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, 2010

 

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 £

 

Accelerated filer x

 

 

 

Non-accelerated filer £

 

Smaller reporting company £

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes £ No x

 

The number of shares outstanding of the issuer’s common stock as of May 7, 2010 was 15,123,676.

 

 

 



Table of Contents

 

TABLE OF CONTENTS

 

 

PART I
FINANCIAL INFORMATION

 

 

 

 

Item 1.

Financial Statements

 

 

 

 

 

Consolidated Balance Sheets — March 31, 2010 (unaudited) and December 31, 2009

3

 

 

 

 

Consolidated Statements of Operations (unaudited) — Three months ended March 31, 2010 and 2009

4

 

 

 

 

Consolidated Statements of Changes in Net Assets (unaudited) — Three months ended March 31, 2010 and 2009

5

 

 

 

 

Consolidated Statements of Cash Flows (unaudited) — Three months ended March 31, 2010 and 2009

6

 

 

 

 

Consolidated Schedule of Investments (unaudited) — March 31, 2010

7

 

 

 

 

Consolidated Schedule of Investments — December 31, 2009

13

 

 

 

 

Notes to Consolidated Financial Statements (unaudited)

18

 

 

 

Item 2.

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

38

 

 

 

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

52

 

 

 

Item 4.

Controls and Procedures

52

 

 

 

 

PART II
OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings

53

 

 

 

Item 1A.

Risk Factors

53

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

53

 

 

 

Item 6.

Exhibits

53

 

 

 

 

Signatures

54

 

2



Table of Contents

 

PART I — FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

MAIN STREET CAPITAL CORPORATION

Consolidated Balance Sheets

 

 

 

March 31, 2010

 

December 31, 2009

 

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Portfolio investments at fair value:

 

 

 

 

 

Control investments (cost: $127,303,070 and $59,544,719 as of March 31, 2010 and December 31, 2009, respectively)

 

$

137,368,925

 

$

66,400,667

 

Affiliate investments (cost: $53,260,066 and $39,252,445 as of March 31, 2010 and December 31, 2009, respectively)

 

63,238,278

 

46,886,202

 

Non-Control/Non-Affiliate investments (cost: $39,204,991 and $27,482,826 as of March 31, 2010 and December 31, 2009, respectively)

 

38,699,498

 

27,416,287

 

Investment in affiliated Investment Manager (cost: $4,284,042 and $18,000,000 as of March 31, 2010 and December 31, 2009, respectively)

 

2,175,801

 

16,036,838

 

 

 

 

 

 

 

Total portfolio investments (cost: $224,052,169 and $144,279,990 as of March 31, 2010 and December 31, 2009, respectively)

 

241,482,502

 

156,739,994

 

Marketable securities and idle funds investments (cost: $25,889,728 and $3,252,954 as of March 31, 2010 and December 31, 2009, respectively)

 

26,143,033

 

3,252,954

 

Cash and cash equivalents

 

32,665,182

 

30,619,998

 

Deferred tax asset

 

2,331,581

 

2,716,400

 

Other assets

 

2,961,841

 

1,509,608

 

Deferred financing costs (net of accumulated amortization of $1,169,366 and $1,071,676 as of March 31, 2010 and December 31, 2009, respectively)

 

1,524,130

 

1,611,508

 

 

 

 

 

 

 

Total assets

 

$

307,108,269

 

$

196,450,462

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

SBIC debentures (par: $135,000,000 and $65,000,000 as of March 31, 2010 and December 31, 2009, respectively; $52,857,899 at fair value as of March 31, 2010)

 

$

117,857,899

 

$

65,000,000

 

Line of credit

 

2,100,000

 

 

Interest payable

 

636,125

 

1,069,148

 

Dividend payable

 

1,885,329

 

 

Accounts payable and other liabilities

 

871,554

 

721,183

 

 

 

 

 

 

 

Total liabilities

 

123,350,907

 

66,790,331

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

NET ASSETS

 

 

 

 

 

 

 

 

 

 

 

Common stock, $0.01 par value per share (150,000,000 shares authorized; 15,082,742 and 10,842,447 issued and outstanding as of March 31, 2010 and December 31, 2009, respectively)

 

150,827

 

108,425

 

Additional paid-in capital

 

172,016,876

 

123,534,156

 

Accumulated net realized income (loss)

 

(11,595,553

)

(8,652,154

)

Net unrealized appreciation from investments, net of income taxes

 

19,675,871

 

14,669,704

 

 

 

 

 

 

 

Total Net Asset Value

 

180,248,021

 

129,660,131

 

 

 

 

 

 

 

Noncontrolling interest

 

3,509,341

 

 

 

 

 

 

 

 

Total net assets including noncontrolling interests

 

183,757,362

 

129,660,131

 

 

 

 

 

 

 

Total liabilities and net assets

 

$

307,108,269

 

$

196,450,462

 

 

 

 

 

 

 

NET ASSET VALUE PER SHARE

 

$

11.95

 

$

11.96

 

 

The accompanying notes are an integral part of these financial statements

 

3



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Operations

(Unaudited)

 

 

 

Three Months Ended March 31,

 

 

 

2010

 

2009

 

 

 

 

 

 

 

INVESTMENT INCOME:

 

 

 

 

 

Interest, fee and dividend income:

 

 

 

 

 

Control investments

 

$

3,595,308

 

$

2,002,620

 

Affiliate investments

 

1,808,613

 

1,169,056

 

Non-Control/Non-Affiliate investments

 

863,396

 

137,955

 

Total interest, fee and dividend income

 

6,267,317

 

3,309,631

 

Interest from marketable securities, idle funds and other

 

825,522

 

282,794

 

Total investment income

 

7,092,839

 

3,592,425

 

EXPENSES:

 

 

 

 

 

Interest

 

(1,993,237

)

(931,335

)

General and administrative

 

(1,577,891

)

(349,098

)

Share-based compensation

 

(301,458

)

(195,726

)

Total expenses

 

(3,872,586

)

(1,476,159

)

NET INVESTMENT INCOME

 

3,220,253

 

2,116,266

 

 

 

 

 

 

 

NET REALIZED GAIN (LOSS) FROM INVESTMENTS:

 

 

 

 

 

Control investments

 

(4,020,918

)

767,601

 

Non-Control/Non-Affiliate investments

 

 

126,623

 

Marketable securities and idle funds investments

 

(39,539

)

 

Total net realized gain (loss) from investments

 

(4,060,457

)

894,224

 

NET REALIZED INCOME (LOSS)

 

(840,204

)

3,010,490

 

 

 

 

 

 

 

NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION):

 

 

 

 

 

Portfolio investments

 

5,114,659

 

(3,405,548

)

Marketable securities and idle funds investments

 

253,304

 

(354,060

)

SBIC debentures

 

281,193

 

 

Investment in affiliated Investment Manager

 

(145,079

)

338,595

 

Total net change in unrealized appreciation (depreciation)

 

5,504,077

 

(3,421,013

)

 

 

 

 

 

 

Income tax provision

 

(384,574

)

(57,275

)

Bargain purchase gain

 

4,890,582

 

 

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS

 

9,169,881

 

(467,798

)

Noncontrolling interest

 

(113,336

)

 

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ATTRIBUTABLE TO COMMON STOCK

 

$

9,056,545

 

$

(467,798

)

 

 

 

 

 

 

NET INVESTMENT INCOME PER SHARE - BASIC AND DILUTED

 

$

0.22

 

$

0.23

 

NET REALIZED INCOME (LOSS) PER SHARE - BASIC AND DILUTED

 

$

(0.06

)

$

0.33

 

DIVIDENDS PAID PER SHARE

 

$

0.38

 

$

0.38

 

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

 

$

0.63

 

$

(0.05

)

WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED

 

14,356,785

 

9,125,440

 

 

The accompanying notes are an integral part of these financial statements

 

4



Table of Contents

 

Consolidated Statements of Changes in Net Assets

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Net Unrealized

 

 

 

 

 

Total Net

 

 

 

 

 

 

 

 

 

 

 

Appreciation from

 

 

 

 

 

Assets

 

 

 

Common Stock

 

Additional

 

Accumulated

 

Investments,

 

 

 

 

 

Including

 

 

 

Number

 

Par

 

Paid-In

 

Net Realized

 

Net of Income

 

Total Net

 

Noncontrolling

 

Noncontrolling

 

 

 

of Shares

 

Value

 

Capital

 

Income (Loss)

 

Taxes

 

Assets Value

 

Interest

 

Interest

 

Balances at December 31, 2008

 

9,206,483

 

$

92,065

 

$

104,467,740

 

$

3,658,495

 

$

4,137,756

 

$

112,356,056

 

$

 

$

112,356,056

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share repurchase program

 

(164,544

)

(1,645

)

(1,615,461

)

 

 

(1,617,106

)

 

(1,617,106

)

Share-based compensation

 

 

 

195,726

 

 

 

195,726

 

 

195,726

 

Dividends to stockholders

 

 

 

 

(3,428,937

)

 

(3,428,937

)

 

(3,428,937

)

Net increase resulting from operations

 

 

 

 

3,010,490

 

(3,478,288

)

(467,798

)

 

(467,798

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at March 31, 2009

 

9,041,939

 

$

90,420

 

$

103,048,005

 

$

3,240,048

 

$

659,468

 

$

107,037,941

 

$

 

$

107,037,941

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at December 31, 2009

 

10,842,447

 

$

108,425

 

$

123,534,156

 

$

(8,652,154

)

$

14,669,704

 

129,660,131

 

$

 

129,660,131

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MSC II exchange offer and related transactions

 

1,239,695

 

12,397

 

19,921,899

 

4,890,582

 

 

24,824,878

 

3,396,005

 

28,220,883

 

Public offering of common stock, net of offering costs

 

2,875,000

 

28,750

 

40,127,248

 

 

 

40,155,998

 

 

40,155,998

 

Share-based compensation

 

 

 

301,458

 

 

 

301,458

 

 

301,458

 

Dividend reinvestment

 

125,600

 

1,255

 

1,848,073

 

 

 

1,849,328

 

 

1,849,328

 

Adjustment to investment in Investment Manager related to the MSC II Exchange Offer

 

 

 

(13,715,958

)

 

 

(13,715,958

)

 

(13,715,958

)

Dividends to stockholders

 

 

 

 

(6,993,777

)

 

(6,993,777

)

 

(6,993,777

)

Net increase resulting from operations

 

 

 

 

(840,204

)

5,119,503

 

4,279,299

 

 

4,279,299

 

Noncontrolling interest

 

 

 

 

 

(113,336

)

(113,336

)

113,336

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at March 31, 2010

 

15,082,742

 

$

150,827

 

$

172,016,876

 

$

(11,595,553

)

$

19,675,871

 

$

180,248,021

 

$

3,509,341

 

$

183,757,362

 

 

The accompanying notes are an integral part of these financial statements

 

5



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Cash Flows

 

 

 

Three Months Ended March 31,

 

 

 

2010

 

2009

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

Net increase in net assets resulting from operations:

 

$

9,169,881

 

$

(467,798

)

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

 

 

 

 

 

Net change in unrealized (appreciation) depreciation

 

(5,504,077

)

3,421,013

 

Net realized (gain) loss from investments

 

4,060,457

 

(894,224

)

Bargain purchase gain

 

(4,890,582

)

 

Accretion of unearned income

 

(596,182

)

(130,356

)

Net payment-in-kind interest accrual

 

(201,775

)

(150,728

)

Share-based compensation expense

 

301,458

 

195,726

 

Amortization of deferred financing costs

 

97,688

 

100,523

 

Deferred taxes

 

301,992

 

327,720

 

Changes in other assets and liabilities:

 

 

 

 

 

Other assets

 

(835,521

)

(512,642

)

Interest payable

 

(1,776,121

)

(791,295

)

Accounts payable and other liabilities

 

(26,139

)

(828,276

)

Net cash provided by operating activities

 

101,079

 

269,663

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

Investments in portfolio companies

 

(18,455,762

)

(2,173,320

)

Investments in marketable securities and idle funds investments

 

(25,939,696

)

(13,085,200

)

Cash acquired in MSC II exchange offer

 

2,489,920

 

 

Proceeds from marketable securities and idle funds investments

 

3,596,689

 

2,345,327

 

Principal payments received on loans and debt securities

 

1,266,386

 

886,042

 

Net cash provided by (used in) investing activities

 

(37,042,463

)

(12,027,151

)

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

Share repurchase program

 

 

(1,323,226

)

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

 

40,155,998

 

 

Dividends paid to stockholders

 

(3,259,120

)

(3,420,886

)

Proceeds from line of credit

 

18,150,000

 

 

Repayments on line of credit

 

(16,050,000

)

 

Payment of deferred loan costs and SBIC debenture fees

 

(10,310

)

(10,424

)

Net cash provided by (used in) financing activities

 

38,986,568

 

(4,754,536

)

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

2,045,184

 

(16,512,024

)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

 

30,619,998

 

35,374,826

 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

 

$

32,665,182

 

$

18,862,802

 

 

The accompanying notes are an integral part of these financial statements

 

6



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

March 31, 2010

 

Portfolio Company/Type of Investment (1) (2)

 

Industry

 

Principal (6)

 

Cost (6)

 

Fair Value

 

 

 

 

 

 

 

 

 

 

 

Control Investments (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advantage Millwork Company, Inc.

 

Manufacturer/Distributor of Wood Doors

 

 

 

 

 

 

 

12% Secured Debt (Maturity - February 5, 2012)

 

 

$

7,666,667

 

$

4,770,657

 

$

3,000,000

 

Warrants (Fully diluted 30.5%)

 

 

 

 

97,808

 

 

 

 

 

 

 

 

4,868,465

 

3,000,000

 

 

 

 

 

 

 

 

 

 

 

Café Brazil, LLC

 

Casual Restaurant Group

 

 

 

 

 

 

 

12% Secured Debt (Maturity - April 20, 2011)

 

 

2,350,000

 

2,340,057

 

2,350,000

 

Member Units (7) (Fully diluted 42.3%)

 

 

 

 

 

41,837

 

1,690,000

 

 

 

 

 

 

 

2,381,894

 

4,040,000

 

 

 

 

 

 

 

 

 

 

 

California Healthcare Medical Billing, Inc.

 

Healthcare Billing and Records Management

 

 

 

 

 

 

 

12% Secured Debt (Maturity - October 17, 2013)

 

 

2,303,000

 

2,051,062

 

2,133,333

 

12% Current / 6% PIK Secured Debt (Maturity - October 17, 2013)

 

 

 

1,910,000

 

1,870,120

 

1,870,120

 

Common Stock (Fully diluted 9.8%)

 

 

 

 

 

1,176,667

 

1,600,000

 

Warrants (Fully diluted 19.6%)

 

 

 

 

 

1,093,333

 

2,040,333

 

 

 

 

 

 

 

6,191,182

 

7,643,786

 

 

 

 

 

 

 

 

 

 

 

CBT Nuggets, LLC

 

Produces and Sells IT Certification Training Videos

 

 

 

 

 

 

 

14% Secured Debt (Maturity - December 31, 2013)

 

 

2,800,000

 

2,780,208

 

2,800,000

 

10% Secured Debt (Maturity - March 31, 2012)

 

 

1,525,000

 

1,525,000

 

1,525,000

 

Member Units (7) (Fully diluted 40.8%)

 

 

 

 

 

1,299,520

 

2,720,000

 

 

 

 

 

 

 

5,604,728

 

7,045,000

 

 

 

 

 

 

 

 

 

 

 

Ceres Management, LLC (Lambs)

 

Aftermarket Automotive Services Chain

 

 

 

 

 

 

 

14% Secured Debt (Maturity - May 31, 2013)

 

 

4,000,000

 

3,955,851

 

3,955,851

 

Member Units (Fully diluted 70%)

 

 

 

 

1,813,333

 

1,900,000

 

Class B Member Units (Non-voting)

 

 

 

 

 

888,391

 

888,391

 

 

 

 

 

 

 

6,657,575

 

6,744,242

 

 

 

 

 

 

 

 

 

 

 

Condit Exhibits, LLC

 

Tradeshow Exhibits/Custom Displays

 

 

 

 

 

 

 

9% current / 9% PIK Secured Debt (Maturity - July 1, 2013)

 

 

4,453,439

 

4,403,107

 

4,403,107

 

Warrants (Fully diluted 46.9%)

 

 

 

 

320,000

 

50,000

 

 

 

 

 

 

 

4,723,107

 

4,453,107

 

 

 

 

 

 

 

 

 

 

 

Currie Acquisitions, LLC

 

Manufacturer of Electric Bicycles / Scooters

 

 

 

 

 

 

 

12% Secured Debt (Maturity - March 1, 2015)

 

 

4,750,000

 

3,880,491

 

3,880,491

 

Warrants (Fully diluted 41.9%)

 

 

 

 

2,566,204

 

2,566,204

 

 

 

 

 

 

 

6,446,695

 

6,446,695

 

 

 

 

 

 

 

 

 

 

 

Gulf Manufacturing, LLC

 

Industrial Metal Fabrication

 

 

 

 

 

 

 

Prime Plus 1% Secured Debt (Maturity - August 31, 2012)

 

 

3,000,000

 

2,993,745

 

3,000,000

 

13% Secured Debt (Maturity - August 31, 2012)

 

 

2,000,000

 

1,951,110

 

1,995,238

 

Member Units (7) (Fully diluted 46%)

 

 

 

 

 

4,012,000

 

5,900,000

 

Warrants (Fully diluted 21%)

 

 

 

 

 

1,780,000

 

2,700,000

 

 

 

 

 

 

 

10,736,855

 

13,595,238

 

 

 

 

 

 

 

 

 

 

 

Hawthorne Customs & Dispatch Services, LLC

 

Transportation/Logistics

 

 

 

 

 

 

 

Member Units (7) (Fully diluted 59.2%)

 

 

 

 

 

692,500

 

990,000

 

 

 

 

 

 

 

 

 

 

 

Hydratec Holdings, LLC

 

Agricultural Services

 

 

 

 

 

 

 

12.5% Secured Debt (Maturity - October 31, 2012)

 

 

2,995,244

 

2,959,500

 

2,959,500

 

Prime Plus 1% Secured Debt (Maturity - October 31, 2012)

 

 

350,000

 

339,667

 

339,667

 

Member Units (Fully diluted 85.1%)

 

 

 

 

4,100,000

 

6,310,000

 

 

 

 

 

 

 

7,399,167

 

9,609,167

 

 

 

 

 

 

 

 

 

 

 

Indianapolis Aviation Partners, LLC

 

FBO / Aviation Support Services

 

 

 

 

 

 

 

12% Secured Debt (Maturity - September 15, 2014)

 

 

4,500,000

 

4,088,106

 

4,088,106

 

Warrants (Fully diluted 30.2%)

 

 

 

 

1,129,286

 

1,129,286

 

 

 

 

 

 

 

5,217,392

 

5,217,392

 

 

7



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

March 31, 2010

 

Portfolio Company/Type of Investment (1) (2)

 

Industry

 

Principal (6)

 

Cost (6)

 

Fair Value

 

 

 

 

 

 

 

 

 

 

 

Jensen Jewelers of Idaho, LLC

 

Retail Jewelry

 

 

 

 

 

 

 

Prime Plus 2% Secured Debt (Maturity - November 14, 2011)

 

 

 

2,610,000

 

2,602,452

 

2,610,000

 

13% current / 6% PIK Secured Debt (Maturity - November 14, 2011)

 

 

 

2,708,821

 

2,698,042

 

2,708,820

 

Member Units (7)  (Fully diluted 60.8%)

 

 

 

 

 

811,000

 

1,010,000

 

 

 

 

 

 

 

6,111,494

 

6,328,820

 

 

 

 

 

 

 

 

 

 

 

Mid-Columbia Lumber Products, LLC

 

Specialized Lumber Products

 

 

 

 

 

 

 

Prime Plus 1% Secured Debt (Maturity - June 30, 2010)

 

 

375,000

 

373,333

 

373,333

 

12% Secured Debt (Maturity — December 18, 2011)

 

 

 

3,900,000

 

3,734,286

 

3,789,209

 

Member Units (Fully diluted 26.7%)

 

 

 

 

 

500,000

 

610,000

 

Warrants (Fully diluted 25.5%)

 

 

 

 

 

250,000

 

580,000

 

 

 

 

 

 

 

4,857,619

 

5,352,542

 

 

 

 

 

 

 

 

 

 

 

NAPCO Precast, LLC

 

Precast Concrete Manufacturing

 

 

 

 

 

 

 

18% Secured Debt (Maturity - February 1, 2013)

 

 

5,923,077

 

5,843,013

 

5,923,077

 

Prime Plus 2% Secured Debt (Maturity - February 1, 2013) (8)

 

 

3,384,615

 

3,363,548

 

3,384,615

 

Member Units (7) (Fully diluted 35.3%)

 

 

 

 

 

2,020,000

 

5,220,000

 

 

 

 

 

 

 

11,226,561

 

14,527,692

 

 

 

 

 

 

 

 

 

 

 

OMi Holdings, Inc.

12% Secured Debt (Maturity - April 1, 2013)

Common Stock (Fully diluted 48%)

 

Manufacturer of Overhead Cranes

 

 

 

 

 

 

 

 

 

10,370,000

 

10,300,493

 

10,300,493

 

 

 

 

 

1,080,000

 

270,000

 

 

 

 

 

 

 

11,380,493

 

10,570,493

 

 

 

 

 

 

 

 

 

 

 

The MPI Group, LLC

 

Manufacturer of Custom Hollow Metal Doors, Frames and Accessories

 

 

 

 

 

 

 

9% Secured Debt (Maturity — October 2, 2013)

 

 

200,000

 

198,619

 

198,619

 

12% Secured Debt (Maturity — October 2, 2013)

 

 

5,000,000

 

4,798,053

 

4,798,053

 

Warrants (Fully diluted 29.7%)

 

 

 

 

695,943

 

400,000

 

Warrants (Fully diluted 17.4%)

 

 

 

 

200,000

 

200,000

 

 

 

 

 

 

 

5,892,615

 

5,596,672

 

 

 

 

 

 

 

 

 

 

 

Thermal & Mechanical Equipment, LLC

 

Heat Exchange / Filtration Products and Services

 

 

 

 

 

 

 

13% current / 5% PIK Secured Debt (Maturity - September 25, 2014)

 

 

5,575,220

 

5,491,500

 

5,491,500

 

Prime Plus 2% Secured Debt (Maturity - September 25, 2014) (8)

 

 

1,750,000

 

1,737,396

 

1,737,396

 

Warrants (Fully diluted 50.0%)

 

 

 

 

 

1,000,000

 

1,000,000

 

 

 

 

 

 

 

8,228,896

 

8,228,896

 

 

 

 

 

 

 

 

 

 

 

Uvalco Supply, LLC

 

Farm and Ranch Supply

 

 

 

 

 

 

 

Member Units (Fully diluted 39.6%) (7)

 

 

 

 

 

1,113,243

 

1,270,000

 

 

 

 

 

 

 

 

 

 

 

Vision Interests, Inc.

 

Manufacturer/Installer of Commercial Signage

 

 

 

 

 

 

 

13% Secured Debt (Maturity - June 5, 2012)

 

 

9,400,000

 

8,461,820

 

8,059,660

 

Common Stock (Fully diluted 22.3%)

 

 

 

 

372,000

 

 

Warrants (Fully diluted 28%)

 

 

 

 

160,000

 

 

 

 

 

 

 

 

8,993,820

 

8,059,660

 

 

 

 

 

 

 

 

 

 

 

Ziegler’s NYPD, LLC

 

Casual Restaurant Group

 

 

 

 

 

 

 

Prime Plus 2% Secured Debt (Maturity - October 1, 2013) (8)

 

 

 

1,000,000

 

992,533

 

992,533

 

13% current / 5% PIK Secured Debt (Maturity - October 1, 2013)

 

 

 

4,680,906

 

4,621,452

 

4,621,452

 

Warrants (Fully diluted 47.6%)

 

 

 

 

 

600,000

 

670,000

 

 

 

 

 

 

 

6,213,985

 

6,283,985

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

537,500

 

2,364,784

 

2,365,538

 

 

 

 

 

 

 

 

 

 

 

Subtotal Control Investments

 

 

 

 

 

127,303,070

 

137,368,925

 

 

8



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

March 31, 2010

 

Portfolio Company/Type of Investment (1) (2)

 

Industry

 

Principal (6)

 

Cost (6)

 

Fair Value

 

 

 

 

 

 

 

 

 

 

 

Affiliate Investments (4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

American Sensor Technologies, Inc.

 

Manufacturer of Commercial/Industrial Sensors

 

 

 

 

 

 

 

Prime Plus 0.5% Secured Debt (Maturity - May 31, 2010) (8)

 

 

3,800,000

 

3,800,000

 

3,800,000

 

Warrants (Fully diluted 19.6%)

 

 

 

 

49,990

 

950,000

 

 

 

 

 

 

 

3,849,990

 

4,750,000

 

 

 

 

 

 

 

 

 

 

 

Audio Messaging Solutions, LLC

 

Audio Messaging Services

 

 

 

 

 

 

 

12% Secured Debt (Maturity - May 8, 2014)

 

 

5,572,000

 

5,190,222

 

5,320,000

 

Warrants (Fully diluted 8.4%)

 

 

 

 

468,373

 

1,120,000

 

 

 

 

 

 

 

5,658,595

 

6,440,000

 

 

 

 

 

 

 

 

 

 

 

Compact Power Equipment Centers, LLC

 

Light to Medium Duty Equipment Rental

 

 

 

 

 

 

 

12% Secured Debt (Maturity - September 23, 2014)

 

 

3,000,000

 

2,963,054

 

2,963,054

 

Member Units (Fully diluted 11.5%)

 

 

 

 

1,147

 

1,147

 

 

 

 

 

 

2,964,201

 

2,964,201

 

 

 

 

 

 

 

 

 

 

 

DrillingInfo, Inc.

 

Information Services for the Oil and Gas Industry

 

 

 

 

 

 

 

12% Secured Debt (Maturity - November 19, 2014)

 

 

8,000,000

 

6,680,939

 

6,680,939

 

Warrants (Fully diluted 5.0%)

 

 

 

 

1,250,000

 

1,830,000

 

 

 

 

 

 

7,930,939

 

8,510,939

 

 

 

 

 

 

 

 

 

 

 

East Teak Fine Hardwoods, Inc.

 

Hardwood Products

 

 

 

 

 

 

 

Common Stock (Fully diluted 5.0%)

 

 

 

 

480,318

 

610,000

 

 

 

 

 

 

 

 

 

 

 

Houston Plating & Coatings, LLC

 

Plating & Industrial Coating Services

 

 

 

 

 

 

 

Prime Plus 2% Secured Debt (Maturity - July 19, 2011)

 

 

100,000

 

100,000

 

100,000

 

Prime Plus 2% Secured Debt (Maturity - July 18, 2013)

 

 

 

200,000

 

200,000

 

200,000

 

Member Units (7) (Fully diluted 11.1%)

 

 

 

 

 

335,000

 

3,005,000

 

 

 

 

 

 

 

635,000

 

3,305,000

 

 

 

 

 

 

 

 

 

 

 

KBK Industries, LLC

 

Specialty Manufacturer of Oilfield and Industrial Products

 

 

 

 

 

 

 

14% Secured Debt (Maturity - January 23, 2011)

 

 

5,250,000

 

5,160,229

 

5,160,229

 

8% Secured Debt (Maturity - March 31, 2011)

 

 

689,940

 

689,940

 

689,940

 

Member Units (7) (Fully diluted 19.3%)

 

 

 

 

340,833

 

1,050,333

 

 

 

 

 

 

 

6,191,002

 

6,900,502

 

 

 

 

 

 

 

 

 

 

 

Laurus Healthcare, LP

 

Healthcare Facilities / Services

 

 

 

 

 

 

 

13% Secured Debt (Maturity - May 7, 2012)

 

 

2,275,000

 

2,275,000

 

2,275,000

 

Warrants (Fully diluted 17.5%)

 

 

 

 

105,000

 

4,400,000

 

 

 

 

 

 

 

2,380,000

 

6,675,000

 

 

 

 

 

 

 

 

 

 

 

Lighting Unlimited, LLC

 

Commercial and Residential Lighting Products and Design Services

 

 

 

 

 

 

 

Prime Plus 1% Secured Debt (Maturity - August 22, 2012) (8)

 

 

1,133,332

 

1,127,494

 

1,127,494

 

14% Secured Debt (Maturity - August 22, 2012)

 

 

1,742,313

 

1,691,709

 

1,691,709

 

Warrants (Fully diluted 15.0%)

 

 

 

 

54,000

 

54,000

 

 

 

 

 

 

 

2,873,203

 

2,873,203

 

 

 

 

 

 

 

 

 

 

 

National Trench Safety, LLC

 

Trench & Traffic Safety Equipment

 

 

 

 

 

 

 

10% PIK Debt (Maturity - April 16, 2014)

 

 

458,476

 

458,476

 

458,476

 

Member Units (Fully diluted 11.7%)

 

 

 

 

1,792,308

 

500,000

 

 

 

 

 

 

2,250,784

 

958,476

 

 

 

 

 

 

 

 

 

 

 

Olympus Building Services, Inc.

 

Custodial/Facilities Services

 

 

 

 

 

 

 

12% Secured Debt (Maturity - March 27, 2014)

 

 

3,150,000

 

2,953,923

 

3,050,000

 

12% Current / 3% PIK Secured Debt (Maturity - March 27, 2014)

 

 

575,586

 

575,587

 

575,587

 

Warrants (Fully diluted 22.5%)

 

 

 

 

470,000

 

930,000

 

 

 

 

 

 

 

3,999,510

 

4,555,587

 

 

 

 

 

 

 

 

 

 

 

Pulse Systems, LLC

 

Manufacturer of Components for Medical Devices

 

 

 

 

 

 

 

Warrants (Fully diluted 7.4%)

 

 

 

 

132,856

 

250,000

 

 

 

 

 

 

 

 

 

 

 

9



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

March 31, 2010

 

Portfolio Company/Type of Investment (1) (2)

 

Industry

 

Principal (6)

 

Cost (6)

 

Fair Value

 

 

 

 

 

 

 

 

 

 

 

Schneider Sales Management, LLC

 

Sales Consulting and Training

 

 

 

 

 

 

 

13% Secured Debt (Maturity - October 15, 2013)

 

 

3,316,527

 

3,222,456

 

3,222,456

 

Warrants (Fully diluted 20.0%)

 

 

 

 

45,000

 

 

 

 

 

 

 

 

3,267,456

 

3,222,456

 

 

 

 

 

 

 

 

 

 

 

Walden Smokey Point, Inc.

 

Specialty Transportation / Logistics

 

 

 

 

 

 

 

14% current / 4% PIK Secured Debt (Maturity - December 30, 2013)

 

 

8,408,587

 

8,276,689

 

8,276,689

 

Common Stock (Fully diluted 12.6%)

 

 

 

 

1,426,667

 

2,300,000

 

 

 

 

 

 

 

9,703,356

 

10,576,689

 

 

 

 

 

 

 

 

 

 

 

WorldCall, Inc.

 

Telecommunication / Information Services

 

 

 

 

 

 

 

13% Secured Debt (Maturity - April 22, 2011)

 

 

646,225

 

646,225

 

646,225

 

Common Stock (Fully diluted 9.9%)

 

 

 

 

296,631

 

 

 

 

 

 

 

942,856

 

646,225

 

 

 

 

 

 

 

 

 

 

 

Subtotal Affiliate Investments

 

 

 

 

 

53,260,066

 

63,238,278

 

 

10



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

March 31, 2010

 

Portfolio Company/Type of Investment (1) (2)

 

Industry

 

Principal (6)

 

Cost (6)

 

Fair Value

 

 

 

 

 

 

 

 

 

 

 

Non-Control/Non-Affiliate Investments(5):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hayden Acquisition, LLC

 

Manufacturer of Utility Structures

 

 

 

 

 

 

 

8% Secured Debt (Maturity - August 9, 2010)

 

 

1,800,000

 

1,781,303

 

300,000

 

 

 

 

 

 

 

 

 

 

 

Support Systems Homes, Inc.

 

Manages Substance Abuse Treatment Centers

 

 

 

 

 

 

 

15% Secured Debt (Maturity - August 21, 2018)

 

 

 

 

 

 

 

 

 

 

 

576,600

 

576,600

 

576,600

 

 

 

 

 

 

 

 

 

 

 

Technical Innovations, LLC

 

Manufacturer of Specialty Cutting Tools and Punches

 

 

 

 

 

 

 

13.5% Secured Debt (Maturity - January 16, 2015)

 

 

3,250,000

 

3,211,552

 

3,250,000

 

 

 

 

 

 

 

 

 

 

 

Apria Healthcare Group Inc. (9)

 

Healthcare Services

 

 

 

 

 

 

 

11.25% Secured Debt (Maturity - November 1, 2014)

 

 

12,000,000

 

12,630,297

 

13,260,000

 

 

 

 

 

 

 

 

 

 

 

Fairway Group Acquisition (9)

 

Retail Grocery Store

 

 

 

 

 

 

 

LIBOR plus 9.5% Secured Debt (Maturity - October 1, 2014) (8)

 

 

 

4,987,500

 

4,864,745

 

4,987,496

 

 

 

 

 

 

 

 

 

 

 

Rentech, Inc. (9)

 

Manufacturer of Fertilizer

 

 

 

 

 

 

 

LIBOR plus 10% Secured Debt (Maturity - July 29, 2014) (8)

 

 

4,906,250

 

4,760,606

 

4,760,606

 

 

 

 

 

 

 

 

 

 

 

Managed Healthcare (9)

 

Healthcare Products

 

 

 

 

 

 

 

LIBOR plus 3.25% Secured Debt (Maturity - August 31, 2014)

 

 

2,000,000

 

1,485,092

 

1,670,000

 

 

 

 

 

 

 

 

 

 

 

Shearer’s Foods, Inc. (9)

 

Manufacturer of Food / Snacks

 

 

 

 

 

 

 

LIBOR plus 9% Secured Debt (Maturity - March 20, 2016) (8)

 

 

4,000,000

 

3,900,000

 

3,900,000

 

 

 

 

 

 

 

 

 

 

 

Alon Refining Krots (9)

 

Petroleum Refiner

 

 

 

 

 

 

 

13.5% Secured Debt (Maturity - October 15, 2014)

 

 

4,000,000

 

3,805,846

 

3,805,846

 

 

 

 

 

 

 

 

 

 

 

Full Spectrum Holdings LLC (9)

 

Professional Services

 

 

 

 

 

 

 

LIBOR Plus 6.0% Secured Debt (Maturity - December 12, 2012) (8)

 

 

2,188,951

 

1,776,427

 

1,776,427

 

Warrants (Fully diluted 0.28%)

 

 

 

 

 

412,523

 

412,523

 

 

 

 

 

 

 

2,188,950

 

2,188,950

 

 

 

 

 

 

 

 

 

 

 

Subtotal Non-Control/Non-Affiliate Investments

 

 

 

 

 

39,204,991

 

38,699,498

 

 

 

 

 

 

 

 

 

 

 

Main Street Capital Partners, LLC (Investment Manager)

 

Asset Management

 

 

 

 

 

 

 

100% of Membership Interests

 

 

 

 

 

4,284,042

 

2,175,801

 

 

 

 

 

 

 

 

 

 

 

Total Portfolio Investments, March 31, 2010

 

 

 

 

 

$

224,052,169

 

$

241,482,502

 

 

11



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

March 31, 2010

 

Portfolio Company/Type of Investment (1) (2)

 

Industry

 

Principal (6)

 

Cost (6)

 

Fair Value

 

 

 

 

 

 

 

 

 

 

 

Marketable Securities and Idle Funds Investments Western Refining Inc.

 

Investments in Secured and  Rated Debt Investments, Certificates of Deposit, and Diversified Bond Funds

 

 

 

 

 

 

 

LIBOR plus 7.5% Secured Term Loan (Maturity - August 1, 2014) (8)

 

 

$

1,757,629

 

$

1,713,923