HOUSTON, March 18, 2020 /PRNewswire/ -- As we at Main
Street Capital Corporation (NYSE: MAIN) ("Main Street") work
collectively with our employees and our portfolio companies to
navigate the significant challenges that have been created by
COVID-19 (Coronavirus), we have placed considerable focus on and
attention to the health and well-being of our employees, the
employees of our portfolio companies and our broader community. As
we continue to work through these challenges, our thoughts are with
everyone who has been negatively impacted in any way by these
events.
We have been and are continuing to execute our contingency plans
in an effort to respond appropriately to these unprecedented
events. In an effort to address the anxiety and concerns of our key
partners and stakeholders, this press release is intended to
provide an update regarding our business, recent actions taken and
ongoing plans in response to the impacts of Coronavirus.
Our Business Continuity and Contingency Plans
Over the last few weeks since Coronavirus began to spread in the
U.S., we have implemented our business continuity and contingency
plans, specifically including the ability for all of our employees
to work remotely. Beginning last Friday,
March 13, 2020, as recommended by many health organizations
and government entities, we implemented remote working arrangements
for our employees. These actions were intended to address
concerns and risks related to the spread of Coronavirus, while
maintaining a safe work environment for our employees. Our
employees are currently maintaining the normal functions necessary
to meet our ongoing operational requirements and to fulfill the
responsibilities and obligations to our stakeholders. Since
implementing these plans, we have not experienced any significant
issues or concerns with our ability to maintain our full
operations. In addition, our complete executive and senior
management team continues to operate at full capacity. We have been
and will continue to be diligent in monitoring this evolving
situation and taking any necessary and appropriate actions to keep
our employees safe and healthy, while also ensuring our business
operations remain fully functional.
Portfolio Company Activities
We place significant value on the relationships we maintain with
our portfolio companies and their management teams and employees.
Over the last few weeks, we have focused our portfolio investment
team's efforts on proactively engaging with our portfolio
companies. Most specifically, our efforts are focused on
collaborating with the management teams of our lower middle market
portfolio companies to assess and evaluate the steps that each
portfolio company can take in response to the impacts of
Coronavirus, while also offering our insights and assistance to
these companies as they navigate this difficult environment.
To date, we are pleased with the diligence of and proactive actions
taken by our portfolio company management teams and we remain
confident in the ability of these teams and their employees to
respond to the challenges associated with these
circumstances.
Investment Portfolio Composition
One of the core philosophies and beliefs that we have always
employed and practiced at Main Street is the view that a
diversified portfolio can provide significant benefits to our
stakeholders. When evaluating portfolio diversity, we do so in
terms of diversity by industry, geography, transaction type and
investment tenure. We continue to believe that the benefits of the
highly diversified and mature investment portfolio will serve our
stakeholders well in any environment, and particularly on a
relative basis compared to other investment firms in the current
environment.
Each quarter we endeavor to provide significant details on the
composition of our investment portfolio as part of our quarterly
financial reporting. The details of our investment portfolio as of
December 31, 2019 can be accessed in
our Investor Presentation for the year-ended December 31, 2019 on the investor relations
section of our website at http://ir.mainstcapital.com.
Liquidity and Capital Structure
We believe that our permanent equity capital as a
publicly-traded company provides us significant flexibility and
benefits that we believe typically do not exist with other
traditional private equity and private debt funds. Our
flexibility allows us to provide our lower middle market companies
with highly customized solutions that are designed to meet the
needs and transaction goals of the management teams and other
owners of these companies. We believe that our approach
generally results in capital structures in these portfolio
companies that are more conservative than the capital structures
typically seen in the broader market, and we believe these
resulting conservative capital structures will provide significant
benefits during times of general economic declines.
In addition to the benefits of our permanent equity capital, we
have also intentionally maintained what we believe is a
conservative approach to leverage at Main Street, maintaining
leverage levels that are well below the regulatory leverage allowed
in our industry. Our approach to deploying conservative amounts of
leverage also provides the benefit of maintaining significant
liquidity for future needs and requirements. We have always viewed
our decision to maintain lower levels of leverage as an investment
in the future, and we believe that our philosophy and practice
regarding our conservative use of leverage will prove to be
valuable in the current environment.
In addition to our conservative capital structure, we also
maintain funding from several different debt capital sources,
including our revolving credit facility, which includes a
diversified group of 17 different banks, our unique relationship
with the U.S. Small Business Administration through our three
active Small Business Investment Company (SBIC) licenses and our
existing long-term bonds. Our capital structure includes
minimal amounts of near-term maturities, with only $77 million, or approximately 5%, of our total
debt capacity of over $1.5 billion
maturing before the end of 2021.
The details of our capital structure and liquidity position as
of December 31, 2019 can be accessed
in our Investor Presentation and our Debt Capital Markets
Presentation for the year-ended December 31,
2019, both of which are available on the investor relations
section of our website at
http://ir.mainstcapital.com/presentations.
Since the U.S. economy began to experience the impacts of
Coronavirus several weeks ago, we completed a detailed evaluation
of our current capital structure and overall liquidity position,
and we presently believe we have ample liquidity to support our
near-term capital requirements. As the impact of Coronavirus
continues to evolve, we will continue to evaluate our overall
liquidity position and the associated expected needs over the next
couple of quarters and will take proactive steps to maintain the
appropriate liquidity position as determined based upon the then
current circumstances.
Future Action Plans and Continued Focus on Shareholder
Alignment
While we are all experiencing unexpected difficulties and
challenges as we deal with the impacts of Coronavirus, we remain
fully committed to supporting our stakeholders. As a management
team, we continue to own a significant amount of Main Street equity
and have continued to be regular purchasers of Main Street stock
through our monthly dividend reinvestment program in a manner
consistent with our historical practices, with the most recent
purchase activity occurring on March 13,
2020. We hope our stakeholders appreciate the strong
alignment of interests that exists between our management team and
our shareholders and understand that we will continue to work hard
for our stakeholders as we proactively work through the ongoing
impacts of Coronavirus.
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 portfolio. 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.
FORWARD-LOOKING STATEMENTS
This press release may contain certain forward-looking
statements, including but not limited to the potential impacts of
Coronavirus on us, our portfolio companies, our communities and the
U.S. and global economies, including, with respect to us, impacts
on our portfolio investments, liquidity and access to
capital. Any such statements other than statements of
historical fact are likely to be affected by other unknowable
future events and conditions, including elements of the future that
are or are not under Main Street's control, and that Main Street
may or may not have considered; accordingly, such statements cannot
be guarantees or assurances of any aspect of future
performance. Actual performance and results could vary
materially from these estimates and projections of the future as a
result of a number of factors, including those described from time
to time in Main Street's filings with the Securities and Exchange
Commission. Such statements speak only as of the time when
made and are based on information available to Main Street as of
the date hereof and are qualified in their entirety by this
cautionary statement. Main Street assumes no obligation to
revise or update any such statement now or in the future.
Contacts:
Main Street Capital Corporation
Dwayne L. Hyzak, CEO,
dhyzak@mainstcapital.com
Brent D. Smith, CFO,
bsmith@mainstcapital.com
713-350-6000
Dennard Lascar Investor
Relations
Ken Dennard / ken@dennardlascar.com
Zach Vaughan /
zvaughan@dennardlascar.com
713-529-6600
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SOURCE Main Street Capital Corporation