Third Quarter 2024 Net
Investment Income of $1.00 Per
Share
Third Quarter 2024
Distributable Net Investment
Income(1) of
$1.06 Per Share
Net Asset Value of $30.57 Per Share
HOUSTON, Nov. 7, 2024
/PRNewswire/ -- Main Street Capital Corporation (NYSE: MAIN)
("Main Street") is pleased to announce its financial results for
the third quarter ended September 30, 2024. Unless otherwise
noted or the context otherwise indicates, the terms "we," "us,"
"our" and the "Company" refer to Main Street and its consolidated
subsidiaries.
Third Quarter 2024 Highlights
- Net investment income of $87.6
million (or $1.00 per
share)
- Distributable net investment income(1) of
$93.0 million (or $1.06 per share)
- Total investment income of $136.8
million
- An industry leading position in cost efficiency, with a ratio
of total non-interest operating expenses as a percentage of
quarterly average total assets ("Operating Expenses to Assets
Ratio") of 1.3% on an annualized basis for the quarter and for the
trailing twelve-month ("TTM") period ended September 30, 2024
- Net increase in net assets resulting from operations of
$124.0 million (or $1.42 per share)
- Return on equity(2) of 18.8% on an annualized basis
for the quarter and 18.7% for the TTM period ended September 30, 2024
- Net asset value of $30.57 per
share as of September 30, 2024,
representing an increase of $0.77 per
share, or 2.6%, compared to $29.80
per share as of June 30, 2024, and
$1.37 per share, or 4.7%, compared to
$29.20 per share as of December 31, 2023
- Declared regular monthly dividends totaling $0.735 per share for the fourth quarter of 2024,
or $0.245 per share for each of
October, November and December 2024,
representing a 4.3% increase from the regular monthly dividends
paid in the fourth quarter of 2023
- Declared and paid a supplemental dividend of $0.30 per share, resulting in total dividends
paid in the third quarter of 2024 of $1.035 per share and representing a 7.3% increase
from the total dividends paid in the third quarter of 2023
- Completed $51.6 million in total
lower middle market ("LMM") portfolio investments, including an
investment of $11.2 million in a new
LMM portfolio company, which after aggregate repayments of debt
principal from several LMM portfolio investments and return of
invested equity capital from a LMM portfolio investment resulted in
a net increase of $2.0 million in the
total cost basis of the LMM investment portfolio
- Completed $309.3 million in total
private loan portfolio investments, which after aggregate
repayments and sales of several private loan portfolio debt
investments and return of invested capital from a private loan
portfolio equity investment resulted in a net increase of
$162.7 million in the total cost
basis of the private loan investment portfolio
- Net decrease of $4.3 million in
the total cost basis of the middle market investment portfolio
- Further diversified our capital structure by issuing an
additional $100.0 million of our
June 2027 Notes that bear interest at
a rate of 6.50% per year (the "June
2027 Notes") at a premium to par of approximately 102.1%,
resulting in a yield-to-maturity of approximately 5.62%
- Enhanced our liquidity position by amending our special purpose
vehicle revolving credit facility (the "SPV Facility") to increase
the total commitments to $600.0
million, extend the final maturity date to September 2029 and decrease the interest
rate
- Issued $63.8 million of
additional Small Business Investment Company ("SBIC") debentures,
increasing the total outstanding SBIC debentures to the regulatory
maximum amount of $350.0 million as
of September 30, 2024
In commenting on the Company's operating results for the third
quarter of 2024, Dwayne L. Hyzak,
Main Street's Chief Executive Officer, stated, "We are pleased with
our performance in the third quarter, which resulted in another
quarter of strong operating results highlighted by a return on
equity of 18.8%, distributable net investment income per share that
continued to exceed the dividends paid to our shareholders and a
new record for net asset value per share for the ninth consecutive
quarter. We believe that these continued strong results demonstrate
the sustainable strength of our overall platform, the benefits of
our differentiated and diversified investment strategies, the
unique contributions of our asset management business and the
continued underlying strength and quality of our portfolio
companies."
Mr. Hyzak continued, "The total dividends paid to our
shareholders in the third quarter of 2024 increased by over 7% when
compared to the third quarter of 2023, continuing our trend of
increasing the dividends paid to our shareholders over the past few
years. Our distributable net investment income per share in the
third quarter exceeded the dividends paid to our shareholders, with
our distributable net investment income exceeding the monthly
dividends paid to our shareholders by 44% and the total dividends
paid to our shareholders by 2%. In addition, our strong third
quarter results and favorable outlook for the fourth quarter
resulted in the declaration of a $0.30 per share supplemental dividend to be paid
in December 2024, representing our
thirteenth consecutive quarterly supplemental dividend, to go with
the eight increases to our regular monthly dividends since the
fourth quarter of 2021. We are also pleased that we further
improved our strong capital structure and liquidity position during
the quarter and continue to maintain very strong liquidity and a
conservative leverage profile, which we believe is important in the
current economic environment. We ended the quarter with attractive
investment pipelines in both our lower middle market and private
loan investment strategies, and we remain excited about the current
opportunities in our lower middle market and private loan
investment strategies and in our asset management business, each of
which have us well positioned for the future."
Third Quarter 2024 Operating Results
The following table provides a summary of our operating results
for the third quarter of 2024:
|
Three Months Ended
September 30,
|
|
2024
|
|
2023
|
|
Change
($)
|
|
Change
(%)
|
|
Interest
income
|
$ 110,551
|
|
$
99,381
|
|
$
11,170
|
|
11 %
|
|
Dividend
income
|
23,239
|
|
21,192
|
|
2,047
|
|
10 %
|
|
Fee income
|
3,034
|
|
2,664
|
|
370
|
|
14 %
|
|
Total investment
income
|
$ 136,824
|
|
$ 123,237
|
|
$
13,587
|
|
11 %
|
|
|
|
|
|
|
|
|
|
Net investment
income
|
$
87,596
|
|
$
82,179
|
|
$
5,417
|
|
7 %
|
|
Net investment income
per share
|
$
1.00
|
|
$
0.99
|
|
$
0.01
|
|
1 %
|
|
|
|
|
|
|
|
|
|
Distributable net
investment income (1)
|
$
92,973
|
|
$
86,171
|
|
$
6,802
|
|
8 %
|
|
Distributable net
investment income per share (1)
|
$
1.06
|
|
$
1.04
|
|
$
0.02
|
|
2 %
|
|
|
|
|
|
|
|
|
|
Net increase in net
assets resulting from operations
|
$ 124,007
|
|
$ 103,261
|
|
$
20,746
|
|
20 %
|
|
Net increase in net
assets resulting from operations per share
|
$
1.42
|
|
$
1.25
|
|
$
0.17
|
|
14 %
|
The $13.6 million increase in
total investment income in the third quarter of 2024 from the
comparable period of the prior year was principally attributable to
(i) an $11.2 million increase in
interest income, primarily due to higher average levels of income
producing investment portfolio debt investments, partially offset
by an increase in investments on non-accrual status and a decrease
in interest rates on floating rate investment portfolio debt
investments primarily resulting from decreases in benchmark index
rates, (ii) a $2.0 million increase
in dividend income, primarily due to increased dividend income from
certain of our LMM portfolio companies and (iii) a $0.4 million increase in fee income. The
$13.6 million increase in total
investment income in the third quarter of 2024 includes the impact
of a net increase of $1.6 million in
certain income considered less consistent or non-recurring,
primarily related to (i) a $1.7
million increase in such interest income from accelerated
prepayment, repricing and other activity related to certain
investment portfolio debt investments and (ii) a $0.3 million increase in such dividend income,
partially offset by a $0.4 million
decrease in such fee income when compared to the same period in
2023.
Total cash expenses(3) increased $6.8 million, or 18.3%, to $43.9 million in the third quarter of 2024 from
$37.1 million for the same period in
2023. This increase in total cash expenses was principally
attributable to a $7.1 million
increase in interest expense, partially offset by a $0.6 million decrease in cash compensation
expenses.(3) The increase in interest expense is
primarily related to (i) an increased weighted-average
interest rate on our debt obligations resulting from the issuance
of the March 2029 Notes (as defined
in the Liquidity and Capital Resources section below) and the
June 2027 Notes and the repayment of
the notes repaid at maturity in May
2024 and (ii) an increase in average borrowings outstanding
used to fund a portion of the growth of our investment portfolio.
The decrease in cash compensation expenses(3) is
primarily related to decreased incentive compensation
accruals, partially offset by (i) increased base compensation rates
and (ii) increased headcount to support our growing investment
portfolio and asset management activities.
Non-cash compensation expenses(3) increased
$1.4 million in the third quarter of
2024 from the comparable period of the prior year, primarily driven
by (i) a $0.7 million increase in
share-based compensation and (ii) a $0.7
million increase in deferred compensation expense.
Our Operating Expenses to Assets Ratio (which includes non-cash
compensation expenses(3)) was 1.3% for the third quarter
of both 2024 and 2023, on an annualized basis.
The $5.4 million increase in net
investment income and the $6.8
million increase in distributable net investment
income(1) in the third quarter of 2024 from the
comparable period of the prior year were both principally
attributable to the increase in total investment income, partially
offset by increased expenses, each as discussed above. Net
investment income increased by $0.01
per share and distributable net investment income(1)
increased by $0.02 per share for the
third quarter of 2024 as compared to the third quarter of 2023, to
$1.00 per share and $1.06 per share, respectively. These increases
include the impact of a 5.5% increase in the weighted-average
shares outstanding compared to the third quarter of 2023 primarily
due to shares issued since the beginning of the comparable period
of the prior year through our (i) at-the-market ("ATM") equity
issuance program, (ii) dividend reinvestment plan and (iii) equity
incentive plans. Net investment income and distributable net
investment income(1) on a per share basis in the third
quarter of 2024 included a net increase of $0.01 and $0.02 per
share, respectively, resulting from an increase in investment
income and an increase in non-cash deferred compensation expenses,
in both cases considered less consistent or non-recurring in nature
compared to the third quarter of 2023, as discussed above.
The $124.0 million net increase in
net assets resulting from operations in the third quarter of 2024
represents a $20.7 million increase
from the third quarter of 2023. This increase was primarily the
result of (i) a $25.7 million
increase in net realized gain from investments resulting from a net
realized gain of $26.4 million in the
third quarter of 2024 compared to a net realized gain of
$0.7 million in the third quarter of
2023 and (ii) a $5.4 million increase
in net investment income, partially offset by (i) a $5.3 million decrease in net unrealized
appreciation from portfolio investments (including the impact of
accounting reversals relating to realized gains/income (losses))
and (ii) a $5.1 million increase in
income tax provision. The $26.4 million net realized gain from
investments for the third quarter of 2024 was primarily the result
of a $25.5 million net realized gain
on the full exit of a private loan investment.
The following table provides a summary of the total net
unrealized appreciation of $21.7
million for the third quarter of 2024:
|
Three Months Ended
September 30, 2024
|
|
LMM
(a)
|
|
Private
Loan
|
|
Middle
Market
|
|
Other
|
|
Total
|
|
|
|
|
|
(dollars in
millions)
|
|
|
|
|
|
Accounting reversals of
net unrealized appreciation
recognized in prior periods due to net realized gains /
income recognized during the current period
|
$
(0.5)
|
|
$ (27.2)
|
|
$
-
|
|
$
(0.2)
|
|
$
(27.9)
|
|
Net unrealized
appreciation (depreciation) relating to
portfolio investments
|
25.7
|
|
(7.3)
|
|
(3.4)
|
|
34.6
|
(b)
|
49.6
|
|
Total net unrealized
appreciation (depreciation) relating
to portfolio investments
|
$ 25.2
|
|
$ (34.5)
|
|
$
(3.4)
|
|
$ 34.4
|
|
$ 21.7
|
|
|
|
(a)
|
LMM includes unrealized
appreciation on 39 LMM portfolio investments and unrealized
depreciation on 20 LMM portfolio investments.
|
|
(b)
|
Includes (i) $31.8
million of unrealized appreciation related to the External
Investment Manager, (ii) $2.3 million of net unrealized
appreciation related to the other portfolio and (iii) $0.5 million
of net unrealized appreciation related to the assets of the
deferred compensation plan.
|
|
|
Liquidity and Capital Resources
As of September 30, 2024, we had aggregate liquidity of
$1.334 billion, including (i)
$84.4 million in cash and cash
equivalents and (ii) $1.250 billion
of aggregate unused capacity under our corporate revolving credit
facility (our "Corporate Facility") and our SPV Facility (with our
Corporate Facility and SPV Facility together, our "Credit
Facilities"), which we maintain to support our investment and
operating activities.
Several details regarding our capital structure as of
September 30, 2024 are as follows:
- Our Corporate Facility included $1.110
billion in total commitments from a diversified group of 19
participating lenders, plus an accordion feature that allows us to
request an increase in the total commitments under the facility to
up to $1.665 billion.
- $300.0 million in outstanding
borrowings under our Corporate Facility, with an interest rate of
7.2% based on SOFR effective for the contractual reset date of
October 1, 2024.
- Our SPV Facility included $600.0
million in total commitments from a diversified group of six
participating lenders, plus an accordion feature that allows us to
request an increase in the total commitments under the facility to
up to $800.0 million.
- $160.0 million in outstanding
borrowings under our SPV Facility, with an interest rate of 7.6%
based on SOFR effective for the contractual reset date of
October 1, 2024.
- $500.0 million of notes
outstanding that bear interest at a rate of 3.00% per year (the
"July 2026 Notes"). The July 2026 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.
- $400.0 million of June 2027 Notes outstanding that bear interest at
a rate of 6.50% per year with a yield-to-maturity of approximately
6.34%. The June 2027 Notes mature on
June 4, 2027 and may be redeemed in
whole or in part at any time at our option subject to certain
make-whole provisions.
- $350.0 million of notes
outstanding that bear interest at a rate of 6.95% per year (the
"March 2029 Notes"). The March 2029 Notes mature on March 1, 2029 and may be redeemed in whole or in
part at any time at our option subject to certain make-whole
provisions.
- $350.0 million of outstanding
SBIC debentures through our wholly owned SBIC subsidiaries. These
debentures, which are guaranteed by the U.S. Small Business
Administration (the "SBA"), had a weighted-average annual fixed
interest rate of 3.28% and mature ten years from original issuance.
The first maturity related to our existing SBIC debentures occurs
in the first quarter of 2027, and the weighted-average remaining
duration was 5.9 years.
- $150.0 million of notes
outstanding that bear interest at a weighted-average rate of 7.74%
per year (the "December 2025 Notes").
The December 2025 Notes mature on
December 23, 2025 and may be redeemed
in whole or in part at any time at our option subject to certain
make-whole provisions.
- We maintain investment grade debt ratings from each of Fitch
Ratings and S&P Global Ratings, both of which have assigned us
investment grade corporate and credit ratings of BBB- with a stable
outlook.
- Our net asset value totaled $2.7
billion, or $30.57 per
share.
Investment Portfolio Information as of September 30,
2024(4)
The following table provides a summary of the investments in our
LMM portfolio, private loan portfolio and middle market portfolio
as of September 30, 2024:
|
|
As of September
30, 2024
|
|
|
LMM
(a)
|
|
Private
Loan
|
|
Middle
Market
|
|
|
|
|
(dollars in
millions)
|
|
|
|
Number of portfolio
companies
|
|
84
|
|
92
|
|
17
|
|
Fair value
|
|
$
2,468.8
|
|
$
1,883.3
|
|
$
178.2
|
|
Cost
|
|
$
1,924.5
|
|
$
1,937.7
|
|
$
218.3
|
|
Debt investments as a %
of portfolio (at cost)
|
|
72.2 %
|
|
95.9 %
|
|
88.0 %
|
|
Equity investments as a
% of portfolio (at cost)
|
|
27.8 %
|
|
4.1 %
|
|
12.0 %
|
|
% of debt investments
at cost secured by first priority lien
|
|
99.2 %
|
|
99.9 %
|
|
97.6 %
|
|
Weighted-average annual
effective yield (b)
|
|
13.0 %
|
|
12.4 %
|
|
12.6 %
|
|
Average EBITDA
(c)
|
|
$
9.6
|
|
$
35.0
|
|
$
53.1
|
|
|
|
(a)
|
We had equity ownership
in all of our LMM portfolio companies, and our average fully
diluted equity ownership in those portfolio companies was
39%.
|
|
(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
four LMM portfolio companies, five private loan portfolio companies
and two middle market 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 and those portfolio companies whose primary operations have
ceased and only residual value remains.
|
|
|
The fair value of our LMM portfolio company equity investments
was 211% 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 2.8 to 1.0 and a median
total EBITDA to senior interest expense ratio of 2.5 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 2.5 to 1.0,
respectively.(4) (5)
As of September 30, 2024, our investment portfolio also
included:
- Other portfolio investments in 14 entities, collectively
totaling $162.4 million in fair value
and $155.8 million in cost basis,
which comprised 3.3% and 3.7% of our investment portfolio at fair
value and cost, respectively; and
- Our investment in the External Investment Manager, with a fair
value of $218.4 million and a cost
basis of $29.5 million, which
comprised 4.4% and 0.7% of our investment portfolio at fair value
and cost, respectively.
As of September 30, 2024, non-accrual investments comprised
1.4% of the total investment portfolio at fair value and 3.9% at
cost, and our total portfolio investments at fair value were 115%
of the related cost basis.
External Investment Manager
MSC Adviser I, LLC is our 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 2024,
the External Investment Manager earned $6.1
million of management fee income, an increase of
$0.5 million from the third quarter
of 2023, and incentive fees of $2.4
million, a decrease of $0.2 million from the third
quarter of 2023. In addition, we allocated $5.3 million of total expenses to the External
Investment Manager, a decrease of $0.1
million from the third quarter of 2023. The increase in
management fee income was attributable 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 $7.9 million,
representing an increase of $0.3
million from the third quarter of 2023.
We continue to execute our fund-raising activities of limited
partner commitments for our second private loan fund managed by the
External Investment Manager. This fund is exclusively focused on
investments in our private loan investment strategy and provides us
an additional opportunity for continued growth of the benefits from
the External Investment Manager.
The External Investment Manager ended the third quarter of 2024
with total assets under management of $1.6 billion.
Third Quarter 2024 Financial Results Conference Call /
Webcast
Main Street has scheduled a conference call for Friday,
November 8, 2024 at 10:00 a.m. Eastern
Time to discuss the third quarter 2024 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 website at
https://www.mainstcapital.com.
A telephonic replay of the conference call will be available
through Friday, November 15, 2024 and may be accessed by
dialing 201-612-7415 and using the passcode 13748740#. An audio
archive of the conference call will also be available on the
investor relations section of the company's website at
https://www.mainstcapital.com shortly after the call and will be
accessible until the date of Main Street's earnings release for the
next quarter.
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, 2024 to be filed with the U.S. Securities
and Exchange Commission (www.sec.gov) and Main Street's Third
Quarter 2024 Investor Presentation to be posted on the investor
relations section of the Main Street website at
https://www.mainstcapital.com.
ABOUT MAIN STREET CAPITAL CORPORATION
Main Street (www.mainstcapital.com) is a principal investment
firm that primarily provides customized long-term debt and equity
capital solutions to lower middle market companies and debt capital
to private companies owned by or in the process of being acquired
by a private equity fund. 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 customized "one-stop" debt and equity financing
solutions within its lower middle market investment strategy. Main
Street seeks to partner with private equity fund sponsors and
primarily invests in secured debt investments in its private loan
investment strategy. Main Street's lower middle market portfolio
companies generally have annual revenues between $10 million and $150
million. Main Street's private loan portfolio companies
generally have annual revenues between $25
million and $500 million.
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 Main Street's ability to successfully
source and execute on new portfolio investments and deliver 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 pandemics and other
public health crises, risk of recession, inflation, supply chain
constraints or disruptions and changes in market index 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 U.S. 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,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
INVESTMENT
INCOME:
|
|
|
|
|
|
|
|
|
Interest, fee and
dividend income:
|
|
|
|
|
|
|
|
|
Control
investments
|
$ 50,134
|
|
$ 48,645
|
|
$
152,572
|
|
$
145,485
|
|
Affiliate
investments
|
20,884
|
|
15,267
|
|
61,813
|
|
53,722
|
|
Non–Control/Non–Affiliate investments
|
65,806
|
|
59,325
|
|
186,201
|
|
171,867
|
|
Total
investment income
|
136,824
|
|
123,237
|
|
400,586
|
|
371,074
|
|
EXPENSES:
|
|
|
|
|
|
|
|
|
Interest
|
(33,474)
|
|
(26,414)
|
|
(89,411)
|
|
(78,165)
|
|
Compensation
|
(11,644)
|
|
(11,560)
|
|
(35,225)
|
|
(34,860)
|
|
General and
administrative
|
(4,564)
|
|
(4,324)
|
|
(14,159)
|
|
(12,915)
|
|
Share–based
compensation
|
(4,868)
|
|
(4,164)
|
|
(13,853)
|
|
(12,351)
|
|
Expenses allocated to
the External Investment Manager
|
5,322
|
|
5,404
|
|
16,768
|
|
16,089
|
|
Total
expenses
|
(49,228)
|
|
(41,058)
|
|
(135,880)
|
|
(122,202)
|
|
NET INVESTMENT
INCOME
|
87,596
|
|
82,179
|
|
264,706
|
|
248,872
|
|
NET REALIZED GAIN
(LOSS):
|
|
|
|
|
|
|
|
|
Control
investments
|
-
|
|
546
|
|
(352)
|
|
(50,532)
|
|
Affiliate
investments
|
32
|
|
(228)
|
|
786
|
|
(16,495)
|
|
Non–Control/Non–Affiliate investments
|
26,350
|
|
346
|
|
16,995
|
|
(36,196)
|
|
Total net realized
gain (loss)
|
26,382
|
|
664
|
|
17,429
|
|
(103,223)
|
|
NET UNREALIZED
APPRECIATION (DEPRECIATION):
|
|
|
|
|
|
|
|
|
Control
investments
|
50,348
|
|
29,838
|
|
88,007
|
|
122,779
|
|
Affiliate
investments
|
7,181
|
|
5,188
|
|
22,609
|
|
26,859
|
|
Non–Control/Non–Affiliate investments
|
(35,791)
|
|
(8,015)
|
|
(25,185)
|
|
17,432
|
|
Total net unrealized
appreciation
|
21,738
|
|
27,011
|
|
85,431
|
|
167,070
|
|
INCOME
TAXES:
|
|
|
|
|
|
|
|
|
Federal and state
income, excise and other taxes
|
(2,457)
|
|
(1,256)
|
|
(6,185)
|
|
(4,663)
|
|
Deferred
taxes
|
(9,252)
|
|
(5,337)
|
|
(27,534)
|
|
(18,690)
|
|
Income tax
provision
|
(11,709)
|
|
(6,593)
|
|
(33,719)
|
|
(23,353)
|
|
NET INCREASE IN NET
ASSETS RESULTING FROM OPERATIONS
|
$
124,007
|
|
$
103,261
|
|
$
333,847
|
|
$
289,366
|
|
NET INVESTMENT
INCOME PER SHARE-BASIC AND DILUTED
|
$
1.00
|
|
$
0.99
|
|
$
3.07
|
|
$
3.07
|
|
NET INCREASE IN NET
ASSETS RESULTING FROM OPERATIONS
PER SHARE-BASIC AND DILUTED
|
$
1.42
|
|
$
1.25
|
|
$
3.87
|
|
$
3.57
|
|
WEIGHTED-AVERAGE
SHARES
OUTSTANDING-BASIC
AND DILUTED
|
87,459,533
|
|
82,921,764
|
|
86,268,415
|
|
81,065,195
|
|
MAIN STREET CAPITAL
CORPORATION
Consolidated Balance
Sheets
(in thousands,
except per share amounts)
|
|
|
|
September
30,
|
|
December
31,
|
|
|
2024
|
|
2023
|
|
|
(Unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
Investments at fair
value:
|
|
|
|
|
|
Control
investments
|
|
$
2,104,576
|
|
$
2,006,698
|
|
Affiliate
investments
|
|
784,092
|
|
615,002
|
|
Non–Control/Non–Affiliate investments
|
|
2,022,386
|
|
1,664,571
|
|
Total
investments
|
|
4,911,054
|
|
4,286,271
|
|
Cash and cash
equivalents
|
|
84,421
|
|
60,083
|
|
Interest and dividend
receivable and other assets
|
|
86,420
|
|
89,337
|
|
Deferred financing
costs, net
|
|
12,882
|
|
7,879
|
|
Total
assets
|
|
$
5,094,777
|
|
$
4,443,570
|
|
LIABILITIES
|
|
|
|
|
|
Credit
Facilities
|
|
$
460,000
|
|
$
360,000
|
|
July 2026 Notes (par:
$500,000 as of both September 30, 2024 and
December 31, 2023)
|
|
499,057
|
|
498,662
|
|
June 2027 Notes (par:
$400,000 as of September 30, 2024)
|
|
401,136
|
|
-
|
|
March 2029 Notes (par:
$350,000 as of September 30, 2024)
|
|
346,822
|
|
-
|
|
SBIC debentures (par:
$350,000 as of both September 30, 2024 and
December 31, 2023)
|
|
343,122
|
|
344,535
|
|
December 2025 Notes
(par: $150,000 as of both September 30, 2024 and
December 31, 2023)
|
|
149,353
|
|
148,965
|
|
May 2024 Notes (par:
$450,000 as of December 31, 2023)
|
|
-
|
|
450,182
|
|
Accounts payable and
other liabilities
|
|
71,553
|
|
62,576
|
|
Interest
payable
|
|
18,513
|
|
17,025
|
|
Dividend
payable
|
|
21,575
|
|
20,368
|
|
Deferred tax liability,
net
|
|
91,392
|
|
63,858
|
|
Total
liabilities
|
|
2,402,523
|
|
1,966,171
|
|
NET
ASSETS
|
|
|
|
|
|
Common stock
|
|
880
|
|
848
|
|
Additional paid–in
capital
|
|
2,418,089
|
|
2,270,549
|
|
Total undistributed
earnings
|
|
273,285
|
|
206,002
|
|
Total net
assets
|
|
2,692,254
|
|
2,477,399
|
|
Total
liabilities and net assets
|
|
$
5,094,777
|
|
$
4,443,570
|
|
NET ASSET VALUE PER
SHARE
|
|
$
30.57
|
|
$
29.20
|
|
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,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Net investment
income
|
$
87,596
|
|
$
82,179
|
|
$
264,706
|
|
$
248,872
|
|
Non-cash
compensation expenses (3)
|
5,377
|
|
3,992
|
|
14,927
|
|
13,068
|
|
Distributable net
investment income (1)
|
$
92,973
|
|
$
86,171
|
|
$
279,633
|
|
$
261,940
|
|
|
|
|
|
|
|
|
|
Per share
amounts:
|
|
|
|
|
|
|
|
|
Net investment income
per share -
|
|
|
|
|
|
|
|
|
Basic and diluted
|
$
1.00
|
|
$
0.99
|
|
$
3.07
|
|
$
3.07
|
|
Distributable net
investment income per share -
|
|
|
|
|
|
|
|
|
Basic and diluted (1)
|
$
1.06
|
|
$
1.04
|
|
$
3.24
|
|
$
3.23
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Share–based
compensation
|
$
(4,868)
|
|
$
(4,164)
|
|
$
(13,853)
|
|
$
(12,351)
|
|
Deferred compensation
(expense) benefit
|
(509)
|
|
172
|
|
(1,074)
|
|
(717)
|
|
Total non-cash
compensation expenses (3)
|
(5,377)
|
|
(3,992)
|
|
(14,927)
|
|
(13,068)
|
|
|
|
|
|
|
|
|
|
Total
expenses
|
(49,228)
|
|
(41,058)
|
|
(135,880)
|
|
(122,202)
|
|
Less non-cash
compensation expenses (3)
|
5,377
|
|
3,992
|
|
14,927
|
|
13,068
|
|
Total cash expenses
(3)
|
$
(43,851)
|
|
$
(37,066)
|
|
$
(120,953)
|
|
$
(109,134)
|
|
|
|
|
|
|
|
|
|
Compensation
|
$
(11,644)
|
|
$
(11,560)
|
|
$
(35,225)
|
|
$
(34,860)
|
|
Share-based
compensation
|
(4,868)
|
|
(4,164)
|
|
(13,853)
|
|
(12,351)
|
|
Total compensation
expenses
|
(16,512)
|
|
(15,724)
|
|
(49,078)
|
|
(47,211)
|
|
Non-cash compensation
expenses (3)
|
5,377
|
|
3,992
|
|
14,927
|
|
13,068
|
|
Total cash compensation
expenses (3)
|
$
(11,135)
|
|
$
(11,732)
|
|
$
(34,151)
|
|
$
(34,143)
|
|
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.(3) 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(3) 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)
|
Return on equity equals
the net increase in net assets resulting from operations divided by
the average quarterly total net assets for the three month and TTM
periods ended September 30, 2024.
|
|
|
|
(3)
|
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 expenses, 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 expenses, 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.
|
|
|
|
(4)
|
Portfolio company
financial information has not been independently verified by Main
Street.
|
|
|
|
(5)
|
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
Ryan R. Nelson, CFO,
rnelson@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-2024-results-302299327.html
SOURCE Main Street Capital Corporation
