Main Street Capital (MAIN)

FORM 10-Q | Quarterly Report
Nov. 2, 2018 10:57 AM
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Main Street Capital CORP (Form: 10-Q, Received: 11/02/2018 10:59:00)

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Table of Contents

 

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, 2018

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, 8 th  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 every Interactive Data File required to be submitted 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 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, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth 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

Emerging growth company o

        If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  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 1, 2018 was 60,993,821.

   


Table of Contents


TABLE OF CONTENTS

PART I
FINANCIAL INFORMATION

Item 1.

 

Consolidated Financial Statements

   

 

Consolidated Balance Sheets—September 30, 2018 (unaudited) and December 31, 2017

  1

 

Consolidated Statements of Operations (unaudited)—Three and nine months ended September 30, 2018 and 2017

  2

 

Consolidated Statements of Changes in Net Assets (unaudited)—Nine months ended September 30, 2018 and 2017

  3

 

Consolidated Statements of Cash Flows (unaudited)—Nine months ended September 30, 2018 and 2017

  4

 

Consolidated Schedule of Investments (unaudited)—September 30, 2018

  5

 

Consolidated Schedule of Investments—December 31, 2017

  31

 

Notes to Consolidated Financial Statements (unaudited)

  56

 

Consolidated Schedules of Investments in and Advances to Affiliates (unaudited)—Nine months ended September 30, 2018 and 2017

  99

Item 2.

 

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

  109

Item 3.

 

Quantitative and Qualitative Disclosures about Market Risk

  132

Item 4.

 

Controls and Procedures

  133


PART II
OTHER INFORMATION


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Balance Sheets

(dollars in thousands, except shares and per share amounts)

 
  September 30,
2018
  December 31,
2017
 
 
  (Unaudited)
   
 

ASSETS

             

  

             

Investments at fair value:

             

Control investments (cost: $717,220 and $530,034 as of September 30, 2018 and December 31, 2017, respectively)

  $ 967,128   $ 750,706  

Affiliate investments (cost: $389,450 and $367,317 as of September 30, 2018 and December 31, 2017, respectively)

    373,444     338,854  

Non-Control/Non-Affiliate investments (cost: $1,105,048 and $1,107,447 as of September 30, 2018 and December 31, 2017, respectively)

    1,086,301     1,081,745  

Total investments (cost: $2,211,718 and $2,004,798 as of September 30, 2018 and December 31, 2017, respectively)

    2,426,873     2,171,305  

  

             

Cash and cash equivalents

    50,303     51,528  

Interest receivable and other assets

    37,339     36,343  

Receivable for securities sold

    5,363     2,382  

Deferred financing costs (net of accumulated amortization of $6,329 and $5,600 as of September 30, 2018 and December 31, 2017, respectively)

    4,585     3,837  

Total assets

  $ 2,524,463   $ 2,265,395  

LIABILITIES

             

Credit facility

 
$

250,000
 
$

64,000
 

SBIC debentures (par: $345,800 and $295,800 as of September 30, 2018 and December 31, 2017, respectively)

    337,931     288,483  

4.50% Notes due 2022 (par: $185,000 as of both September 30, 2018 and December 31, 2017)

    182,471     182,015  

4.50% Notes due 2019 (par: $175,000 as of both September 30, 2018 and December 31, 2017)

    174,157     173,616  

6.125% Notes (par: $90,655 as of December 31, 2017)

        89,057  

Accounts payable and other liabilities

    19,252     20,168  

Payable for securities purchased

    22,425     40,716  

Interest payable

    6,731     5,273  

Dividend payable

    11,889     11,146  

Deferred tax liability, net

    14,165     10,553  

Total liabilities

    1,019,021     885,027  

  

             

Commitments and contingencies (Note M)

             

NET ASSETS

   
 
   
 
 

Common stock, $0.01 par value per share (150,000,000 shares authorized; 60,962,505 and 58,660,680 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively)

   
610
   
586
 

Additional paid-in capital

    1,396,256     1,310,780  

Accumulated net investment income, net of cumulative dividends of $770,516 and $662,563 as of September 30, 2018 and December 31, 2017, respectively

    13,155     7,921  

Accumulated net realized gain from investments (accumulated net realized gain from investments of $65,808 before cumulative dividends of $135,871 as of September 30, 2018 and accumulated net realized gain from investments of $64,576 before cumulative dividends of $124,690 as of December 31, 2017)

    (70,063 )   (60,114 )

Net unrealized appreciation, net of income taxes

    165,484     121,195  

Total net assets

    1,505,442     1,380,368  

Total liabilities and net assets

  $ 2,524,463   $ 2,265,395  

NET ASSET VALUE PER SHARE

  $ 24.69   $ 23.53  

   

The accompanying notes are an integral part of these consolidated financial statements

1


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Operations

(dollars in thousands, except shares and per share amounts)

(Unaudited)

 
  Three Months Ended
September 30,
  Nine Months Ended
September 30,
 
 
  2018   2017   2018   2017  

INVESTMENT INCOME:

                         

Interest, fee and dividend income:

                         

Control investments

  $ 18,926   $ 15,145   $ 64,756   $ 42,720  

Affiliate investments

    9,643     10,134     27,230     29,601  

Non-Control/Non-Affiliate investments           

    29,694     26,507     82,089     77,623  

Total investment income

    58,263     51,786     174,075     149,944  

EXPENSES:

                         

Interest

    (10,884 )   (9,420 )   (31,982 )   (26,820 )

Compensation

    (5,798 )   (4,777 )   (16,962 )   (13,762 )

General and administrative

    (2,951 )   (2,748 )   (9,023 )   (8,748 )

Share-based compensation

    (2,147 )   (2,476 )   (6,883 )   (7,542 )

Expenses allocated to the External Investment Manager

    1,592     1,664     5,336     4,816  

Total expenses

    (20,188 )   (17,757 )   (59,514 )   (52,056 )

NET INVESTMENT INCOME

    38,075     34,029     114,561     97,888  

NET REALIZED GAIN (LOSS):

   
 
   
 
   
 
   
 
 

Control investments

        (2,848 )   4,681     259  

Affiliate investments

    1,898     (9,896 )   1,898     12,920  

Non-Control/Non-Affiliate investments           

    7,340     2,038     (3,825 )   14,663  

Realized loss on extinguishment of debt           

            (2,896 )   (5,217 )

Total net realized gain (loss)

    9,238     (10,706 )   (142 )   22,625  

NET UNREALIZED APPRECIATION (DEPRECIATION):

                         

Control investments

    30,285     14,171     33,357     31,217  

Affiliate investments

    3,135     8,783     16,997     (18,013 )

Non-Control/Non-Affiliate investments           

    (8,159 )   (6,586 )   (3,264 )   (17,562 )

SBIC debentures

    (53 )   (221 )   1,296     5,408  

Total net unrealized appreciation

    25,208     16,147     48,386     1,050  

INCOME TAXES:

                         

Federal and state income, excise and other taxes

    (759 )   (799 )   (793 )   (2,489 )

Deferred taxes

    (3,022 )   (3,772 )   (3,304 )   (9,894 )

Income tax provision

    (3,781 )   (4,571 )   (4,097 )   (12,383 )

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS

  $ 68,740   $ 34,899   $ 158,708   $ 109,180  

NET INVESTMENT INCOME PER SHARE—BASIC AND DILUTED

  $ 0.63   $ 0.60   $ 1.91   $ 1.74  

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

  $ 1.13   $ 0.61   $ 2.65   $ 1.94  

DIVIDENDS PAID PER SHARE:

                         

Regular monthly dividends

  $ 0.570   $ 0.555   $ 1.710   $ 1.665  

Supplemental dividends

            0.275     0.275  

Total dividends

  $ 0.570   $ 0.555   $ 1.985   $ 1.940  

WEIGHTED AVERAGE SHARES OUTSTANDING—BASIC AND DILUTED

    60,807,096     57,109,104     59,836,527     56,140,953  

   

The accompanying notes are an integral part of these consolidated financial statements

2


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Changes in Net Assets

(dollars in thousands, except shares)

(Unaudited)

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

Balances at December 31, 2016

    54,354,857   $ 543   $ 1,143,883   $ 19,033   $ (58,887 ) $ 96,909   $ 1,201,481  

Public offering of common stock, net of offering costs

   
3,119,581
   
31
   
118,087
   
   
   
   
118,118
 

Share-based compensation

            7,542                 7,542  

Purchase of vested stock for employee payroll tax withholding

    (113,371 )   (1 )   (4,350 )               (4,351 )

Investment through issuance of unregistered shares

    11,464         442                 442  

Dividend reinvestment

    158,301     2     6,085                 6,087  

Amortization of directors' deferred compensation

            488                 488  

Issuance of restricted stock, net of forfeited shares

    225,361     2     (2 )                

Dividends to stockholders

                (82,605 )   (26,716 )       (109,321 )

Net increase (decrease) resulting from operations

                92,671     27,842     (11,333 )   109,180  

Balances at September 30, 2017

    57,756,193   $ 577   $ 1,272,175   $ 29,099   $ (57,761 ) $ 85,576   $ 1,329,666  

Balances at December 31, 2017

    58,660,680   $ 586   $ 1,310,780   $ 7,921   $ (60,114 ) $ 121,195   $ 1,380,368  

Public offering of common stock, net of offering costs

   
1,907,519
   
19
   
72,318
   
   
   
   
72,337
 

Share-based compensation

            6,883                 6,883  

Purchase of vested stock for employee payroll tax withholding

    (109,693 )   (1 )   (4,076 )               (4,077 )

Dividend reinvestment

    253,125     3     9,720                 9,723  

Amortization of directors' deferred compensation

            634                 634  

Issuance of restricted stock, net of forfeited shares

    250,874     3     (3 )                

Dividends to stockholders

                (107,953 )   (11,181 )       (119,134 )

Net increase resulting from operations

                113,187     1,232     44,289     158,708  

Balances at September 30, 2018

    60,962,505   $ 610   $ 1,396,256   $ 13,155   $ (70,063 ) $ 165,484   $ 1,505,442  

   

The accompanying notes are an integral part of these consolidated financial statements

3


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Cash Flows

(dollars in thousands)

(Unaudited)

 
  Nine Months Ended
September 30,
 
 
  2018   2017  

CASH FLOWS FROM OPERATING ACTIVITIES

             

Net increase in net assets resulting from operations

  $ 158,708   $ 109,180  

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

             

Investments in portfolio companies

    (766,483 )   (743,695 )

Proceeds from sales and repayments of debt investments in portfolio companies

    480,738     527,562  

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

    71,010     80,078  

Net unrealized appreciation

    (48,386 )   (1,050 )

Net realized (gain) loss

    142     (22,625 )

Accretion of unearned income

    (11,253 )   (12,403 )

Payment-in-kind interest

    (1,760 )   (4,122 )

Cumulative dividends

    (1,735 )   (2,711 )

Share-based compensation expense

    6,883     7,542  

Amortization of deferred financing costs

    2,482     2,022  

Deferred tax provision

    3,304     9,894  

Changes in other assets and liabilities:

             

Interest receivable and other assets

    (1,170 )   (2,848 )

Interest payable

    1,458     (494 )

Accounts payable and other liabilities

    (282 )   640  

Deferred fees and other

    2,969     2,050  

Net cash used in operating activities

    (103,375 )   (50,980 )

CASH FLOWS FROM FINANCING ACTIVITIES

   
 
   
 
 

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

    72,337     118,118  

Dividends paid

    (108,668 )   (102,347 )

Proceeds from issuance of SBIC debentures

    54,000     60,000  

Repayments of SBIC debentures

    (4,000 )   (25,200 )

Redemption of 6.125% Notes

    (90,655 )    

Proceeds from credit facility

    516,000     394,000  

Repayments on credit facility

    (330,000 )   (382,000 )

Payment of deferred issuance costs and SBIC debenture fees

    (2,787 )   (1,576 )

Purchases of vested stock for employee payroll tax withholding

    (4,077 )   (4,351 )

Net cash provided by financing activities

    102,150     56,644  

Net increase (decrease) in cash and cash equivalents

    (1,225 )   5,664  

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

    51,528     24,480  

CASH AND CASH EQUIVALENTS AT END OF PERIOD

  $ 50,303   $ 30,144  

Supplemental cash flow disclosures:

             

Interest paid

  $ 27,948   $ 25,200  

Taxes paid

  $ 4,725   $ 3,162  

Non-cash financing activities:

             

Shares issued pursuant to the DRIP

  $ 9,723   $ 6,087  

   

The accompanying notes are an integral part of these consolidated financial statements

4


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments

September 30, 2018

(dollars in thousands)

(unaudited)

Portfolio Company(1)(20)
  Investment Date(26)
  Business Description
  Type of Investment(2)(3)(25)
  Principal(4)
  Cost(4)
  Fair Value(18)
 
   

Control Investments(5)

     

 

 

 

                   

                               

Access Media Holdings, LLC(10)

  July 22, 2015  

Private Cable Operator

                       

         

10% PIK Secured Debt (Maturity—July 22, 2020)(14)(19)

  $ 23,828   $ 23,828   $ 15,120  

         

Preferred Member Units (9,279,000 units)(27)

          9,173     (487 )

         

Member Units (45 units)

          1      

                      33,002     14,633  

                               

ASC Interests, LLC

  August 1, 2013  

Recreational and Educational Shooting Facility

                       

         

11% Secured Debt (Maturity—July 31, 2020)

    1,650     1,617     1,617  

         

Member Units (1,500 units)

          1,500     1,370  

                      3,117     2,987  

                               

ATS Workholding, LLC(10)

  March 10, 2014  

Manufacturer of Machine Cutting Tools and Accessories

                       

         

5% Secured Debt (Maturity—November 16, 2021)

    4,772     4,374     4,374  

         

Preferred Member Units (3,725,862 units)

          3,726     3,726  

                      8,100     8,100  

                               

Bond-Coat, Inc .

  December 28, 2012  

Casing and Tubing Coating Services

                       

         

12% Secured Debt (Maturity—December 28, 2020)

    11,596     11,343     11,596  

         

Common Stock (57,508 shares)

          6,350     9,370  

                      17,693     20,966  

                               

Brewer Crane Holdings, LLC

  January 9, 2018  

Provider of Crane Rental and Operating Services

                       

         

LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 12.10%, Secured Debt (Maturity—January 9, 2023)(9)

    9,672     9,586     9,586  

         

Preferred Member Units (2,950 units)(8)

          4,280     4,280  

                      13,866     13,866  

Café Brazil, LLC

  April 20, 2004  

Casual Restaurant Group

                       

         

Member Units (1,233 units)(8)

          1,742     4,780  

                               

California Splendor Holdings LLC

  March 30, 2018  

Processor of Frozen Fruits

                       

         

LIBOR Plus 8.00% (Floor 1.00%), Current Coupon 10.38%, Secured Debt (Maturity—March 30, 2023)(9)

    14,991     14,818     14,818  

         

LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 12.38%, Secured Debt (Maturity—March 30, 2023)(9)

    28,000     27,744     27,744  

         

Preferred Member Units (6,157 units)(8)

          10,775     10,775  

                      53,337     53,337  

                               

CBT Nuggets, LLC

  June 1, 2006  

Produces and Sells IT Training Certification Videos

                       

         

Member Units (416 units)(8)

          1,300     62,090  

                               

5


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

September 30, 2018

(dollars in thousands)

(unaudited)

Portfolio Company(1)(20)
  Investment Date(26)
  Business Description
  Type of Investment(2)(3)(25)
  Principal(4)
  Cost(4)
  Fair Value(18)
 
   

Chamberlin Holding LLC

  February 26, 2018  

Roofing and Waterproofing Specialty Contractor

                       

         

LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 12.38%, Secured Debt (Maturity—February 26, 2023)(9)

    21,600     21,405     21,405  

         

Member Units (4,347 units)(8)

          11,440     17,790  

                      32,845     39,195  

                               

Charps, LLC

  February 3, 2017  

Pipeline Maintenance and Construction

                       

         

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 9.10%, Secured Debt (Maturity—February 3, 2022)(9)

    1,600     1,587     1,587  

         

12% Secured Debt (Maturity—February 3, 2022)

    15,900     15,783     15,783  

         

Preferred Member Units (1,600 units)

          400     1,050  

                      17,770     18,420  

                               

Clad-Rex Steel, LLC

  December 20, 2016  

Specialty Manufacturer of Vinyl-Clad Metal

                       

         

LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 11.60%, Secured Debt (Maturity—December 20, 2021)(9)

    12,480     12,392     12,480  

         

Member Units (717 units)(8)

          7,280     10,380  

         

10% Secured Debt (Clad-Rex Steel RE Investor, LLC) (Maturity—December 20, 2036)

    1,167     1,156     1,167  

         

Member Units (Clad-Rex Steel RE Investor, LLC) (800 units)

          210     280  

                      21,038     24,307  

                               

CMS Minerals Investments

  January 30, 2015  

Oil & Gas Exploration & Production

                       

         

Member Units (CMS Minerals II, LLC) (100 units)(8)

          2,891     2,591  

                               

Copper Trail Fund Investments(12)(13)

  July 17, 2017  

Investment Partnership

                       

         

LP Interests (CTMH, LP) (Fully diluted 38.8%)

          872     872  

         

LP Interests (Copper Trail Energy Fund I, LP) (Fully diluted 30.1%)(8)

          3,270     3,499  

                      4,142     4,371  

                               

Datacom, LLC

  May 30, 2014  

Technology and Telecommunications Provider

                       

         

8% Secured Debt (Maturity—May 30, 2019)(14)

    1,800     1,800     1,690  

         

10.50% PIK Secured Debt (Maturity—May 30, 2019)(14)(19)

    12,511     12,479     10,560  

         

Class A Preferred Member Units

          1,294      

         

Class B Preferred Member Units (6,453 units)

          6,030      

                      21,603     12,250  

                               

Digital Products Holdings LLC

  April 1, 2018  

Designer and Distributor of Consumer Electronics

                       

         

LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 12.13%, Secured Debt (Maturity—April 1, 2023)(9)

    26,070     25,828     25,828  

         

Preferred Member Units (3,451 shares)(8)

          8,466     8,466  

                      34,294     34,294  

                               

6


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

September 30, 2018

(dollars in thousands)

(unaudited)

Portfolio Company(1)(20)
  Investment Date(26)
  Business Description
  Type of Investment(2)(3)(25)
  Principal(4)
  Cost(4)
  Fair Value(18)
 
   

Direct Marketing Solutions, Inc .

  February 13, 2018  

Provider of Omni-Channel Direct Marketing Services

                       

         

LIBOR Plus 11.00% (Floor 1.00%), Current Coupon 13.13%, Secured Debt (Maturity—February 13, 2023)(9)

    18,252     18,073     18,073  

         

Preferred Stock (8,400 shares)

          8,400     11,780  

                      26,473     29,853  

                               

Gamber-Johnson Holdings, LLC

  June 24, 2016  

Manufacturer of Ruggedized Computer Mounting Systems

                       

         

LIBOR Plus 8.00% (Floor 2.00%), Current Coupon 10.10%, Secured Debt (Maturity—June 24, 2021)(9)

    22,526     22,378     22,526  

         

Member Units (8,619 units)(8)

          14,844     40,120  

                      37,222     62,646  

                               

Garreco, LLC

  July 15, 2013  

Manufacturer and Supplier of Dental Products

                       

         

LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 12.00%, Secured Debt (Maturity—March 31, 2020)(9)

    5,362     5,335     5,335  

         

Member Units (1,200 units)

          1,200     1,940  

                      6,535     7,275  

                               

GRT Rubber Technologies LLC

  December 19, 2014  

Manufacturer of Engineered Rubber Products

                       

         

LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 11.10%, Secured Debt (Maturity—December 19, 2019)(9)

    10,101     10,071     10,101  

         

Member Units (5,879 units)(8)

          13,065     32,040  

                      23,136     42,141  

                               

Guerdon Modular Holdings, Inc .

  August 13, 2014  

Multi-Family and Commercial Modular Construction Company

                       

         

13% Secured Debt (Maturity—March 1, 2019)

    12,588     12,548     11,978  

         

Preferred Stock (404,998 shares)

          1,140      

         

Common Stock (212,033 shares)

          2,983      

         

Warrants (6,208,877 equivalent shares; Expiration—April 25, 2028; Strike price—$0.01 per unit)

               

                      16,671     11,978  

                               

Gulf Manufacturing, LLC

  August 31, 2007  

Manufacturer of Specialty Fabricated Industrial Piping Products

                       

         

Member Units (438 units)(8)

          2,980     11,690  

                               

Gulf Publishing Holdings, LLC

  April 29, 2016  

Energy Industry Focused Media and Publishing

                       

         

LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 11.60%, Secured Debt (Maturity—September 30, 2020)(9)

    160     160     160  

         

12.5% Secured Debt (Maturity—April 29, 2021)

    12,666     12,588     12,588  

         

Member Units (3,681 units)

          3,681     4,570  

                      16,429     17,318  

                               

Harborside Holdings, LLC

  March 20, 2017  

Real Estate Holding Company

                       

         

Member units (100 units)

          6,306     9,500  

                               

7


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

September 30, 2018

(dollars in thousands)

(unaudited)

Portfolio Company(1)(20)
  Investment Date(26)
  Business Description
  Type of Investment(2)(3)(25)
  Principal(4)
  Cost(4)
  Fair Value(18)
 
   

Harris Preston Fund Investments(12)(13)

  October 1, 2017  

Investment Partnership

                       

         

LP Interests (2717 MH, L.P.) (Fully diluted 49.3%)

          1,040     1,133  

                               

Harrison Hydra-Gen, Ltd .

  June 4, 2010  

Manufacturer of Hydraulic Generators

                       

         

Common Stock (107,456 shares)(8)

          718     7,570  

                               

HW Temps LLC

  July 2, 2015  

Temporary Staffing Solutions

                       

         

LIBOR Plus 13.00% (Floor 1.00%), Current Coupon 15.10%, Secured Debt (Maturity July 2, 2020)(9)

    9,976     9,932     9,932  

         

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

          3,942     3,942  

                      13,874     13,874  

                               

IDX Broker, LLC

  November 15, 2013  

Provider of Marketing and CRM Tools for the Real Estate Industry

                       

         

11.5% Secured Debt (Maturity—November 15, 2020)

    14,500     14,401     14,500  

         

Preferred Member Units (5,607 units)(8)

          5,952     12,470  

                      20,353     26,970  

                               

Jensen Jewelers of Idaho, LLC

  November 14, 2006  

Retail Jewelry Store

                       

         

Prime Plus 6.75% (Floor 2.00%), Current Coupon 11.75%, Secured Debt (Maturity—November 14, 2019)(9)

    3,505     3,482     3,505  

         

Member Units (627 units)(8)

          811     5,090  

                      4,293     8,595  

                               

KBK Industries, LLC

  January 23, 2006  

Manufacturer of Specialty Oilfield and Industrial Products

                       

         

Member Units (325 units)(8)

          783     7,100  

                               

Lamb Ventures, LLC

  May 30, 2008  

Aftermarket Automotive Services Chain

                       

         

11% Secured Debt (Maturity—July 1, 2022)

    8,339     8,303     8,339  

         

Preferred Equity (non-voting)

          400     400  

         

Member Units (742 units)

          5,273     6,730  

         

9.5% Secured Debt (Lamb's Real Estate Investment I, LLC) (Maturity—March 31, 2027)

    432     428     432  

         

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

          625     630  

                      15,029     16,531  

                               

Market Force Information, LLC

  July 28, 2017  

Provider of Customer Experience Management Services

                       

         

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 9.32%, Secured Debt (Maturity—July 28, 2022)(9)

    400     400     400  

         

LIBOR Plus 11.00% (Floor 1.00%), Current Coupon 13.32%, Secured Debt (Maturity—July 28, 2022)(9)

    22,800     22,615     22,615  

         

Member Units (657,113 units)

          14,700     14,250  

                      37,715     37,265  

                               

8


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

September 30, 2018

(dollars in thousands)

(unaudited)

Portfolio Company(1)(20)
  Investment Date(26)
  Business Description
  Type of Investment(2)(3)(25)
  Principal(4)
  Cost(4)
  Fair Value(18)
 
   

MH Corbin Holding LLC

  August 31, 2015  

Manufacturer and Distributor of Traffic Safety Products

                       

         

10% Current / 3% PIK Secured Debt (Maturity—August 31, 2020)(19)

    12,147     11,999     11,999  

         

Preferred Member Units (4,000 shares)

          6,000     4,500  

                      17,999     16,499  

                               

Mid-Columbia Lumber Products, LLC

  December 18, 2006  

Manufacturer of Finger-Jointed Lumber Products

                       

         

10% Secured Debt (Maturity—January 15, 2020)

    1,750     1,745     1,745  

         

12% Secured Debt (Maturity—January 15, 2020)

    3,900     3,875     3,875  

         

Member Units (7,874 units)

          3,001     3,860  

         

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

    757     757     757  

         

Member Units (Mid-Columbia Real Estate, LLC) (500 units)(8)

          790     1,470  

                      10,168     11,707  

                               

MSC Adviser I, LLC(16)

  November 22, 2013  

Third Party Investment Advisory Services

                       

         

Member Units (Fully diluted 100.0%)(8)

              70,148  

                               

Mystic Logistics Holdings, LLC

  August 18, 2014  

Logistics and Distribution Services Provider for Large Volume Mailers

                       

         

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

    7,536     7,496     7,496  

         

Common Stock (5,873 shares)

          2,720     710  

                      10,216     8,206  

                               

NAPCO Precast, LLC

  January 31, 2008  

Precast Concrete Manufacturing

                       

         

LIBOR Plus 8.50%, Current Coupon 10.82%, Secured Debt (Maturity—May 31, 2019)

    11,475     11,457     11,475  

         

Member Units (2,955 units)(8)

          2,975     13,280  

                      14,432     24,755  

                               

NexRev LLC

  February 28, 2018  

Provider of Energy Efficiency Products & Services

                       

         

10% Secured Debt (Maturity—February 28, 2023)

    17,440     17,281     17,281  

         

Preferred Member Units (86,400,000 units)(8)

          6,880     7,890  

                      24,161     25,171  

                               

NRI Clinical Research, LLC

  September 8, 2011  

Clinical Research Service Provider

                       

         

14% Secured Debt (Maturity—June 8, 2022)

    6,900     6,748     6,900  

         

Warrants (251,723 equivalent units; Expiration—June 8, 2027; Strike price—$0.01 per unit)

          252     500  

         

Member Units (1,454,167 units)

          765     2,500  

                      7,765     9,900  

                               

9


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

September 30, 2018

(dollars in thousands)

(unaudited)

Portfolio Company(1)(20)
  Investment Date(26)
  Business Description
  Type of Investment(2)(3)(25)
  Principal(4)
  Cost(4)
  Fair Value(18)
 
   

NRP Jones, LLC

  December 22, 2011  

Manufacturer of Hoses, Fittings and Assemblies

                       

         

12% Secured Debt (Maturity—March 20, 2023)

    6,376     6,376     6,376  

         

Member Units (65,962 units)(8)

          3,717     5,370  

                      10,093     11,746  

                               

NuStep, LLC

  January 31, 2017  

Designer, Manufacturer and Distributor of Fitness Equipment

                       

         

12% Secured Debt (Maturity—January 31, 2022)

    20,600     20,448     20,448  

         

Preferred Member Units (406 units)

          10,200     10,200  

                      30,648     30,648  

                               

OMi Holdings, Inc .

  April 1, 2008  

Manufacturer of Overhead Cranes

                       

         

Common Stock (1,500 shares)(8)

          1,080     15,480  

                               

Pegasus Research Group, LLC

  January 6, 2011  

Provider of Telemarketing and Data Services

                       

         

Member Units (460 units)

          1,290     8,250  

         

LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 8.50%, Secured Debt (Maturity—October 31, 2022)(9)(24)

                   

                               

PPL RVs, Inc .

  June 10, 2010  

Recreational Vehicle Dealer

                       

         

LIBOR Plus 7.00% (Floor 0.50%), Current Coupon 9.34%, Secured Debt (Maturity—November 15, 2021)(9)

    15,100     14,999     15,100  

         

Common Stock (1,962 shares)(8)

          2,150     11,780  

                      17,149     26,880  

                               

Principle Environmental, LLC (d/b/a TruHorizon Environmental Solutions)

  February 1, 2011  

Noise Abatement Service Provider

                       

         

13% Secured Debt (Maturity—April 30, 2020)

    7,477     7,384     7,477  

         

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

          4,600     13,090  

         

Warrants (1,018 equivalent units; Expiration—January 31, 2021; Strike price—$0.01 per unit)

          1,200     780  

                      13,184     21,347  

                               

Quality Lease Service, LLC

  June 8, 2015  

Provider of Rigsite Accommodation Unit Rentals and Related Services

                       

         

Zero Coupon Secured Debt (Maturity—June 8, 2021)

    7,341     7,341     6,450  

         

Member Units (1,000 units)

          3,968     4,370  

                      11,309     10,820  

                               

River Aggregates, LLC

  March 30, 2011  

Processor of Construction Aggregates

                       

         

Zero Coupon Secured Debt (Maturity—June 30, 2018)(17)

    750     750     722  

         

Member Units (1,150 units)

          1,150     4,610  

         

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

          369     2,730  

                      2,269     8,062  

                               

10


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

September 30, 2018

(dollars in thousands)

(unaudited)

Portfolio Company(1)(20)
  Investment Date(26)
  Business Description
  Type of Investment(2)(3)(25)
  Principal(4)
  Cost(4)
  Fair Value(18)
 
   

Tedder Industries, LLC

  August 31, 2018  

Manufacturer of Firearm Holsters and Accessories

                       

         

12% Secured Debt (Maturity—August 31, 2023)

    16,400     16,240     16,240  

         

Preferred Member Units (440 units)

          7,476     7,476  

                      23,716     23,716  

                               

The MPI Group, LLC

  October 2, 2007  

Manufacturer of Custom Hollow Metal Doors, Frames and Accessories

                       

         

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

    2,924     2,924     1,110  

         

Series A Preferred Units (2,500 units)

          2,500      

         

Warrants (1,424 equivalent units; Expiration—July 1, 2024; Strike price—$0.01 per unit)

          1,096      

         

Member Units (MPI Real Estate Holdings, LLC) (100 units)(8)

          2,300     2,480  

                      8,820     3,590  

                               

Vision Interests, Inc .

  June 5, 2007  

Manufacturer / Installer of Commercial Signage

                       

         

13% Secured Debt (Maturity—December 23, 2018)

    2,314     2,311     2,311  

         

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

          3,000     3,740  

         

Common Stock (1,126,242 shares)

          3,706     280  

                      9,017     6,331  

                               

Ziegler's NYPD, LLC

  October 1, 2008  

Casual Restaurant Group

                       

         

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

    1,000     998     1,000  

         

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

    425     425     425  

         

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

    2,750     2,750     2,750  

         

Warrants (587 equivalent units; Expiration—October 1, 2019; Strike price—$0.01 per unit)

          600      

         

Preferred Member Units (10,072 units)

          2,834     2,071  

                      7,607     6,246  

Subtotal Control Investments (64.2% of net assets at fair value)

  $ 717,220   $ 967,128  

11


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

September 30, 2018

(dollars in thousands)

(unaudited)

Portfolio Company(1)(20)
  Investment Date(26)
  Business Description
  Type of Investment(2)(3)(25)
  Principal(4)
  Cost(4)
  Fair Value(18)
 
   

Affiliate Investments(6)

     

 

 

 

                   

                               

AFG Capital Group, LLC

  November 7, 2014  

Provider of Rent-to-Own Financing Solutions and Services

                       

         

Warrants (42 equivalent units; Expiration—November 7, 2024; Strike price—$0.01 per unit)

        $ 259   $ 940  

         

Preferred Member Units (186 units)(8)

          1,200     3,940  

                      1,459     4,880  

                               

Barfly Ventures, LLC(10)

  August 31, 2015  

Casual Restaurant Group

                       

         

12% Secured Debt (Maturity—August 31, 2020)

    9,817     9,669     9,808  

         

Options (2 equivalent units)

          397     730  

         

Warrant (1 equivalent unit; Expiration—August 31, 2025; Strike price—$1.00 per unit)

          473     410  

                      10,539     10,948  

                               

BBB Tank Services, LLC

  April 8, 2016  

Maintenance, Repair and Construction Services to the Above-Ground Storage Tank Market

                       

         

LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 12.10%, Secured Debt (Maturity—April 8, 2018)(9)(17)

    650     633     633  

         

17% Secured Debt (Maturity—April 8, 2021)

    4,000     3,898     3,898  

         

Member Units (800,000 units)

          800     470  

                      5,331     5,001  

                               

Boccella Precast Products LLC

  June 30, 2017  

Manufacturer of Precast Hollow Core Concrete

                       

         

LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 12.34%, Secured Debt (Maturity—June 30, 2022)(9)

    16,284     16,143     16,284  

         

Member Units (2,160,000 units)(8)

          2,160     4,960  

                      18,303     21,244  

                               

Boss Industries, LLC

  July 1, 2014  

Manufacturer and Distributor of Air, Power and Other Industrial Equipment

                       

         

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

          2,203     5,830  

                               

Bridge Capital Solutions Corporation

  April 18, 2012  

Financial Services and Cash Flow Solutions Provider

                       

         

13% Secured Debt (Maturity—July 25, 2021)

    7,500     6,130     6,130  

         

Warrants (82 equivalent shares; Expiration—July 25, 2026; Strike price—$0.01 per share)

          2,132     4,020  

         

13% Secured Debt (Mercury Service Group, LLC) (Maturity—July 25, 2021)

    1,000     994     1,000  

         

Preferred Member Units (Mercury Service Group, LLC) (17,742 units)(8)

          1,000     1,000  

                      10,256     12,150  

                               

12


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

September 30, 2018

(dollars in thousands)

(unaudited)

Portfolio Company(1)(20)
  Investment Date(26)
  Business Description
  Type of Investment(2)(3)(25)
  Principal(4)
  Cost(4)
  Fair Value(18)
 
   

Buca C, LLC

  June 30, 2015  

Casual Restaurant Group

                       

         

LIBOR Plus 9.25% (Floor 1.00%), Current Coupon 11.36%, Secured Debt (Maturity—June 30, 2020)(9)

    19,404     19,327     19,327  

         

Preferred Member Units (6 units; 6% cumulative)(8)(19)

          4,365     4,365  

                      23,692     23,692  

                               

CAI Software LLC

  October 10, 2014  

Provider of Specialized Enterprise Resource Planning Software

                       

         

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

    3,283     3,272     3,283