Core Insights - Monroe Capital LLC acted as the sole lead arranger and administrative agent for a senior credit facility to support Milrose Consultants' acquisition of Surface Design Group [1] Company Overview - Surface Design Group, headquartered in New York, specializes in architectural and engineering services, particularly in building envelope design and construction [1] - Milrose Consultants is an existing portfolio company of Southfield Capital [1]

Core Insights - Monroe Capital LLC acted as the sole lead arranger and administrative agent for a senior credit facility to support Frontenac's acquisition of Beckway Consulting, LLC [1] Company Overview - Beckway Consulting, LLC, founded in 2016 and headquartered in New York, NY, is a professional services firm [1] - The firm specializes in executing strategies and creating value by providing full-time resources, interim management, and project solutions to financial sponsors [1]

分组1 - Monroe Capital reported quarterly earnings of $0.09 per share, missing the Zacks Consensus Estimate of $0.15 per share, and down from $0.31 per share a year ago, representing an earnings surprise of -40.00% [1] - The company posted revenues of $8.21 million for the quarter ended September 2025, missing the Zacks Consensus Estimate by 7.17%, and down from $15.69 million year-over-year [2] - Over the last four quarters, Monroe Capital has surpassed consensus EPS estimates only once and has not beaten consensus revenue estimates [2] 分组2 - Monroe Capital shares have lost about 17.7% since the beginning of the year, while the S&P 500 has gained 15.1% [3] - The company's earnings outlook is crucial for investors, with current consensus EPS estimate for the coming quarter at $0.16 on revenues of $9.76 million, and $0.64 on revenues of $38.42 million for the current fiscal year [7] - The Zacks Industry Rank for Financial - Investment Management is in the top 32% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]

Investment Portfolio Composition - As of September 30, 2025, the portfolio included approximately 73.4% senior secured loans, 0.6% unitranche secured loans, 8.7% junior secured loans, and 17.3% equity investments, compared to December 31, 2024, when the portfolio included approximately 78.3% senior secured loans, 0.8% unitranche secured loans, 6.5% junior secured loans, and 14.4% equity investments [268]. - The investment objective is to maximize total return to stockholders through investment in senior secured, unitranche secured, and junior secured debt, with investments generally ranging between $2.0 million and $35.0 million each [268]. - As of September 30, 2025, the weighted average annualized contractual coupon yield for senior secured loans was 10.4%, while the total yield was 9.9% [280]. - The fair value of senior secured loans decreased to $264.7 million, representing 73.4% of total investments, down from $358.0 million or 78.3% as of December 31, 2024 [282]. - As of September 30, 2025, 79.5% of investments were rated Grade 2, indicating an acceptable level of risk, while 15.6% were rated Grade 3, indicating below-expectation performance [287]. - Investments on non-accrual status totaled $12.5 million at fair value, representing 3.5% of total investments as of September 30, 2025 [287]. Investment Activity - During the three months ended September 30, 2025, the company invested $9.0 million in 17 existing portfolio companies and had $15.2 million in aggregate sales and principal repayments, resulting in a net decrease in investments of $6.2 million for the period [277]. - For the nine months ended September 30, 2025, the company invested $7.6 million in one new portfolio company and $21.3 million in 59 existing portfolio companies, with $120.2 million in aggregate sales and principal repayments, resulting in a net decrease in investments of $91.3 million for the period [278]. - The company has not made investments in any new portfolio companies during the three months ended September 30, 2025 [277]. - During the nine months ended September 30, 2024, the company invested $27.6 million in six new portfolio companies and $44.1 million in 51 existing portfolio companies, resulting in a net decrease in investments of $14.6 million [280]. Financial Performance - The company's total investment income for the three months ended September 30, 2025, was $8.2 million, a decrease from $15.7 million in the same period of 2024 [288]. - For the nine months ended September 30, 2025, total investment income was $29.7 million, down from $46.5 million in 2024 [289]. - The net investment income before income taxes for the three months ended September 30, 2025, was $1.9 million, compared to $6.6 million in 2024 [288]. - The company reported a net realized loss on investments of $2.4 million for the three months ended September 30, 2025 [288]. - Total investment income decreased by $7.5 million (47.8%) and $16.8 million (36.2%) for the three and nine months ended September 30, 2025, compared to the same periods in 2024, primarily due to lower interest income, PIK interest income, and dividend income [291]. - For the three months ended September 30, 2025, the net increase (decrease) in net assets resulting from operations was $(1.1) million, compared to a net increase of $5.0 million in 2024 [303]. - For the nine months ended September 30, 2025, the net increase (decrease) in net assets resulting from operations was $(2.5) million, compared to a net increase of $11.4 million in 2024 [304]. Operating Expenses - The primary operating expenses include management and incentive fees to MC Advisors and other operating costs, including interest expense on indebtedness [275]. - Total operating expenses decreased by $2.8 million (30.9%) and $7.3 million (26.4%) during the three and nine months ended September 30, 2025, compared to the same periods in 2024, mainly due to lower interest and other debt financing expenses [294]. Debt and Liquidity - As of September 30, 2025, the company had $3.5 million in cash and cash equivalents, $82.8 million of total debt outstanding on the revolving credit facility, and $130.0 million on the 2026 Notes [305]. - The asset coverage ratio based on aggregate borrowings outstanding was 181% as of September 30, 2025, compared to 165% as of December 31, 2024 [306]. - For the nine months ended September 30, 2025, the company experienced a net decrease in cash and cash equivalents of $5.5 million, with operating activities providing $92.7 million [307]. - The company reduced its commitment of the Revolving Credit Facility from $255.0 million to $175.0 million on August 20, 2025 [313]. - The outstanding borrowings under the Revolving Credit Facility were accruing at a weighted average interest rate of 6.9% as of September 30, 2025, compared to 7.1% as of December 31, 2024 [317]. Market Conditions and Risks - Increased competition in the middle-market lending space has resulted in lower yields and weaker financial covenants for new assets [351]. - Middle market direct lending has historically outperformed U.S. high yield bonds and U.S. traded loans, generating considerable yield premiums during various economic cycles [1]. - Interest coverage ratios have increased above 2024 levels, indicating borrowers' earnings power sufficiently satisfies debt service obligations [1]. - U.S. inflation rates remain above historical levels, increasing costs for labor, energy, and raw materials, which could adversely affect portfolio companies' profit margins [380]. Valuation and Accounting - The Valuation Designee uses a multi-step valuation process for investments lacking readily available market quotations, including independent appraisals [2]. - As of September 30, 2025, the fair value of the investment portfolio was determined in accordance with GAAP and the company's valuation procedures [2]. - The company is currently evaluating the impact of new accounting standards but does not expect a material impact on its consolidated financial statements [2]. - The company is subject to financial market risks, including interest rate risk and inflation, which may affect the prices of securities held [2].

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Financial Performance - Net Investment Income (NII) for Q3 2025 was $1.8 million, or $0.08 per share, down from $3.3 million, or $0.15 per share in Q2 2025[3][8] - Adjusted Net Investment Income for Q3 2025 was $1.9 million, or $0.09 per share, compared to $3.3 million, or $0.15 per share in the previous quarter[4][8] - Total investment income for Q3 2025 was $8.2 million, down from $9.9 million in Q2 2025, primarily due to declines in dividend income and interest income[9] - Total investment income decreased to $8,206,000 for the quarter ended September 30, 2025, down 16.9% from $9,873,000 in the previous quarter[23] - Net investment income before income taxes was $1,883,000, a decline of 42.2% compared to $3,255,000 in the prior quarter[23] - Net increase in net assets resulting from operations was a loss of $1,137,000, compared to a loss of $1,869,000 in the previous quarter[23] - The company reported a net realized loss of $2,378,000 from non-controlled/non-affiliate company investments for the quarter[23] Asset and Liability Management - Net Asset Value (NAV) decreased to $173.0 million, or $7.99 per share, from $179.6 million, or $8.29 per share in Q2 2025[4][6] - Total assets decreased to $388,952,000 as of September 30, 2025, down from $394,617,000 at the end of the previous quarter[21] - Total liabilities increased slightly to $215,914,000 from $215,025,000 in the previous quarter[21] - Net asset value per share decreased to $7.99 from $8.29 in the previous quarter[21] Investment and Portfolio Management - The number of portfolio company investments decreased to 79 from 80 in the previous quarter[7] - The percentage of portfolio company investments on non-accrual status was 3.5%, slightly down from 3.6% in Q2 2025[7] - Interest income from non-controlled/non-affiliate company investments was $5,463,000, down from $6,757,000 in the previous quarter[23] Expenses and Cost Management - Total expenses for Q3 2025 were $6.4 million, a decrease from $6.6 million in Q2 2025, mainly due to lower professional fees and management fees[10] - Total operating expenses were $6,323,000, a decrease from $6,618,000 in the prior quarter[23] Future Outlook - The company anticipates closing its merger with Horizon Technology Finance Corporation in Q1 2026, which is expected to unlock value for shareholders[2] - The company continues to focus on maximizing total return to stockholders through current income and capital appreciation[25] Debt Management - The company's debt-to-equity leverage increased to 1.23 times as of September 30, 2025, from 1.17 times at the end of Q2 2025[5] - As of September 30, 2025, the company had $3.5 million in cash and cash equivalents and $82.8 million of debt outstanding on its revolving credit facility[13]

Core Viewpoint - Monroe Capital Corporation reported its financial results for the third quarter of 2025, highlighting a decrease in net investment income and net asset value, while announcing a merger with Horizon Technology Finance Corporation that is expected to close in the first quarter of 2026, aiming to create long-term value for shareholders [3][5][31]. Financial Highlights - Adjusted Net Investment Income for Q3 2025 was $1.9 million, or $0.09 per share, down from $3.3 million, or $0.15 per share in Q2 2025 [5][13]. - Net Asset Value (NAV) decreased to $173.0 million, or $7.99 per share, from $179.6 million, or $8.29 per share in the previous quarter [5][8]. - Total investment income for Q3 2025 was $8.2 million, a decline from $9.9 million in Q2 2025, primarily due to decreases in dividend income and interest income [14][30]. Operational Performance - The company experienced a net loss of $(3.0) million for Q3 2025, compared to a net loss of $(5.2) million in Q2 2025, driven by mark-to-market declines in certain portfolio companies [16][29]. - Total expenses for Q3 2025 were $6.4 million, slightly down from $6.6 million in Q2 2025, mainly due to lower professional fees and management fees [15][30]. Portfolio Overview - As of September 30, 2025, investments at fair value totaled $360.7 million, down from $367.7 million in the previous quarter, with 79 portfolio company investments [7][10]. - The percentage of portfolio company investments on non-accrual status was 3.5%, a slight decrease from 3.6% in the prior quarter [10]. Liquidity and Capital Resources - The company had $3.5 million in cash and cash equivalents and $212.8 million in total debt as of September 30, 2025 [18][26]. - Approximately $92.2 million was available for additional borrowings on its revolving credit facility [18]. Merger and Future Outlook - The anticipated merger with Horizon Technology Finance Corporation is expected to unlock significant value and provide long-term upside for shareholders [3][31].

Core Viewpoint - Monroe Capital Corporation will report its third quarter financial results for the period ending September 30, 2025, on November 5, 2025, after market close [1] Company Overview - Monroe Capital Corporation is a publicly-traded specialty finance company focused on investing in senior, unitranche, and junior secured debt, as well as unsecured debt and equity investments in middle-market companies [2] - The company's investment objective is to maximize total return for stockholders through current income and capital appreciation [2] - Investment activities are managed by Monroe Capital BDC Advisors, LLC, which is registered under the Investment Advisers Act of 1940 [2] Asset Management Firm - Monroe Capital LLC specializes in private credit markets, offering various strategies including direct lending, technology finance, venture debt, and structured credit [3] - The firm has been providing capital solutions since 2004 and operates in the U.S. and Canada [3] - Monroe Capital LLC aims to generate high-quality "alpha" returns for institutional and high net worth investors, regardless of economic cycles [3] Awards and Recognition - Monroe has received multiple awards, including being named in Inc.'s 2025 Founder-Friendly Investors List and recognized as the 2025 Most Innovative Private Credit CLO Manager of the Year by DealCatalyst [4] - The firm has also been acknowledged as the 2024 Lower Mid-Market Lender of the Year by Private Debt Investor and the 2024 Lower Mid-Markets Lender of the Year by Global M&A Network [4]

Core Insights - Monroe Capital LLC has officially opened its office in Abu Dhabi, marking a significant milestone for the company in the private credit markets [1] Company Developments - The new office was established following the receipt of Financial Services Permission (FSP) from the Financial Services Regulatory Authority of ADGM [1] - This expansion into Abu Dhabi positions Monroe Capital to leverage the opportunities within the international financial center of the UAE [1]

Core Insights - Monroe Capital LLC's Chairman and CEO Ted Koenig discussed inflation risk, interest-rate cuts, AI infrastructure, and the outlook for mergers and acquisitions in late 2025 [1] Inflation Risk - The discussion highlighted concerns regarding inflation risk and its potential impact on the market [1] Interest-Rate Cuts - Koenig provided insights on the anticipated interest-rate cuts and their implications for investment strategies [1] AI Infrastructure - The role of AI infrastructure in shaping future investment opportunities was emphasized, indicating a growing trend in the industry [1] Mergers and Acquisitions - The outlook for mergers and acquisitions in late 2025 was addressed, suggesting a dynamic environment for corporate consolidation [1]