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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 September 30, 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, 8th floor
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 November 6, 2015 was 50,130,534.

   


Table of Contents


TABLE OF CONTENTS

PART I
FINANCIAL INFORMATION

Item 1.

 

Consolidated Financial Statements

   

 

Consolidated Balance Sheets—September 30, 2015 (unaudited) and December 31, 2014

  1

 

Consolidated Statements of Operations (unaudited)—Three and nine months ended September 30, 2015 and 2014

  2

 

Consolidated Statements of Changes in Net Assets (unaudited)—Nine months ended September 30, 2015 and 2014

  3

 

Consolidated Statements of Cash Flows (unaudited)—Nine months ended September 30, 2015 and 2014

  4

 

Consolidated Schedule of Investments (unaudited)—September 30, 2015

  5

 

Consolidated Schedule of Investments—December 31, 2014

  34

 

Notes to Consolidated Financial Statements (unaudited)

  59

 

Consolidated Financial Statement Schedule

   

 

Consolidated Schedule of Investments in and Advances to Affiliates for the Nine Months Ended September 30, 2015

  101

Item 2.

 

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

  105

Item 3.

 

Quantitative and Qualitative Disclosures about Market Risk

  131

Item 4.

 

Controls and Procedures

  132


PART II
OTHER INFORMATION

Item 1.

 

Legal Proceedings

  133

Item 1A.

 

Risk Factors

  133

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

  133

Item 5.

 

Other Information

  133

Item 6.

 

Exhibits

  135

 

Signatures

  136

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Balance Sheets

(in thousands, except shares and per share amounts)

 
  September 30,
2015
  December 31,
2014
 
 
  (Unaudited)
   
 

ASSETS

             

Portfolio investments at fair value:

   
 
   
 
 

Control investments (cost: $402,302 and $342,847 as of September 30, 2015 and December 31, 2014, respectively)

  $ 568,025   $ 469,846  

Affiliate investments (cost: $312,016 and $266,243 as of September 30, 2015 and December 31, 2014, respectively)

    322,497     278,675  

Non-Control/Non-Affiliate investments (cost: $1,008,980 and $832,312 as of September 30, 2015 and December 31, 2014, respectively)

    976,912     814,809  

Total portfolio investments (cost: $1,723,298 and $1,441,402 as of September 30, 2015 and December 31, 2014, respectively)

    1,867,434     1,563,330  

Marketable securities and idle funds investments (cost: $6,641 and $10,604 as of September 30, 2015 and December 31, 2014, respectively)

    4,583     9,067  

Total investments (cost: $1,729,939 and $1,452,006 as of September 30, 2015 and December 31, 2014, respectively)

    1,872,017     1,572,397  

Cash and cash equivalents

   
35,295
   
60,432
 

Interest receivable and other assets

    27,031     23,273  

Receivable for securities sold

    8,245     23,133  

Deferred financing costs (net of accumulated amortization of $8,324 and $6,462 as of September 30, 2015 and December 31, 2014, respectively)

    12,779     14,550  

Total assets

  $ 1,955,367   $ 1,693,785  

LIABILITIES

             

Credit facility

 
$

346,000
 
$

218,000
 

SBIC debentures (par: $225,000 as of September 30, 2015 and December 31, 2014, par of $75,200 is recorded at a fair value of $73,804 and $72,981 as of September 30, 2015 and December 31, 2014, respectively)

    223,604     222,781  

4.50% Notes

    175,000     175,000  

6.125% Notes

    90,740     90,823  

Payable for securities purchased

    5,453     14,773  

Deferred tax liability, net

    663     9,214  

Dividend payable

    9,014     7,663  

Accounts payable and other liabilities

    8,917     10,701  

Interest payable

    4,995     4,848  

Total liabilities

    864,386     753,803  

Commitments and contingencies (Note M)

   
 
   
 
 

NET ASSETS

   
 
   
 
 

Common stock, $0.01 par value per share (150,000,000 shares authorized; 50,079,178 and 45,079,150 shares issued and outstanding as of September 30, 2015 and December 31, 2014, respectively)

   
500
   
451
 

Additional paid-in capital

    998,123     853,606  

Accumulated net investment income, net of cumulative dividends of $382,083 and $293,789 as of September 30, 2015 and December 31, 2014, respectively

    13,927     23,665  

Accumulated net realized gain from investments (accumulated net realized gain from investments of $31,284 before cumulative dividends of $62,945 as of September 30, 2015 and accumulated net realized gain from investments of $40,321 before cumulative dividends of $60,777 as of December 31, 2014)

    (31,661 )   (20,456 )

Net unrealized appreciation, net of income taxes

    110,092     82,716  

Total net assets

    1,090,981     939,982  

Total liabilities and net assets

  $ 1,955,367   $ 1,693,785  

NET ASSET VALUE PER SHARE

  $ 21.79   $ 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 shares and per share amounts)

(Unaudited)

 
  Three Months Ended
September 30,
  Nine Months Ended
September 30,
 
 
  2015   2014   2015   2014  

INVESTMENT INCOME:

                         

Interest, fee and dividend income:

                         

Control investments

  $ 13,437   $ 9,705   $ 36,264   $ 29,547  

Affiliate investments

    6,852     6,687     19,862     18,412  

Non-Control/Non-Affiliate investments

    22,090     19,839     64,124     53,488  

Interest, fee and dividend income

    42,379     36,231     120,250     101,447  

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

    229     120     846     557  

Total investment income

    42,608     36,351     121,096     102,004  

EXPENSES:

                         

Interest

    (8,302 )   (5,954 )   (23,755 )   (16,713 )

Compensation

    (3,727 )   (3,047 )   (11,055 )   (9,115 )

General and administrative

    (2,212 )   (1,871 )   (6,271 )   (5,279 )

Share-based compensation

    (1,651 )   (1,208 )   (4,592 )   (3,034 )

Expenses charged to the External Investment Manager

    1,145     616     3,133     1,343  

Total expenses

    (14,747 )   (11,464 )   (42,540 )   (32,798 )

NET INVESTMENT INCOME

    27,861     24,887     78,556     69,206  

NET REALIZED GAIN (LOSS):

   
 
   
 
   
 
   
 
 

Control investments

            3,324      

Affiliate investments

    5,964     14,737     5,827     8,159  

Non-Control/Non-Affiliate investments

    (6,195 )   962     (16,836 )   2,634  

Marketable securities and idle funds investments

    (1,112 )   11     (1,352 )   (4 )

Total net realized gain (loss)

    (1,343 )   15,710     (9,037 )   10,789  

NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION):

                         

Portfolio investments

    (8,389 )   (6,891 )   21,716     17,018  

Marketable securities and idle funds investments

    (648 )   (426 )   (521 )   920  

SBIC debentures

    (50 )   (8,749 )   (823 )   (10,778 )

Total net change in unrealized appreciation (depreciation)            

    (9,087 )   (16,066 )   20,372     7,160  

INCOME TAXES:

                         

Federal and state income, excise and other taxes

    495     (960 )   (1,547 )   (1,758 )

Deferred taxes

    2,742     (2,002 )   8,551     (6,643 )

Income tax benefit (provision)

    3,237     (2,962 )   7,004     (8,401 )

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS

  $ 20,668   $ 21,569   $ 96,895   $ 78,754  

NET INVESTMENT INCOME PER SHARE—BASIC AND DILUTED

  $ 0.56   $ 0.55   $ 1.61   $ 1.61  

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

  $ 0.41   $ 0.48   $ 1.99   $ 1.83  

DIVIDENDS PAID PER SHARE:

                         

Regular monthly dividends

  $ 0.525   $ 0.495   $ 1.560   $ 1.485  

Supplemental dividends

            0.275     0.275  

Total dividends

  $ 0.525   $ 0.495   $ 1.835   $ 1.760  

WEIGHTED AVERAGE SHARES OUTSTANDING—BASIC AND DILUTED

    50,036,776     44,910,756     48,681,260     43,027,105  

   

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  

Public offering of common stock, net of offering costs

   
4,600,000
   
46
   
139,651
   
   
   
   
139,697
 

Share-based compensation

            3,034                 3,034  

Purchase of vested stock for employee payroll tax withholding

    (46,507 )       (1,481 )               (1,481 )

Dividend reinvestment

    333,657     3     10,842                 10,845  

Amortization of directors' deferred compensation

            229                 229  

Issuance of restricted stock

    241,578     2     (2 )                

Tax benefit related to vesting of restricted shares

            542                 542  

Forfeited shares of terminated employees

    (36,138 )                        

Dividends to stockholders

                (63,098 )   (13,549 )       (76,647 )

Net increase (loss) resulting from operations

                69,206     10,789     (1,241 )   78,754  

Balances at September 30, 2014

    44,945,194   $ 449   $ 847,796   $ 28,886   $ (29,094 ) $ 99,469   $ 947,506  

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

            4,592                 4,592  

Purchase of vested stock for employee payroll tax withholding

    (54,840 )   (1 )   (1,739 )               (1,740 )

Dividend reinvestment

    444,957     4     13,654                 13,658  

Amortization of directors' deferred compensation

            292                 292  

Issuance of restricted stock

    240,074     2     (2 )                

Forfeited shares of terminated employees

    (163 )                        

Dividends to stockholders

                (88,294 )   (2,168 )       (90,462 )

Net increase (loss) resulting from operations

                78,556     (9,037 )   27,376     96,895  

Balances at September 30, 2015

    50,079,178   $ 500   $ 998,123   $ 13,927   $ (31,661 ) $ 110,092   $ 1,090,981  

   

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)

 
  Nine Months Ended
September 30,
 
 
  2015   2014  

CASH FLOWS FROM OPERATING ACTIVITIES

             

Net increase in net assets resulting from operations

  $ 96,895   $ 78,754  

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

             

Investments in portfolio companies

    (727,099 )   (637,843 )

Proceeds from sales and repayments of debt investments in portfolio companies

    421,933     396,557  

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

    29,289     26,117  

Investments in marketable securities and idle funds investments

    (4,483 )   (17,704 )

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

    7,094     22,747  

Net change in net unrealized appreciation

    (20,372 )   (7,160 )

Net realized (gain) loss

    9,037     (10,789 )

Accretion of unearned income

    (6,474 )   (8,167 )

Payment-in-kind interest

    (2,485 )   (3,947 )

Cumulative dividends

    (1,242 )   (1,422 )

Share-based compensation expense

    4,592     3,034  

Amortization of deferred financing costs

    1,899     1,184  

Deferred taxes

    (8,551 )   6,643  

Changes in other assets and liabilities:

             

Interest receivable and other assets

    (3,493 )   (4,480 )

Interest payable

    147     (171 )

Accounts payable and other liabilities

    (1,618 )   (1,584 )

Deferred fees and other

    1,438     1,457  

Net cash used in operating activities

    (203,493 )   (156,774 )

CASH FLOWS FROM FINANCING ACTIVITIES

   
 
   
 
 

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

    127,764     139,697  

Dividends paid

    (75,453 )   (64,739 )

Proceeds from issuance of SBIC debentures

        24,800  

Proceeds from credit facility

    473,000     353,000  

Repayments on credit facility

    (345,000 )   (303,000 )

Payment of deferred loan costs and SBIC debenture fees

    (132 )   (1,880 )

Purchase of vested stock for employee payroll tax withholding

    (1,740 )   (1,481 )

Other

    (83 )    

Net cash provided by financing activities

    178,356     146,397  

Net decrease in cash and cash equivalents

    (25,137 )   (10,377 )

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

    60,432     34,701  

CASH AND CASH EQUIVALENTS AT END OF PERIOD

  $ 35,295   $ 24,324  

Supplemental cash flow disclosures:

             

Interest paid

  $ 21,708   $ 15,701  

Taxes paid

  $ 2,504   $ 3,656  

Non-cash financing activities:

             

Shares issued pursuant to the DRIP

  $ 13,658   $ 10,845  

   

The accompanying notes are an integral part of these financial statements

4


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments

September 30, 2015

(in thousands)

(Unaudited)

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

Control Investments(5)

 

 

 

 

                   

                           

Access Media Holdings, LLC(10)

 

Private Cable Operator

 

 

                   

     

5.00% Current / 5.00% PIK Secured Debt (Maturity—October 22, 2018)

    21,284     21,284     18,784  

     

Preferred Member Units (12% cumulative)

          3,201     3,201  

     

Member Units (3,307,545 units)

          1      

                  24,486     21,985  

                           

ASC Interests, LLC

 

Recreational and Educational Shooting Facility

 

 

                   

     

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

    2,750     2,715     2,750  

     

Member Units (1,500 units)(8)

          1,500     2,230  

                  4,215     4,980  

                           

Bond-Coat, Inc.

 

Casing and Tubing Coating Services

 

 

                   

     

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

    11,596     11,513     11,596  

     

Common Stock (57,508 shares)

          6,350     10,210  

                  17,863     21,806  

                           

Café Brazil, LLC

 

Casual Restaurant Group

 

 

                   

     

Member Units (1,233 units)(8)

          1,742     7,330  

                           

CBT Nuggets, LLC

 

Produces and Sells IT Training Certification Videos

 

 

                   

     

Member Units (416 units)(8)

          1,300     38,890  

                           

Ceres Management, LLC (Lambs Tire & Automotive)

 

Aftermarket Automotive Services Chain

 

 

                   

     

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

    8,070     8,070     8,070  

     

Member Units (5,460 units)

          5,273     4,420  

     

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

    931     931     931  

     

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

          625     1,240  

                  14,899     14,661  

                           

CMS Minerals LLC

 

Oil & Gas Exploration & Production

 

 

                   

     

Preferred Member Units (458 units)(8)

          3,246     7,193  

                           

5


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

September 30, 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     11,117     11,117  

     

Class A Preferred Member Units (13,154 units)(8)

          1,137     1,137  

     

Class B Preferred Member Units (6,453 units)

          6,030     5,570  

                  18,284     17,824  

                           

Garreco, LLC

 

Manufacturer and Supplier of Dental Products

 

 

                   

     

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

    5,800     5,733     5,733  

     

Member Units (1,200 units)(8)

          1,200     1,470  

                  6,933     7,203  

                           

GRT Rubber Technologies LLC

 

Manufacturer of Engineered Rubber Products

 

 

                   

     

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

    16,331     16,189     16,189  

     

Member Units (5,879 units)(8)

          13,065     13,065  

                  29,254     29,254  

                           

Gulf Manufacturing, LLC

 

Manufacturer of Specialty Fabricated Industrial Piping Products

 

 

                   

     

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

    777     777     777  

     

Member Units (438 units)(8)

          2,980     15,130  

                  3,757     15,907  

                           

Harrison Hydra-Gen, Ltd.

 

Manufacturer of Hydraulic Generators

 

 

                   

     

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

    5,010     5,010     5,010  

     

Preferred Stock (8% cumulative)(8)

          1,336     1,336  

     

Common Stock (107,456 shares)

          718     2,300  

                  7,064     8,646  

                           

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  

                           

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Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

September 30, 2015

(in thousands)

(Unaudited)

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

HW Temps LLC

 

Temporary Staffing Solutions

 

 

                   

     

LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 10.50%, Secured Debt (Maturity July 2, 2020)(9)

    9,976     9,880     9,880  

     

Preferred Member Units (3,200 units)(8)

          3,942     3,942  

                  13,822     13,822  

                           

Hydratec, Inc.

 

Designer and Installer of Micro-Irrigation Systems

 

 

                   

     

Common Stock (7,095 shares)(8)

          7,095     14,950  

                           

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 15, 2018)(9)

    25     25     25  

     

12.5% Secured Debt (Maturity—November 15, 2018)

    11,350     11,276     11,350  

     

Member Units (5,400 units)

          5,606     6,440  

                  16,907     17,815  

                           

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     15,893     15,893  

     

Warrants (5,516,667 equivalent shares)

          8,000     4,160  

                  25,463     21,623  

                           

Indianapolis Aviation Partners, LLC

 

Fixed Base Operator

 

 

                   

     

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

    3,100     3,079     3,100  

     

Warrants (1,046 equivalent units)

          1,129     2,540  

                  4,208     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)

    4,205     4,169     4,205  

     

Member Units (627 units)(8)

          811     4,750  

                  4,980     8,955  

                           

7


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

September 30, 2015

(in thousands)

(Unaudited)

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

Lighting Unlimited, LLC

 

Commercial and Residential Lighting Products and Design Services

 

 

                   

     

8% Secured Debt (Maturity—August 22, 2016)

    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

 

 

                   

     

6% Current / 6% PIK Secured Debt (Maturity—December 28, 2017)

    8,781     8,688     8,688  

     

Preferred Member Units (3,810 units)

          5,352     5,352  

                  14,040     14,040  

                           

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     3,980  

     

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

    893     893     893  

     

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

          250     550  

                  8,037     11,073  

                           

MH Corbin Holding LLC

 

Manufacturer and distributor of traffic safety products

 

 

                   

     

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

    14,000     13,864     13,864  

     

Preferred Member Units (4,000 shares)

          6,000     6,000  

                  19,864     19,864  

                           

MSC Adviser I, LLC(16)

 

Third Party Investment Advisory Services

 

 

                   

     

Member Units (Fully diluted 100.0%)(8)

              32,305  

                           

Mystic Logistics, Inc

 

Logistics and Distribution Services Provider for Large Volume Mailers

 

 

                   

     

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

    9,448     9,273     9,448  

     

Common Stock (5,873 shares)(8)

          2,720     6,580  

                  11,993     16,028  

                           

8


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

September 30, 2015

(in thousands)

(Unaudited)

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

NAPCO Precast, LLC

 

Precast Concrete Manufacturing

 

 

                   

     

Prime Plus 2.00% (Floor 7.00%), Current Coupon 9.00%, Secured Debt (Maturity—January 31, 2016)(9)

    625     625     625  

     

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

    2,923     2,921     2,923  

     

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

    4,468     4,460     4,468  

     

Member Units (2,955 units)(8)

          2,975     8,590  

                  10,981     16,606  

                           

NRI Clinical Research, LLC

 

Clinical Research Service Provider

 

 

                   

     

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

    4,740     4,650     4,650  

     

Warrants (251,723 equivalent units)

          252     190  

     

Member Units (1,454,167 units)

          765     1,052  

                  5,667     5,892  

                           

NRP Jones, LLC

 

Manufacturer of Hoses, Fittings and Assemblies

 

 

                   

     

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

    13,224     12,885     12,885  

     

Warrants (14,331 equivalent units)

          817     450  

     

Member Units (50,877 units)(8)

          2,900     1,480  

                  16,602     14,815  

                           

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—January 1, 2016)

    9,710     9,710     9,710  

     

Common Stock (1,962 shares)

          2,150     8,710  

                  11,860     18,420  

                           

Principle Environmental, LLC

 

Noise Abatement Service Provider

 

 

                   

     

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

    4,060     3,979     4,060  

     

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

    3,294     3,288     3,294  

     

Preferred Member Units (19,631 units)(8)

          4,663     9,560  

     

Warrants (1,036 equivalent units)

          1,200     530  

                  13,130     17,444  

                           

9


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

September 30, 2015

(in thousands)

(Unaudited)

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

Quality Lease Service, LLC

 

Provider of Rigsite Accommodation Unit Rentals and Related Services

 

 

                   

     

8% PIK Secured Debt (Maturity—June 8, 2020)

    6,410     6,410     6,410  

     

Member Units (1,000 units)

          568     2,638  

                  6,978     9,048  

                           

River Aggregates, LLC

 

Processor of Construction Aggregates

 

 

                   

     

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

    750     540     540  

     

Member Units (1,150 units)(8)

          1,150     3,830  

     

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

          369     2,360  

                  2,059     6,730  

                           

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)

    8,245     8,175     8,175  

     

Member Units (4,450 units)(8)

          4,930     5,340  

                  13,105     13,515  

                           

Southern RV, LLC

 

Recreational Vehicle Dealer

 

 

                   

     

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

    11,400     11,288     11,400  

     

Member Units (1,680 units)(8)

          1,680     11,600  

     

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

    3,250     3,218     3,250  

     

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

          480     540  

                  16,666     26,790  

                           

The MPI Group, LLC

 

Manufacturer of Custom Hollow Metal Doors, Frames and Accessories

 

 

                   

     

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

    2,924     2,921     2,920  

     

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  

                  8,817     6,130  

                           

10


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

September 30, 2015

(in thousands)

(Unaudited)

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

Travis Acquisition LLC

 

Manufacturer of Aluminum Trailers

 

 

                   

     

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

    3,628     3,581     3,628  

     

Member Units (7,282 units)

          7,100     14,110  

                  10,681     17,738  

                           

Uvalco Supply, LLC

 

Farm and Ranch Supply Store

 

 

                   

     

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

    1,418     1,418     1,418  

     

Member Units (1,006 units)(8)

          1,113     3,210  

                  2,531     4,628  

                           

Vision Interests, Inc.

 

Manufacturer / Installer of Commercial Signage

 

 

                   

     

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

    3,138     3,115     3,115  

     

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

          3,000     3,550  

     

Common Stock (1,126,242 shares)

          3,706     210  

                  9,821     6,875  

                           

Ziegler's NYPD, LLC

 

Casual Restaurant Group

 

 

                   

     

6.5% Secured Debt (Maturity—October 1, 2019)

    1,000     992     992  

     

12% Secured Debt (Maturity—October 1, 2019)

    500     500     500  

     

14% Secured Debt (Maturity—October 1, 2019)

    2,750     2,750     2,750  

     

Warrants (587 equivalent units)

          600      

     

Preferred Member Units (10,072 units)

          2,834     2,240  

                  7,676     6,482  

Subtotal Control Investments (30.3% of total investments at fair value)

    402,302     568,025  

11


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

September 30, 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)

    12,560     12,199     12,199  

     

Warrants (42 equivalent units)

          259     410  

     

Member Units (186 units)

          1,200     1,700  

                  13,658     14,309  

                           

Boss Industries, LLC

 

Manufacturer and Distributor of Air, Power and Other Industrial Equipment

 

 

                   

     

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

          2,203     2,543  

                           

Bridge Capital Solutions Corporation

 

Financial Services and Cash Flow Solutions Provider

 

 

                   

     

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

    7,000     6,872     6,872  

     

Warrants (22 equivalent shares)

          200     1,020  

                  7,072     7,892  

                           

Buca C, LLC

 

Restaurants

 

 

                   

     

LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.25%, Secured Debt (Maturity—June 30, 2020)(9)

    25,530     25,288     25,288  

     

Preferred Member Units (6 units)(8)

          3,656     3,656  

                  28,944     28,944  

                           

CAI Software LLC

 

Provider of Specialized Enterprise Resource Planning Software

 

 

                   

     

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

    4,973     4,930     4,930  

     

Member Units (65,356 units)

          654     840  

                  5,584     5,770  

                           

Condit Exhibits, LLC

 

Tradeshow Exhibits / Custom Displays Provider

 

 

                   

     

Member Units (3,936 units)(8)

          100     770  

                           

Congruent Credit Opportunities Funds(12)(13)

 

Investment Partnership

 

 

                   

     

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

          7,644     4,228  

     

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

          12,099     12,222  

                  19,743     16,450  

                           

12


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

September 30, 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)

    21,118     20,849     21,118  

     

Common Stock (19,467 shares)

          5,213     22,660  

                  26,062     43,778  

                           

Dos Rios Partners(12)(13)

 

Investment Partnership

 

 

                   

     

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

          3,104     2,031  

     

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

          986     648  

                  4,090     2,679  

                           

East Teak Fine Hardwoods, Inc.

 

Distributor of Hardwood Products

 

 

                   

     

Common Stock (5,000 shares)

          480     860  

                           

East West Copolymer & Rubber, LLC

 

Manufacturer of Synthetic Rubbers

 

 

                   

     

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

    9,600     9,456     9,456  

     

Warrants (2,014,799 equivalent units)

          50     50  

                  9,506     9,506  

                           

Freeport Financial Funds(12)(13)

 

Investment Partnership

 

 

                   

     

LP Interests (Freeport Financial SBIC Fund LP) (Fully diluted 9.9%)(8)

          5,974     5,974  

     

LP Interests (Freeport First Lien Loan Fund III LP) (Fully diluted 6.4%)

          759     759  

                  6,733     6,733  

                           

Gault Financial, LLC (RMB Capital, LLC)

 

Purchases and Manages Liquidation of Distressed Assets

 

 

                   

     

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

    13,046     12,858     10,891  

     

Warrants (29,025 equivalent units)

          400      

                  13,258     10,891  

                           

Glowpoint, Inc.

 

Provider of Cloud Managed Video Collaboration Services

 

 

                   

     

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

    21     18     18  

     

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

    9,000     8,924     8,924  

     

Common Stock (7,711,517 shares)

          3,958     4,460  

                  12,900     13,402  

                           

Guerdon Modular Holdings, Inc.

 

Multi-Family and Commercial Modular Construction Company

 

 

                   

     

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

    10,400     10,273     10,273  

     

Common Stock (170,577 shares)

          2,983     2,590  

                  13,256     12,863  

                           

13


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

September 30, 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     10,820  

                           

Indianhead Pipeline Services, LLC

 

Provider of Pipeline Support Services

 

 

                   

     

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

    6,225     6,046     6,046  

     

Preferred Member Units (33,819 units; 8% cumulative)

          2,302     2,302  

     

Warrants (31,928 equivalent units)

          459      

     

Member Units (14,732 units)

          1      

                  8,808     8,348  

                           

KBK Industries, LLC

 

Manufacturer of Specialty Oilfield and Industrial Products

 

 

                   

     

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

    6,200     6,170     6,200  

     

Member Units (250 units)(8)

          341     4,090  

                  6,511     10,290  

                           

L.F. Manufacturing Holdings, LLC(10)

 

Manufacturer of Fiberglass Products

 

 

                   

     

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

          2,019     1,790  

                           

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—December 31, 2015)

    3,887     3,887     3,887  

     

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

          1,981     1,380  

     

Warrants (5,333 equivalent shares)

          1,919      

                  7,787     5,267  

                           

OPI International Ltd.(13)

 

Provider of Man Camp and Industrial Storage Services

 

 

                   

     

10% Unsecured Debt (Maturity—April 8, 2018)

    244     244     244  

     

Common Stock (20,766,317 shares)

          1,371     3,200  

                  1,615     3,444  

                           

PCI Holding Company, Inc.

 

Manufacturer of Industrial Gas Generating Systems

 

 

                   

     

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

          2,625     4,750  

                           

14


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

September 30, 2015

(in thousands)

(Unaudited)

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

Radial Drilling Services Inc.

 

Oil and Gas Lateral Drilling Technology Provider

 

 

                   

     

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

    4,200     3,936     2,000  

     

Warrants (316 equivalent shares)

          758      

                  4,694     2,000  

                           

Rocaceia, LLC (Quality Lease and Rental Holdings, LLC)

 

Provider of Rigsite Accommodation Unit Rentals and Related Services

 

 

                   

     

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

    30,785     30,281     250  

     

Preferred Member Units (250 units)

          2,500      

                  32,781     250  

                           

Samba Holdings, Inc.

 

Provider of Intelligent Driver Record Monitoring Software and Services

 

 

                   

     

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

    25,665     25,522     25,665  

     

Common Stock (170,963 shares)

          2,087     20,410  

                  27,609     46,075  

                           

Tin Roof Acquisition Company

 

Casual Restaurant Group

 

 

                   

     

12% Secured Debt (Maturity—November 13, 2018)

    14,100     13,898     13,898  

     

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

          2,415     2,415  

                  16,313     16,313  

                           

Universal Wellhead Services Holdings, LLC(10)

 

Provider of Wellhead Equipment, Designs, and Personnel to the Oil & Gas Industry

 

 

                   

     

Class A Units (4,000,000 units; 4.5% cumulative)(8)

          4,000     3,091  

                           

Volusion, LLC

 

Provider of Online Software-as-a-Service eCommerce Solutions

 

 

                   

     

10.5% Secured Debt (Maturity—January 26, 2020)

    17,500     16,139     16,139  

     

Warrants (950,618 equivalent units)

          1,400     1,400  

     

Preferred Member Units (4,876,670 units)

          14,000     14,000  

                  31,539     31,539  

Subtotal Affiliate Investments (17.2% of total investments at fair value)

    312,016     322,497  

15


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

September 30, 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     10,077     10,029  

                           

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     2,218     1,914  

                           

AM3 Pinnacle Corporation(10)

 

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

                       

     

Common Stock (60,240 shares)

          2,000      

                           

American Seafoods Group, LLC(11)

 

Catcher-Processor of Alaskan Pollock

                       

     

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.00%, Secured Debt (Maturity—August 19, 2021)(9)

    10,000     9,988     9,950  

                           

AmeriTech College, LLC

 

For-Profit Nursing and Healthcare College

                       

     

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

    489     489     489  

     

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

    3,025     3,025     2,668  

                  3,514     3,157  

                           

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)

    7,927     7,818     7,908  

                           

Anchor Hocking, LLC(11)

 

Household Products Manufacturer

                       

     

LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.00%, Secured Debt (Maturity—June 4, 2018)(9)

    2,312     2,312     2,323  

     

Member Units (440,620 units)

          4,928     3,415  

                  7,240     5,738  

                           

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)

    11,343     11,128     11,210  

                           

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Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

September 30, 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)

    5,850     5,794     5,794  

                           

Arcus Hunting LLC.(10)

 

Manufacturer of Bowhunting and Archery Products and Accessories

                       

     

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

    10,875     10,758     10,758  

                           

Artel, LLC(11)

 

Provider of Secure Satellite Network and IT Solutions