Provides Preliminary Estimate of First Quarter 2020 Results and Liquidity Position
Provides Updated Dividend Guidance
April 15, 2020 /PRNewswire/ -- Main Street Capital Corporation (NYSE: MAIN) ("Main Street") is providing an update regarding its business and the impacts from COVID-19 ("Coronavirus"), its preliminary operating results and liquidity position for the first quarter of 2020, and its regular monthly dividends and semi-annual supplemental dividends;">HOUSTON, April 15, 2020 /PRNewswire/ -- Main Street Capital Corporation (NYSE: MAIN) ("Main Street") is providing an update regarding its business and the impacts from COVID-19 ("Coronavirus"), its preliminary operating results and liquidity position for the first quarter of 2020, and its regular monthly dividends and semi-annual supplemental dividends.
Business and Coronavirus Update
Main Street continues to work collectively with its employees and portfolio companies to navigate the significant challenges created by the Coronavirus pandemic. Main Street remains focused on ensuring the safety of its employees and the employees of its portfolio companies, while also managing its ongoing business activities. Main Street remains heavily engaged with its portfolio companies and continues to be pleased with the diligent and proactive actions taken by the portfolio company management teams and their ability to respond effectively to the continuing challenges in the current environment. Main Street's lower middle market portfolio companies have also been actively evaluating the programs and relief under the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, stimulus packages that may be available to assist these portfolio companies as they navigate the impact of Coronavirus on their businesses, employees and operations. Main Street continues to believe that it has sufficient levels of liquidity to support its existing portfolio companies and selectively deploy capital in new investment opportunities and a capital structure that provides Main Street the flexibility to navigate the current challenging environment.
$0.55 to $0.57 per share Main Street's preliminary estimate of first quarter 2020 distributable net investment income ("DNII"), which is NII before non-cash, share-based compensation expense;is $0.59 to $0.61 per share.(1) >Preliminary Estimates of First Quarter 2020 Results and Liquidity Position
Main Street's preliminary estimate of first quarter 2020 net investment income ("NII") is $0.55 to $0.57 per share. Main Street's preliminary estimate of first quarter 2020 distributable net investment income ("DNII"), which is NII before non-cash, share-based compensation expense, is $0.59 to $0.61 per share.(1)
$20.35 to $20.85 per share. The estimate includes unrealized depreciation on investments primarily resulting from the immediate adverse economic effects of the impacts of Coronavirus on market conditions and the overall economy as of March 31, 2020 and the related uncertainty regarding its future impact, including, but not limited to, the related declines in quoted loan prices, increases in underlying market credit spreads and company-specific negative impacts on past and expected future operating performance.">Main Street's preliminary estimate of net asset value ("NAV") per share as of March 31, 2020 is $20.35 to $20.85 per share. The estimate includes unrealized depreciation on investments primarily resulting from the immediate adverse economic effects of the impacts of Coronavirus on market conditions and the overall economy as of March 31, 2020 and the related uncertainty regarding its future impact, including, but not limited to, the related declines in quoted loan prices, increases in underlying market credit spreads and company-specific negative impacts on past and expected future operating performance.
$463.0 million of available capacity, and maintains availability for an additional $45.2 million of capacity under its Small Business Investment Company ("SBIC") licenses.">As of March 31, 2020, Main Street had approximately $54.2 million of cash and cash equivalents. Also as of March 31, 2020, Main Street had $277.0 million of outstanding borrowings under its revolving credit facility, thereby providing $463.0 million of available capacity, and maintains availability for an additional $45.2 million of capacity under its Small Business Investment Company ("SBIC") licenses.
$0.615 per share in aggregate, or $0.205 per share for each of April, May and June 2020, and such dividends will be paid on the previously announced payment dates of April 15, 2020, May 15, 2020 and June 15, 2020. Based upon its current expectations and projections, Main Street's management expects that at Main Street's next regularly scheduled Board of Directors ("Board") meetings in May 2020 they will recommend that the Board approve regular monthly cash dividends for the third quarter of 2020 of $0.615 per share in aggregate, unchanged from the regular monthly dividends to be paid in the second quarter of 2020, and with such amount payable in $0.205 increments for each of July, August and September 2020.">Updated Dividend Guidance
As previously announced, Main Street declared its regular monthly cash dividends for the second quarter of 2020 of $0.615 per share in aggregate, or $0.205 per share for each of April, May and June 2020, and such dividends will be paid on the previously announced payment dates of April 15, 2020, May 15, 2020 and June 15, 2020. Based upon its current expectations and projections, Main Street's management expects that at Main Street's next regularly scheduled Board of Directors ("Board") meetings in May 2020 they will recommend that the Board approve regular monthly cash dividends for the third quarter of 2020 of $0.615 per share in aggregate, unchanged from the regular monthly dividends to be paid in the second quarter of 2020, and with such amount payable in $0.205 increments for each of July, August and September 2020.
$0.75 per share and, as discussed below, its expectation that the Board will agree to suspend its semi-annual supplemental cash dividends. ">As discussed above, Main Street's business and operating results, and the businesses and operating results of Main Street's portfolio companies, have been significantly impacted by Coronavirus. As a result, there is uncertainty related to Main Street's expected operating results for the second and third quarters of 2020, and as such, Main Street is not currently able to provide projections for its expected NII, DNII or NAV for these future periods. However, it is reasonable to expect that Main Street's NII and DNII for the second and third quarters of 2020 will be below the regular monthly dividend amounts for these periods. As such, the above expected recommendation by Main Street's management team to declare the regular monthly dividends for the third quarter of 2020 is based upon a combination of Main Street's reasonable expectations for its operating results for the second and third quarters of 2020, its estimated undistributed taxable income as of March 31, 2020 of approximately $0.75 per share and, as discussed below, its expectation that the Board will agree to suspend its semi-annual supplemental cash dividends.