Table of Contents

 

 

 

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 March 31, 2014

 

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 x

 

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 x

 

The number of shares outstanding of the issuer’s common stock as of May 8, 2014 was 44,546,660.

 

 

 



Table of Contents

 

TABLE OF CONTENTS

 

PART I

 

FINANCIAL INFORMATION

 

 

 

 

Item 1.

Financial Statements

 

 

 

 

 

Consolidated Balance Sheets — March 31, 2014 (unaudited) and December 31, 2013

1

 

 

 

 

Consolidated Statements of Operations (unaudited) — Three months ended March 31, 2014 and 2013

2

 

 

 

 

Consolidated Statements of Changes in Net Assets (unaudited) — Three months ended March 31, 2014 and 2013

3

 

 

 

 

Consolidated Statements of Cash Flows (unaudited) — Three months ended March 31, 2014 and 2013

4

 

 

 

 

Consolidated Schedule of Investments (unaudited) — March 31, 2014

5

 

 

 

 

Consolidated Schedule of Investments — December 31, 2013

23

 

 

 

 

Notes to Consolidated Financial Statements (unaudited)

41

 

 

 

Item 2.

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

71

 

 

 

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

90

 

 

 

Item 4.

Controls and Procedures

90

 

 

 

PART II

 

OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings

91

 

 

 

Item 1A.

Risk Factors

91

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

97

 

 

 

Item 6.

Exhibits

97

 

 

 

 

Signatures

98

 



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

Consolidated Balance Sheets

(in thousands, except shares and per share amounts)

 

 

 

March 31, 2014

 

December 31, 2013

 

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Portfolio investments at fair value:

 

 

 

 

 

Control investments (cost: $275,694 and $277,411 as of March 31, 2014 and December 31, 2013, respectively)

 

$

364,559

 

$

356,973

 

Affiliate investments (cost: $241,145 and $242,592 as of March 31, 2014 and December 31, 2013, respectively)

 

265,240

 

268,113

 

Non-Control/Non-Affiliate investments (cost: $661,936 and $643,068 as of March 31, 2014 and December 31, 2013, respectively)

 

679,080

 

661,102

 

 

 

 

 

 

 

Total portfolio investments (cost: $1,178,775 and $1,163,071 as of March  31, 2014 and December 31, 2013, respectively)

 

1,308,879

 

1,286,188

 

Marketable securities and idle funds investments (cost: $11,792 and $14,885 as of March 31, 2014 and December 31, 2013, respectively)

 

11,258

 

13,301

 

 

 

 

 

 

 

Total investments (cost: $1,190,567 and $1,177,956 as of March 31, 2014 and December 31, 2013, respectively)

 

1,320,137

 

1,299,489

 

 

 

 

 

 

 

Cash and cash equivalents

 

24,362

 

34,701

 

Interest receivable and other assets

 

18,457

 

16,054

 

Receivable for securities sold

 

3,216

 

 

Deferred financing costs (net of accumulated amortization of $5,102 and $4,722 as of March 31, 2014 and December 31, 2013, respectively)

 

10,400

 

9,931

 

 

 

 

 

 

 

Total assets

 

$

1,376,572

 

$

1,360,175

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

Credit facility

 

$

236,000

 

$

237,000

 

SBIC debentures (par: $225,000 as of March 31, 2014 and $200,200 as of December 31, 2013, par of $75,200 is recorded at a fair value of $63,239 and $62,050 as of March 31, 2014 and December 31, 2013, respectively)

 

213,039

 

187,050

 

Notes payable

 

90,882

 

90,882

 

Payable for securities purchased

 

12,488

 

27,088

 

Deferred tax liability, net

 

6,938

 

5,940

 

Dividend payable

 

6,592

 

6,577

 

Accounts payable and other liabilities

 

4,060

 

10,549

 

Interest payable

 

2,166

 

2,556

 

 

 

 

 

 

 

Total liabilities

 

572,165

 

567,642

 

 

 

 

 

 

 

Commitments and contingencies (Note M)

 

 

 

 

 

 

 

 

 

 

 

NET ASSETS

 

 

 

 

 

 

 

 

 

 

 

Common stock, $0.01 par value per share (150,000,000 shares authorized; 39,945,148 and 39,852,604 shares issued and outstanding as of March 31, 2014 and December 31, 2013, respectively)

 

399

 

398

 

Additional paid-in capital

 

699,377

 

694,981

 

Accumulated net investment income, net of cumulative dividends of $218,897 and $199,140 as of March 31, 2014 and December 31, 2013, respectively

 

23,760

 

22,778

 

Accumulated net realized gain from investments (accumulated net realized gain from investments of $18,558 before cumulative dividends of $43,449 as of March 31, 2014 and accumulated net realized gain from investments of $17,115 before cumulative dividends of $43,449 as of December 31, 2013)

 

(24,891

)

(26,334

)

Net unrealized appreciation, net of income taxes

 

105,762

 

100,710

 

 

 

 

 

 

 

Total net assets

 

804,407

 

792,533

 

 

 

 

 

 

 

Total liabilities and net assets

 

$

1,376,572

 

$

1,360,175

 

 

 

 

 

 

 

NET ASSET VALUE PER SHARE

 

$

20.14

 

$

19.89

 

 

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,

 

 

 

2014

 

2013

 

INVESTMENT INCOME:

 

 

 

 

 

Interest, fee and dividend income:

 

 

 

 

 

Control investments

 

$

9,296

 

$

6,534

 

Affiliate investments

 

5,640

 

5,661

 

Non-Control/Non-Affiliate investments

 

15,633

 

13,138

 

Interest, fee and dividend income

 

30,569

 

25,333

 

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

 

207

 

311

 

Total investment income

 

30,776

 

25,644

 

EXPENSES:

 

 

 

 

 

Interest

 

(5,286

)

(3,882

)

Compensation

 

(2,351

)

 

General and administrative

 

(1,547

)

(687

)

Share-based compensation

 

(853

)

(603

)

Expenses reimbursed to Internal Investment Manager

 

 

(3,189

)

Total expenses

 

(10,037

)

(8,361

)

NET INVESTMENT INCOME

 

20,739

 

17,283

 

 

 

 

 

 

 

NET REALIZED GAIN (LOSS):

 

 

 

 

 

Non-Control/Non-Affiliate investments

 

1,433

 

(343

)

Marketable securities and idle funds investments

 

10

 

(59

)

Total net realized gain (loss)

 

1,443

 

(402

)

NET REALIZED INCOME

 

22,182

 

16,881

 

 

 

 

 

 

 

NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION):

 

 

 

 

 

Portfolio investments

 

6,857

 

10,078

 

Marketable securities and idle funds investments

 

1,049

 

(67

)

SBIC debentures

 

(1,189

)

(1,212

)

Total net change in unrealized appreciation

 

6,717

 

8,799

 

 

 

 

 

 

 

INCOME TAXES:

 

 

 

 

 

Federal and state income, excise, and other taxes

 

(667

)

(671

)

Deferred taxes

 

(998

)

(1,380

)

Income tax provision

 

(1,665

)

(2,051

)

 

 

 

 

 

 

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ATTRIBUTABLE TO COMMON STOCK

 

$

27,234

 

$

23,629

 

 

 

 

 

 

 

NET INVESTMENT INCOME PER SHARE - BASIC AND DILUTED

 

$

0.52

 

$

0.50

 

NET REALIZED INCOME PER SHARE - BASIC AND DILUTED

 

$

0.56

 

$

0.49

 

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ATTRIBUTABLE TO COMMON STOCK PER SHARE - BASIC AND DILUTED

 

$

0.68

 

$

0.68

 

 

 

 

 

 

 

DIVIDENDS PAID PER SHARE:

 

 

 

 

 

Regular monthly dividends

 

$

0.50

 

$

0.45

 

Supplemental dividends

 

 

0.35

 

Total dividends

 

$

0.50

 

$

0.80

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED

 

39,898,573

 

34,699,505

 

 

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)

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

Net Unrealized

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

Net Realized

 

Appreciation from

 

 

 

 

 

Common Stock

 

Additional

 

Net Investment

 

Gain From

 

Investments,

 

 

 

 

 

Number

 

Par

 

Paid-In

 

Income, Net

 

Investments,

 

Net of Income

 

Total Net

 

 

 

of Shares

 

Value

 

Capital

 

of Dividends

 

Net of Dividends

 

Taxes

 

Asset Value

 

Balances at December 31, 2012

 

34,589,484

 

$

346

 

$

544,136

 

$

35,869

 

$

(19,155

)

$

81,780

 

$

642,976

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation

 

 

 

603

 

 

 

 

603

 

Dividend reinvestment

 

164,760

 

2

 

5,320

 

 

 

 

5,322

 

Issuance of restricted stock

 

1,100

 

 

 

 

 

 

 

Issuances of common stock

 

18,125

 

 

578

 

 

 

 

578

 

Dividends to stockholders

 

 

 

 

(27,715

)

(183

)

 

(27,898

)

Net increase resulting from operations

 

 

 

 

17,283

 

(402

)

6,748

 

23,629

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at March 31, 2013

 

34,773,469

 

$

348

 

$

550,637

 

$

25,437

 

$

(19,740

)

$

88,528

 

$

645,210

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

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,

 

 

 

2014

 

2013

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

Net increase in net assets resulting from operations

 

$

27,234

 

$

23,629

 

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

 

 

 

 

 

Investments in portfolio companies

 

(146,896

)

(125,982

)

Proceeds from sales and repayments of investments in portfolio companies

 

119,462

 

81,371

 

Investments in marketable securities and idle funds investments

 

(2,105

)

(16,701

)

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

 

5,207

 

28,819

 

Net change in unrealized appreciation

 

(6,717

)

(8,799

)

Net realized (gain) loss

 

(1,443

)

402

 

Accretion of unearned income

 

(2,611

)

(2,530

)

Payment-in-kind interest

 

(1,655

)

(1,326

)

Cumulative dividends

 

(369

)

(180

)

Share-based compensation expense

 

853

 

603

 

Amortization of deferred financing costs

 

380

 

227

 

Deferred taxes

 

998

 

1,380

 

Changes in other assets and liabilities:

 

 

 

 

 

Interest receivable and other assets

 

(2,557

)

2,666

 

Interest payable

 

(390

)

(2,434

)

Payable to affiliated Internal Investment Manager

 

 

(3,960

)

Accounts payable and other liabilities

 

(6,258

)

(2,105

)

Deferred fees and other

 

133

 

620

 

Net cash used in operating activities

 

(16,734

)

(24,300

)

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

Dividends paid to stockholders

 

(16,516

)

(22,374

)

Proceeds from issuance of SBIC debentures

 

24,800

 

 

Proceeds from credit facility

 

46,000

 

77,000

 

Repayments on credit facility

 

(47,000

)

(68,000

)

Payment of deferred loan costs and SBIC debenture fees

 

(849

)

 

Other

 

(40

)

378

 

Net cash provided by financing activities

 

6,395

 

(12,996

)

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

(10,339

)

(37,296

)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

 

34,701

 

63,517

 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

 

$

24,362

 

$

26,221

 

 

 

 

 

 

 

Supplemental cash flow disclosures:

 

 

 

 

 

Interest paid

 

$

5,296

 

$

6,089

 

Taxes paid

 

$

2,657

 

$

2,059

 

Non-cash financing activities:

 

 

 

 

 

Shares issued pursuant to the DRIP

 

$

3,226

 

$

5,322

 

 

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, 2014

(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)

 

3,425

 

3,364

 

3,364

 

 

 

 

 

Member Units (Fully diluted 48.4%) (8)

 

 

 

1,500

 

1,590

 

 

 

 

 

 

 

 

 

4,864

 

4,954

 

 

 

 

 

 

 

 

 

 

 

 

 

Bond-Coat, Inc.

 

Casing and Tubing Coating Services

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

14,750

 

14,589

 

14,750

 

 

 

 

 

Common Stock (Fully diluted 42.9%)

 

 

 

6,220

 

9,250

 

 

 

 

 

 

 

 

 

20,809

 

24,000

 

 

 

 

 

 

 

 

 

 

 

 

 

Café Brazil, LLC

 

Casual Restaurant Group

 

 

 

 

 

 

 

 

 

 

 

 

 

Member Units (Fully diluted 69.0%) (8)

 

 

 

1,742

 

6,930

 

 

 

 

 

 

 

 

 

 

 

 

 

California Healthcare Medical Billing, Inc.

 

Outsourced Billing and Revenue Cycle Management

 

 

 

 

 

 

 

 

 

 

 

 

 

12% Secured Debt (Maturity - October 17, 2015)

 

8,103

 

7,988

 

8,103

 

 

 

 

 

Warrants (Fully diluted 21.5%)

 

 

 

1,193

 

3,380

 

 

 

 

 

Common Stock (Fully diluted 9.6%)

 

 

 

1,176

 

1,560

 

 

 

 

 

 

 

 

 

10,357

 

13,043

 

 

 

 

 

 

 

 

 

 

 

 

 

CBT Nuggets, LLC

 

Produces and Sells IT Training Certification Videos

 

 

 

 

 

 

 

 

 

 

 

 

 

Member Units (Fully diluted 41.6%) (8)

 

 

 

1,300

 

18,500

 

 

 

 

 

 

 

 

 

 

 

 

 

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)

 

 

 

3,695

 

3,695

 

 

 

 

 

Member Units (Fully diluted 65.0%)

 

 

 

5,273

 

1,190

 

 

 

 

 

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

 

1,004

 

1,004

 

1,004

 

 

 

 

 

Member Units (Lamb’s Real Estate Investment I, LLC) (Fully diluted 100.0%) (8)

 

 

 

625

 

1,060

 

 

 

 

 

 

 

 

 

14,597

 

10,949

 

 

 

 

 

 

 

 

 

 

 

 

 

Garreco, LLC

 

Manufacturer and Supplier of Dental Products

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

5,800

 

5,698

 

5,698

 

 

 

 

 

Member Units (Fully diluted 32.0%) (8)

 

 

 

1,200

 

1,200

 

 

 

 

 

 

 

 

 

6,898

 

6,898

 

 

 

 

 

 

 

 

 

 

 

 

 

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 (Fully diluted 32.1%) (8)

 

 

 

2,980

 

13,220

 

 

 

 

 

 

 

 

 

3,724

 

13,964

 

 

 

 

 

 

 

 

 

 

 

 

 

Harrison Hydra-Gen, Ltd.

 

Manufacturer of Hydraulic Generators

 

 

 

 

 

 

 

 

 

 

 

 

 

10.5% Secured Debt (Maturity - June 4, 2015)

 

4,487

 

4,302

 

4,487

 

 

 

 

 

Preferred Stock (8% cumulative) (8)

 

 

 

1,190

 

1,190

 

 

 

 

 

Common Stock (Fully diluted 34.4%) (8)

 

 

 

718

 

1,560

 

 

 

 

 

 

 

 

 

6,210

 

7,237

 

 

5



Table of Contents

 

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

 

220

 

 

 

 

 

Member Units (Wallisville Real Estate, LLC) (Fully diluted 59.1%) (8)

 

 

 

1,215

 

2,050

 

 

 

 

 

 

 

 

 

1,804

 

2,270

 

 

 

 

 

 

 

 

 

 

 

 

 

Hydratec, Inc.

 

Designer and Installer of Micro-Irrigation Systems

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock (Fully diluted 95.9%) (8)

 

 

 

7,095

 

13,720

 

 

 

 

 

 

 

 

 

 

 

 

 

IDX Broker, LLC

 

Provider of Marketing and CRM Tools for Real Estate

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

10,571

 

10,471

 

10,471

 

 

 

 

 

Member Units (Fully diluted 63.9%)

 

 

 

5,029

 

5,029

 

 

 

 

 

 

 

 

 

15,500

 

15,500

 

Impact Telecom, Inc.

 

Telecommunications Services Provider

 

 

 

 

 

 

 

 

 

 

 

 

 

LIBOR Plus 4.50%, Current Coupon 6.50%, Secured Debt (Maturity - May 31, 2018) (9)

 

1,575

 

1,568

 

1,568

 

 

 

 

 

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

 

22,500

 

14,940

 

14,940

 

 

 

 

 

Warrants (Fully diluted 40.0%)

 

 

 

8,000

 

8,760

 

 

 

 

 

 

 

 

 

24,508

 

25,268

 

 

 

 

 

 

 

 

 

 

 

 

 

Indianapolis Aviation Partners, LLC

 

Fixed Base Operator

 

 

 

 

 

 

 

 

 

 

 

 

 

15% Secured Debt (Maturity - September 15, 2014)

 

3,400

 

3,356

 

3,400

 

 

 

 

 

Warrants (Fully diluted 30.1%)

 

 

 

1,129

 

2,270

 

 

 

 

 

 

 

 

 

4,485

 

5,670

 

 

 

 

 

 

 

 

 

 

 

 

 

Jensen Jewelers of Idaho, LLC

 

Retail Jewelry Store

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

4,105

 

4,049

 

4,105

 

 

 

 

 

Member Units (Fully diluted 60.8%) (8)

 

 

 

811

 

3,310

 

 

 

 

 

 

 

 

 

4,860

 

7,415

 

 

 

 

 

 

 

 

 

 

 

 

 

Lighting Unlimited, LLC

 

Commercial and Residential Lighting Products and Design Services

 

 

 

 

 

 

 

 

 

 

 

 

 

8% Secured Debt (Maturity - August 22, 2014)

 

1,622

 

1,622

 

1,622

 

 

 

 

 

Preferred Stock (non-voting)

 

 

 

451

 

451

 

 

 

 

 

Warrants (Fully diluted 7.1%)

 

 

 

54

 

40

 

 

 

 

 

Common Stock (Fully diluted 70.0%) (8)

 

 

 

100

 

360

 

 

 

 

 

 

 

 

 

2,227

 

2,473

 

 

 

 

 

 

 

 

 

 

 

 

 

Marine Shelters Holdings, LLC (LoneStar Marine Shelters)

 

Fabricator of Marine and Industrial Shelters

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

10,250

 

10,085

 

10,085

 

 

 

 

 

Preferred Stock (Fully diluted 26.7%)

 

 

 

3,750

 

3,750

 

 

 

 

 

 

 

 

 

13,835

 

13,835

 

 

6



Table of Contents

 

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)

 

960

 

961

 

961

 

 

 

 

 

Member Units (Fully diluted 55.1%) (8)

 

 

 

1,244

 

9,310

 

 

 

 

 

Member Units (Mid - Columbia Real Estate, LLC) (Fully diluted 50.0%) (8)

 

 

 

250

 

440

 

 

 

 

 

 

 

 

 

8,105

 

16,361

 

 

 

 

 

 

 

 

 

 

 

 

 

MSC Adviser I, LLC

 

Third Party Investment Advisory Services

 

 

 

 

 

 

 

 

 

 

 

 

 

Member Units (Fully diluted 100.0%)

 

 

 

 

2,325

 

 

 

 

 

 

 

 

 

 

 

 

 

NAPCO Precast, LLC

 

Precast Concrete Manufacturing

 

 

 

 

 

 

 

 

 

 

 

 

 

Prime Plus 2%, Current Coupon 9%, Secured Debt (Maturity - September 1, 2015) (9)

 

2,750

 

2,710

 

2,750

 

 

 

 

 

Prime Plus 2%, Current Coupon 9%, Secured Debt (Maturity - February 1, 2016) (9)

 

1,438

 

1,425

 

1,438

 

 

 

 

 

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

 

4,468

 

4,423

 

4,468

 

 

 

 

 

Member Units (Fully diluted 44.0%) (8)

 

 

 

2,975

 

6,090

 

 

 

 

 

 

 

 

 

11,533

 

14,746

 

 

 

 

 

 

 

 

 

 

 

 

 

NRI Clinical Research, LLC

 

Clinical Research Service
 Provider

 

 

 

 

 

 

 

 

 

 

 

 

 

14% Secured Debt (Maturity - September 8, 2016)

 

4,392

 

4,237

 

4,237

 

 

 

 

 

Warrants (Fully diluted 12.5%)

 

 

 

252

 

230

 

 

 

 

 

Member Units (Fully diluted 24.8%)

 

 

 

671

 

711

 

 

 

 

 

 

 

 

 

5,160

 

5,178

 

 

 

 

 

 

 

 

 

 

 

 

 

NRP Jones, LLC

 

Manufacturer of Hoses, Fittings and Assemblies

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

12,100

 

11,431

 

12,100

 

 

 

 

 

Warrants (Fully diluted 12.2%)

 

 

 

817

 

1,500

 

 

 

 

 

Member Units (Fully diluted 43.2%) (8)

 

 

 

2,900

 

5,080

 

 

 

 

 

 

 

 

 

15,148

 

18,680

 

 

 

 

 

 

 

 

 

 

 

 

 

OMi Holdings, Inc.

 

Manufacturer of Overhead Cranes

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock (Fully diluted 48.0%) (8)

 

 

 

1,080

 

13,420

 

 

 

 

 

 

 

 

 

 

 

 

 

Pegasus Research Group, LLC (Televerde)

 

Provider of Telemarketing and Data Services

 

 

 

 

 

 

 

 

 

 

 

 

 

15% Secured Debt (Maturity - January 6, 2016)

 

4,591

 

4,564

 

4,591

 

 

 

 

 

Member Units (Fully diluted 43.7%) (8)

 

 

 

1,250

 

4,860

 

 

 

 

 

 

 

 

 

5,814

 

9,451

 

 

 

 

 

 

 

 

 

 

 

 

 

PPL RVs, Inc.

 

Recreational Vehicle Dealer

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

7,860

 

7,832

 

7,860

 

 

 

 

 

Common Stock (Fully diluted 51.1%)

 

 

 

2,150

 

8,110

 

 

 

 

 

 

 

 

 

9,982

 

15,970

 

 

 

 

 

 

 

 

 

 

 

 

 

Principle Environmental, LLC

 

Noise Abatement Service Provider

 

 

 

 

 

 

 

 

 

 

 

 

 

12% Secured Debt (Maturity - February 1, 2016)

 

3,506

 

3,114

 

3,506

 

 

 

 

 

12% Current / 2% PIK Secured Debt (Maturity - February 1, 2016)

 

4,697

 

4,646

 

4,678

 

 

 

 

 

Warrants (Fully diluted 14.6%)

 

 

 

1,200

 

1,810

 

 

 

 

 

Member Units (Fully diluted 22.6%) (8)

 

 

 

1,863

 

4,560

 

 

 

 

 

 

 

 

 

10,823

 

14,554

 

 

7



Table of Contents

 

Portfolio Company (1)

 

Business Description

 

Type of Investment (2) (3)

 

Principal (4)

 

Cost (4)

 

Fair Value

 

River Aggregates, LLC

 

Processor of Construction Aggregates

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

500

 

500

 

500

 

 

 

 

 

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

 

750

 

430

 

430

 

 

 

 

 

Member Units (Fully diluted 38.3%)

 

 

 

1,150

 

 

 

 

 

 

Member Units (RA Properties, LLC) (Fully diluted 50.0%)

 

 

 

369

 

369

 

 

 

 

 

 

 

 

 

2,449

 

1,299

 

 

 

 

 

 

 

 

 

 

 

 

 

Southern RV, LLC

 

Recreational Vehicle Dealer

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

11,400

 

11,245

 

11,245

 

 

 

 

 

Member Units (Fully diluted 50.2%)

 

 

 

1,680

 

3,460

 

 

 

 

 

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

 

3,250

 

3,206

 

3,206

 

 

 

 

 

Member Units (Southern RV Real Estate, LLC) (Fully diluted 55.7%)

 

 

 

480

 

470

 

 

 

 

 

 

 

 

 

16,611

 

18,381

 

 

 

 

 

 

 

 

 

 

 

 

 

The MPI Group, LLC

 

Manufacturer of Custom Hollow Metal Doors, Frames and Accessories

 

 

 

 

 

 

 

 

 

 

 

 

 

4.5% Current / 4.5% PIK Secured Debt (Maturity - July 1, 2014)

 

1,079

 

1,079

 

880

 

 

 

 

 

6% Current / 6% PIK Secured Debt (Maturity - July 1, 2014)

 

5,845

 

5,845

 

4,806

 

 

 

 

 

Warrants (Fully diluted 52.3%)

 

 

 

1,096

 

 

 

 

 

 

 

 

 

 

8,020

 

5,686

 

 

 

 

 

 

 

 

 

 

 

 

 

Travis Acquisition LLC

 

Manufacturer of Aluminum Trailers

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

9,085

 

8,919

 

9,085

 

 

 

 

 

Member Units (Fully diluted 65.5%)

 

 

 

7,100

 

10,420

 

 

 

 

 

 

 

 

 

16,019

 

19,505

 

 

 

 

 

 

 

 

 

 

 

 

 

Uvalco Supply, LLC

 

Farm and Ranch Supply Store

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

2,106

 

2,106

 

2,106

 

 

 

 

 

Member Units (Fully diluted 42.8%) (8)

 

 

 

1,113

 

3,780

 

 

 

 

 

 

 

 

 

3,219

 

5,886

 

 

 

 

 

 

 

 

 

 

 

 

 

Vision Interests, Inc.

 

Manufacturer / Installer of Commercial Signage

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

3,204

 

3,161

 

3,161

 

 

 

 

 

Series A Preferred Stock (Fully diluted 50.9%)

 

 

 

3,000

 

1,510

 

 

 

 

 

Common Stock (Fully diluted 19.1%)

 

 

 

3,706

 

 

 

 

 

 

 

 

 

 

9,867

 

4,671

 

 

 

 

 

 

 

 

 

 

 

 

 

Ziegler’s NYPD, LLC

 

Casual Restaurant Group

 

 

 

 

 

 

 

 

 

 

 

 

 

Prime Plus 2%, Current Coupon 9%, Secured Debt (Maturity - October 1, 2018) (9)

 

1,000

 

1,000

 

1,000

 

 

 

 

 

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

 

5,449

 

5,449

 

4,820

 

 

 

 

 

Warrants (Fully diluted 46.6%)

 

 

 

600

 

 

 

 

 

 

 

 

 

 

7,049

 

5,820

 

 

 

 

 

 

 

 

 

 

 

 

 

Subtotal Control Investments (27.6% of total investments at fair value)

 

 

 

275,694

 

364,559

 

 

8



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

March 31, 2014

(in thousands)

(Unaudited)

 

Portfolio Company (1)

 

Business Description

 

Type of Investment (2) (3)

 

Principal (4)

 

Cost (4)

 

Fair Value

 

Affiliate Investments (6)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

American Sensor Technologies, Inc.

 

Manufacturer of Commercial / Industrial Sensors

 

 

 

 

 

 

 

 

 

 

 

 

 

Warrants (Fully diluted 19.6%)

 

 

 

50

 

9,600

 

 

 

 

 

 

 

 

 

 

 

 

 

Bridge Capital Solutions Corporation

 

Financial Services and Cash Flow Solutions Provider

 

 

 

 

 

 

 

 

 

 

 

 

 

13% Secured Debt (Maturity - April 17, 2017)

 

5,000

 

4,811

 

4,811

 

 

 

 

 

Warrants (Fully diluted 7.5%)

 

 

 

200

 

630

 

 

 

 

 

 

 

 

 

5,011

 

5,441

 

 

 

 

 

 

 

 

 

 

 

 

 

Buffalo Composite Materials Holdings, LLC (10)

 

Manufacturer of Fiberglass Products

 

 

 

 

 

 

 

 

 

 

 

 

 

Member Units (Fully diluted 23.1%)

 

 

 

2,035

 

2,035

 

 

 

 

 

 

 

 

 

 

 

 

 

Condit Exhibits, LLC

 

Tradeshow Exhibits / Custom Displays Provider

 

 

 

 

 

 

 

 

 

 

 

 

 

Warrants (Fully diluted 15.0%) (8)

 

 

 

100

 

610

 

 

 

 

 

 

 

 

 

 

 

 

 

Congruent Credit Opportunities Funds (12) (13)

 

Investment Partnerships

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

22,654

 

22,758

 

 

 

 

 

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

 

 

 

3,743

 

3,743

 

 

 

 

 

 

 

 

 

26,397

 

26,501

 

 

 

 

 

 

 

 

 

 

 

 

 

Daseke, Inc.

 

Specialty Transportation Provider

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

20,332

 

19,968

 

19,968

 

 

 

 

 

Common Stock (Fully diluted 12.6%)

 

 

 

4,642

 

11,690