UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2013
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 |
|
41-2230745 |
|
(State or other jurisdiction of incorporation or organization) |
|
(I.R.S. Employer Identification No.) |
|
|
|
|
|
1300 Post Oak Boulevard, Suite 800 |
|
|
|
Houston, TX |
|
77056 |
|
(Address of principal executive offices) |
|
(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 x 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 o |
|
Accelerated filer x |
|
|
|
|
|
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 x
The number of shares outstanding of the issuer’s common stock as of November 7, 2013 was 39,734,794.
|
PART I | ||
|
|
|
|
|
Item 1. |
Financial Statements |
|
|
|
|
|
|
|
Consolidated Balance Sheets — September 30, 2013 (unaudited) and December 31, 2012 |
1 |
|
|
|
|
|
|
2 | |
|
|
|
|
|
|
3 | |
|
|
|
|
|
|
Consolidated Statements of Cash Flows (unaudited) — Nine months ended September 30, 2013 and 2012 |
4 |
|
|
|
|
|
|
Consolidated Schedule of Investments (unaudited) — September 30, 2013 |
5 |
|
|
|
|
|
|
22 | |
|
|
|
|
|
|
37 | |
|
|
|
|
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
65 | |
|
|
|
|
|
85 | ||
|
|
|
|
|
85 | ||
|
|
|
|
|
|
|
|
|
85 | ||
|
|
|
|
|
86 | ||
|
|
|
|
|
86 | ||
|
|
|
|
|
86 | ||
|
|
|
|
|
|
88 | |
MAIN STREET CAPITAL CORPORATION
(in thousands, except shares and per share amounts)
|
|
|
September 30, 2013 |
|
December 31, 2012 |
| ||
|
|
|
(Unaudited) |
|
|
| ||
|
ASSETS |
|
|
|
|
| ||
|
|
|
|
|
|
| ||
|
Portfolio investments at fair value: |
|
|
|
|
| ||
|
Control investments (cost: $275,407 and $217,483 as of September 30, 2013 and December 31, 2012, respectively) |
|
$ |
349,581 |
|
$ |
278,475 |
|
|
Affiliate investments (cost: $212,953 and $142,607 as of September 30, 2013 and December 31, 2012, respectively) |
|
261,229 |
|
178,413 |
| ||
|
Non-Control/Non-Affiliate investments (cost: $526,197 and $456,975 as of September 30, 2013 and December 31, 2012, respectively) |
|
541,597 |
|
467,543 |
| ||
|
Investment in affiliated Investment Manager (cost: $2,668 as of December 31, 2012) |
|
— |
|
— |
| ||
|
|
|
|
|
|
| ||
|
Total portfolio investments (cost: $1,014,557 and $819,733 as of September 30, 2013 and December 31, 2012, respectively) |
|
1,152,407 |
|
924,431 |
| ||
|
Marketable securities and idle funds investments (cost: $21,195 and $28,469 as of September 30, 2013 and December 31, 2012, respectively) |
|
19,963 |
|
28,535 |
| ||
|
|
|
|
|
|
| ||
|
Total investments (cost: $1,035,752 and $848,202 as of September 30, 2013 and December 31, 2012, respectively) |
|
1,172,370 |
|
952,966 |
| ||
|
|
|
|
|
|
| ||
|
Cash and cash equivalents |
|
17,574 |
|
63,517 |
| ||
|
Interest receivable and other assets |
|
14,429 |
|
14,580 |
| ||
|
Receivable for securities sold |
|
25,639 |
|
— |
| ||
|
Deferred financing costs (net of accumulated amortization of $4,370 and $3,203 as of September 30, 2013 and December 31, 2012, respectively) |
|
9,312 |
|
5,162 |
| ||
|
|
|
|
|
|
| ||
|
Total assets |
|
$ |
1,239,324 |
|
$ |
1,036,225 |
|
|
|
|
|
|
|
| ||
|
LIABILITIES |
|
|
|
|
| ||
|
|
|
|
|
|
| ||
|
SBIC debentures (par: $161,200 as of September 30, 2013 and $225,000 as of December 31, 2012, par of $75,200 and $100,000 is recorded at a fair value of $62,259 and $86,467 as of September 30, 2013 and December 31, 2012, respectively) |
|
$ |
148,259 |
|
$ |
211,467 |
|
|
Credit facility |
|
166,000 |
|
132,000 |
| ||
|
Notes payable |
|
90,882 |
|
— |
| ||
|
Payable for securities purchased |
|
12,913 |
|
20,661 |
| ||
|
Deferred tax liability, net |
|
11,110 |
|
11,778 |
| ||
|
Accounts payable and other liabilities |
|
7,414 |
|
4,527 |
| ||
|
Dividend payable |
|
6,353 |
|
5,188 |
| ||
|
Interest payable |
|
2,217 |
|
3,562 |
| ||
|
Payable to affiliated Investment Manager |
|
— |
|
4,066 |
| ||
|
|
|
|
|
|
| ||
|
Total liabilities |
|
445,148 |
|
393,249 |
| ||
|
|
|
|
|
|
| ||
|
Commitments and contingencies (Note M) |
|
|
|
|
| ||
|
|
|
|
|
|
| ||
|
NET ASSETS |
|
|
|
|
| ||
|
|
|
|
|
|
| ||
|
Common stock, $0.01 par value per share (150,000,000 shares authorized; 39,698,645 and 34,589,484 shares issued and outstanding as of September 30, 2013 and December 31, 2012, respectively) |
|
397 |
|
346 |
| ||
|
Additional paid-in capital |
|
688,544 |
|
544,136 |
| ||
|
Accumulated net investment income, net of cumulative dividends of $181,149 and $115,401 as of September 30, 2013 and December 31, 2012, respectively |
|
17,939 |
|
35,869 |
| ||
|
Accumulated net realized gain from investments (accumulated net realized gain from investments of $7,244 before cumulative dividends of $32,192 as of September 30, 2013 and accumulated net realized gain from investments of $9,838 before cumulative dividends of $28,993 as of December 31, 2012) |
|
(24,948 |
) |
(19,155 |
) | ||
|
Net unrealized appreciation, net of income taxes |
|
112,244 |
|
81,780 |
| ||
|
|
|
|
|
|
| ||
|
Total net assets |
|
794,176 |
|
642,976 |
| ||
|
|
|
|
|
|
| ||
|
Total liabilities and net assets |
|
$ |
1,239,324 |
|
$ |
1,036,225 |
|
|
|
|
|
|
|
| ||
|
NET ASSET VALUE PER SHARE |
|
$ |
20.01 |
|
$ |
18.59 |
|
The accompanying notes are an integral part of these financial statements
MAIN STREET CAPITAL CORPORATION
Consolidated Statements of Operations
(in thousands, except per share amounts)
(Unaudited)
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
| ||||||||
|
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
INVESTMENT INCOME: |
|
|
|
|
|
|
|
|
| ||||
|
Interest, fee and dividend income: |
|
|
|
|
|
|
|
|
| ||||
|
Control investments |
|
$ |
8,840 |
|
$ |
5,991 |
|
$ |
23,543 |
|
$ |
17,841 |
|
|
Affiliate investments |
|
6,453 |
|
4,838 |
|
17,514 |
|
14,652 |
| ||||
|
Non-Control/Non-Affiliate investments |
|
13,974 |
|
12,015 |
|
40,974 |
|
30,263 |
| ||||
|
Interest, fee and dividend income |
|
29,267 |
|
22,844 |
|
82,031 |
|
62,756 |
| ||||
|
Interest, fee and dividend income from marketable securities and idle funds |
|
392 |
|
110 |
|
1,073 |
|
1,599 |
| ||||
|
Total investment income |
|
29,659 |
|
22,954 |
|
83,104 |
|
64,355 |
| ||||
|
EXPENSES: |
|
|
|
|
|
|
|
|
| ||||
|
Interest |
|
(5,922 |
) |
(3,923 |
) |
(15,346 |
) |
(11,967 |
) | ||||
|
Compensation |
|
(2,575 |
) |
— |
|
(5,148 |
) |
— |
| ||||
|
General and administrative |
|
(1,533 |
) |
(595 |
) |
(3,471 |
) |
(1,757 |
) | ||||
|
Expenses reimbursed to affiliated Investment Manager |
|
— |
|
(2,215 |
) |
(3,189 |
) |
(7,574 |
) | ||||
|
Share-based compensation |
|
(2,152 |
) |
(699 |
) |
(3,357 |
) |
(1,860 |
) | ||||
|
Total expenses |
|
(12,182 |
) |
(7,432 |
) |
(30,511 |
) |
(23,158 |
) | ||||
|
NET INVESTMENT INCOME |
|
17,477 |
|
15,522 |
|
52,593 |
|
41,197 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
NET REALIZED GAIN (LOSS): |
|
|
|
|
|
|
|
|
| ||||
|
Control investments |
|
(2,635 |
) |
122 |
|
(2,635 |
) |
(1,940 |
) | ||||
|
Affiliate investments |
|
780 |
|
— |
|
780 |
|
5,500 |
| ||||
|
Non-Control/Non-Affiliate investments |
|
(1,164 |
) |
128 |
|
(1,024 |
) |
478 |
| ||||
|
Marketable securities and idle funds investments |
|
22 |
|
277 |
|
285 |
|
1,297 |
| ||||
|
SBIC debentures |
|
(4,775 |
) |
— |
|
(4,775 |
) |
— |
| ||||
|
Total net realized gain (loss) |
|
(7,772 |
) |
527 |
|
(7,369 |
) |
5,335 |
| ||||
|
NET REALIZED INCOME |
|
9,705 |
|
16,049 |
|
45,224 |
|
46,532 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION): |
|
|
|
|
|
|
|
|
| ||||
|
Portfolio investments |
|
14,475 |
|
22,096 |
|
30,889 |
|
44,120 |
| ||||
|
Marketable securities and idle funds investments |
|
(490 |
) |
(151 |
) |
(1,300 |
) |
(235 |
) | ||||
|
SBIC debentures |
|
4,839 |
|
(1,858 |
) |
4,183 |
|
(3,367 |
) | ||||
|
Investment in affiliated Investment Manager |
|
— |
|
— |
|
— |
|
(51 |
) | ||||
|
Total net change in unrealized appreciation |
|
18,824 |
|
20,087 |
|
33,772 |
|
40,467 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
INCOME TAXES: |
|
|
|
|
|
|
|
|
| ||||
|
Federal and state income, excise, and other taxes |
|
(371 |
) |
— |
|
(1,793 |
) |
(1,006 |
) | ||||
|
Deferred taxes |
|
(104 |
) |
(4,169 |
) |
(1,515 |
) |
(6,035 |
) | ||||
|
Income tax provision |
|
(475 |
) |
(4,169 |
) |
(3,308 |
) |
(7,041 |
) | ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS |
|
28,054 |
|
31,967 |
|
75,688 |
|
79,958 |
| ||||
|
Noncontrolling interest |
|
— |
|
— |
|
— |
|
(54 |
) | ||||
|
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ATTRIBUTABLE TO COMMON STOCK |
|
$ |
28,054 |
|
$ |
31,967 |
|
$ |
75,688 |
|
$ |
79,904 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
NET INVESTMENT INCOME PER SHARE - BASIC AND DILUTED |
|
$ |
0.47 |
|
$ |
0.49 |
|
$ |
1.48 |
|
$ |
1.44 |
|
|
NET REALIZED INCOME PER SHARE - BASIC AND DILUTED |
|
$ |
0.26 |
|
$ |
0.51 |
|
$ |
1.27 |
|
$ |
1.62 |
|
|
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ATTRIBUTABLE TO COMMON STOCK PER SHARE - BASIC AND DILUTED |
|
$ |
0.76 |
|
$ |
1.01 |
|
$ |
2.13 |
|
$ |
2.79 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
DIVIDENDS PAID PER SHARE: |
|
|
|
|
|
|
|
|
| ||||
|
Regular monthly dividends |
|
$ |
0.47 |
|
$ |
0.44 |
|
$ |
1.38 |
|
$ |
1.26 |
|
|
Supplemental dividends |
|
0.20 |
|
— |
|
0.55 |
|
— |
| ||||
|
Total |
|
$ |
0.67 |
|
$ |
0.44 |
|
$ |
1.93 |
|
$ |
1.26 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED |
|
37,144,693 |
|
31,578,742 |
|
35,558,266 |
|
28,615,877 |
| ||||
The accompanying notes are an integral part of these financial statements
MAIN STREET CAPITAL CORPORATION
Consolidated Statements of Changes in Net Assets
(in thousands, except shares)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
Net Unrealized |
|
|
|
|
|
Total Net |
| ||||||||
|
|
|
|
|
|
|
|
|
Accumulated |
|
Net Realized |
|
Appreciation from |
|
|
|
|
|
Assets |
| ||||||||
|
|
|
Common Stock |
|
Additional |
|
Net Investment |
|
Gain From |
|
Investments, |
|
|
|
|
|
Including |
| ||||||||||
|
|
|
Number |
|
Par |
|
Paid-In |
|
Income, Net |
|
Investments, |
|
Net of Income |
|
Total Net |
|
Noncontrolling |
|
Noncontrolling |
| ||||||||
|
|
|
of Shares |
|
Value |
|
Capital |
|
of Dividends |
|
Net of Dividends |
|
Taxes |
|
Asset Value |
|
Interest |
|
Interest |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
Balances at December 31, 2011 |
|
26,714,384 |
|
$ |
267 |
|
$ |
360,164 |
|
$ |
12,531 |
|
$ |
(20,445 |
) |
$ |
53,194 |
|
$ |
405,711 |
|
$ |
5,477 |
|
$ |
411,188 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
Public offering of common stock, net of offering costs |
|
4,312,500 |
|
43 |
|
92,950 |
|
|
|
|
|
|
|
92,993 |
|
|
|
92,993 |
| ||||||||
|
MSC II noncontrolling interest acquisition |
|
229,634 |
|
2 |
|
5,328 |
|
— |
|
— |
|
— |
|
5,330 |
|
(5,417 |
) |
(87 |
) | ||||||||
|
Adjustment to investment in Investment Manager related to MSC II noncontrolling interest acquisition |
|
— |
|
— |
|
(1,616 |
) |
— |
|
— |
|
— |
|
(1,616 |
) |
— |
|
(1,616 |
) | ||||||||
|
Share-based compensation |
|
— |
|
— |
|
1,860 |
|
— |
|
— |
|
— |
|
1,860 |
|
— |
|
1,860 |
| ||||||||
|
Purchase of vested stock for employee payroll tax withholding |
|
(40,549 |
) |
|
|
(1,012 |
) |
|
|
|
|
|
|
(1,012 |
) |
|
|
(1,012 |
) | ||||||||
|
Dividend reinvestment |
|
264,331 |
|
2 |
|
6,468 |
|
— |
|
— |
|
— |
|
6,471 |
|
— |
|
6,471 |
| ||||||||
|
Issuance of restricted stock |
|
139,033 |
|
1 |
|
(1 |
) |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
| ||||||||
|
Distributions to noncontrolling interest |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(114 |
) |
(114 |
) | ||||||||
|
Dividends to stockholders |
|
— |
|
— |
|
— |
|
(22,439 |
) |
(14,048 |
) |
— |
|
(36,487 |
) |
— |
|
(36,487 |
) | ||||||||
|
Net increase resulting from operations |
|
— |
|
— |
|
— |
|
41,197 |
|
5,335 |
|
33,426 |
|
79,958 |
|
— |
|
79,958 |
| ||||||||
|
Noncontrolling interest |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(54 |
) |
(54 |
) |
54 |
|
— |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
Balances at September 30, 2012 |
|
31,619,333 |
|
$ |
315 |
|
$ |
464,141 |
|
$ |
31,289 |
|
$ |
(29,158 |
) |
$ |
86,566 |
|
$ |
553,154 |
|
$ |
— |
|
$ |
553,154 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
Balances at December 31, 2012 |
|
34,589,484 |
|
$ |
346 |
|
$ |
544,136 |
|
$ |
35,869 |
|
$ |
(19,155 |
) |
$ |
81,780 |
|
$ |
642,976 |
|
$ |
— |
|
$ |
642,976 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
Public offering of common stock, net of offering costs |
|
4,600,000 |
|
46 |
|
131,407 |
|
— |
|
— |
|
— |
|
131,453 |
|
— |
|
131,453 |
| ||||||||
|
Share-based compensation |
|
— |
|
— |
|
3,357 |
|
— |
|
— |
|
— |
|
3,357 |
|
— |
|
3,357 |
| ||||||||
|
Purchase of vested stock for employee payroll tax withholding |
|
(62,025 |
) |
(1 |
) |
(1,764 |
) |
— |
|
— |
|
— |
|
(1,765 |
) |
— |
|
(1,765 |
) | ||||||||
|
Dividend reinvestment |
|
278,166 |
|
3 |
|
8,727 |
|
— |
|
— |
|
— |
|
8,730 |
|
— |
|
8,730 |
| ||||||||
|
Other |
|
— |
|
— |
|
69 |
|
— |
|
— |
|
— |
|
69 |
|
— |
|
69 |
| ||||||||
|
Issuance of restricted stock |
|
274,895 |
|
3 |
|
(3 |
) |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
| ||||||||
|
Consolidation of Investment Manager |
|
— |
|
— |
|
2,037 |
|
— |
|
— |
|
— |
|
2,037 |
|
— |
|
2,037 |
| ||||||||
|
Issuances of common stock |
|
18,125 |
|
— |
|
578 |
|
— |
|
— |
|
— |
|
578 |
|
— |
|
578 |
| ||||||||
|
Dividends to stockholders |
|
— |
|
— |
|
— |
|
(65,748 |
) |
(3,199 |
) |
— |
|
(68,947 |
) |
— |
|
(68,947 |
) | ||||||||
|
Net increase resulting from operations |
|
— |
|
— |
|
— |
|
47,818 |
|
(2,594 |
) |
30,464 |
|
75,688 |
|
— |
|
75,688 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
Balances at September 30, 2013 |
|
39,698,645 |
|
$ |
397 |
|
$ |
688,544 |
|
$ |
17,939 |
|
$ |
(24,948 |
) |
$ |
112,244 |
|
$ |
794,176 |
|
$ |
— |
|
$ |
794,176 |
|
The accompanying notes are an integral part of these financial statements
MAIN STREET CAPITAL CORPORATION
Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
|
|
|
Nine Months Ended September 30, |
| ||||
|
|
|
2013 |
|
2012 |
| ||
|
|
|
|
|
|
| ||
|
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
| ||
|
Net increase in net assets resulting from operations |
|
$ |
75,688 |
|
$ |
79,958 |
|
|
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used in) operating activities: |
|
|
|
|
| ||
|
Investments in portfolio companies |
|
(533,435 |
) |
(397,912 |
) | ||
|
Proceeds from sales and repayments of debt investments |
|
325,150 |
|
246,138 |
| ||
|
Proceeds from sale of equity investments in portfolio companies |
|
1,336 |
|
25,869 |
| ||
|
Investments in marketable securities and idle funds investments |
|
(53,102 |
) |
(7,596 |
) | ||
|
Proceeds from marketable securities and idle funds investments |
|
44,395 |
|
33,502 |
| ||
|
Net change in unrealized appreciation |
|
(33,772 |
) |
(40,467 |
) | ||
|
Net realized (gain) loss |
|
7,369 |
|
(5,335 |
) | ||
|
Accretion of unearned income |
|
(7,721 |
) |
(9,263 |
) | ||
|
Payment-in-kind interest |
|
(3,517 |
) |
(2,405 |
) | ||
|
Cumulative dividends |
|
(1,000 |
) |
1,745 |
| ||
|
Share-based compensation expense |
|
3,357 |
|
1,860 |
| ||
|
Amortization of deferred financing costs |
|
1,167 |
|
802 |
| ||
|
Deferred taxes |
|
1,515 |
|
5,650 |
| ||
|
Changes in other assets and liabilities: |
|
|
|
|
| ||
|
Interest receivable and other assets |
|
1,009 |
|
(1,160 |
) | ||
|
Interest payable |
|
(1,345 |
) |
(2,787 |
) | ||
|
Payable to affiliated Investment Manager |
|
(3,960 |
) |
(1,489 |
) | ||
|
Accounts payable and other liabilities |
|
1,376 |
|
316 |
| ||
|
Deferred fees and other |
|
2,558 |
|
1,428 |
| ||
|
Net cash used in operating activities |
|
(172,932 |
) |
(71,146 |
) | ||
|
|
|
|
|
|
| ||
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
| ||
|
Proceeds from credit facility |
|
360,000 |
|
170,000 |
| ||
|
Repayments on credit facility |
|
(326,000 |
) |
(174,000 |
) | ||
|
Proceeds from issuance of SBIC debentures |
|
— |
|
5,000 |
| ||
|
Repayments of SBIC debentures |
|
(63,800 |
) |
(16,000 |
) | ||
|
Proceeds from public offering of 6.125% Notes |
|
92,000 |
|
— |
| ||
|
Repurchases of 6.125% Notes |
|
(1,108 |
) |
— |
| ||
|
Proceeds from public offering of common stock, net of offering costs |
|
131,453 |
|
92,993 |
| ||
|
Dividends paid to stockholders |
|
(59,052 |
) |
(28,879 |
) | ||
|
Payment of deferred loan costs and SBIC debenture fees |
|
(5,317 |
) |
(571 |
) | ||
|
Other |
|
(1,187 |
) |
(463 |
) | ||
|
Net cash provided by financing activities |
|
126,989 |
|
48,080 |
| ||
|
|
|
|
|
|
| ||
|
Net increase (decrease) in cash and cash equivalents |
|
(45,943 |
) |
(23,066 |
) | ||
|
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD |
|
63,517 |
|
42,650 |
| ||
|
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
|
$ |
17,574 |
|
$ |
19,584 |
|
|
|
|
|
|
|
| ||
|
Supplemental cash flow disclosures: |
|
|
|
|
| ||
|
Interest Paid |
|
$ |
15,558 |
|
$ |
13,953 |
|
|
Taxes paid |
|
$ |
4,803 |
|
$ |
561 |
|
|
Non-cash financing activities: |
|
|
|
|
| ||
|
Shares issued pursuant to the DRIP |
|
$ |
8,730 |
|
$ |
6,471 |
|
The accompanying notes are an integral part of these financial statements
MAIN STREET CAPITAL CORPORATION
CONSOLIDATED SCHEDULE OF INVESTMENTS
September 30, 2013
(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) |
|
3,500 |
|
3,432 |
|
3,432 |
|
|
|
|
|
|
Member Units (Fully diluted 48.4%) |
|
|
|
1,500 |
|
1,500 |
|
|
|
|
|
|
|
|
|
|
4,932 |
|
4,932 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bond-Coat, Inc. |
|
Casing and Tubing Coating Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12% Secured Debt (Maturity - December 28, 2017) |
|
14,750 |
|
14,573 |
|
14,750 |
|
|
|
|
|
|
Common Stock (Fully diluted 42.9%) |
|
|
|
6,220 |
|
7,750 |
|
|
|
|
|
|
|
|
|
|
20,793 |
|
22,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Café Brazil, LLC |
|
Casual Restaurant Group |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Member Units (Fully diluted 69.0%) (8) |
|
|
|
1,742 |
|
6,770 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
California Healthcare Medical Billing, Inc. |
|
Outsourced Billing and Revenue Cycle Management |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12% Secured Debt (Maturity - October 17, 2015) |
|
8,103 |
|
7,958 |
|
8,094 |
|
|
|
|
|
|
Warrants (Fully diluted 21.3%) |
|
|
|
1,193 |
|
3,380 |
|
|
|
|
|
|
Common Stock (Fully diluted 9.8%) |
|
|
|
1,177 |
|
1,560 |
|
|
|
|
|
|
|
|
|
|
10,328 |
|
13,034 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CBT Nuggets, LLC |
|
Produces and Sells IT Training Certification Videos |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Member Units (Fully diluted 41.6%) (8) |
|
|
|
1,300 |
|
10,950 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ceres Management, LLC (Lambs Tire & Automotive) |
|
Aftermarket Automotive Services Chain |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14% Secured Debt (Maturity - May 31, 2018) |
|
4,000 |
|
4,000 |
|
4,000 |
|
|
|
|
|
|
Class B Member Units (12% cumulative) (8) |
|
|
|
3,437 |
|
3,437 |
|
|
|
|
|
|
Member Units (Fully diluted 100.0%) |
|
|
|
5,273 |
|
1,000 |
|
|
|
|
|
|
9.5% Secured Debt (Lamb’s Real Estate Investment I, LLC) (Maturity - October 1, 2025) |
|
1,029 |
|
1,029 |
|
1,029 |
|
|
|
|
|
|
Member Units (Lamb’s Real Estate Investment I, LLC) (Fully diluted 100%) |
|
|
|
625 |
|
1,130 |
|
|
|
|
|
|
|
|
|
|
14,364 |
|
10,596 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Garreco, LLC |
|
Manufacturer and Supplier of Dental Products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14% Secured Debt (Maturity - January 12, 2018) |
|
5,800 |
|
5,689 |
|
5,689 |
|
|
|
|
|
|
Member Units (Fully diluted 32.0%) |
|
|
|
1,200 |
|
1,200 |
|
|
|
|
|
|
|
|
|
|
6,889 |
|
6,889 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gulf Manufacturing, LLC |
|
Manufacturer of Specialty Fabricated Industrial Piping Products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9% PIK Secured Debt (Ashland Capital IX, LLC) (Maturity - June 30, 2017) |
|
919 |
|
919 |
|
919 |
|
|
|
|
|
|
Member Units (Fully diluted 34.2%) (8) |
|
|
|
2,980 |
|
12,660 |
|
|
|
|
|
|
|
|
|
|
3,899 |
|
13,579 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Harrison Hydra-Gen, Ltd. |
|
Manufacturer of Hydraulic Generators |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12% Secured Debt (Maturity - June 4, 2015) |
|
4,896 |
|
4,624 |
|
4,896 |
|
|
|
|
|
|
Preferred Stock (8% cumulative) (8) |
|
|
|
1,145 |
|
1,145 |
|
|
|
|
|
|
Common Stock (Fully diluted 34.4%) (8) |
|
|
|
718 |
|
1,340 |
|
|
|
|
|
|
|
|
|
|
6,487 |
|
7,381 |
|
|
Portfolio Company (1) |
|
Business Description |
|
Type of Investment (2) (3) |
|
Principal (4) |
|
Cost (4) |
|
Fair Value |
|
|
Hawthorne Customs and Dispatch Services, LLC |
|
Facilitator of Import Logistics, Brokerage, and Warehousing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Member Units (Fully diluted 47.6%) (8) |
|
|
|
589 |
|
440 |
|
|
|
|
|
|
Member Units (Wallisville Real Estate, LLC) (Fully diluted 59.1%) (8) |
|
|
|
1,215 |
|
1,890 |
|
|
|
|
|
|
|
|
|
|
1,804 |
|
2,330 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hydratec, Inc. |
|
Designer and Installer of Micro-Irrigation Systems |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock (Fully diluted 95.9%) (8) |
|
|
|
7,095 |
|
13,050 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact Telecom, Inc. |
|
Telecommunications Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIBOR Plus 4.50%, Current Coupon 6.50%, Secured Debt (Maturity - May 31, 2018) (9) |
|
2,500 |
|
2,493 |
|
2,493 |
|
|
|
|
|
|
13% Secured Debt (Maturity - May 31, 2018) |
|
22,500 |
|
14,454 |
|
14,454 |
|
|
|
|
|
|
Warrants (Fully diluted 40.0%) |
|
|
|
8,000 |
|
8,000 |
|
|
|
|
|
|
|
|
|
|
24,947 |
|
24,947 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Indianapolis Aviation Partners, LLC |
|
Fixed Base Operator |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15% Secured Debt (Maturity - September 15, 2014) |
|
3,700 |
|
3,609 |
|
3,700 |
|
|
|
|
|
|
Warrants (Fully diluted 30.1%) |
|
|
|
1,129 |
|
1,940 |
|
|
|
|
|
|
|
|
|
|
4,738 |
|
5,640 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jensen Jewelers of Idaho, LLC |
|
Retail Jewelry Store |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prime Plus 2%, Current Coupon 5.25%, Secured Debt (Maturity - November 14, 2013) (9) |
|
1,548 |
|
1,548 |
|
1,548 |
|
|
|
|
|
|
13% Current / 6% PIK Secured Debt (Maturity - November 14, 2013) |
|
1,607 |
|
1,607 |
|
1,607 |
|
|
|
|
|
|
Member Units (Fully diluted 60.8%) (8) |
|
|
|
811 |
|
3,720 |
|
|
|
|
|
|
|
|
|
|
3,966 |
|
6,875 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lighting Unlimited, LLC |
|
Commercial and Residential Lighting Products and Design Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8% Secured Debt (Maturity - August 22, 2014) |
|
1,730 |
|
1,730 |
|
1,730 |
|
|
|
|
|
|
Preferred Stock (non-voting) |
|
|
|
468 |
|
280 |
|
|
|
|
|
|
Warrants (Fully diluted 7.1%) |
|
|
|
54 |
|
— |
|
|
|
|
|
|
Common Stock (Fully diluted 70.0%) (8) |
|
|
|
100 |
|
— |
|
|
|
|
|
|
|
|
|
|
2,352 |
|
2,010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marine Shelters Holdings, LLC (LoneStar Marine Shelters) |
|
Fabricator of Marine and Industrial Shelters |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12% Secured Debt (Maturity - December 28, 2017) |
|
10,250 |
|
10,068 |
|
10,068 |
|
|
|
|
|
|
Preferred Stock (Fully diluted 26.7%) |
|
|
|
3,750 |
|
3,750 |
|
|
|
|
|
|
|
|
|
|
13,818 |
|
13,818 |
|
|
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 |
|
|
|
|
|
|
9.5% Secured Debt (Mid - Columbia Real Estate, LLC) (Maturity - May 13, 2025) |
|
983 |
|
983 |
|
983 |
|
|
|
|
|
|
Member Units (Fully diluted 54.0%) |
|
|
|
1,132 |
|
5,290 |
|
|
|
|
|
|
Member Units (Mid - Columbia Real Estate, LLC) (Fully diluted 50.0%) (8) |
|
|
|
250 |
|
440 |
|
|
|
|
|
|
|
|
|
|
8,015 |
|
12,363 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NAPCO Precast, LLC |
|
Precast Concrete Manufacturing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prime Plus 2%, Current Coupon 9%, Secured Debt (Maturity - September 1, 2015) (9) |
|
2,750 |
|
2,697 |
|
2,697 |
|
|
|
|
|
|
Prime Plus 2%, Current Coupon 9%, Secured Debt (Maturity - February 1, 2016) (9) |
|
2,923 |
|
2,890 |
|
2,890 |
|
|
|
|
|
|
18% Secured Debt (Maturity - February 1, 2016) |
|
4,468 |
|
4,413 |
|
4,413 |
|
|
|
|
|
|
Member Units (Fully diluted 44.0%) |
|
|
|
2,975 |
|
5,100 |
|
|
|
|
|
|
|
|
|
|
12,975 |
|
15,100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NRI Clinical Research, LLC |
|
Clinical Research Center |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14% Secured Debt (Maturity - September 8, 2016) |
|
4,520 |
|
4,335 |
|
4,335 |
|
|
|
|
|
|
Warrants (Fully diluted 12.5%) (8) |
|
|
|
252 |
|
480 |
|
|
|
|
|
|
Member Units (Fully diluted 24.8%) (8) |
|
|
|
500 |
|
960 |
|
|
|
|
|
|
|
|
|
|
5,087 |
|
5,775 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NRP Jones, LLC |
|
Manufacturer of Hoses, Fittings and Assemblies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12% Secured Debt (Maturity - December 22, 2016) |
|
12,100 |
|
11,334 |
|
12,100 |
|
|
|
|
|
|
Warrants (Fully diluted 12.2%) |
|
|
|
817 |
|
1,420 |
|
|
|
|
|
|
Member Units (Fully diluted 43.2%) (8) |
|
|
|
2,900 |
|
5,050 |
|
|
|
|
|
|
|
|
|
|
15,051 |
|
18,570 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OMi Holdings, Inc. |
|
Manufacturer of Overhead Cranes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock (Fully diluted 48.0%) |
|
|
|
1,080 |
|
11,270 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pegasus Research Group, LLC (Televerde) |
|
Telemarketing and Data Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15% Secured Debt (Maturity - January 6, 2016) |
|
4,991 |
|
4,955 |
|
4,991 |
|
|
|
|
|
|
Member Units (Fully diluted 43.7%) (8) |
|
|
|
1,250 |
|
4,860 |
|
|
|
|
|
|
|
|
|
|
6,205 |
|
9,851 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PPL RVs, Inc. |
|
Recreational Vehicle Dealer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11.1% Secured Debt (Maturity - June 10, 2015) |
|
8,010 |
|
7,971 |
|
8,010 |
|
|
|
|
|
|
Common Stock (Fully diluted 51.1%) |
|
|
|
2,150 |
|
6,810 |
|
|
|
|
|
|
|
|
|
|
10,121 |
|
14,820 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principle Environmental, LLC |
|
Noise Abatement Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12% Secured Debt (Maturity - February 1, 2016) |
|
3,506 |
|
3,027 |
|
3,506 |
|
|
|
|
|
|
12% Current / 2% PIK Secured Debt (Maturity - February 1, 2016) |
|
4,351 |
|
4,294 |
|
4,338 |
|
|
|
|
|
|
Warrants (Fully diluted 14.6%) |
|
|
|
1,200 |
|
3,860 |
|
|
|
|
|
|
Member Units (Fully diluted 22.6%) (8) |
|
|
|
1,863 |
|
6,150 |
|
|
|
|
|
|
|
|
|
|
10,384 |
|
17,854 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
River Aggregates, LLC |
|
Processor of Construction Aggregates |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12% Secured Debt (Maturity - June 30, 2018) (14) |
|
500 |
|
500 |
|
500 |
|
|
|
|
|
|
Zero Coupon Secured Debt (Maturity - June 30, 2018) (14) |
|
750 |
|
413 |
|
413 |
|
|
|
|
|
|
Member Units (Fully diluted 38.3%) |
|
|
|
1,150 |
|
— |
|
|
|
|
|
|
Member Units (RA Properties, LLC) (Fully diluted 50.0%) |
|
|
|
269 |
|
269 |
|
|
|
|
|
|
|
|
|
|
2,332 |
|
1,182 |
|
|
Portfolio Company (1) |
|
Business Description |
|
Type of Investment (2) (3) |
|
Principal (4) |
|
Cost (4) |
|
Fair Value |
|
|
Southern RV, LLC |
|
Recreational Vehicle Dealer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13% Secured Debt (Maturity - August 8, 2018) |
|
11,400 |
|
11,233 |
|
11,233 |
|
|
|
|
|
|
Member Units (Fully diluted 50.2%) |
|
|
|
1,680 |
|
1,680 |
|
|
|
|
|
|
13% Secured Debt (Southern RV Real Estate, LLC) (Maturity - August 8, 2018) |
|
3,250 |
|
3,202 |
|
3,202 |
|
|
|
|
|
|
Member Units (Southern RV Real Estate, LLC) (Fully diluted 55.69%) |
|
|
|
480 |
|
480 |
|
|
|
|
|
|
|
|
|
|
16,595 |
|
16,595 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The MPI Group, LLC |
|
Manufacturer of Custom Hollow Metal Doors, Frames and Accessories |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.5% Current / 4.5% PIK Secured Debt (Maturity - October 2, 2013) |
|
1,079 |
|
1,079 |
|
880 |
|
|
|
|
|
|
6% Current / 6% PIK Secured Debt (Maturity - October 2, 2013) |
|
5,639 |
|
5,639 |
|
4,600 |
|
|
|
|
|
|
Warrants (Fully diluted 52.3%) |
|
|
|
1,096 |
|
— |
|
|
|
|
|
|
|
|
|
|
7,814 |
|
5,480 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thermal and Mechanical Equipment, LLC |
|
Commercial and Industrial Engineering Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prime Plus 2%, Current Coupon 9%, Secured Debt (Maturity - September 25, 2014) (9) |
|
818 |
|
817 |
|
818 |
|
|
|
|
|
|
13% Current / 5% PIK Secured Debt (Maturity - September 25, 2014) |
|
2,607 |
|
2,595 |
|
2,607 |
|
|
|
|
|
|
Member Units (Fully diluted 52.6%) (8) |
|
|
|
1,000 |
|
10,080 |
|
|
|
|
|
|
|
|
|
|
4,412 |
|
13,505 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Travis Acquisition LLC |
|
Manufacturer of Aluminum Trailers |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12% Secured Debt (Maturity - August 30, 2018) |
|
9,200 |
|
9,018 |
|