     

Warrants (14,331 equivalent units)

          817     810  

     

Member Units (50,877 units)(8)

          2,900     2,730  

                  16,650     16,473  

                           

8


Table of Contents


MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

March 31, 2015

(in thousands)

(Unaudited)

Portfolio Company(1)
  Business Description
  Type of Investment(2)(3)
  Principal(4)
  Cost(4)
  Fair Value
 
   

OMi Holdings, Inc.

 

Manufacturer of Overhead Cranes

 

 

                   

     

Common Stock (1,500 shares)(8)

          1,080     13,420  

                           

Pegasus Research Group, LLC (Televerde)

 

Provider of Telemarketing and Data Services

 

 

                   

     

Member Units (460 units)(8)

          1,290     6,490  

                           

PPL RVs, Inc.

 

Recreational Vehicle Dealer

 

 

                   

     

11.1% Secured Debt (Maturity—June 10, 2015)

    9,960     9,954     9,960  

     

Common Stock (1,962 shares)

          2,150     8,430  

                  12,104     18,390  

                           

Principle Environmental, LLC

 

Noise Abatement Service Provider

 

 

                   

     

12% Secured Debt (Maturity—April 30, 2017)

    4,060     3,866     4,060  

     

12% Current / 2% PIK Secured Debt (Maturity—April 30, 2017)

    3,261     3,247     3,261  

     

Preferred Member Units (19,631 units)

          4,663     9,560  

     

Warrants (1,036 equivalent units)

          1,200     530  

                  12,976     17,411  

                           

River Aggregates, LLC

 

Processor of Construction Aggregates

 

 

                   

     

Zero Coupon Secured Debt (Maturity—June 30, 2018)

    750     509     509  

     

12% Secured Debt (Maturity—June 30, 2018)

    500     500     500  

     

Member Units (1,150 units)(8)

          1,150     3,190  

     

Member Units (RA Properties, LLC) (1,500 units)

          369     430  

                  2,528     4,629  

                           

SoftTouch Medical Holdings LLC

 

Home Provider of Pediatric Durable Medical Equipment

 

 

                   

     

LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.00%, Secured Debt (Maturity—October 31, 2019)(9)

    8,500     8,421     8,421  

     

Member Units (4,526 units)

          5,015     5,015  

                  13,436     13,436  

                           

Southern RV, LLC

 

Recreational Vehicle Dealer

 

 

                   

     

13% Secured Debt (Maturity—August 8, 2018)

    11,400     11,273     11,400  

     

Member Units (1,680 units)(8)

          1,680     5,810  

     

13% Secured Debt (Southern RV Real Estate, LLC) (Maturity—August 8, 2018)

    3,250     3,214     3,250  

     

Member Units (Southern RV Real Estate, LLC) (480 units)

          480     540  

                  16,647     21,000  

                           

9


Table of Contents


MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

March 31, 2015

(in thousands)

(Unaudited)

Portfolio Company(1)
  Business Description
  Type of Investment(2)(3)
  Principal(4)
  Cost(4)
  Fair Value
 
   

The MPI Group, LLC

 

Manufacturer of Custom Hollow Metal Doors, Frames and Accessories

 

 

                   

     

9% Secured Debt (Maturity—October 2, 2018)

    2,724     2,724     2,724  

     

Series A Preferred Units (2,500 units; 10% Cumulative)

          2,500     980  

     

Warrants (1,424 equivalent units)

          1,096      

     

Member Units (MPI Real Estate Holdings, LLC) (100% Fully diluted)(8)

          2,300     2,230  

                  8,620     5,934  

                           

Travis Acquisition LLC

 

Manufacturer of Aluminum Trailers

 

 

                   

     

12% Secured Debt (Maturity—August 30, 2018)

    4,578     4,510     4,578  

     

Member Units (7,282 units)

          7,100     13,650  

                  11,610     18,228  

                           

Uvalco Supply, LLC

 

Farm and Ranch Supply Store

 

 

                   

     

9% Secured Debt (Maturity—January 1, 2019)

    1,659     1,659     1,659  

     

Member Units (1,006 units)(8)

          1,113     3,350  

                  2,772     5,009  

                           

Vision Interests, Inc.

 

Manufacturer / Installer of Commercial Signage

 

 

                   

     

13% Secured Debt (Maturity—December 23, 2016)

    3,204     3,174     3,174  

     

Series A Preferred Stock (3,000,000 shares)

          3,000     3,550  

     

Common Stock (1,126,242 shares)

          3,706     210  

                  9,880     6,934  

                           

Ziegler's NYPD, LLC

 

Casual Restaurant Group

 

 

                   

     

Prime Plus 2.00% (Floor 7.00%), Current Coupon 9.00%, Secured Debt (Maturity—October 1, 2018)(9)

    1,500     1,491     1,491  

     

9% Current / 9% PIK Secured Debt (Maturity—October 1, 2018)

    5,509     5,509     4,880  

     

Warrants (587 equivalent units)

          600      

     

Member units (480 units)

          75      

                  7,675     6,371  

Subtotal Control Investments (28.0% of total investments at fair value)

    349,766     489,328  

10


Table of Contents


MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

March 31, 2015

(in thousands)

(Unaudited)

Portfolio Company(1)
  Business Description
  Type of Investment(2)(3)
  Principal(4)
  Cost(4)
  Fair Value
 
   

Affiliate Investments(6)

 

 

 

 

                   

                           

AFG Capital Group, LLC

 

Provider of Rent-to-Own Financing Solutions and Services

                       

     

11% Secured Debt (Maturity—November 7, 2019)

    11,760     11,376     11,376  

     

Warrants (42 equivalent units)

          259     259  

     

Member Units (186 units)

          1,200     1,200  

                  12,835     12,835  

                           

Boss Industries, LLC

 

Manufacturer and Distributor of Air Compressors, Auxiliary Power Units, Gas Booster Systems and Vapor Recovery Systems

                       

     

Preferred Member Units (2,242 units)(8)

          2,000     2,000  

                           

Bridge Capital Solutions Corporation

 

Financial Services and Cash Flow Solutions Provider

                       

     

13% Secured Debt (Maturity—April 18, 2017)

    6,000     5,852     5,852  

     

Warrants (19 equivalent shares)

          200     860  

                  6,052     6,712  

                           

Brightwood Capital Fund III, LP(12)(13)

 

Investment Partnership

                       

     

LP Interests (Brightwood Capital Fund III, LP) (Fully diluted 2.3%)(8)

          4,524     4,524  

                           

CAI Software LLC

 

Provider of Specialized Enterprise Resource Planning Software

                       

     

12% Secured Debt (Maturity—October 10, 2019)

    5,400     5,350     5,350  

     

Member Units (65,356 units)

          654     654  

                  6,004     6,004  

                           

Condit Exhibits, LLC

 

Tradeshow Exhibits / Custom Displays Provider

                       

     

Member Units (3,936 units)(8)

          100     610  

                           

Congruent Credit Opportunities Funds(12)(13)

 

Investment Partnership

                       

     

LP Interests (Congruent Credit Opportunities Fund II, LP) (Fully diluted 19.8%)(8)

          17,169     16,879  

     

LP Interests (Congruent Credit Opportunities Fund III, LP) (Fully diluted 17.4%)(8)

          9,450     9,450  

                  26,619     26,329  

                           

11


Table of Contents


MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

March 31, 2015

(in thousands)

(Unaudited)

Portfolio Company(1)
  Business Description
  Type of Investment(2)(3)
  Principal(4)
  Cost(4)
  Fair Value
 
   

Daseke, Inc.

 

Specialty Transportation Provider

                       

     

12% Current / 2.5% PIK Secured Debt (Maturity—July 31, 2018)

    20,853     20,548     20,853  

     

Common Stock (19,467 shares)

          5,213     17,460  

                  25,761     38,313  

                           

Dos Rios Partners(12)(13)

 

Investment Partnership

                       

     

LP Interests (Dos Rios Partners, LP) (Fully diluted 20.2%)(8)

          2,325     2,325  

     

LP Interests (Dos Rios Partners—A, LP) (Fully diluted 6.4%)(8)

          738     738  

                  3,063     3,063  

                           

East Teak Fine Hardwoods, Inc.

 

Distributor of Hardwood Products

                       

     

Common Stock (5,000 shares)(8)

          480     860  

                           

East West Copolymer & Rubber, LLC

 

Manufacturer of Synthetic Rubbers

                       

     

12% Secured Debt (Maturity—October 17, 2019)

    9,600     9,442     9,442  

     

Warrants (1,823,278 equivalent units)

          50     50  

                  9,492     9,492  

                           

Freeport Financial SBIC Fund LP(12)(13)

 

Investment Partnership

                       

     

LP Interests (Fully diluted 9.9%)(8)

          5,140     5,140  

                           

Gault Financial, LLC (RMB Capital, LLC)

 

Purchases and Manages Liquidation of Distressed Assets

                       

     

10% Secured Debt (Maturity—November 21, 2016)

    13,046     12,784     10,818  

     

Warrants (29,025 equivalent units)

          400      

                  13,184     10,818  

                           

Glowpoint, Inc.

 

Provider of Cloud Managed Video Collaboration Services

                       

     

8% Secured Debt (Maturity—October 18, 2018)

    400     396     396  

     

12% Secured Debt (Maturity—October 18, 2018)

    9,000     8,914     8,914  

     

Common Stock (7,711,517 shares)

          3,958     6,830  

                  13,268     16,140  

                           

Guerdon Modular Holdings, Inc.

 

Multi-Family and Commercial Modular Construction Company

                       

     

11% Secured Debt (Maturity—August 13, 2019)

    11,200     11,051     11,051  

     

Common Stock (170,577 shares)

          2,400     2,400  

                  13,451     13,451  

                           

12


Table of Contents


MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

March 31, 2015

(in thousands)

(Unaudited)

Portfolio Company(1)
  Business Description
  Type of Investment(2)(3)
  Principal(4)
  Cost(4)
  Fair Value
 
   

Houston Plating and Coatings, LLC

 

Provider of Plating and Industrial Coating Services

                       

     

Member Units (248,082 units)(8)

          996     11,470  

                           

Indianhead Pipeline Services, LLC

 

Provider of Pipeline Support Services

                       

     

12% Secured Debt (Maturity—February 6, 2017)

    6,675     6,432     6,432  

     

Preferred Member Units (28,905 units; 8% cumulative)(8)

          2,013     2,013  

     

Warrants (38,193 equivalent units)

          459      

     

Member Units (14,732 units)

          1      

                  8,905     8,445  

                           

irth Solutions, LLC

 

Provider of Damage Prevention Information Technology Services

                       

     

Member Units (128 units)(8)

          624     4,010  

                           

KBK Industries, LLC

 

Specialty Manufacturer of Oilfield and Industrial Products

                       

     

12.5% Secured Debt (Maturity—September 28, 2017)

    7,950     7,904     7,950  

     

Member Units (250 units)(8)

          341     4,880  

                  8,245     12,830  

                           

L.F. Manufacturing Holdings, LLC(10)

 

Manufacturer of Fiberglass Products

                       

     

Member Units (2,000,000 units)(8)

          2,019     2,374  

                           

MPS Denver, LLC

 

Specialty Card Printing

                       

     

Member Units (13,800 units)

          1,130     1,130  

                           

OnAsset Intelligence, Inc.

 

Provider of Transportation Monitoring / Tracking Products and Services

                       

     

12% PIK Secured Debt (Maturity—May 31, 2015)

    3,658     3,658     3,658  

     

Preferred Stock (912 shares; 7% cumulative)(8)

          1,981     2,734  

     

Warrants (5,333 equivalent shares)

          1,919      

                  7,558     6,392  

                           

OPI International Ltd.(13)

 

Provider of Man Camp and Industrial Storage Services

                       

     

Common Stock (20,766,317 shares)

          1,371     3,200  

                           

PCI Holding Company, Inc.

 

Manufacturer of Industrial Gas Generating Systems

                       

     

Preferred Stock (1,500,000 shares; 20% cumulative)(8)

          2,374     4,970  

                           

13


Table of Contents


MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

March 31, 2015

(in thousands)

(Unaudited)

Portfolio Company(1)
  Business Description
  Type of Investment(2)(3)
  Principal(4)
  Cost(4)
  Fair Value
 
   

Quality Lease and Rental Holdings, LLC

 

Provider of Rigsite Accommodation Unit Rentals and Related Services

                       

     

8% Secured Debt (Maturity—October 1, 2014)(14)(18)

    157     157     157  

     

8% Secured Debt (Maturity—June 15, 2015)(14)(18)

    150     150     150  

     

12% Secured Debt (Maturity—January 8, 2018)(14)(18)

    36,577     36,073     11,000  

     

Preferred Member Units (Rocaciea, LLC) (250 units)

          2,500      

                  38,880     11,307  

                           

Radial Drilling Services Inc.

 

Oil and Gas Technology Provider

                       

     

12% Secured Debt (Maturity—November 22, 2016)

    4,200     3,838     2,870  

     

Warrants (316 equivalent shares)

          758      

                  4,596     2,870  

                           

Samba Holdings, Inc.

 

Provider of Intelligent Driver Record Monitoring Software and Services

                       

     

12.5% Secured Debt (Maturity—November 17, 2016)

    26,304     26,102     26,304  

     

Common Stock (170,963 shares)

          2,087     8,130  

                  28,189     34,434  

                           

SYNEO, LLC

 

Manufacturer of Automation Machines, Specialty Cutting Tools and Punches

                       

     

12% Secured Debt (Maturity—July 13, 2016)

    2,700     2,678     2,678  

     

10% Secured Debt (Leadrock Properties, LLC) (Maturity—May 4, 2026)

    1,440     1,415     1,415  

                  4,093     4,093  

                           

Tin Roof Acquisition Company

 

Casual Restaurant Group

                       

     

12% Secured Debt (Maturity—November 30, 2018)

    14,100     13,873     13,873  

     

Class C Preferred Stock (Fully diluted 10.0%; 10% cumulative)(8)

          2,297     2,297  

                  16,170     16,170  

Subtotal Affiliate Investments (16.0% of total investments at fair value)

          267,123     279,986  

14


Table of Contents


MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

March 31, 2015

(in thousands)

(Unaudited)

Portfolio Company(1)
  Business Description
  Type of Investment(2)(3)
  Principal(4)
  Cost(4)
  Fair Value
 
   

Non-Control/Non-Affiliate Investments(7)

             

                           

Allflex Holdings III Inc.(11)

 

Manufacturer of Livestock Identification Products

 

 

                   

     

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.00%, Secured Debt (Maturity—July 19, 2021)(9)

    10,150     10,079     10,188  

                           

AM General LLC(11)

 

Specialty Vehicle Manufacturer

 

 

                   

     

LIBOR Plus 9.00% (Floor 1.25%), Current Coupon 10.25%, Secured Debt (Maturity—March 22, 2018)(9)

    2,256     2,211     2,087  

                           

AM3 Pinnacle Corporation(10)

 

Provider of Comprehensive Internet, TV and Voice Services for Multi-Dwelling Unit Properties

 

 

                   

     

10% Secured Debt (Maturity—October 22, 2018)

    21,002     20,870     20,870  

     

Common Stock (60,240 shares)

          2,000      

                  22,870     20,870  

                           

AmeriTech College, LLC

 

For-Profit Nursing and Healthcare College

 

 

                   

     

10% Secured Debt (Maturity—November 30, 2019)

    685     685     685  

     

10% Secured Debt (Maturity—January 31, 2020)

    4,235     4,235     3,700  

                  4,920     4,385  

                           

AMF Bowling Centers, Inc.(11)

 

Bowling Alley Operator

 

 

                   

     

LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.25%, Secured Debt (Maturity—September 18, 2021)(9)

    7,971     7,855     7,938  

                           

Anchor Hocking, LLC(11)

 

Household Products Manufacturer

 

 

                   

     

LIBOR Plus 6.50% (Floor 1.25%), Current Coupon 7.75% / 1.75% PIK, Current Coupon Plus PIK 9.50%, Secured Debt (Maturity—May 21, 2020)(9)

    10,964     10,892     5,852  

                           

AP Gaming I, LLC(10)

 

Developer, Manufacturer, and Operator of Gaming Machines

 

 

                   

     

LIBOR Plus 8.25% (Floor 1.00%), Current Coupon 9.25%, Secured Debt (Maturity—December 20, 2020)(9)

    6,913     6,733     6,910  

                           

15


Table of Contents


MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

March 31, 2015

(in thousands)

(Unaudited)

Portfolio Company(1)
  Business Description
  Type of Investment(2)(3)
  Principal(4)
  Cost(4)
  Fair Value
 
   

Applied Products, Inc.(10)

 

Adhesives Distributor

 

 

                   

     

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—September 30, 2019)(9)

    6,161     6,098     6,098  

                           

Aptean, Inc.(11)

 

Enterprise Application Software Provider

 

 

                   

     

LIBOR Plus 4.25% (Floor 1.00%), Current Coupon 5.25%, Secured Debt (Maturity—February 26, 2020)(9)

    7,688     7,619     7,553  

                           

Arcus Hunting LLC(10)

 

Deer Lures, Attractants and Scent Elimination Products

 

 

                   

     

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.00%, Secured Debt (Maturity—November 13, 2019)(9)

    9,094     8,964     8,964  

                           

Artel, LLC(11)

 

Land-Based and Commercial Satellite Provider

 

 

                   

     

LIBOR Plus 6.00% (Floor 1.25%), Current Coupon 7.25%, Secured Debt (Maturity—November 27, 2017)(9)

    7,988     7,844     7,668  

                           

ATS Workholding, Inc.(10)

 

Manufacturer of Machine Cutting Tools and Accessories

 

 

                   

     

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.00%, Secured Debt (Maturity—March 10, 2019)(9)

    6,563     6,513     6,513  

                           

Beers Enterprises, Inc.(10)

 

Provider of Broadcast Video Transport Services

 

 

                   

     

Prime Plus 7.50% (Floor 1.00%), Current Coupon 8.50%, Secured Debt (Maturity—March 19, 2019)(9)

    6,484     6,434     6,484  

                           

Berry Aviation, Inc.(10)

 

Charter Airline Services

 

 

                   

     

12.00% Current / 1.75% PIK Secured Debt (Maturity—January 20, 2020)

    6,000     5,942     5,942  

     

Common Stock (553 shares)

          400     400  

                  6,342     6,342  

                           

Bioventus LLC(10)

 

Production of Orthopedic Healing Products

 

 

                   

     

LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 11.00%, Secured Debt (Maturity—April 10, 2020)(9)

    5,000     4,907     5,000  

                           

Blackbrush Oil and Gas LP(11)

 

Oil & Gas Exploration

 

 

                   

     

LIBOR Plus 6.50%, (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—July 30, 2021)(9)

    4,000     3,972     3,250  

                           

16


Table of Contents


MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

March 31, 2015

(in thousands)

(Unaudited)

Portfolio Company(1)
  Business Description
  Type of Investment(2)(3)
  Principal(4)
  Cost(4)
  Fair Value
 
   

Blackhawk Specialty Tools LLC(11)

 

Oilfield Equipment & Services

 

 

                   

     

LIBOR Plus 5.25% (Floor 1.25%), Current Coupon 6.50%, Secured Debt (Maturity—August 1, 2019)(9)

    6,141     6,109     5,972  

                           

Blue Bird Body Company(11)

 

School Bus Manufacturer

 

 

                   

     

LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 6.50%, Secured Debt (Maturity—June 26, 2020)(9)

    11,356     11,204     11,370  

                           

Bluestem Brands, Inc.(11)

 

Multi-Channel Retailer of General Merchandise

 

 

                   

     

LIBOR Plus 7.50% (Floor 1.00%), Current Coupon 8.50%, Secured Debt (Maturity—November 6, 2020)(9)

    7,500     7,229     7,523  

                           

Brainworks Software, LLC(10)

 

Advertising Sales and Production and Newspaper Circulation Software

 

 

                   

     

LIBOR Plus 8.25% (Floor 1.00%), Current Coupon 9.25%, Secured Debt (Maturity—July 22, 2019)(9)

    6,447     6,370     6,370  

                           

Brasa Holdings Inc.(11)

 

Upscale Full Service Restaurants

 

 

                   

     

LIBOR Plus 9.50% (Floor 1.50%), Current Coupon 11.00%, Secured Debt (Maturity—January 20, 2020)(9)

    2,143     2,130     2,148  

                           

Brundage-Bone Concrete Pumping, Inc.(11)

 

Construction Services Provider

 

 

                   

     

10.375% Secured Debt (Maturity—September 1, 2021)

    2,500     2,500     2,588  

                           

Calloway Laboratories, Inc.(10)

 

Health Care Testing Facilities

 

 

                   

     

12% PIK Secured Debt (Maturity—September 30, 2015)(14)

    7,287     7,238     2,948  

     

Warrants (125,000 equivalent shares)

          17      

                  7,255     2,948  

                           

Cengage Learning Acquisitions, Inc.(11)

 

Provider of Educational Print and Digital Services

 

 

                   

     

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—March 31, 2020)(9)

    9,965     9,878     10,019  

                           

CGSC of Delaware Holdings Corp.(11)(13)

 

Insurance Brokerage Firm

 

 

                   

     

LIBOR Plus 7.00% (Floor 1.25%), Current Coupon 8.25%, Secured Debt (Maturity—October 16, 2020)(9)

    2,000     1,976     1,740  

                           

17


Table of Contents


MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

March 31, 2015

(in thousands)

(Unaudited)

Portfolio Company(1)
  Business Description
  Type of Investment(2)(3)
  Principal(4)
  Cost(4)
  Fair Value
 
   

Charlotte Russe, Inc(11)

 

Fast-Fashion Retailer to Young Women

 

 

                   

     

LIBOR Plus 5.50% (Floor 1.25%), Current Coupon 6.75%, Secured Debt (Maturity—May 22, 2019)(9)

    8,925     8,803     8,742  

                           

CHI Overhead Doors, Inc.(11)

 

Manufacturer of Overhead Garage Doors

 

 

                   

     

LIBOR Plus 9.50% (Floor 1.50%), Current Coupon 11.00%, Secured Debt (Maturity—September 18, 2019)(9)

    2,500     2,469     2,503  

                           

CJ Holding Co.(11)

 

Oil & Gas Equipment & Services

 

 

                   

     

LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 6.50%, Secured Debt (Maturity—March 24, 2020)(9)

    2,000