Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 
__________________________________________________________
Form 10-Q
__________________________________________________________
(Mark One)
ý
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2012
OR
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission file number 814-00733 
__________________________________________________________
Triangle Capital Corporation
(Exact name of registrant as specified in its charter)
__________________________________________________________
Maryland
 
06-1798488
(State or other jurisdiction of
 
(I.R.S. Employer
incorporation or organization)
 
Identification No.)
 
 
3700 Glenwood Avenue, Suite 530
Raleigh, North Carolina
 
27612
(Address of principal executive offices)
 
(Zip Code)
Registrant’s telephone number, including area code: (919) 719-4770
Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report: N/A 
__________________________________________________________
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ¨    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
¨
Accelerated filer
ý
 
 
 
 
Non-accelerated filer
¨  (Do not check if a smaller reporting company)
Smaller reporting company
¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  ý
The number of shares outstanding of the registrant’s Common Stock on November 5, 2012 was 27,320,385.


Table of Contents

TRIANGLE CAPITAL CORPORATION
TABLE OF CONTENTS
QUARTERLY REPORT ON FORM 10-Q

 
 
Page
 
PART I – FINANCIAL INFORMATION
Item 1.
 
 
 
 
 
 
 
 
Item 2.
Item 3.
Item 4.
 
PART II – OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
 


2

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

TRIANGLE CAPITAL CORPORATION
Consolidated Balance Sheets
 
 
September 30, 2012
 
December 31, 2011
 
(Unaudited)
 
 
Assets:
 
 
 
Investments at fair value:
 
 
 
Non–Control / Non–Affiliate investments (cost of $485,599,055 and $389,312,451 at September 30, 2012 and December 31, 2011, respectively)
$
498,027,652

 
$
396,502,490

Affiliate investments (cost of $126,931,742 and $97,751,264 at September 30, 2012 and December 31, 2011, respectively)
128,065,635

 
103,266,298

Control investments (cost of $11,462,759 and $11,278,339 at September 30, 2012 and December 31, 2011, respectively)
5,216,666

 
7,309,787

Total investments at fair value
631,309,953

 
507,078,575

Cash and cash equivalents
60,110,779

 
66,868,340

Interest and fees receivable
3,969,957

 
1,883,395

Prepaid expenses and other current assets
451,017

 
623,318

Deferred financing fees
8,635,658

 
6,682,889

Property and equipment, net
54,826

 
58,304

Total assets
$
704,532,190

 
$
583,194,821

Liabilities:
 
 
 
Accounts payable and accrued liabilities
$
4,885,429

 
$
4,116,822

Interest payable
857,450

 
3,521,932

Taxes payable
307,000

 
1,402,866

Deferred income taxes
1,220,454

 
628,742

Borrowings under credit facility
26,000,000

 
15,000,000

Senior notes
69,000,000

 

SBA-guaranteed debentures payable
183,559,252

 
224,237,504

Total liabilities
285,829,585

 
248,907,866

Net Assets:
 
 
 
Common stock, $0.001 par value per share (150,000,000 shares authorized, 27,320,385 and 22,774,726 shares issued and outstanding as of September 30, 2012 and December 31, 2011, respectively)
27,320

 
22,775

Additional paid-in-capital
398,842,128

 
318,297,269

Investment income in excess of distributions
7,501,895

 
6,847,486

Accumulated realized gains on investments
6,235,321

 
1,011,649

Net unrealized appreciation of investments
6,095,941

 
8,107,776

Total net assets
418,702,605

 
334,286,955

Total liabilities and net assets
$
704,532,190

 
$
583,194,821

Net asset value per share
$
15.33

 
$
14.68


See accompanying notes.


3

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Operations

 
Three Months
Ended
 
Three Months
Ended
 
Nine Months
Ended
 
Nine Months
Ended
 
September 30,
2012
 
September 30,
2011
 
September 30,
2012
 
September 30,
2011
Investment income:
 
 
 
 
 
 
 
Loan interest, fee and dividend income:
 
 
 
 
 
 
 
Non–Control / Non–Affiliate investments
$
16,376,768

 
$
10,715,995

 
$
44,401,267

 
$
30,690,335

Affiliate investments
3,838,341

 
2,409,455

 
9,508,295

 
5,508,253

Control investments
49,384

 
96,535

 
161,375

 
1,243,396

Total loan interest, fee and dividend income
20,264,493

 
13,221,985

 
54,070,937

 
37,441,984

Payment–in–kind interest income:
 
 
 
 
 
 
 
Non–Control / Non–Affiliate investments
3,017,120

 
2,217,084

 
8,454,799

 
5,585,410

Affiliate investments
946,345

 
668,660

 
2,470,663

 
1,613,555

Control investments
20,250

 
18,592

 
60,221

 
137,393

Total payment–in–kind interest income
3,983,715

 
2,904,336

 
10,985,683

 
7,336,358

Interest income from cash and cash equivalent investments
78,500

 
94,489

 
344,407

 
281,611

Total investment income
24,326,708

 
16,220,810

 
65,401,027

 
45,059,953

Expenses:
 
 
 
 
 
 
 
Interest and other financing fees
4,046,885

 
2,901,089

 
11,502,245

 
7,796,997

General and administrative expenses
4,403,469

 
2,927,465

 
11,778,156

 
8,761,462

Total expenses
8,450,354

 
5,828,554

 
23,280,401

 
16,558,459

Net investment income
15,876,354

 
10,392,256

 
42,120,626

 
28,501,494

Net realized gain on investments – Non–Control / Non–Affiliate
816,393

 
1,011,649

 
3,600,501

 
1,839,248

Net realized gain on investments – Affiliate
785,132

 

 
785,132

 

Net realized gain (loss) on investments – Control

 
(2,997,979
)
 
838,039

 
9,155,191

Net unrealized appreciation (depreciation) of investments
(586,937
)
 
9,030,048

 
(2,011,835
)
 
4,966,744

Total net gain on investments
1,014,588

 
7,043,718

 
3,211,837

 
15,961,183

Loss on extinguishment of debt
(624,768
)
 

 
(829,811
)
 
(157,590
)
Income tax benefit (provision)
(34,388
)
 
34,269

 
(27,157
)
 
61,628

Net increase in net assets resulting from operations
$
16,231,786

 
$
17,470,243

 
$
44,475,495

 
$
44,366,715

Net investment income per share—basic and diluted
$
0.58

 
$
0.52

 
$
1.59

 
$
1.54

Net increase in net assets resulting from operations per share—basic and diluted
$
0.59

 
$
0.87

 
$
1.68

 
$
2.40

Dividends declared per common share
$
0.52

 
$
0.44

 
$
1.49

 
$
1.30

Weighted average number of shares outstanding—basic and diluted
27,290,493

 
20,015,230

 
26,545,542

 
18,489,842


See accompanying notes.


4

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Changes in Net Assets
 
 
Common Stock
 
Additional
Paid In
Capital
 
Investment
Income
in Excess of
(Less Than)
Distributions
 
Accumulated
Realized
Gains
(Losses) on
Investments
 
Net
Unrealized
Appreciation
(Depreciation)
of Investments
 
Total
Net
Assets
 
Number
of Shares
 
Par
Value
 
 
 
 
 
Balance, January 1, 2011
14,928,987

 
$
14,929

 
$
183,602,755

 
$
3,365,548

 
$
(8,244,376
)
 
$
1,740,303

 
$
180,479,159

Net investment income

 

 

 
28,501,494

 

 

 
28,501,494

Stock-based compensation

 

 
1,409,654

 

 

 

 
1,409,654

Net realized gain on investments

 

 

 

 
10,994,439

 
(9,250,107
)
 
1,744,332

Net unrealized appreciation of investments

 

 

 

 

 
14,216,851

 
14,216,851

Loss on extinguishment of debt

 

 

 
(157,590
)
 

 

 
(157,590
)
Income tax provision

 

 

 
61,628

 

 

 
61,628

Dividends/distributions declared
181,755

 
182

 
3,082,442

 
(25,910,242
)
 

 

 
(22,827,618
)
Public offerings of common stock
7,475,000

 
7,475

 
128,652,398

 

 

 

 
128,659,873

Issuance of restricted stock
161,174

 
161

 
(161
)
 

 

 

 

Common stock withheld for payroll taxes upon vesting of restricted stock
(32,065
)
 
(32
)
 
(643,276
)
 

 

 

 
(643,308
)
Balance, September 30, 2011
22,714,851

 
$
22,715

 
$
316,103,812

 
$
5,860,838

 
$
2,750,063

 
$
6,707,047

 
$
331,444,475

 
 
Common Stock
 
Additional
Paid In
Capital
 
Investment
Income
in Excess of
(Less Than)
Distributions
 
Accumulated
Realized
Gains
(Losses) on
Investments
 
Net
Unrealized
Appreciation
(Depreciation)
of Investments
 
Total
Net
Assets
 
Number
of Shares
 
Par
Value
 
 
 
 
 
Balance, January 1, 2012
22,774,726

 
$
22,775

 
$
318,297,269

 
$
6,847,486

 
$
1,011,649

 
$
8,107,776

 
$
334,286,955

Net investment income

 

 

 
42,120,626

 

 

 
42,120,626

Stock-based compensation

 

 
2,074,927

 

 

 

 
2,074,927

Net realized gain on investments

 

 

 

 
5,223,672

 
(3,713,579
)
 
1,510,093

Net unrealized appreciation of investments

 

 

 

 

 
1,701,744

 
1,701,744

Loss on extinguishment of debt

 

 

 
(829,811
)
 

 

 
(829,811
)
Income tax provision

 

 

 
(27,157
)
 

 

 
(27,157
)
Dividends/distributions declared
113,112

 
113

 
2,462,834

 
(40,609,249
)
 

 

 
(38,146,302
)
Public offering of common stock
4,255,000

 
4,255

 
77,118,719

 

 

 

 
77,122,974

Issuance of restricted stock
235,086

 
235

 
(235
)
 

 

 

 

Common stock withheld for payroll taxes upon vesting of restricted stock
(57,539
)
 
(58
)
 
(1,111,386
)
 

 

 

 
(1,111,444
)
Balance, September 30, 2012
27,320,385

 
$
27,320

 
$
398,842,128

 
$
7,501,895

 
$
6,235,321

 
$
6,095,941

 
$
418,702,605


See accompanying notes.


5

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Cash Flows
 
 
Nine Months
Ended
 
Nine Months
Ended
 
September 30, 2012
 
September 30, 2011
Cash flows from operating activities:
 
 
 
Net increase in net assets resulting from operations
$
44,475,495

 
$
44,366,715

Adjustments to reconcile net increase in net assets resulting from operations to net cash used in operating activities:
 
 
 
Purchases of portfolio investments
(228,510,522
)
 
(184,144,674
)
Repayments received/sales of portfolio investments
113,898,080

 
63,434,578

Loan origination and other fees received
3,565,896

 
3,689,444

Net realized (gain) loss on investments
(5,223,672
)
 
(10,994,439
)
Net unrealized depreciation (appreciation) of investments
1,420,124

 
(5,049,919
)
Deferred income taxes
591,712

 
83,173

Payment–in–kind interest accrued, net of payments received
(5,501,302
)
 
(3,452,028
)
Amortization of deferred financing fees
789,479

 
724,663

Loss on extinguishment of debt
829,811

 

Accretion of loan origination and other fees
(2,397,275
)
 
(1,029,151
)
Accretion of loan discounts
(1,482,707
)
 
(843,534
)
Accretion of discount on SBA-guaranteed debentures payable
131,748

 
128,528

Depreciation expense
24,145

 
21,170

Stock-based compensation
2,074,927

 
1,409,654

Changes in operating assets and liabilities:
 
 
 
Interest and fees receivable
(2,086,562
)
 
(1,460,945
)
Prepaid expenses
172,301

 
(389,127
)
Accounts payable and accrued liabilities
768,607

 
393,049

Interest payable
(2,664,482
)
 
(1,574,400
)
Deferred revenue

 
7,718

Taxes payable
(1,095,866
)
 
(191,672
)
Net cash used in operating activities
(80,220,063
)
 
(94,871,197
)
Cash flows from investing activities:
 
 
 
Purchases of property and equipment
(20,667
)
 
(23,267
)
Net cash used in investing activities
(20,667
)
 
(23,267
)
Cash flows from financing activities:
 
 
 
Borrowings under SBA-guaranteed debentures payable

 
31,100,000

Repayments of SBA-guaranteed debentures payable
(40,810,000
)
 
(9,500,000
)
Borrowings under credit facility
26,000,000

 

Repayments of credit facility
(15,000,000
)
 

Proceeds from senior notes
69,000,000

 

Financing fees paid
(3,572,059
)
 
(1,265,628
)
Proceeds from public stock offerings, net of expenses
77,122,974

 
128,659,873

Common stock withheld for payroll taxes upon vesting of restricted stock
(1,111,444
)
 
(643,308
)
Cash dividends paid
(38,146,302
)
 
(22,827,618
)
Net cash provided by financing activities
73,483,169

 
125,523,319

Net increase (decrease) in cash and cash equivalents
(6,757,561
)
 
30,628,855

Cash and cash equivalents, beginning of period
66,868,340

 
54,820,222

Cash and cash equivalents, end of period
$
60,110,779

 
$
85,449,077

Supplemental disclosure of cash flow information:
 
 
 
Cash paid for interest
$
12,999,240

 
$
8,675,796

Summary of non-cash financing transactions:
 
 
 
Dividends paid through DRIP share issuances
$
2,462,947

 
$
3,082,624


See accompanying notes.


6

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
September 30, 2012
Portfolio Company
Industry
 
Type of Investment(1)(2)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
Non–Control / Non–Affiliate Investments:
 
 
 
 
 
 
Ambient Air Corporation (“AA”) and Peaden-Hobbs Mechanical, LLC (“PHM”) (1%)*
Specialty Trade Contractors
 
Subordinated Note-AA (15% Cash, 3% PIK, Due 06/13)
 
$
4,093,283

 
$
4,080,366

 
$
4,080,366

Subordinated Note-PHM (12% Cash, Due 09/12)
 
12,857

 
12,857

 
12,857

Common Stock-PHM (128,571 shares)
 
 
 
128,571

 
128,571

Common Stock Warrants-AA (455 shares)
 
 
 
142,361

 
773,000

 
 
 
4,106,140

 
4,364,155

 
4,994,794

 
 
 
 
 
 
 
 
 
 
Ann’s House of Nuts, Inc. (3%)*
Trail Mixes and Nut Producers
 
Subordinated Note (12% Cash, 1% PIK, Due 11/17)
 
7,134,675

 
6,805,180

 
6,805,180

Preferred A Units (22,368 units)
 
 
 
2,124,957

 
2,878,000

Preferred B Units (10,380 units)
 
 
 
986,059

 
1,343,000

Common Units (190,935 units)
 
 
 
150,000

 
105,000

Common Stock Warrants (14,558 shares)
 
 
 
14,558

 
10,000

 
 
 
7,134,675

 
10,080,754

 
11,141,180

 
 
 
 
 
 
 
 
 
 
Aramsco, Inc. (0%)*
Environmental Emergency Preparedness Products Distributor
 
Subordinated Note (12% Cash, 2% PIK, Due 03/14)
 
1,639,059

 
1,550,199

 
1,550,199

 
 
 
1,639,059

 
1,550,199

 
1,550,199

 
 
 
 
 
 
 
 
 
 
Assurance Operations Corporation (0%)*
Metal Fabrication
 
Common Stock (517 shares)
 
 
 
516,867

 
930,000

 
 
 
 
 
516,867

 
930,000

 
 
 
 
 
 
 
 
 
 
BioSan Laboratories, Inc. (1%)*
Nutritional Supplement Manufacturing and Distribution
 
Subordinated Note (12% Cash, 3.8% PIK, Due 10/16)
 
5,428,328

 
5,342,823

 
5,342,823

 
 
 
5,428,328

 
5,342,823

 
5,342,823

 
 
 
 
 
 
 
 
 
 
Botanical Laboratories, Inc. (2%)*
Nutritional Supplement Manufacturing and Distribution
 
Senior Notes (14% Cash, 1% PIK, Due 02/15)
 
9,674,809

 
9,243,485

 
9,243,485

Common Unit Warrants (998,680 units)
 
 
 
474,600

 
774,000

 
 
 
9,674,809

 
9,718,085

 
10,017,485

 
 
 
 
 
 
 
 
 
 
Capital Contractors, Inc. (2%)*
Janitorial and Facilities Maintenance Services
 
Subordinated Notes (12% Cash, 2% PIK, Due
12/15)
 
9,325,994

 
8,845,622

 
8,845,622

Common Stock Warrants (20 shares)
 
 
 
492,000

 
470,000

 
 
9,325,994

 
9,337,622

 
9,315,622

 
 
 
 
 
 
 
 
 
 
Carolina Beverage Group, LLC (0%)*
Beverage
Manufacturing
and Packaging
 
Class A Units (11,974 units)
 
 
 
1,077,615

 
1,333,000

 
Class B Units (11,974 units)
 
 
 
119,735

 
628,000

 
 
 
 
 
1,197,350

 
1,961,000

 
 
 
 
 
 
 
 
 
 
Chromaflo Technologies, LLC (4%)*
Colorant
Manufacturer
and Distributor
 
Subordinated Note (12% Cash, 2% PIK, Due 10/17)
 
16,383,163

 
16,079,882

 
16,079,882

Preferred A Units (22,561 units)
 
 
 
2,256,098

 
2,256,098

 
 
 
16,383,163

 
18,335,980

 
18,335,980

 
 
 
 
 
 
 
 
 
 
Continental Anesthesia Management, LLC (2%)*
Physicians
Management
Services
 
Senior Note (13.5% Cash, Due 11/14)
 
10,200,000

 
9,964,639

 
9,964,639

Warrant (263 shares)
 
 
 
276,100

 
43,000

 
 
10,200,000

 
10,240,739

 
10,007,639

 
 
 
 
 
 
 
 
 
 
CRS Reprocessing, LLC (6%)*
Fluid
Reprocessing
Services
 
Subordinated Note (10% Cash, 4% PIK, Due 11/15)
 
11,648,849

 
11,386,608

 
11,386,608

Subordinated Note (10% Cash, 4% PIK, Due 11/15)
 
12,846,496

 
11,529,465

 
11,529,465

Series C Preferred Units (26 units)
 
 
 
288,342

 
449,000

Common Unit Warrant (664 units)
 
 
 
1,759,556

 
3,642,000

Series D Preferred Units (16 units)
 
 
 
107,074

 
183,000

 
 
 
24,495,345

 
25,071,045

 
27,190,073

 
 
 
 
 
 
 
 
 
 
DataSource Incorporated (2%)*
Print Supply Chain Management Services
 
Subordinated Note (12% Cash, 2% PIK, Due 01/18)
 
8,540,611

 
8,376,178

 
8,376,178

 
Common Units (47 units)
 
 
 
1,000,000

 
1,000,000

 

 
8,540,611

 
9,376,178

 
9,376,178

 
 
 
 
 
 
 
 
 
 
DCWV Acquisition Corporation (1%)*
Arts & Crafts and Home Decor Products Designer and Supplier
 
Subordinated Note (12% Cash, 3% PIK, Due 09/17)
 
6,008,500

 
5,888,500

 
5,888,500

 

 
6,008,500

 
5,888,500

 
5,888,500

 
 
 
 
 
 
 
 
 
 
DLR Restaurants, LLC (3%)*
Restaurant
 
Subordinated Note (12% Cash, 2% PIK, Due 03/16)
 
10,878,564

 
10,697,145

 
10,697,145

Subordinated Note (12% Cash, 4% PIK, Due 03/16)
 
775,291

 
760,291

 
760,291

Royalty Rights
 
 
 

 
109,000

 
 
 
11,653,855

 
11,457,436

 
11,566,436

 
 
 
 
 
 
 
 
 
 

7

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
September 30, 2012
Portfolio Company
Industry
 
Type of Investment(1)(2)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
Eckler's Holdings, Inc. (2%)*
Restoration Parts and Accessories for Classic Cars and Trucks
 
Subordinated Note (11% Cash, 4% PIK, Due 07/18)
 
$
5,620,029

 
$
5,484,806

 
$
5,484,806

 
Common Stock (15,850 shares)
 


 
158,500

 
158,500

 
Preferred Stock A (1,427 shares)
 


 
1,426,500

 
1,426,500

 

 
5,620,029

 
7,069,806

 
7,069,806

 
 
 
 
 
 
 
 
 
 
Electronic Systems Protection, Inc. (1%)*
Power Protection Systems Manufacturing
 
Subordinated Note (12% Cash, 2% PIK, Due 12/15)
 
4,225,552

 
4,196,392

 
4,196,392

Common Stock (570 shares)
 
 
 
285,000

 
315,000

 
 
 
4,225,552

 
4,481,392

 
4,511,392

 
 
 
 
 
 
 
 
 
 
Empire Facilities Management Group, Inc. (1%)*
Retail, Restaurant, and Commercial Facilities Maintenance
 
Subordinated Note (9% Cash, 4% PIK, Due 07/18)
 
5,049,444

 
4,964,734

 
4,964,734

 
Convertible Preferred Units (2,500 units)
 


 
250,000

 
250,000

 

 
5,049,444

 
5,214,734

 
5,214,734

 
 
 
 
 
 
 
 
 
 
Frozen Specialties, Inc. (2%)*
Frozen Foods Manufacturer
 
Subordinated Note (13% Cash, 5% PIK, Due 07/14)
 
8,806,906

 
8,743,231

 
8,743,231

 
 
8,806,906

 
8,743,231

 
8,743,231

 
 
 
 
 
 
 
 
 
 
Garden Fresh Restaurant Corp. (0%)*
Restaurant
 
Membership Units (5,000 units)
 
 
 
500,000

 
511,000

 
 
 
 
500,000

 
511,000

 
 
 
 
 
 
 
 
 
 
Grindmaster-Cecilware Corp. (1%)*
Food Services Equipment Manufacturer
 
Subordinated Note (12% Cash, 6% PIK, Due 04/16)
 
6,566,765

 
6,505,970

 
5,798,000

 
 
6,566,765

 
6,505,970

 
5,798,000

 
 
 
 
 
 
 
 
 
 
Hatch Chile Co., LLC (1%)*
Food Products Distributor
 
Senior Note (19% Cash, Due 07/15)
 
3,600,000

 
3,525,624

 
3,525,624

Subordinated Note (14% Cash, Due 07/15)
 
800,000

 
689,289

 
689,289

Unit Purchase Warrant (5,265 units)
 
 
 
149,800

 
273,000

 
 
4,400,000

 
4,364,713

 
4,487,913

 
 
 
 
 
 
 
 
 
 
Home Physicians, LLC (“HP”) and Home Physicians Holdings, LP (“HPH”) (2%)*
In-home Primary Care Physician Services
 
Subordinated Note-HP (12% Cash, 5% PIK, Due 03/16)
 
11,066,468

 
10,618,484

 
6,356,000

Subordinated Note-HPH (4% Cash, 6% PIK, Due 03/16)
 
1,343,623

 
1,303,361

 

Senior Subordinated Note-HP (14% Cash, 2% PIK, Due 03/16)
 
609,126

 
598,767

 
598,767

Royalty Rights
 
 
 

 

 
 
13,019,217

 
12,520,612

 
6,954,767

 
 
 
 
 
 
 
 
 
 
Infrastructure Corporation of America, Inc. (3%)*
Roadway Maintenance, Repair and Engineering Services
 
Subordinated Note (12% Cash, 1% PIK, Due 10/15)
 
10,961,896

 
10,126,400

 
10,126,400

Common Stock Purchase Warrant (199,526 shares)
 
 
 
980,000

 
1,135,000

 
 
10,961,896

 
11,106,400

 
11,261,400

 
 
 
 
 
 
 
 
 
 
Inland Pipe Rehabilitation Holding Company LLC
(5%)*
Cleaning and Repair Services
 
Subordinated Note (13% Cash, 2.5% PIK, Due 12/16)
 
20,665,759

 
20,416,709

 
20,416,709

Membership Interest Purchase Warrant (3.0%)
 
 
 
853,500

 
2,307,000

 
 
20,665,759

 
21,270,209

 
22,723,709

 
 
 
 
 
 
 
 
 
 
Library Systems & Services, LLC (2%)*
Municipal Business Services
 
Subordinated Note (12.5% Cash, 4.5% PIK, Due 06/15)
 
5,429,814

 
5,331,408

 
5,331,408

Common Stock Warrants (112 shares)
 
 
 
58,995

 
1,001,000

 
 
5,429,814

 
5,390,403

 
6,332,408

 
 
 
 
 
 
 
 
 
 
Magpul Industries Corp. (4%)*
Firearm Accessories Manufacturer and Distributor
 
Subordinated Note (12% Cash, 3% PIK, Due 03/17)
 
13,300,000

 
13,070,443

 
13,070,443

Preferred Units (1,470 units)
 
 
 
1,470,000

 
1,694,000

Common Units (30,000 units)
 
 
 
30,000

 
3,100,000

 
 
13,300,000

 
14,570,443

 
17,864,443

 
 
 
 
 
 
 
 
 
 
Marine Acquisition Corp. (3%)*
Boat Steering System and Driver Control Provider
 
Subordinated Note (11.50% Cash, 2% PIK, Due 05/17)
 
12,000,000

 
11,730,000

 
11,730,000

 
 
 
12,000,000

 
11,730,000

 
11,730,000

 
 
 
 
 
 
 
 
 
 
Media Storm, LLC (2%)*
Marketing Services
 
Subordinated Note (12% Cash, 2% PIK, Due 10/17)
 
8,016,580

 
7,941,909

 
7,941,909

Membership Units (1,216,204 units)
 
 
 
1,120,533

 
1,181,001

 
 
8,016,580

 
9,062,442

 
9,122,910

 
 
 
 
 
 
 
 
 
 
Media Temple, Inc. (4%)*
Web Hosting Services
 
Subordinated Note (12% Cash, 3% PIK, Due 04/15)
 
8,800,000

 
8,686,475

 
8,686,475

Convertible Note (8% Cash, 6% PIK, Due 04/15)
 
3,200,000

 
2,865,998

 
5,485,000

Common Stock Purchase Warrant (28,000 shares)
 
 
 
536,000

 
2,400,000

 
 
12,000,000

 
12,088,473

 
16,571,475

 
 
 
 
 
 
 
 
 
 

8

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
September 30, 2012
Portfolio Company
Industry
 
Type of Investment(1)(2)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
Minco Technology Labs, LLC (1%)*
Semiconductor Distribution
 
Subordinated Note (6.5% Cash, 3.5% PIK, Due 05/16)
 
$
5,407,351

 
$
5,318,464

 
$
3,938,000

Class A Units (5,000 units)
 
 
 
500,000

 

 
 
5,407,351

 
5,818,464

 
3,938,000

 
 
 
 
 
 
 
 
 
 
My Alarm Center, LLC (2%)*
Security Company
 
Subordinated Note (12% Cash, 2.5% PIK, Due 09/17)
 
8,033,880

 
7,956,670

 
7,956,670

 
Preferred Units (2,000,000 units)
 


 
2,000,000

 
2,000,000

 
 
 
8,033,880

 
9,956,670

 
9,956,670

 
 
 
 
 
 
 
 
 
 
National Investment Managers Inc. (3%)*
Retirement Plan Administrator
 
Subordinated Note (12% Cash, 5% PIK, Due 09/16)
 
12,154,073

 
11,933,723

 
11,933,723

Preferred A Units (90,000 units)
 
 
 
900,000

 
653,000

Common Units (10,000 units)
 
 
 
100,000

 

 
 
12,154,073

 
12,933,723

 
12,586,723

 
 
 
 
 
 
 
 
 
 
Novolyte Technologies, Inc. (0%)*
Specialty Manufacturing
 
Common Units (24,522 units)
 


 
43,905

 
178,801

 
 
 


 
43,905

 
178,801

 
 
 
 
 
 
 
 
 
 
Pomeroy IT Solutions (2%)*
Information Technology Outsourcing Services
 
Subordinated Notes (13% Cash, 2% PIK, Due 02/16)
 
10,336,967

 
10,144,990

 
10,144,990

 
 
10,336,967

 
10,144,990

 
10,144,990

 
 
 
 
 
 
 
 
 
 
PowerDirect Marketing, LLC (2%)*
Marketing Services
 
Subordinated Note (12% Cash, 2% PIK, Due 05/16)
 
7,721,438

 
7,097,237

 
7,097,237

Common Unit Purchase Warrants
 
 
 
590,200

 
1,241,000

 
 
7,721,438

 
7,687,437

 
8,338,237

 
 
 
 
 
 
 
 
 
 
ROM Acquisition Corporation (2%)*
Military and Industrial Vehicles Equipment Manufacturing
 
Subordinated Note (12% Cash, 3% PIK, Due 3/17)
 
8,631,886

 
8,553,307

 
8,553,307

 
 
8,631,886

 
8,553,307

 
8,553,307

 
 
 
 
 
 
 
 
 
 
Sheplers, Inc. (3%)*
Western Apparel Retailer
 
Subordinated Note (13.15% Cash, Due 12/16)
 
8,750,000

 
8,555,784

 
8,555,784

Subordinated Note (10% Cash, 7% PIK, Due 12/17)
 
3,958,152

 
3,892,182

 
3,892,182

 
 
 
12,708,152

 
12,447,966

 
12,447,966

 
 
 
 
 
 
 
 
 
 
SRC, Inc. (1%)*
Specialty Chemical Manufacturer
 
Subordinated Notes (12% Cash, 2% PIK, Due 09/14)
 
5,993,701

 
5,807,681

 
5,807,681

Common Stock Purchase Warrants
 
 
 
123,800

 

 
 
 
5,993,701

 
5,931,481

 
5,807,681

 
 
 
 
 
 
 
 
 
 
Stella Environmental Services, LLC (1%)*
Waste Transfer Stations
 
Subordinated Notes (12% Cash, 3% PIK, Due 2/17)
 
5,871,313

 
5,737,266

 
5,737,266

Common Stock Purchase Warrants
 
 
 
20,000

 
427,000

 
 
 
5,871,313

 
5,757,266

 
6,164,266

 
 
 
 
 
 
 
 
 
 
Syrgis Holdings, Inc. (0%)*
Specialty Chemical Manufacturer
 
Class C Units (2,114 units)
 
 
 
111,037

 
201,281

 
 
 
 
111,037

 
201,281

 
 
 
 
 
 
 
 
 
 
The Krystal Company (4%)*
Quick Serve Restaurants
 
Subordinated Note (12% Cash, 3% PIK, Due 6/17)
 
12,419,455

 
12,192,337

 
12,192,337

Class A Units of Limited Partnership (2,000 units)
 
 
 
2,000,000

 
2,853,000

 
 
 
12,419,455

 
14,192,337

 
15,045,337

 
 
 
 
 
 
 
 
 
 
TMR Automotive Service Supply, LLC (1%)*
Automotive Supplies
 
Subordinated Note (12% Cash, 1% PIK, Due 03/16)
 
4,750,000

 
4,526,014

 
4,526,014

Unit Purchase Warrant (329,518 units)
 
 
 
195,000

 
371,000

 
 
 
4,750,000

 
4,721,014

 
4,897,014

 
 
 
 
 
 
 
 
 
 
Tomich Brothers, LLC (2%)*
Squid and Wetfish Processor and Distributor
 
Subordinated Note (12% Cash, 3% PIK, Due 04/16)
 
7,092,064

 
6,966,164

 
6,966,164

Royalty Rights
 
 
 

 

 
 
7,092,064

 
6,966,164

 
6,966,164

 
 
 
 
 
 
 
 
 
 
Top Knobs USA, Inc. (3%)*
Hardware Designer and Distributor
 
Subordinated Note (12% Cash, 4.5% PIK, Due 05/17)
 
10,726,884

 
10,599,249

 
10,599,249

Common Stock (26,593 shares)
 
 
 
750,000

 
987,000

 
 
 
10,726,884

 
11,349,249

 
11,586,249

 
 
 
 
 
 
 
 
 
 
Trinity Consultants Holdings, Inc. (2%)*
Air Quality Consulting Services
 
Subordinated Note (12% Cash, 2.5% PIK, Due 11/17)
 
7,354,981

 
7,223,909

 
7,223,909

Series A Preferred Stock (10,000 units)
 
 
 
950,000

 
1,108,000

Common Stock (55,556 units)
 
 
 
50,000

 
377,000

 
 
 
7,354,981

 
8,223,909

 
8,708,909

 
 
 
 
 
 
 
 
 
 

9

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
September 30, 2012
 
Portfolio Company
Industry
 
Type of Investment(1)(2)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
 
TrustHouse Services Group, Inc. (7%)*
Food Management Services
 
Subordinated Note (12% Cash, 2.25% PIK, Due 06/19)
 
$
25,189,322

 
$
24,898,388

 
$
24,898,388

 
Class A Units (1,557 units)
 
 
 
512,124

 
1,502,000

 
Class B Units (82 units)
 
 
 
26,954

 
61,000

 
Class E Units (838 units)
 
 
 
750,406

 
863,000

 
 
 
 
25,189,322

 
26,187,872

 
27,324,388

 
 
 
 
 
 
 
 
 
 
 
 
Tulsa Inspection Resources, Inc. (2%)*
Pipeline Inspection Services
 
Subordinated Note (14%-17.5% Cash, Due 03/14)
 
5,810,588

 
5,644,994

 
5,644,994

 
Common Units (2 units)
 
 
 
337,925

 
579,000

 
Common Stock Warrants (8 shares)
 
 
 
321,000

 
2,220,000

 
 
 
 
5,810,588

 
6,303,919

 
8,443,994

 
 
 
 
 
 
 
 
 
 
 
 
Twin-Star International, Inc. (1%)*
Consumer Home Furnishings Manufacturer
 
Subordinated Note (12% Cash, 1% PIK, Due 04/14)
 
4,500,000

 
4,487,507

 
4,487,507

 
Senior Note (4.5%, Due 04/13)
 
1,020,671

 
1,020,671

 
1,020,671

 
 
 
5,520,671

 
5,508,178

 
5,508,178

 
 
 
 
 
 
 
 
 
 
 
 
United Biologics, LLC (3%)*
Allergy Immunotherapy
 
Subordinated Note (12% Cash, 2% PIK, Due 03/17)
 
10,117,252

 
9,157,562

 
9,157,562

 
Class A Common Stock (177,935 shares)
 
 
 
1,999,989

 
2,777,000

 
Class A & Class B Unit Purchase Warrants
 
 
 
838,117

 
933,000

 
 
 
 
10,117,252

 
11,995,668

 
12,867,562

 
 
 
 
 
 
 
 
 
 
 
 
Wholesale Floors, Inc. (1%)*
Commercial Services
 
Subordinated Note (12.5% Cash, 3.5% PIK, Due 06/14)
 
3,787,038

 
3,724,767

 
3,724,767

 
Membership Interest Purchase Warrant (4.0%)
 
 
 
132,800

 

 
 
 
 
3,787,038

 
3,857,567

 
3,724,767

 
 
 
 
 
 
 
 
 
 
 
 
Workforce Software, LLC (2%)*
Software Provider
 
Subordinated Note (11% Cash, 3% PIK, Due 11/16)
 
7,000,000

 
6,175,220

 
6,175,220

 
Class B Preferred Units (1,020,000 units)
 
 
 
1,020,000

 
1,107,000

 
Common Unit Purchase Warrants (2,224,561 units)
 
 
 
782,300

 
1,870,000

 
 
 
 
7,000,000

 
7,977,520

 
9,152,220

 
 
 
 
 
 
 
 
 
 
 
 
WSO Holdings, LP (5%)*
Organic/Fair Trade Sugar, Syrup, Nectar and Honey Producer
 
Subordinated Note (12% Cash, 2% PIK,
Due 10/17)
 
20,198,267

 
19,918,210

 
19,918,210

 
 
Common Points (3,000 points)
 
 
 
3,000,000

 
3,000,000

 
 
 
20,198,267

 
22,918,210

 
22,918,210

 
 
 
 
 
 
 
 
 
 
 
 
Xchange Technology Group, LLC (1%)*
Used and Refurbished IT Asset Supplier
 
Subordinated (8% Cash, Due 06/15)
 
6,024,000

 
5,904,000

 
3,041,000

 
Royalty Rights
 
 
 

 

 
 
 
6,024,000

 
5,904,000

 
3,041,000

 
 
 
 
 
 
 
 
 
 
 
 
Yellowstone Landscape Group, Inc. (3%)*
Landscaping Services
 
Subordinated Note (12% Cash, 3% PIK, Due 04/14)
 
13,106,756

 
13,010,641

 
13,010,641

 
 
 
13,106,756

 
13,010,641

 
13,010,641

 
 
 
 
 
 
 
 
 
Subtotal Non–Control / Non–Affiliate Investments
 
460,608,480

 
485,599,055

 
498,027,652

 
 
 
 
 
 
 
 
 
 
 
 
Affiliate Investments:
 
 
 
 
 
 
 
 
 
 
All Aboard America! Holdings Inc. (2%)*
Motor Coach Operator
 
Subordinated Note (12% Cash, 3% PIK, Due (10/17)
 
8,565,333

 
8,401,261

 
8,401,261

 
 
Convertible Preferred Interest in LLC
 
 
 
1,500,000

 
1,500,000

 
 
 
 
8,565,333

 
9,901,261

 
9,901,261

 
 
 
 
 
 
 
 
 
 
 
 
American De-Rosa Lamparts, LLC and Hallmark Lighting (1%)*
Wholesale and Distribution
 
Subordinated Note (12% Cash, 6% PIK, Due 10/13)
 
6,339,068

 
5,544,163

 
5,544,163

 
Membership Units (6,516 units)
 
 
 
620,653

 

 
 
 
 
6,339,068

 
6,164,816

 
5,544,163

 
 
 
 
 
 
 
 
 
 
 
 
AP Services, Inc. (2%)*
Fluid Sealing Supplies and Services
 
Subordinated Note (12% Cash, 2% PIK, Due 09/15)
 
4,418,235

 
4,340,623

 
4,340,623

 
Class A Units (933 units)
 
 
 
933,333

 
1,913,000

 
Class B Units (496 units)
 
 
 

 
441,000

 
 
 
 
4,418,235

 
5,273,956

 
6,694,623

 
 
 
 
 
 
 
 
 
 
 

10

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
September 30, 2012
Portfolio Company
Industry
 
Type of Investment(1)(2)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
Asset Point, LLC (2%)*
Asset Management Software Provider
 
Senior Note (12% Cash, 4% PIK, Due 03/13)
 
$
6,241,802

 
$
6,228,938

 
$
6,228,938

Senior Note (12% Cash, 2% PIK, Due 07/15)
 
627,037

 
627,037

 
569,000

Subordinated Note (7% Cash, Due 03/13)
 
941,798

 
941,798

 
888,000

Membership Units (1,000,000 units)
 
 
 
8,203

 
464,000

Options to Purchase Membership Units (342,407 units)
 
 
 
500,000

 
226,000

Membership Unit Warrants (356,506 units)
 
 
 

 

 
 
 
7,810,637

 
8,305,976

 
8,375,938

 
 
 
 
 
 
 
 
 
 
Axxiom Manufacturing, Inc. (0%)*
Industrial Equipment
Manufacturer
 
Common Stock (136,400 shares)
 
 
 
200,000

 
1,477,000

Common Stock Warrant (4,000 shares)
 
 
 

 
43,000

 
 
 
 
200,000

 
1,520,000

 
 
 
 
 
 
 
 
 
 
Captek Softgel International, Inc. (2%)*
Nutraceutical Manufacturer
 
Subordinated Note (12% Cash, 4% PIK, Due 08/16)
 
8,532,545

 
8,406,437

 
8,406,437

Class A Units (80,000 units)
 
 
 
800,000

 
633,000

 
 
 
8,532,545

 
9,206,437

 
9,039,437

 
 
 
 
 
 
 
 
 
 
CIS Secure Computing Inc. (2%)*
Secure
Communications and Computing Solutions Provider
 
Subordinated Note (12% Cash, 2% PIK, Due
06/17)
 
10,076,038

 
9,886,791

 
9,886,791

Common Stock (84 shares)
 
 
 
502,320

 
502,320

 
 
10,076,038

 
10,389,111

 
10,389,111

 
 
 
 
 
 
 
 
 
 
Dyson Corporation (1%)*
Custom Forging and Fastener Supplies
 
Class A Units (1,000,000 units)
 
 
 
1,000,000

 
3,819,000

 
 
 
 
 
1,000,000

 
3,819,000