Monroe Capital Corporation BDC Announces Third Quarter 2025 Results

CHICAGO, Nov. 05, 2025 (GLOBE NEWSWIRE) -- Monroe Capital Corporation (NASDAQ: MRCC) today announced its financial results for the third quarter ended September 30, 2025. Except where the context suggests otherwise, the terms “Company,” “we,” “us,” and “our” refer to Monroe Capital Corporation (together with its subsidiaries). Third Quarter 2025 Financial Highlights Net Investment Income ("NII") of $1.8 million, or $0.08 per shareAdjusted Net Investment Income (a non-GAAP measure described below) of $1.9 million, or $0.09 per shareNet increase (decrease) in net assets resulting from operations of $(1.1) million, or $(0.05) per shareNet Asset Value (“NAV”) of $173.0 million, or $7.99 per sharePaid quarterly dividend of $0.25 per share on September 30, 2025Current annual cash dividend yield to stockholders of approximately 14.3%(1) Chief Executive Officer Theodore L. Koenig commented, "We believe that MRCC's previously announced merger with Horizon Technology Finance Corporation ("HRZN"), through its NAV for NAV structure, will unlock meaningful value for our shareholders and provide them with compelling long-term upside through participation in a larger, more scaled HRZN, which stands to benefit from meaningful synergies and operating leverage as it continues to grow. We currently anticipate the closing of the merger to occur during the first quarter of 2026. In advance of the expected closing of the merger, we have continued to support the quarterly dividend of $0.25 per share through utilizing the spillover income we have accumulated from prior strong NII performance." Monroe Capital Corporation is a business development company affiliate of the award-winning private credit investment firm and lender, Monroe Capital LLC. ______________________________________________________________________ (1) Based on an annualized dividend and closing share price as of November 4, 2025. Management Commentary Adjusted Net Investment Income totaled $1.9 million, or $0.09 per share for the quarter ended September 30, 2025, a decrease from $3.3 million, or $0.15 per share for the quarter ended June 30, 2025. NAV decreased to $173.0 million or $7.99 per share as of September 30, 2025, compared to $179.6 million or $8.29 per share as of June 30, 2025. The decrease in NAV this quarter was primarily the result of the utilization of spillover income to support the third quarter dividend and net unrealized losses associated with certain portfolio companies. As of September 30, 2025, the Company has an estimated $0.25 per share in undistributed spillover income. At quarter end, the Company's debt-to-equity leverage increased from 1.17 times debt-to-equity at June 30, 2025 to 1.23 times debt-to-equity at September 30, 2025. Weighted average leverage decreased to 1.18 times debt-to-equity for the quarter ended September 30, 2025, compared to 1.22 times debt-to-equity for the prior quarter ended June 30, 2025. The decline in weighted average leverage was primarily driven by the use of proceeds from sales, payoffs and paydowns to reduce the average outstanding balance on the revolving credit facility. Selected Financial Highlights (in thousands, except per share data) September 30, 2025 June 30, 2025Consolidated Statements of Assets and Liabilities data:(unaudited)Investments, at fair value$360,650 $367,700Total assets$388,952 $394,617Net assets$173,038 $179,592Net asset value per share$7.99 $8.29 For the Quarter Ended September 30, 2025 June 30, 2025Consolidated Statements of Operations data:(unaudited)Net investment income$1,813 $3,298 Adjusted net investment income(2)$1,883 $3,255 Net gain (loss)$(2,950) $(5,167)Net increase (decrease) in net assets resulting from operations$(1,137) $(1,869) Per share data: Net investment income$0.08 $0.15 Adjusted net investment income(2)$0.09 $0.15 Net gain (loss)$(0.13) $(0.24)Net increase (decrease) in net assets resulting from operations$(0.05) $(0.09) ______________________________________________________________________ (2) See Non-GAAP Financial Measure – Adjusted Net Investment Income below for a detailed description of this non-GAAP measure and a reconciliation from NII to Adjusted Net Investment Income. The Company uses this non-GAAP financial measure internally in analyzing financial results and believes that this non-GAAP financial measure is useful to investors as an additional tool to evaluate ongoing results and trends for the Company. Portfolio Summary September 30, 2025 June 30, 2025 (unaudited)Investments, at fair value$360,650 $367,700 Number of portfolio company investments 79 80 Percentage portfolio company investments on non-accrual(3) 3.5% 3.6%Weighted average contractual yield(4) 9.9% 9.9%Weighted average effective yield(4) 8.8% 8.8% Asset class percentage at fair value: First lien loans 74.0% 74.1%Junior secured loans 8.7% 8.6%Equity investments 17.3% 17.3% ______________________________________________________________________ (3) Represents portfolio debt or preferred equity investments on non-accrual status as a percentage of total investments at fair value. (4) Portfolio yield is calculated only on the portion of the portfolio that has a contractual coupon and therefore does not account for dividends on equity investments (other than preferred equity investments). Financial Review The Company's NII for the quarter ended September 30, 2025 totaled $1.8 million, or $0.08 per share, compared to $3.3 million, or $0.15 per share, for the quarter ended June 30, 2025. Adjusted Net Investment Income was $1.9 million, or $0.09 per share, for the quarter ended September 30, 2025, compared to $3.3 million, or $0.15 per share, for the quarter ended June 30, 2025. Total investment income for the quarter ended September 30, 2025 totaled $8.2 million, compared to $9.9 million for the quarter ended June 30, 2025. Total investment income decreased by $1.7 million, driven by declines in dividend income, prepayment gain (loss) and interest income. Interest income declines were primarily as a result of the decline in weighted average invested assets. The decline in dividend income was primarily driven by the treatment of the quarterly distribution from the Company's investment in MRCC Senior Loan Fund I, LLC ("SLF") as a return of capital for the quarter ended September 30, 2025. SLF is currently in the process of winding-down in advance of the closing of the proposed merger. Total expenses for the quarter ended September 30, 2025 were $6.4 million, compared to $6.6 million for the quarter ended June 30, 2025. Total expenses decreased by $0.2 million primarily due to lower professional fees and general and administrative expenses, as well as reduced base management fees, reflecting a quarter-over-quarter decline in total assets. These reductions were partially offset by an increase in tax expense within our taxable subsidiaries associated with certain equity holdings. Net gain (loss) was $(3.0) million for the quarter ended September 30, 2025, compared to $(5.2) million for the quarter ended June 30, 2025. For the quarter ended September 30, 2025,the net loss was primarily driven by mark-to-market declines in certain portfolio companies still held in the portfolio, as well as unrealized losses on the Company's equity investment in SLF. The Company's average portfolio mark slightly decreased by 0.3%, from 88.6% of amortized cost as of June 30, 2025 to 88.3% of amortized cost as of September 30, 2025. Net increase (decrease) in net assets resulting from operations was $(1.1) million, or $(0.05) per share, for the quarter ended September 30, 2025, compared to $(1.9) million, or $(0.09) per share, for the quarter ended June 30, 2025. Liquidity and Capital Resources As of September 30, 2025, the Company had $3.5 million in cash and cash equivalents, $82.8 million of debt outstanding on its revolving credit facility and $130.0 million of debt outstanding on its 2026 Notes. As of September 30, 2025, the Company had approximately $92.2 million available for additional borrowings on its revolving credit facility, subject to borrowing base availability. MRCC Senior Loan Fund SLF is a joint venture with Life Insurance Company of the Southwest (“LSW”), an affiliate of National Life Insurance Company. SLF invests primarily in senior secured loans to middle market companies in the United States. SLF’s underlying investments are loans to middle-market borrowers that are generally larger than the rest of MRCC’s portfolio, which is focused on lower middle-market companies. The Company and LSW each committed $50.0 million of capital to the joint venture. The Company and LSW have agreed to work towards a wind-down of SLF in advance of the proposed merger and during the quarter began actively selling underlying investments in the portfolio. As of September 30, 2025, the Company had made net capital contributions of $42.1 million to SLF, with a fair value of $28.2 million, compared to a fair value of $30.2 million as of June 30, 2025. For the quarter ended September 30, 2025, the Company recorded no dividend income from SLF, compared to $0.7 million in the prior quarter ended June 30, 2025. For the quarter ended September 30, 2025, the Company received a $0.6 million return of capital distribution from SLF. As part of the continued wind-down of SLF, on October 31, 2025, the Company received an additional $14.5 million return of capital distribution from SLF. As of September 30, 2025, SLF had total assets of $56.7 million (including investments at fair value of $22.8 million, $18.1 million in receivables for unsettled trades and $14.8 million in cash and cash equivalents), total liabilities of $0.2 million and total members’ capital of $56.5 million. On September 18, 2025, SLF fully repaid its secured revolving credit facility with Capital One, N.A. (the “SLF Credit Facility”). As of June 30, 2025, SLF had total assets of $75.9 million (including investments at fair value of $67.5 million), total liabilities of $15.6 million (including borrowings under the SLF Credit Facility of $15.2 million) and total members’ capital of $60.3 million. SLF’s average mark on the underlying investment portfolio decreased during the quarter, from 77.4% of amortized cost as of June 30, 2025, to 64.9% of amortized cost as of September 30, 2025. Non-GAAP Financial Measure – Adjusted Net Investment Income On a supplemental basis, the Company discloses Adjusted Net Investment Income (including on a per share basis) which is a financial measure that is calculated and presented on a basis of methodology other than in accordance with generally accepted accounting principles of the United States of America (“non-GAAP”). Adjusted Net Investment Income represents NII, excluding the net capital gains incentive fee and income taxes. The Company uses this non-GAAP financial measure internally in analyzing financial results and believes that this non-GAAP financial measure is useful to investors as an additional tool to evaluate ongoing results and trends for the Company. The management agreement with the Company’s advisor provides that a capital gains incentive fee is determined and paid annually with respect to realized capital gains (but not unrealized capital gains) to the extent such realized capital gains exceed realized and unrealized capital losses for such year. Management believes that Adjusted Net Investment Income is a useful indicator of operations exclusive of any net capital gains incentive fee as NII does not include gains associated with the capital gains incentive fee. The following tables provide a reconciliation from NII (the most comparable GAAP measure) to Adjusted Net Investment Income for the periods presented (in thousands, except per share data): For the Quarter Ended September 30, 2025 June 30, 2025 Amount Per Share Amount Amount Per Share Amount (unaudited)Net investment income$1,813 $0.08 $3,298 $0.15Net capital gains incentive fee — — — —Income tax expense (benefit), including excise taxes 70 0.01 (43) 0.00Adjusted Net Investment Income$1,883 $0.09 $3,255 $0.15 Adjusted Net Investment Income may not be comparable to similar measures presented by other companies, as it is a non-GAAP financial measure that is not based on a comprehensive set of accounting rules or principles and therefore may be defined differently by other companies. In addition, Adjusted Net Investment Income should be considered in addition to, not as a substitute for, or superior to, financial measures determined in accordance with GAAP. MONROE CAPITAL CORPORATIONCONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES(in thousands, except per share data) September 30, 2025 June 30, 2025 (unaudited)Assets Investments, at fair value: Non-controlled/non-affiliate company investments$254,910 $261,164 Non-controlled affiliate company investments 77,500 76,379 Controlled affiliate company investments 28,240 30,157 Total investments, at fair value (amortized cost of: $408,331 and $414,808, respectively) 360,650 367,700 Cash and cash equivalents 3,526 2,425 Interest and dividend receivable 23,832 23,461 Other assets 944 1,031 Total assets$388,952 $394,617 Liabilities Debt$212,800 $210,300 Less: Unamortized debt issuance costs (1,602) (1,722)Total debt, less unamortized debt issuance costs 211,198 208,578 Interest payable 1,444 2,768 Base management fees payable 1,652 1,742 Accounts payable and accrued expenses 1,561 1,937 Directors' fees payable 59 — Total liabilities 215,914 215,025 Net Assets Common stock, $0.001 par value, 100,000 shares authorized, 21,666 and 21,666 shares issued and outstanding, respectively$22 $22 Capital in excess of par value 297,712 297,712 Accumulated undistributed (overdistributed) earnings (124,696) (118,142)Total net assets$173,038 $179,592 Total liabilities and total net assets$388,952 $394,617 Net asset value per share$7.99 $8.29 MONROE CAPITAL CORPORATIONCONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except per share data) For the Quarter Ended September 30, 2025 June 30, 2025 (unaudited)Investment income: Non-controlled/non-affiliate company investments: Interest income$5,463 $6,757 Payment-in-kind interest income 1,325 983 Dividend income 54 69 Other income 23 54 Total investment income from non-controlled/non-affiliate company investments 6,865 7,863 Non-controlled affiliate company investments: Interest income 577 573 Payment-in-kind interest income 704 677 Dividend income 60 60 Total investment income from non-controlled affiliate company investments 1,341 1,310 Controlled affiliate company investments: Dividend income — 700 Total investment income from controlled affiliate company investments — 700 Total investment income 8,206 9,873 Operating expenses: Interest and other debt financing expenses 3,913 3,933 Base management fees 1,652 1,742 Incentive fees — — Professional fees 187 267 Administrative service fees 360 374 General and administrative expenses 152 232 Directors' fees 59 70 Total operating expenses 6,323 6,618 Net investment income before income taxes 1,883 3,255 Income tax expense (benefit), including excise taxes 70 (43)Net investment income 1,813 3,298 Net gain (loss): Net realized gain (loss): Non-controlled/non-affiliate company investments (2,378) 77 Net realized gain (loss) (2,378) 77 Net change in unrealized gain (loss): Non-controlled/non-affiliate company investments 458 (2,603)Non-controlled affiliate company investments 337 (881)Controlled affiliate company investments (1,367) (1,760)Net change in unrealized gain (loss) (572) (5,244)Net gain (loss) (2,950) (5,167)Net increase (decrease) in net assets resulting from operations$(1,137) $(1,869)Per common share data: Net investment income per share - basic and diluted$0.08 $0.15 Net increase (decrease) in net assets resulting from operations per share - basic and diluted$(0.05) $(0.09)Weighted average common shares outstanding - basic and diluted 21,666 21,666 Additional Supplemental Information: The composition of the Company’s investment income was as follows (in thousands): For the Quarter Ended September 30, 2025 June 30, 2025 (unaudited)Interest income$5,844 $6,864Payment-in-kind interest income 2,029 1,660Dividend income 114 829Other income 23 54Prepayment gain (loss) 43 288Accretion of discounts and amortization of premiums 153 178Total investment income$8,206 $9,873 The composition of the Company’s interest expense and other debt financing expenses was as follows (in thousands): For the Quarter Ended September 30, 2025 June 30, 2025 (unaudited)Interest expense - revolving credit facility$1,947 $1,977Interest expense - 2026 Notes 1,555 1,555Amortization of debt issuance costs 411 401Total interest and other debt financing expenses$3,913 $3,933 About Monroe Capital Corporation Monroe Capital Corporation is a publicly-traded specialty finance company that principally invests in senior, unitranche and junior secured debt and, to a lesser extent, unsecured debt and equity investments in middle-market companies. The Company’s investment objective is to maximize the total return to its stockholders in the form of current income and capital appreciation. The Company’s investment activities are managed by its investment adviser, Monroe Capital BDC Advisors, LLC, which is an investment adviser registered under the Investment Advisers Act of 1940, as amended, and an affiliate of Monroe Capital LLC. To learn more about Monroe Capital Corporation, visit https://monroebdc.com. About Monroe Capital LLC Monroe Capital LLC (“Monroe”) is a premier asset management firm specializing in private credit markets across various strategies, including direct lending, technology finance, venture debt, alternative credit solutions, structured credit, real estate and equity. Since 2004, the firm has been successfully providing capital solutions to clients in the U.S. and Canada. Monroe prides itself on being a value-added and user-friendly partner to business owners, management, and both private equity and independent sponsors. Monroe’s platform offers a wide variety of investment products for both institutional and high net worth investors with a focus on generating high quality “alpha” returns irrespective of business or economic cycles. The firm is headquartered in Chicago and has 12 locations throughout the United States, Middle East, Asia and Australia. Monroe has been recognized by both its peers and investors with various awards including Inc.’s 2025 Founder-Friendly Investors List; DealCatalyst as the 2025 Most Innovative Private Credit CLO Manager of the Year; Private Debt Investor as the 2024 Lower Mid-Market Lender of the Year, Americas and 2023 Lower Mid-Market Lender of the Decade; Global M&A Network as the 2024 Lower Mid-Markets Lender of the Year, Americas; Korean Economic Daily as the 2022 Best Performance in Private Debt – Mid Cap; Creditflux as the 2021 Best U.S. Direct Lending Fund; and Pension Bridge as the 2020 Private Credit Strategy of the Year. For more information and important disclaimers, please visit https://monroecap.com. Forward-Looking Statements This press release may contain certain forward-looking statements. 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 the Company’s control, and that the Company may or may not have considered; accordingly, such statements cannot be guarantees or assurances of any aspect of future performance. Actual developments and results are highly likely to vary materially from these estimates and projections of the future. Such statements speak only as of the time when made, and the Company undertakes no obligation to update any such statement now or in the future. SOURCE: Monroe Capital Corporation Investor Contact:Mick Solimene Chief Financial Officer and Chief Investment Officer Monroe Capital Corporation (312) 598-8401 msolimene@monroecap.com Media Contact:Daniel Abramson BackBay Communications (857) 305-8441 daniel.abramson@backbaycommunications.com

Monroe Capital Corporation BDC Announces Third Quarter 2025 Results

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