Third Quarter 2022 Net
Investment Income of $0.83 Per
Share
Third Quarter 2022
Distributable Net Investment
Income(1) of
$0.88 Per Share
Net Asset Value of $25.94 Per Share
HOUSTON, Nov. 3, 2022
/PRNewswire/ -- Main Street Capital Corporation (NYSE: MAIN)
("Main Street") is pleased to announce its financial results for
the third quarter of 2022.
Third Quarter 2022 Highlights
- Net investment income of $62.4
million (or $0.83 per
share)
- Distributable net investment income(1) of
$65.8 million (or $0.88 per share)
- Total investment income of $98.4
million
- An industry leading position in cost efficiency, with a ratio
of total non-interest operating expenses as a percentage of average
total assets ("Operating Expenses to Assets Ratio") of 1.5% on an
annualized basis for the quarter and 1.4% for the trailing twelve
month ("TTM") period ended September 30, 2022
- Net asset value of $25.94 per
share at September 30, 2022
- Declared regular monthly dividends totaling $0.66 per share for the fourth quarter of 2022,
or $0.22 per share for each of
October, November and December 2022,
representing a 4.8% increase from the regular monthly dividends
paid for the fourth quarter of 2021
- Declared and paid a supplemental dividend of $0.10 per share, resulting in total dividends
paid in the third quarter of 2022 of $0.745 per share
- Completed $111.5 million in total
lower middle market ("LMM") portfolio investments, which after
aggregate repayments of debt principal and return of invested
equity capital from several LMM portfolio investments resulted in a
net increase of $84.5 million in
total LMM portfolio investments
- Completed $233.8 million in total
private loan portfolio investments, which after aggregate
repayments of debt principal and return of invested equity capital
from several private loan portfolio investments resulted in a net
increase of $174.3 million in total
private loan portfolio investments
- Amended our revolving credit facility ("Credit Facility") in
August 2022 to increase the total
commitments from $855.0 million to
$920.0 million and extend the
maturity date to August 2027
- Received an investment grade credit and corporate rating of
BBB- with a stable outlook from Fitch Ratings in July 2022, which is in addition to the rating of
BBB- with a stable outlook that we maintain from S&P Global
Ratings
"We are very pleased with Main Street's strong third quarter
results, which include another consecutive quarter with records for
net investment income per share and distributable net investment
income per share," stated Dwayne L.
Hyzak, Main Street's Chief Executive Officer. "These
positive results included contributions from each of our core
investment strategies, and as a result of our strong performance,
distributable net investment income per share exceeded our regular
monthly dividends by over 36%. We continue to be pleased with the
performance of our lower middle market portfolio companies, which
resulted in another quarter of fair value appreciation in the
equity investments in this portfolio, and we are excited about the
$111.5 million in follow-on
investments we made in existing lower middle market portfolio
companies during the quarter to support the growth strategies of
these companies. Our Private Credit group also continued its
success with $269.9 million in new
commitments across the eight new borrowers in the quarter."
Mr. Hyzak continued, "These positive results and our favorable
outlook for the next quarter resulted in our recommendation that
our board of directors approve both an increase to our regular
monthly dividends to $0.225 per
share, or $0.675 per share for the
first quarter of 2023, representing the second consecutive quarter
with a monthly dividend increase, and another supplemental dividend
of $0.10 per share to be paid in
December, representing our fifth consecutive quarterly supplemental
dividend. We continue to be very encouraged with the performance of
our diversified lower middle market and private loan investment
strategies and remain confident that these strategies will allow us
to continue to deliver superior results for our shareholders."
Third Quarter 2022 Operating Results
The following table provides a summary of our operating results
for the third quarter of 2022:
|
Three Months Ended September
30,
|
|
2022
|
|
2021
|
|
Change
($)
|
|
Change
(%)
|
Interest
income
|
$
|
75,023
|
|
$
|
50,468
|
|
$
|
24,555
|
|
49 %
|
Dividend
income
|
19,424
|
|
23,012
|
|
(3,588)
|
|
(16) %
|
Fee income
|
3,940
|
|
3,299
|
|
641
|
|
19 %
|
Total investment
income
|
$
|
98,387
|
|
$
|
76,779
|
|
$
|
21,608
|
|
28 %
|
|
|
|
|
|
|
|
|
Net investment
income
|
$
|
62,448
|
|
$
|
49,304
|
|
$
|
13,144
|
|
27 %
|
Net investment income
per share
|
$
|
0.83
|
|
$
|
0.71
|
|
$
|
0.12
|
|
17 %
|
|
|
|
|
|
|
|
|
Distributable net
investment income (1)
|
$
|
65,767
|
|
$
|
52,151
|
|
$
|
13,616
|
|
26 %
|
Distributable net
investment income per share (1)
|
$
|
0.88
|
|
$
|
0.76
|
|
$
|
0.12
|
|
16 %
|
|
|
|
|
|
|
|
|
Net increase in net
assets resulting from operations
|
$
|
55,338
|
|
$
|
83,956
|
|
$
|
(28,618)
|
|
(34) %
|
Net increase in net
assets resulting from operations per share
|
$
|
0.74
|
|
$
|
1.22
|
|
$
|
(0.48)
|
|
(39) %
|
|
|
|
|
|
|
|
|
The $21.6 million increase in
total investment income in the third quarter of 2022 from the
comparable period of the prior year was principally attributable to
(i) a $24.6 million increase in
interest income, primarily due to higher average levels of
investment portfolio debt investments and an increase in interest
rates on floating rate investment portfolio debt investments
resulting from increases in benchmark index rates during the
quarter, and (ii) a $0.6 million
increase in fee income, primarily attributable to the increased
investment activity. These increases were partially offset by a
$3.6 million decrease in dividend
income from investment portfolio equity investments, primarily due
to a $4.7 million decrease in certain
distributions considered less consistent or non-recurring. The
$21.6 million increase in total
investment income in the third quarter of 2022 is net of the impact
of a decrease of $8.0 million in
certain income considered less consistent or non-recurring,
including a $4.7 million decrease of
such dividend income as referenced above and a $3.3 million decrease in income from accelerated
prepayment, repricing and other activity related to certain
investment portfolio debt investments, when compared to the same
period in 2021.
Total cash expenses(2) increased to $32.6 million in the third quarter of 2022 from
$24.6 million for the same period in
2021. This increase in total cash expenses was principally
attributable to (i) a $6.5 million
increase in interest expense, (ii) a $1.1
million increase in cash compensation
expenses(2) and (iii) a $1.0 million increase in general and
administrative expense, partially offset by a $0.6 million increase in expenses allocated to
the External Investment Manager (as defined below). The increase in
interest expense is primarily related to (i) increased borrowings
under our Credit Facility and from our unsecured notes offering in
October 2021 used to fund our
investment activity and support the growth of our investment
portfolio and (ii) the increased interest rate under our Credit
Facility resulting from increases in benchmark index rates. The
increase in cash compensation expenses(2) is primarily
related to increased headcount to support our growing investment
portfolio and asset management activities, base compensation rates
and incentive compensation accruals.
Non-cash compensation expenses(2) increased
$0.5 million in the third quarter of
2022 from the comparable period of the prior year, principally
attributable to a $0.7 million
increase in share-based compensation, resulting from an increase in
incentive based grants, partially offset by the comparable
period increase in deferred compensation benefit of $0.3 million.
Our Operating Expenses to Assets Ratio (which includes non-cash
compensation expenses(2)) was 1.5% for the third quarter
of 2022, on an annualized basis, as compared to 1.6% for the same
period in 2021.
The $13.1 million increase in net
investment income and the $13.6
million increase in distributable net investment
income(1) in the third quarter of 2022 from the
comparable period of the prior year were principally attributable
to the increase in total investment income, partially offset by
increased expenses, each as discussed above.
Net investment income and distributable net investment
income(1) on a per share basis for the third quarter of
2022 each increased by $0.12 per
share, compared to the third quarter of 2021, to $0.83 per share and $0.88 per share, respectively. These increases
include the impact of an 8.7% increase in the average shares
outstanding compared to the third quarter of 2021 primarily due to
(i) shares issued through our public offering in August 2022 and through our at-the-market ("ATM")
program over the last twelve months, (ii) shares issued through our
equity incentive plans and (iii) shares issued through our dividend
reinvestment plan. Net investment income and distributable net
investment income(1) on a per share basis in the third
quarter of 2022 each include a $0.12
per share decrease in investment income considered less consistent
or non-recurring compared to the third quarter of 2021 and as
discussed above.
The $55.3 million net increase in
net assets resulting from operations in the third quarter of 2022
represents a $28.6 million decrease
from the third quarter of 2021. This decrease was primarily the
result of (i) a $48.7 million
decrease in net unrealized appreciation (depreciation) from
portfolio investments (including the impact of accounting reversals
relating to realized gains/income (losses)) resulting from a net
unrealized depreciation of $10.1
million in the third quarter of 2022 compared to a net
unrealized appreciation of $38.6
million in the third quarter of 2021, (ii) a $3.3 million decrease in net realized gain
from investments, partially offset by (i) a $13.1 million increase in net investment income
as discussed above and (ii) a $10.2
million decrease in income tax provision. The $5.0 million net realized gain from investments
for the third quarter of 2022 was primarily the result of (i) an
$8.9 million net realized gain from
the full exit of three private loan investments, (ii) a
$1.0 million realized gain from the
full exit of one middle market investment and (iii) a $0.6 million of realized gain on distributions
from one other portfolio investment, partially offset by a
$5.8 million realized loss on the
restructure of one LMM investment.
The following table provides a summary of the total net
unrealized depreciation of $10.1
million for the third quarter of 2022:
|
Three Months Ended
September 30, 2022
|
|
LMM
(a)
|
|
Private
Loan
|
|
Middle
Market
|
|
Other
|
|
Total
|
|
|
|
|
|
(dollars in
millions)
|
|
|
|
|
Accounting reversals of
net unrealized (appreciation) depreciation recognized in prior
periods due to net realized
(gains / income) losses recognized during the current
period
|
$ 5.8
|
|
$ (9.0)
|
|
$ (1.0)
|
|
$ (0.6)
|
|
$ (4.8)
|
Net unrealized
appreciation (depreciation) relating to portfolio
investments
|
4.1
|
|
1.6
|
|
(8.6)
|
|
(2.4)
|
(b)
|
(5.3)
|
Total net unrealized
appreciation (depreciation) relating to portfolio
investments
|
$ 9.9
|
|
$ (7.4)
|
|
$ (9.6)
|
|
$ (3.0)
|
|
$ (10.1)
|
|
a.
|
LMM includes unrealized
appreciation on 28 LMM portfolio investments and unrealized
depreciation on 28 LMM portfolio investments.
|
b.
|
Other includes (i) $5.8
million of unrealized depreciation relating to the External
Investment Manager (as defined below) and (ii) $0.3 million of
unrealized depreciation relating to Main Street's deferred
compensation plan assets, partially offset by $3.6 million of net
unrealized appreciation relating to the other portfolio.
|
|
|
Liquidity and Capital Resources
As of September 30, 2022, we had aggregate liquidity of
$420.2 million, including (i)
$61.2 million in cash and cash
equivalents and (ii) $359.0 million
of unused capacity under our Credit Facility, which we maintain to
support our investment and operating activities.
Several details regarding our capital structure as of
September 30, 2022 are as follows:
- Our Credit Facility included $920.0
million in total commitments from a diversified group of 18
participating lenders, plus an accordion feature that allows us to
request an increase in the total commitments under the facility to
up to $1.4 billion.
- $561.0 million in outstanding
borrowings under our Credit Facility, with an interest rate of 5.0%
based on SOFR effective for the contractual reset date of
October 1, 2022.
- $350.0 million of outstanding
Small Business Investment Company ("SBIC") debentures through our
wholly owned SBIC subsidiaries. These debentures, which are
guaranteed by the U.S. Small Business Administration, had a
weighted-average annual fixed interest rate of approximately 2.9%
and mature ten years from original issuance. The first maturity
related to our existing SBIC debentures occurs in the first quarter
of 2023, and the weighted-average remaining duration was
approximately 5.4 years.
- $500.0 million of notes
outstanding that bear interest at a rate of 3.00% per year (the
"3.00% Notes"). The 3.00% Notes mature on July 14, 2026 and may be redeemed in whole or in
part at any time at our option subject to certain make-whole
provisions.
- $450.0 million of notes
outstanding that bear interest at a rate of 5.20% per year (the
"5.20% Notes"). The 5.20% Notes mature on May 1, 2024 and may be redeemed in whole or in
part at any time at our option subject to certain make-whole
provisions.
- $185.0 million of notes
outstanding that bear interest at a rate of 4.50% per year (the
"4.50% Notes"). The 4.50% Notes mature on December 1, 2022 and may be redeemed in whole or
in part at any time at our option subject to certain make-whole
provisions.
- Our net asset value totaled $2.0
billion, or $25.94 per
share.
Investment Portfolio Information as of September 30,
2022(3)
The following table provides a summary of the investments in our
LMM portfolio, private loan portfolio and middle market portfolio
as of September 30, 2022:
|
|
As of September
30, 2022
|
|
|
LMM
(a)
|
|
Private
Loan
|
|
Middle
Market
|
|
|
|
|
(dollars in
millions)
|
|
|
Number of portfolio
companies
|
|
75
|
|
87
|
|
33
|
Fair value
|
|
$
1,910.9
|
|
$
1,476.9
|
|
$
354.3
|
Cost
|
|
$
1,593.7
|
|
$
1,523.8
|
|
$
419.4
|
Debt investments as a %
of portfolio (at cost)
|
|
73.0 %
|
|
97.1 %
|
|
94.4 %
|
Equity investments as a
% of portfolio (at cost)
|
|
27.0 %
|
|
2.9 %
|
|
5.6 %
|
% of debt investments
at cost secured by first priority lien
|
|
99.1 %
|
|
99.9 %
|
|
98.8 %
|
Weighted-average annual
effective yield (b)
|
|
11.8 %
|
|
9.9 %
|
|
9.6 %
|
Average EBITDA
(c)
|
|
$
7.7
|
|
$
41.9
|
|
$
70.7
|
|
|
|
|
|
|
|
a.
|
We had equity ownership
in all of our LMM portfolio companies, and the average fully
diluted equity ownership in those portfolio companies was
approximately 41%.
|
b.
|
The weighted-average
annual effective yields were computed using the effective interest
rates for all debt investments at cost, including amortization of
deferred debt origination fees and accretion of original issue
discount but excluding fees payable upon repayment of the debt
instruments and any debt investments on non-accrual
status.
|
c.
|
The average EBITDA is
calculated using a simple average for the LMM portfolio and a
weighted-average for the private loan and middle market portfolios.
These calculations exclude certain portfolio companies, including
three LMM portfolio companies and two private loan portfolio
companies, as EBITDA is not a meaningful valuation metric for our
investments in these portfolio companies, and those portfolio
companies whose primary purpose is to own real estate.
|
|
|
The fair value of our LMM portfolio company equity investments
was approximately 189% of the cost of such equity investments, and
our LMM portfolio companies had a median net senior debt (senior
interest-bearing debt through our debt position less cash and cash
equivalents) to EBITDA (Earnings Before Interest, Taxes,
Depreciation and Amortization) ratio of 2.7 to 1.0 and a median
total EBITDA to senior interest expense ratio of 2.8 to 1.0.
Including all debt that is junior in priority to our debt position,
these median ratios were 2.9 to 1.0 and 2.8 to 1.0,
respectively.(3) (4)
As of September 30, 2022, our investment portfolio also
included:
- Other portfolio investments in 14 companies, collectively
totaling $117.0 million in fair value
and $121.3 million in cost basis,
which comprised 2.9% and 3.3% of our investment portfolio at fair
value and cost, respectively; and
- Our investment in the External Investment Manager (as defined
below), with a fair value of $112.5
million and a cost basis of $29.5
million, which comprised 2.8% and 0.8% of our investment
portfolio at fair value and cost, respectively.
As of September 30, 2022, we had eleven investments on
non-accrual status, which comprised 0.8% of the total investment
portfolio at fair value and 3.7% at cost, and our total portfolio
investments at fair value were 108% of the related cost basis.
External Investment Manager
MSC Adviser I, LLC is a wholly owned portfolio company and
registered investment adviser that provides investment management
services to external parties (the "External Investment Manager").
We share employees with the External Investment Manager and
allocate costs related to such shared employees and other operating
expenses to the External Investment Manager. The total contribution
of the External Investment Manager to our net investment income
consists of the combination of the expenses we allocate to the
External Investment Manager and the dividend income we earn from
the External Investment Manager. During the third quarter of 2022,
the External Investment Manager earned $5.5
million of management fee income, an increase of
$0.9 million from the third quarter
of 2021, and we allocated $3.3
million of total expenses to the External Investment
Manager, an increase of $0.6 million
from the third quarter of 2021. The increases in management fee
income and expenses allocated were primarily related to an increase
in assets under management. The combination of the dividend income
we earned from the External Investment Manager and expenses we
allocated to it resulted in a total contribution to our net
investment income of $5.0 million,
representing an increase of $0.8
million from the third quarter of 2021. The External
Investment Manager ended the third quarter of 2022 with total
assets under management of approximately $1.4 billion.
Third Quarter 2022 Financial Results Conference Call /
Webcast
Main Street has scheduled a conference call for Friday,
November 4, 2022 at 10:00 a.m. Eastern
Time to discuss the third quarter 2022 financial
results.
You may access the conference call by dialing 412-902-0030 at
least 10 minutes prior to the start time. The conference call can
also be accessed via a simultaneous webcast by logging into the
investor relations section of the Main Street web site at
http://www.mainstcapital.com.
A telephonic replay of the conference call will be available
through Friday, November 11, 2022 and may be accessed by
dialing 201-612-7415 and using the passcode 13733711#. An audio
archive of the conference call will also be available on the
investor relations section of the company's website at
http://www.mainstcapital.com shortly after the call and will be
accessible for approximately 90 days.
For a more detailed discussion of the financial and other
information included in this press release, please refer to the
Main Street Quarterly Report on Form 10-Q for the quarterly period
ended September 30, 2022 to be filed with the Securities and
Exchange Commission (www.sec.gov) and Main Street's Third Quarter
2022 Investor Presentation to be posted on the investor relations
section of the Main Street website at
http://www.mainstcapital.com.
ABOUT MAIN STREET CAPITAL CORPORATION
Main Street (www.mainstcapital.com) is a principal investment
firm that primarily provides long-term debt and equity capital to
lower middle market companies and debt capital to middle market
companies. Main Street's portfolio investments are typically made
to support management buyouts, recapitalizations, growth
financings, refinancings and acquisitions of companies that operate
in diverse industry sectors. Main Street seeks to partner with
entrepreneurs, business owners and management teams and generally
provides "one stop" financing alternatives within its lower middle
market investment strategy. Main Street's lower middle market
companies generally have annual revenues between $10 million and $150
million. Main Street's middle market debt investments are
made in businesses that are generally larger in size than its lower
middle market portfolio companies.
Main Street, through its wholly owned portfolio company MSC
Adviser I, LLC ("MSC Adviser"), also maintains an asset management
business through which it manages investments for external parties.
MSC Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended.
FORWARD-LOOKING STATEMENTS
Main Street cautions that statements in this press release which
are forward–looking and provide other than historical information,
including but not limited to our ability to successfully source and
execute on new portfolio investments and delivery of future
financial performance and results, are based on current conditions
and information available to Main Street as of the date hereof and
include statements regarding Main Street's goals, beliefs,
strategies and future operating results and cash flows. Although
its management believes that the expectations reflected in those
forward–looking statements are reasonable, Main Street can give no
assurance that those expectations will prove to be correct. Those
forward-looking statements are made based on various underlying
assumptions and are subject to numerous uncertainties and risks,
including, without limitation: Main Street's continued
effectiveness in raising, investing and managing capital; adverse
changes in the economy generally or in the industries in which Main
Street's portfolio companies operate; the impacts of macroeconomic
factors on Main Street and its portfolio companies' business and
operations, liquidity and access to capital, and on the U.S. and
global economies, including impacts related to the COVID-19
pandemic and other public health crises, risk of recession,
inflation, supply chain constraints or disruptions and rising
interest rates; changes in laws and regulations or business,
political and/or regulatory conditions that may adversely impact
Main Street's operations or the operations of its portfolio
companies; the operating and financial performance of Main Street's
portfolio companies and their access to capital; retention of key
investment personnel; competitive factors; and such other factors
described under the captions "Cautionary Statement Concerning
Forward-Looking Statements" and "Risk Factors" included in Main
Street's filings with the Securities and Exchange Commission
(www.sec.gov). Main Street undertakes no obligation to update the
information contained herein to reflect subsequently occurring
events or circumstances, except as required by applicable
securities laws and regulations.
MAIN STREET CAPITAL
CORPORATION
|
Consolidated
Statements of Operations
|
(in thousands,
except shares and per share amounts)
|
(Unaudited)
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
INVESTMENT
INCOME:
|
|
|
|
|
|
|
|
Interest, fee and
dividend income:
|
|
|
|
|
|
|
|
Control
investments
|
$
|
41,367
|
|
$
|
34,852
|
|
$
|
110,751
|
|
$
|
85,904
|
Affiliate
investments
|
12,490
|
|
12,274
|
|
38,300
|
|
34,785
|
Non–Control/Non–Affiliate investments
|
44,530
|
|
29,653
|
|
113,930
|
|
86,192
|
Total investment
income
|
98,387
|
|
76,779
|
|
262,981
|
|
206,881
|
EXPENSES:
|
|
|
|
|
|
|
|
Interest
|
(21,234)
|
|
(14,711)
|
|
(55,216)
|
|
(42,914)
|
Compensation
|
(10,404)
|
|
(9,576)
|
|
(26,480)
|
|
(22,790)
|
General and
administrative
|
(4,018)
|
|
(3,047)
|
|
(11,483)
|
|
(9,439)
|
Share–based
compensation
|
(3,617)
|
|
(2,869)
|
|
(10,031)
|
|
(7,961)
|
Expenses allocated to
the External Investment Manager
|
3,334
|
|
2,728
|
|
9,613
|
|
7,680
|
Total
expenses
|
(35,939)
|
|
(27,475)
|
|
(93,597)
|
|
(75,424)
|
NET INVESTMENT
INCOME
|
62,448
|
|
49,304
|
|
169,384
|
|
131,457
|
NET REALIZED GAIN
(LOSS):
|
|
|
|
|
|
|
|
Control
investments
|
(5,822)
|
|
8,786
|
|
(5,822)
|
|
(4,459)
|
Affiliate
investments
|
601
|
|
(5,147)
|
|
1,340
|
|
3,962
|
Non–Control/Non–Affiliate investments
|
10,252
|
|
4,666
|
|
7,784
|
|
11,072
|
Total net realized
gain
|
5,031
|
|
8,305
|
|
3,302
|
|
10,575
|
NET UNREALIZED
APPRECIATION (DEPRECIATION):
|
|
|
|
|
|
|
|
Control
investments
|
7,517
|
|
20,671
|
|
20,618
|
|
65,756
|
Affiliate
investments
|
(1,069)
|
|
14,285
|
|
3,703
|
|
30,518
|
Non–Control/Non–Affiliate investments
|
(16,529)
|
|
3,675
|
|
(44,243)
|
|
20,798
|
Total net unrealized
appreciation (depreciation)
|
(10,081)
|
|
38,631
|
|
(19,922)
|
|
117,072
|
INCOME
TAXES:
|
|
|
|
|
|
|
|
Federal and state
income, excise and other taxes
|
(1,540)
|
|
(953)
|
|
(3,658)
|
|
(2,242)
|
Deferred
taxes
|
(520)
|
|
(11,331)
|
|
(13,819)
|
|
(20,449)
|
Income tax
provision
|
(2,060)
|
|
(12,284)
|
|
(17,477)
|
|
(22,691)
|
NET INCREASE IN NET
ASSETS RESULTING FROM OPERATIONS
|
$
|
55,338
|
|
$
|
83,956
|
|
$
|
135,287
|
|
$
|
236,413
|
NET INVESTMENT
INCOME PER SHARE—BASIC AND DILUTED
|
$
|
0.83
|
|
$
|
0.71
|
|
$
|
2.31
|
|
$
|
1.92
|
NET INCREASE IN NET
ASSETS RESULTING FROM OPERATIONS PER SHARE—BASIC AND
DILUTED
|
$
|
0.74
|
|
$
|
1.22
|
|
$
|
1.84
|
|
$
|
3.45
|
WEIGHTED AVERAGE
SHARES
OUTSTANDING—BASIC
AND DILUTED
|
75,036,522
|
|
69,021,826
|
|
73,363,281
|
|
68,557,362
|
|
|
|
|
|
|
|
|
MAIN STREET CAPITAL
CORPORATION
|
Consolidated Balance
Sheets
|
(in thousands,
except per share amounts)
|
|
|
|
September
30,
|
|
December
31,
|
|
|
2022
|
|
2021
|
|
|
(unaudited)
|
|
|
ASSETS
|
|
|
|
|
Investments at fair
value:
|
|
|
|
|
Control
investments
|
|
$
|
1,599,429
|
|
$
|
1,489,257
|
Affiliate
investments
|
|
552,581
|
|
549,214
|
Non–Control/Non–Affiliate investments
|
|
1,821,480
|
|
1,523,360
|
Total
investments
|
|
3,973,490
|
|
3,561,831
|
Cash and cash
equivalents
|
|
61,158
|
|
32,629
|
Interest and dividend
receivable and other assets
|
|
74,283
|
|
56,488
|
Receivable for
securities sold
|
|
20,929
|
|
35,125
|
Deferred financing
costs, net
|
|
5,106
|
|
4,217
|
Total
assets
|
|
$
|
4,134,966
|
|
$
|
3,690,290
|
LIABILITIES
|
|
|
|
|
Credit
facility
|
|
$
|
561,000
|
|
$
|
320,000
|
3.00%
Notes due 2026 (par: $500,000 as of both
September 30, 2022 and December 31, 2021)
|
|
498,004
|
|
497,609
|
5.20%
Notes due 2024 (par: $450,000 as of both
September 30, 2022 and December 31, 2021)
|
|
450,863
|
|
451,272
|
SBIC debentures (par:
$350,000 as of both September 30, 2022 and December 31,
2021)
|
|
343,618
|
|
342,731
|
4.50%
Notes due 2022 (par: $185,000 as of both
September 30, 2022 and December 31, 2021)
|
|
184,899
|
|
184,444
|
Accounts payable and
other liabilities
|
|
40,158
|
|
40,469
|
Payable for securities
purchased
|
|
—
|
|
5,111
|
Interest
payable
|
|
16,673
|
|
14,926
|
Dividend
payable
|
|
16,789
|
|
15,159
|
Deferred tax liability,
net
|
|
43,542
|
|
29,723
|
Total
liabilities
|
|
2,155,546
|
|
1,901,444
|
|
|
|
|
|
NET
ASSETS
|
|
|
|
|
Common stock
|
|
763
|
|
707
|
Additional paid–in
capital
|
|
1,952,992
|
|
1,736,346
|
Total undistributed
earnings
|
|
25,665
|
|
51,793
|
Total net
assets
|
|
1,979,420
|
|
1,788,846
|
Total liabilities and
net assets
|
|
$
|
4,134,966
|
|
$
|
3,690,290
|
NET ASSET VALUE PER
SHARE
|
|
$
|
25.94
|
|
$
|
25.29
|
|
MAIN STREET CAPITAL
CORPORATION
|
|
|
|
|
Reconciliation of
Distributable Net Investment Income,
|
|
|
|
|
Total Cash Expenses,
Non-Cash Compensation Expenses
|
|
|
|
|
and Cash
Compensation Expenses
|
|
|
|
|
(in thousands,
except per share amounts)
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Nine Months
Ended
|
|
September
30,
|
|
|
September
30,
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
Net investment
income
|
$
|
62,448
|
|
|
$
|
49,304
|
|
|
$
|
169,384
|
|
|
$
|
131,457
|
Non-cash
compensation expenses (2)
|
|
3,319
|
|
|
|
2,847
|
|
|
|
8,132
|
|
|
|
8,667
|
Distributable net
investment income (1)
|
$
|
65,767
|
|
|
$
|
52,151
|
|
|
$
|
177,516
|
|
|
$
|
140,124
|
|
|
|
|
|
|
|
|
|
|
|
Per share
amounts:
|
|
|
|
|
|
|
|
|
|
|
Net investment income
per share -
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
$
|
0.83
|
|
|
$
|
0.71
|
|
|
$
|
2.31
|
|
|
$
|
1.92
|
Distributable net
investment income per share -
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted (1)
|
$
|
0.88
|
|
|
$
|
0.76
|
|
|
$
|
2.42
|
|
|
$
|
2.04
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Nine Months
Ended
|
|
September 30,
|
|
|
September 30,
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
Share–based
compensation
|
$
|
(3,617)
|
|
$
|
(2,869)
|
|
$
|
(10,031)
|
|
$
|
(7,961)
|
Deferred compensation
(expense) benefit
|
298
|
|
|
22
|
|
|
1,899
|
|
|
(706)
|
Total non-cash
compensation expenses (2)
|
(3,319)
|
|
|
(2,847)
|
|
|
(8,132)
|
|
|
(8,667)
|
|
|
|
|
|
|
|
|
|
|
|
Total
expenses
|
(35,939)
|
|
|
(27,475)
|
|
|
(93,597)
|
|
|
(75,424)
|
Less non-cash
compensation expenses (2)
|
3,319
|
|
|
2,847
|
|
|
8,132
|
|
|
8,667
|
Total cash expenses
(2)
|
$
|
(32,620)
|
|
$
|
(24,628)
|
|
$
|
(85,465)
|
|
$
|
(66,757)
|
|
|
|
|
|
|
|
|
|
|
|
Compensation
|
$
|
(10,404)
|
|
$
|
(9,576)
|
|
$
|
(26,480)
|
|
$
|
(22,790)
|
Share-based
compensation
|
(3,617)
|
|
|
(2,869)
|
|
|
(10,031)
|
|
|
(7,961)
|
Total compensation
expenses
|
(14,021)
|
|
|
(12,445)
|
|
|
(36,511)
|
|
|
(30,751)
|
Non-cash compensation
expenses (2)
|
3,319
|
|
|
2,847
|
|
|
8,132
|
|
|
8,667
|
Total cash compensation
expenses (2)
|
$
|
(10,702)
|
|
$
|
(9,598)
|
|
$
|
(28,379)
|
|
$
|
(22,084)
|
|
|
|
|
|
MAIN STREET CAPITAL CORPORATION
Endnotes
(1) Distributable net investment income is net investment income
as determined in accordance with U.S. Generally Accepted Accounting
Principles, or U.S. GAAP, excluding the impact of non-cash
compensation expenses(2). Main Street believes
presenting distributable net investment income and the related per
share amount is useful and appropriate supplemental disclosure for
analyzing its financial performance since non-cash compensation
expenses(2) do not result in a net cash impact to Main
Street upon settlement. However, distributable net investment
income is a non-U.S. GAAP measure and should not be considered as a
replacement for net investment income or other earnings measures
presented in accordance with U.S. GAAP and should be reviewed only
in connection with such U.S. GAAP measures in analyzing Main
Street's financial performance. A reconciliation of net investment
income in accordance with U.S. GAAP to distributable net investment
income is detailed in the financial tables included with this press
release.
(2) Non-cash compensation expenses consist of (i) share-based
compensation and (ii) deferred compensation expense or benefit,
both of which are non-cash in nature. Share-based compensation does
not require settlement in cash. Deferred compensation expense or
benefit does not result in a net cash impact to Main Street upon
settlement. The appreciation (depreciation) in the fair value of
deferred compensation plan assets is reflected in Main Street's
Consolidated Statements of Operations as unrealized appreciation
(depreciation) and an increase (decrease) in compensation expense,
respectively. Cash compensation expenses are total compensation
expenses as determined in accordance with U.S. GAAP, less non-cash
compensation expenses. Total cash expenses are total expenses, as
determined in accordance with U.S. GAAP, excluding non-cash
compensation expenses. Main Street believes presenting cash
compensation expense, non-cash compensation expenses and total cash
expenses is useful and appropriate supplemental disclosure for
analyzing its financial performance since non-cash compensation
expenses do not result in a net cash impact to Main Street upon
settlement. However, cash compensation expenses, non-cash
compensation expenses and total cash expenses are non-U.S. GAAP
measures and should not be considered as a replacement for
compensation expenses, total expenses or other earnings measures
presented in accordance with U.S. GAAP and should be reviewed only
in connection with such U.S. GAAP measures in analyzing Main
Street's financial performance. A reconciliation of compensation
expenses and total expenses in accordance with U.S. GAAP to cash
compensation expenses, non-cash compensation expenses and total
cash expenses is detailed in the financial tables included with
this press release.
(3) Portfolio company financial information has not been
independently verified by Main Street.
(4) These credit statistics exclude portfolio companies on
non-accrual or for which EBITDA is not a meaningful metric.
Contacts:
Main Street Capital Corporation
Dwayne L. Hyzak, CEO,
dhyzak@mainstcapital.com
Jesse E. Morris, CFO and COO,
jmorris@mainstcapital.com
713-350-6000
Dennard Lascar Investor
Relations
Ken Dennard /
ken@dennardlascar.com
Zach Vaughan /
zvaughan@dennardlascar.com
713-529-6600
View original
content:https://www.prnewswire.com/news-releases/main-street-announces-third-quarter-2022-results-301668027.html
SOURCE Main Street Capital Corporation