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 June 30, 2013
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 August 5, 2013 was 27,600,250.


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
 
 
June 30, 2013
 
December 31, 2012
 
(Unaudited)
 
 
Assets:
 
 
 
Investments at fair value:
 
 
 
Non-Control / Non-Affiliate investments (cost of $519,536,914 and $565,737,092 at June 30, 2013 and December 31, 2012, respectively)
$
537,770,803

 
$
579,078,939

Affiliate investments (cost of $111,083,771 and $123,019,204 at June 30, 2013 and December 31, 2012, respectively)
109,258,133

 
123,408,445

Control investments (cost of $7,990,474 and $11,474,208 at June 30, 2013 and December 31, 2012, respectively)
3,068,541

 
4,315,339

Total investments at fair value
650,097,477

 
706,802,723

Cash and cash equivalents
117,131,063

 
72,300,423

Interest and fees receivable
4,179,016

 
2,650,178

Prepaid expenses and other current assets
509,768

 
403,123

Deferred financing fees
11,828,830

 
12,323,430

Property and equipment, net
53,595

 
55,535

Total assets
$
783,799,749

 
$
794,535,412

Liabilities:
 
 
 
Accounts payable and accrued liabilities
$
4,451,101

 
$
6,405,570

Interest payable
2,955,187

 
3,136,574

Taxes payable
234,796

 
3,210,989

Deferred income taxes
2,373,214

 
1,342,456

Notes
149,500,000

 
149,500,000

SBA-guaranteed debentures payable
193,193,422

 
213,604,579

Total liabilities
352,707,720

 
377,200,168

Net Assets:
 
 
 
Common stock, $0.001 par value per share (150,000,000 shares authorized, 27,600,250 and 27,284,798 shares issued and outstanding as of June 30, 2013 and December 31, 2012, respectively)
27,600

 
27,285

Additional paid in capital
406,567,839

 
403,322,097

Investment income in excess of distributions
8,098,018

 
6,783,161

Accumulated realized gains on investments
7,285,470

 
1,972,940

Net unrealized appreciation of investments
9,113,102

 
5,229,761

Total net assets
431,092,029

 
417,335,244

Total liabilities and net assets
$
783,799,749

 
$
794,535,412

Net asset value per share
$
15.62

 
$
15.30


See accompanying notes.


3

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Operations

 
Three Months
Ended
 
Three Months
Ended
 
Six Months Ended
 
Six Months Ended
 
June 30,
2013
 
June 30,
2012
 
June 30,
2013
 
June 30,
2012
Investment income:
 
 
 
 
 
 
 
Loan interest, fee and dividend income:
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
$
19,696,422

 
$
15,060,897

 
$
36,883,923

 
$
28,024,499

Affiliate investments
3,246,452

 
2,952,805

 
6,209,481

 
5,669,954

Control investments
46,194

 
52,218

 
95,565

 
111,991

Total loan interest, fee and dividend income
22,989,068

 
18,065,920

 
43,188,969

 
33,806,444

Payment-in-kind interest income:
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
3,234,925

 
2,850,412

 
6,485,473

 
5,437,679

Affiliate investments
981,731

 
870,085

 
1,940,110

 
1,524,318

Control investments
5,961

 
20,000

 
11,828

 
39,971

Total payment-in-kind interest income
4,222,617

 
3,740,497

 
8,437,411

 
7,001,968

Interest income from cash and cash equivalent investments
44,463

 
156,049

 
95,703

 
265,907

Total investment income
27,256,148

 
21,962,466

 
51,722,083

 
41,074,319

Expenses:
 
 
 
 
 
 
 
Interest and other debt financing fees
4,989,523

 
4,144,623

 
10,101,035

 
7,455,360

General and administrative expenses
5,994,702

 
3,767,420

 
10,115,660

 
7,374,687

Total expenses
10,984,225

 
7,912,043

 
20,216,695

 
14,830,047

Net investment income
16,271,923

 
14,050,423


31,505,388

 
26,244,272

Net realized gains:
 
 
 
 
 
 
 
Net realized gain on investments – Non-Control / Non-Affiliate
2,428,668

 
2,784,108

 
3,007,450

 
2,784,108

Net realized gain on investments – Affiliate
3,321,999

 

 
4,595,999

 

Net realized gain (loss) on investments – Control
(2,290,919
)
 
838,039

 
(2,290,919
)
 
838,039

Net unrealized appreciation (depreciation) of investments
2,116,796

 
(2,046,369
)
 
3,883,341

 
(1,424,898
)
Total net gain on investments
5,576,544

 
1,575,778

 
9,195,871

 
2,197,249

Loss on extinguishment of debt

 

 
(412,673
)

(205,043
)
Income tax benefit (provision)

 

 
(20,303
)

7,231

Net increase in net assets resulting from operations
$
21,848,467


$
15,626,201

 
$
40,268,283

 
$
28,243,709

Net investment income per share—basic and diluted
$
0.59

 
$
0.52

 
$
1.15

 
$
1.00

Net increase in net assets resulting from operations per share—basic and diluted
$
0.79

 
$
0.57

 
$
1.46

 
$
1.08

Dividends declared per common share
$
0.54

 
$
0.50

 
$
1.08

 
$
0.97

Weighted average number of shares outstanding—basic and diluted
27,569,524

 
27,262,646

 
27,501,407

 
26,168,973


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
Distributions
 
Accumulated
Realized
Gains on
Investments
 
Net
Unrealized
Appreciation
of Investments
 
Total
Net
Assets
 
Number
of Shares
 
Par
Value
 
 
 
 
 
Balance, December 31, 2011
22,774,726

 
$
22,775

 
$
318,297,269

 
$
6,847,486

 
$
1,011,649

 
$
8,107,776

 
$
334,286,955

Net investment income

 

 

 
26,244,272

 

 

 
26,244,272

Stock-based compensation

 

 
1,372,096

 

 

 

 
1,372,096

Net realized gain on investments

 

 

 

 
3,622,147

 
(3,062,895
)
 
559,252

Net unrealized appreciation of investments

 

 

 

 

 
1,637,997

 
1,637,997

Loss on extinguishment of debt

 

 

 
(205,043
)
 

 

 
(205,043
)
Income tax benefit

 

 

 
7,231

 

 

 
7,231

Dividends/distributions declared
81,861

 
81

 
1,664,085

 
(26,418,899
)
 

 

 
(24,754,733
)
Public offering of common stock
4,255,000

 
4,255

 
77,118,719

 

 

 

 
77,122,974

Issuance of restricted stock
235,086

 
236

 
(236
)
 

 

 

 

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

 

 

 
(1,111,444
)
Balance, June 30, 2012
27,289,134

 
$
27,289

 
$
397,340,547

 
$
6,475,047

 
$
4,633,796

 
$
6,682,878

 
$
415,159,557

 
 
Common Stock
 
Additional
Paid In
Capital
 
Investment
Income
in Excess of
Distributions
 
Accumulated
Realized
Gains on
Investments
 
Net
Unrealized
Appreciation
of Investments
 
Total
Net
Assets
 
Number
of Shares
 
Par
Value
 
 
 
 
 
Balance, December 31, 2012
27,284,798

 
$
27,285

 
$
403,322,097

 
$
6,783,161

 
$
1,972,940

 
$
5,229,761

 
$
417,335,244

Net investment income

 

 

 
31,505,388

 

 

 
31,505,388

Stock-based compensation

 

 
1,675,896

 

 

 

 
1,675,896

Net realized gain on investments

 

 

 

 
5,312,530

 
(3,863,315
)
 
1,449,215

Net unrealized appreciation of investments

 

 

 

 

 
7,746,656

 
7,746,656

Loss on extinguishment of debt

 

 

 
(412,673
)
 

 

 
(412,673
)
Income tax provision

 

 

 
(20,303
)
 

 

 
(20,303
)
Dividends/distributions declared
57,042

 
57

 
1,570,104

 
(29,757,555
)
 

 

 
(28,187,394
)
Issuance of restricted stock
258,410

 
258

 
(258
)
 

 

 

 

Balance, June 30, 2013
27,600,250

 
$
27,600

 
$
406,567,839

 
$
8,098,018

 
$
7,285,470

 
$
9,113,102

 
$
431,092,029


See accompanying notes.


5

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Cash Flows
 
 
Six Months Ended
 
Six Months Ended
 
June 30, 2013
 
June 30, 2012
Cash flows from operating activities:
 
 
 
Net increase in net assets resulting from operations
$
40,268,283

 
$
28,243,709

Adjustments to reconcile net increase in net assets resulting from operations to net cash used in operating activities:
 
 
 
Purchases of portfolio investments
(37,112,821
)
 
(156,571,355
)
Repayments received/sales of portfolio investments
111,695,347

 
71,439,853

Loan origination and other fees received
621,440

 
2,309,229

Net realized gain on investments
(5,312,530
)
 
(3,622,147
)
Net unrealized (appreciation) depreciation of investments
(4,914,099
)
 
1,251,562

Deferred income taxes
1,030,758

 
173,337

Payment-in-kind interest accrued, net of payments received
(5,263,335
)
 
(3,765,725
)
Amortization of deferred financing fees
766,221

 
504,619

Loss on extinguishment of debt
412,673

 
205,043

Accretion of loan origination and other fees
(2,243,128
)
 
(1,554,726
)
Accretion of loan discounts
(765,628
)
 
(811,990
)
Accretion of discount on SBA-guaranteed debentures payable
88,843

 
87,256

Depreciation expense
19,085

 
15,811

Stock-based compensation
1,675,896

 
1,372,096

Changes in operating assets and liabilities:
 
 
 
Interest and fees receivable
(1,528,838
)
 
(2,564,588
)
Prepaid expenses
(106,645
)
 
221,547

Accounts payable and accrued liabilities
(1,954,469
)
 
(1,397,172
)
Interest payable
(181,387
)
 
29,435

Taxes payable
(2,976,193
)
 
(1,198,973
)
Net cash provided by (used in) operating activities
94,219,473

 
(65,633,179
)
Cash flows from investing activities:
 
 
 
Purchases of property and equipment
(17,145
)
 
(13,354
)
Net cash used in investing activities
(17,145
)
 
(13,354
)
Cash flows from financing activities:
 
 
 
Repayments of SBA-guaranteed debentures payable
(20,500,000
)
 
(10,410,000
)
Repayments of credit facility

 
(15,000,000
)
Proceeds from notes

 
69,000,000

Financing fees paid
(684,294
)
 
(2,340,983
)
Proceeds from public stock offerings, net of expenses

 
77,122,974

Common stock withheld for payroll taxes upon vesting of restricted stock

 
(1,111,444
)
Cash dividends paid
(28,187,394
)
 
(24,754,733
)
Net cash provided by (used in) financing activities
(49,371,688
)
 
92,505,814

Net increase in cash and cash equivalents
44,830,640

 
26,859,281

Cash and cash equivalents, beginning of period
72,300,423

 
66,868,340

Cash and cash equivalents, end of period
$
117,131,063

 
$
93,727,621

Supplemental disclosure of cash flow information:
 
 
 
Cash paid for interest
$
9,084,547

 
$
6,671,706

Summary of non-cash financing transactions:
 
 
 
Dividends paid through DRIP share issuances
$
1,570,161

 
$
1,664,166


See accompanying notes.


6

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
June 30, 2013
Portfolio Company
 
Industry
 
Type of Investment(1)(2)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
Non–Control / Non–Affiliate Investments:
 
 
 
 
 
 
Agilex Flavors & Fragrances, Inc. (3%)*
 
Custom Fragrance Producers
 
Subordinated Note (12% Cash, 1.5% PIK, Due 06/19)
 
$
12,601,270

 
$
12,364,434

 
$
12,364,434

Common Units (1,250 units)
 
 
 
1,250,000
 
1,264,000
 
 
 
12,601,270
 
13,614,434
 
13,628,434
 
 
 
 
 
 
 
 
 
 
 
Ambient Air Corporation (0%)*
 
Specialty Trade Contractors
 
Subordinated Note (0% Cash, 8% PIK, Due 06/20)
 
454,628
 
66,993
 
372,000
 
 
 
454,628

 
66,993

 
372,000

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

 
935,000

 
 
 
 
 
516,867

 
935,000

 
 
 
 
 
 
 
 
 
 
 
Audio and Video Labs Holdings, Inc. (3%)*
 
Manufacturer and Distributor for Independent Artists and Authors
 
Subordinated Note (12% Cash, 2% PIK, Due 06/18)
 
13,134,189

 
12,891,473

 
12,891,473

Common Units (134 units)
 
 
 
1,300,000

 
1,150,000

 
 
 
13,134,189

 
14,191,473

 
14,041,473

 
 
 
 
 
 
 
 
 
 
 
Botanical Laboratories, Inc. (0%)*
 
Nutritional Supplement Manufacturing and Distribution
 
Common Unit Warrants (998,680 units)
 
 
 
237,301

 
580,603

 
 
 


 
237,301

 
580,603

 
 
 
 
 
 
 
 
 
 
 
Capital Contractors, Inc. (2%)*
 
Janitorial and Facilities Maintenance Services
 
Subordinated Notes (12% Cash, 2% PIK, Due
12/15)
 
9,468,396

 
9,083,092

 
9,083,092

Common Stock Warrants (20 shares)
 
 
 
492,000

 
345,000

 
 
9,468,396

 
9,575,092

 
9,428,092

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

 
1,449,000

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

 
1,823,000

 
 
 
 
 
1,197,350

 
3,272,000

 
 
 
 
 
 
 
 
 
 
 
Charter Facilities Services, Inc. (2%)*
 
Retail, Restaurant, and Commercial Facilities Maintenance
 
Subordinated Note (10% Cash, 3% PIK, Due 07/18)
 
8,210,044

 
8,083,515

 
8,083,515

 
Convertible Preferred Units (2,500 units)
 
 
 
250,000

 
424,000

 
 
 
8,210,044

 
8,333,515

 
8,507,515

 
 
 
 
 
 
 
 
 
 
 
Chromaflo Technologies, LLC (4%)*
 
Colorant
Manufacturer
and Distributor
 
Subordinated Note (12% Cash, 2% PIK, Due 10/17)
 
16,632,900

 
16,364,505

 
16,364,505

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

 
2,847,000

 
 
 
16,632,900

 
18,620,603

 
19,211,505

 
 
 
 
 
 
 
 
 
 
 
Comverge, Inc. (4%)*
 
Provider of Intelligent Energy Management Solutions
 
Senior Note (12% Cash, 3% PIK, Due 05/18)
 
15,270,247

 
14,998,819

 
14,998,819

Preferred Units (900 units)
 
 
 
900,000

 
942,000

Common Units (1,000,000 units)
 
 
 
100,000

 
115,000

 
 
 
15,270,247

 
15,998,819

 
16,055,819

 
 
 
 
 
 
 
 
 
 
 
Continental Anesthesia Management, LLC (2%)*
 
Physicians
Management
Services
 
Subordinated Note (14.0% Cash, Due 11/14)
 
9,825,000

 
9,666,763

 
8,849,000

Warrant (263 shares)
 
 
 
276,100

 

 
 
9,825,000

 
9,942,863

 
8,849,000

 
 
 
 
 
 
 
 
 
 
 
CRS Reprocessing, LLC (6%)*
 
Fluid
Reprocessing
Services
 
Subordinated Note (12% Cash, 2% PIK, Due 11/15)
 
11,887,166

 
11,704,712

 
11,704,712

Subordinated Note (12% Cash, 2% PIK, Due 11/15)
 
13,109,315

 
12,055,213

 
12,055,213

Series C Preferred Units (30 units)
 
 
 
288,342

 
427,000

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

 
2,626,000

Series D Preferred Units (16 units)
 
 
 
107,074

 
168,000

 
 
 
24,996,481

 
25,914,897

 
26,980,925

 
 
 
 
 
 
 
 
 
 
 
DataSource Incorporated (2%)*
 
Print Supply Chain Management Services
 
Subordinated Note (12% Cash, 2% PIK, Due 01/18)
 
8,670,799

 
8,524,089

 
8,524,089

 
Common Units (47 units)
 
 
 
1,000,000

 
1,114,000

 

 
8,670,799

 
9,524,089

 
9,638,089

 
 
 
 
 
 
 
 
 
 
 
DCWV Acquisition Corporation (1%)*
 
Arts & Crafts and Home Decor Products Designer and Supplier
 
Subordinated Note (12% Cash, 3% PIK, Due 09/17)
 
6,146,584

 
6,040,388

 
4,862,000

 

 
6,146,584

 
6,040,388

 
4,862,000

 
 
 
 
 
 
 
 
 
 
 
DLR Restaurants, LLC (0%)*
 
Restaurant
 
Royalty Rights
 
 
 

 

 
 
 


 

 

 
 
 
 
 
 
 
 
 
 
 
Dyno Acquiror, Inc. (2%)*
 
Sewing Products and Seasonal Decorative Products Supplier
 
Subordinated Note (12% Cash, 2% PIK, Due 11/18)
 
7,022,574

 
6,882,574

 
6,882,574

 
Preferred Series A Units (600,000 units)
 
 
 
600,000

 
600,000

 
 
 
7,022,574

 
7,482,574

 
7,482,574


7

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
June 30, 2013
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)
 
$
6,940,632

 
$
6,792,567

 
$
6,792,567

 
Common Stock (18,029 shares)
 


 
183,562

 
111,000

 
Preferred Stock A (1,596 shares)
 


 
1,596,126

 
1,724,000

 

 
6,940,632

 
8,572,255

 
8,627,567

 
 
 
 
 
 
 
 
 
 
 
Electronic Systems Protection, Inc. (1%)*
 
Power Protection Systems Manufacturing
 
Subordinated Note (12% Cash, 2% PIK, Due 12/15)
 
4,289,253

 
4,265,863

 
4,265,863

Common Stock (570 shares)
 
 
 
285,000

 
307,000

 
 
 
4,289,253

 
4,550,863

 
4,572,863

 
 
 
 
 
 
 
 
 
 
 
Foodstate, Inc. (1%)*
 
Nutritional Supplement Manufacturing and Distribution
 
Subordinated Note (12% Cash, 3.8% PIK, Due 10/16)
 
5,584,163

 
5,510,802

 
5,510,802

 
 
 
5,584,163

 
5,510,802

 
5,510,802

 
 
 
 
 
 
 
 
 
 
 
Frozen Specialties, Inc. (2%)*
 
Frozen Foods Manufacturer
 
Subordinated Note (13% Cash, 5% PIK, Due 05/16)
 
10,674,242

 
10,636,122

 
10,636,122

 
 
10,674,242

 
10,636,122

 
10,636,122

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

 
113,000

 
 
 
 
500,000

 
113,000

 
 
 
 
 
 
 
 
 
 
 
Glencoe Business Services Holdings (5%)*
 
Business Process Outsourcing Provider
 
Subordinated Note (12% Cash, 2.5% PIK, Due 06/18)
 
20,254,112

 
19,880,702

 
19,880,702

 
 
20,254,112

 
19,880,702

 
19,880,702

 
 
 
 
 
 
 
 
 
 
 
Grindmaster-Cecilware Corp. (1%)*
 
Food Services Equipment Manufacturer
 
Subordinated Note (12% Cash, 6% PIK, Due 04/16)
 
6,871,666

 
6,827,412

 
6,002,000

 
 
6,871,666

 
6,827,412

 
6,002,000

 
 
 
 
 
 
 
 
 
 
 
Hatch Chile Co., LLC (1%)*
 
Food Products Distributor
 
Senior Note (19% Cash, Due 07/15)
 
3,346,363

 
3,288,667

 
3,288,667

Subordinated Note (14% Cash, Due 07/15)
 
743,637

 
659,094

 
659,094

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

 
291,000

 
 
4,090,000

 
4,097,561

 
4,238,761

 
 
 
 
 
 
 
 
 
 
 
Home Physicians, LLC (“HP”) and Home Physicians Holdings, LP (“HPH”) (3%)*
 
In-home Primary Care Physician Services
 
Subordinated Note-HP (12% Cash, 5% PIK, Due 03/16)
 
11,493,212

 
10,793,434

 
10,625,000

Subordinated Note-HPH (4% Cash, 6% PIK, Due 03/16)
 
1,406,009

 
1,303,361

 
292,000

Senior Subordinated Note-HP (14% Cash, 2% PIK, Due 03/16)
 
1,374,824

 
1,353,013

 
1,353,013

Preferred Units (0%)
 
 
 
1,100,000

 
1,980,000

Preferred Unit Purchase Warrants (25%)
 
 
 

 

Royalty Rights
 
 
 

 

 
 
14,274,045

 
14,549,808

 
14,250,013

 
 
 
 
 
 
 
 
 
 
 
Infrastructure Corporation of America, Inc. (3%)*
 
Roadway Maintenance, Repair and Engineering Services
 
Subordinated Note (12% Cash, 2% PIK, Due 09/18)
 
11,078,757

 
9,481,668

 
9,481,668

Common Stock Purchase Warrant (417,593 shares)
 
 
 
2,411,000

 
2,370,000

 
 
11,078,757

 
11,892,668

 
11,851,668

 
 
 
 
 
 
 
 
 
 
 
Inland Pipe Rehabilitation Holding Company LLC
(5%)*
 
Cleaning and Repair Services
 
Subordinated Note (13% Cash, 2% PIK, Due 12/16)
 
21,007,449

 
20,793,115

 
20,793,115

Membership Interest Purchase Warrant (3.0%)
 
 
 
853,500

 
2,174,000

 
 
21,007,449

 
21,646,615

 
22,967,115

 
 
 
 
 
 
 
 
 
 
 
IOS Acquisitions, Inc. (4%)*
 
Provider of Oil Country Tubular Goods Inspections and Repair Services
 
Subordinated Note (12% Cash, 2% PIK, Due 06/18)
 
17,176,425

 
16,859,027

 
16,859,027

Common Units (7,314 Class A Units)
 
 
 
1,699,847

 
1,357,000

 
 
17,176,425

 
18,558,874

 
18,216,027

 
 
 
 
 
 
 
 
 
 
 
Library Systems & Services, LLC (0%)*
 
Municipal Business Services
 
Common Stock Warrants (112 shares)
 
 
 
58,995

 
1,638,000

 
 


 
58,995

 
1,638,000

 
 
 
 
 
 
 
 
 
 
 
Magpul Industries Corp. (5%)*
 
Firearm Accessories Manufacturer and Distributor
 
Subordinated Note (12% Cash, 3% PIK, Due 03/17)
 
13,300,000

 
13,100,747

 
13,100,747

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

 
1,874,000

Common Units (30,000 units)
 
 
 
30,000

 
5,532,000

 
 
13,300,000

 
14,600,747

 
20,506,747

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

 
11,763,585

 
11,763,585

 
 
 
12,000,000

 
11,763,585

 
11,763,585

 
 
 
 
 
 
 
 
 
 
 
Media Storm, LLC (2%)*
 
Marketing Services
 
Subordinated Note (12% Cash, 2% PIK, Due 10/17)
 
8,137,431

 
8,071,349

 
8,071,349

Membership Units (1,216,204 units)
 
 
 
1,176,957

 
1,501,000

 
 
8,137,431

 
9,248,306

 
9,572,349


8

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
June 30, 2013
Portfolio Company
 
Industry
 
Type of Investment(1)(2)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
 
 
 
 
 
 
 
 
 
 
 
Media Temple, Inc. (3%)*
 
Web Hosting Services
 
Convertible Note (8% Cash, 6% PIK, Due 04/15)
 
$
4,000,001

 
$
4,594,351

 
$
8,117,000

Common Stock Purchase Warrant (28,000 shares)
 
 
 
1,251,000

 
3,551,000

 
 
4,000,001

 
5,845,351

 
11,668,000

 
 
 
 
 
 
 
 
 
 
 
Micross Solutions LLC (3%)*
 
Provider of Semiconductor Products and Services
 
Subordinated Note (12% Cash, 2% PIK, Due 06/18)
 
10,722,502

 
10,574,072

 
10,574,072

Class A-2 Common Units (1,500,000 units)
 
 
 
1,500,000

 
1,024,000

 
 
10,722,502

 
12,074,072

 
11,598,072

 
 
 
 
 
 
 
 
 
 
 
Minco Technology Labs, LLC (0%)*
 
Semiconductor Distribution
 
Subordinated Note (6.5% Cash, 3.5% PIK, Due 12/16)
 
5,635,155

 
5,462,938

 
2,164,000

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

 

Class A Units (3,907 OpCo. units)
 
 
 
3,907

 

 
 
5,635,155

 
5,966,845

 
2,164,000

 
 
 
 
 
 
 
 
 
 
 
My Alarm Center, LLC (3%)*
 
Security Company
 
Subordinated Note (12% Cash, 2.5% PIK, Due 09/17)
 
10,198,879

 
10,111,405

 
10,111,405

 
Preferred Units (2,000,000 units)
 


 
2,000,000

 
2,023,000

 
 
 
10,198,879

 
12,111,405

 
12,134,405

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


 
43,905

 
178,801

 
 
 


 
43,905

 
178,801

 
 
 
 
 
 
 
 
 
 
 
Performance Health & Wellness Holdings, Inc. (3%)*
 
Designer and Manufacturer of Rehabilitation and Wellness Products
 
Subordinated Note (12% Cash, 1% PIK, Due 04/19)
 
13,094,852

 
12,915,486

 
12,915,486

 
Class A Limited Partnership Units (15,000 units)
 
 
 
1,500,000

 
1,446,000

 
 
 
13,094,852

 
14,415,486

 
14,361,486

 
 
 
 
 
 
 
 
 
 
 
PowerDirect Marketing, LLC (2%)*
 
Marketing Services
 
Subordinated Note (12% Cash, 2% PIK, Due 05/16)
 
7,236,063

 
6,713,962

 
6,713,962

Common Unit Purchase Warrants
 
 
 
590,200

 
1,562,000

 
 
7,236,063

 
7,304,162

 
8,275,962

 
 
 
 
 
 
 
 
 
 
 
ROM Acquisition Corporation (3%)*
 
Military and Industrial Vehicle Equipment Manufacturing
 
Subordinated Note (12% Cash, 3% PIK, Due 03/17)
 
13,357,469

 
13,248,838

 
13,248,838

 
 
13,357,469

 
13,248,838

 
13,248,838

 
 
 
 
 
 
 
 
 
 
 
Sheplers, Inc. (3%)*
 
Western Apparel Retailer
 
Subordinated Note (13.2% Cash, Due 12/16)
 
8,750,000

 
8,582,808

 
8,582,808

Subordinated Note (10% Cash, 7% PIK, Due 12/17)
 
4,169,023

 
4,112,778

 
4,112,778

 
 
 
12,919,023

 
12,695,586

 
12,695,586

 
 
 
 
 
 
 
 
 
 
 
Snacks Holding Corporation (2%)*
 
Trail Mixes and Nut Manufacturer and Marketer
 
Subordinated Note (12% Cash, 1% PIK, Due 5/20)
 
5,005,278

 
4,967,778

 
4,967,778

Preferred A Units (22,368 units)
 
 
 
1,053,897

 
2,254,000

Preferred B Units (10,380 units)
 
 
 
25,337

 
123,000

Common Units (190,935 units)
 
 
 
150,000

 
903,000

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

 
98,000

 
 
 
5,005,278

 
6,211,570

 
8,345,778

 
 
 
 
 
 
 
 
 
 
 
SRC, Inc. (1%)*
 
Specialty Chemical Manufacturer
 
Subordinated Notes (12% Cash, 2% PIK, Due 09/14)
 
6,084,208

 
5,957,071

 
5,670,000

Common Stock Purchase Warrants
 
 
 
123,800

 

 
 
 
6,084,208

 
6,080,871

 
5,670,000

 
 
 
 
 
 
 
 
 
 
 
Stella Environmental Services, LLC (0%)*
 
Waste Transfer Stations
 
Common Stock Purchase Warrants
 
 
 
20,000

 
394,000

 
 
 


 
20,000

 
394,000

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

 
201,281

 
 
 
 
111,037

 
201,281

 
 
 
 
 
 
 
 
 
 
 
The Krystal Company (1%)*
 
Quick Service Restaurant
 
Class A Units of Limited Partnership (2,000 units)
 
 
 
2,000,000

 
3,455,000

 
 
 


 
2,000,000

 
3,455,000

 
 
 
 
 
 
 
 
 
 
 
TMR Automotive Service Supply, LLC (1%)*
 
Automotive Supplies
 
Subordinated Note (12% Cash, 1% PIK, Due 03/16)
 
4,500,000

 
4,316,532

 
4,316,532

Unit Purchase Warrant (316,858 units)
 
 
 
195,000

 
377,000

 
 
 
4,500,000

 
4,511,532

 
4,693,532

 
 
 
 
 
 
 
 
 
 
 
Tomich Brothers, LLC (3%)*
 
Squid and Wetfish Processor and Distributor
 
Subordinated Note (12% Cash, 3% PIK, Due 04/16)
 
12,128,369

 
11,912,539

 
11,912,539

 
 
12,128,369

 
11,912,539

 
11,912,539

 
 
 
 
 
 
 
 
 
 
 

9

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
June 30, 2013
Portfolio Company
 
Industry
 
Type of Investment(1)(2)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
Top Knobs USA, Inc. (0%)*
 
Hardware Designer and Distributor
 
Common Stock (26,593 shares)
 
 
 
$
750,000

 
$
1,149,000

 
 
 
 
 
750,000

 
1,149,000

 
 
 
 
 
 
 
 
 
 
 
Trinity Consultants Holdings, Inc. (2%)*
 
Air Quality Consulting Services
 
Subordinated Note (12% Cash, 2.0% PIK, Due 11/17)
 
$
8,242,454

 
8,111,078

 
8,111,078

Series A Preferred Stock (10,000 units)
 
 
 
785,775

 
883,000

Common Stock (50,000 units)
 
 
 
50,000

 
658,000

 
 
 
8,242,454

 
8,946,853

 
9,652,078

 
 
 
 
 
 
 
 
 
 
 
TrustHouse Services Group, Inc. (0%)*
 
Food Management Services
 
Class A Units (1,557 units)
 
 
 
69,302

 
242,996

Class B Units (82 units)
 
 
 
3,647

 
8,794

Class E Units (838 units)
 
 
 
101,532

 
139,628

 
 
 
 
 


 
174,481

 
391,418

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

 
5,723,472

 
5,723,472

Common Units (2 units)
 
 
 
337,925

 
810,000

Common Stock Warrants (8 shares)
 
 
 
321,000

 
3,109,000

 
 
 
5,810,588

 
6,382,397

 
9,642,472

 
 
 
 
 
 
 
 
 
 
 
United Biologics, LLC (2%)*
 
Allergy Immunotherapy
 
Subordinated Note (12% Cash, 2% PIK, Due 03/17)
 
10,020,470

 
9,187,466

 
9,187,466

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

 
648,000

Class A-1 Common Stock (18,818 shares)
 
 
 
137,324

 
137,324

Class A-1 Common Kicker Stock (14,114 shares)
 
 
 

 

Class A & Class B Unit Purchase Warrants
 
 
 
838,117

 
165,000

 
 
10,020,470

 
12,162,896

 
10,137,790

 
 
 
 
 
 
 
 
 
 
 
United Retirement Plan Consultants, Inc. (3%)*
 
Retirement Plan Administrator
 
Subordinated Note (12% Cash, 4% PIK, Due 09/16)
 
12,589,260

 
12,403,285

 
12,403,285

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

 
926,000

Common Units (10,000 units)
 
 
 
100,000

 

 
 
12,589,260

 
13,403,285

 
13,329,285

 
 
 
 
 
 
 
 
 
 
 
Wholesale Floors, Inc. (1%)*
 
Commercial Services
 
Subordinated Note (12.5% Cash, 3.5% PIK, Due 06/14)
 
3,887,615

 
3,850,397

 
3,850,397

Membership Interest Purchase Warrant (4.0%)
 
 
 
132,800

 
192,000

 
 
 
3,887,615

 
3,983,197

 
4,042,397

 
 
 
 
 
 
 
 
 
 
 
Workforce Software, LLC (3%)*
 
Software Provider
 
Subordinated Note (11% Cash, 5% PIK, Due 11/16)
 
8,000,000

 
7,134,199

 
7,134,199

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

 
1,188,000

Class C Preferred Units (624,253 units)
 
 
 
1,250,000

 
1,875,000

Common Unit Purchase Warrants (2,434,749 units)
 
 
 
952,300

 
4,706,000

 
 
 
8,000,000

 
10,356,499

 
14,903,199

 
 
 
 
 
 
 
 
 
 
 
WSO Holdings, LP (5%)*
 
Organic/Fair Trade Sugar, Syrup, Nectar and Honey Producer
 
Subordinated Note (12% Cash, 2% PIK, Due 10/17)
 
20,300,379

 
20,052,537

 
20,052,537

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

 
2,816,000

 
 
20,300,379

 
23,052,537

 
22,868,537

 
 
 
 
 
 
 
 
 
 
 
Xchange Technology Group, LLC (0%)*
 
Used and Refurbished IT Asset Supplier
 
Subordinated Note (8% Cash, Due 06/15)
 
6,266,299

 
5,904,000

 
750,000

Royalty Rights
 
 
 

 

 
 
6,266,299

 
5,904,000

 
750,000

 
 
 
 
 
 
 
 
 
 
 
Yellowstone Landscape Group, Inc. (4%)*
 
Landscaping Services
 
Subordinated Note (8% Cash, 8% PIK, Due 04/14)
 
15,786,071

 
15,714,997

 
15,714,997

 
 
15,786,071

 
15,714,997

 
15,714,997

 
 
 
 
 
 
 
Subtotal Non–Control / Non–Affiliate Investments
 
483,896,222

 
519,536,914

 
537,770,803

 
 
 
 
 
 
 
 
 
 
 
Affiliate Investments:
 
 
 
 
 
 
 
 
 
 
All Aboard America! Holdings Inc. (2%)*
 
Motor Coach Operator
 
Subordinated Note (12% Cash, 3% PIK, Due 10/17)
 
8,762,177

 
8,616,978

 
8,616,978

 
Convertible Preferred Interest in LLC
 
 
 
1,500,000

 
1,843,000

 
 
 
8,762,177

 
10,116,978

 
10,459,978

 
 
 
 
 
 
 
 
 
 
 
American De-Rosa Lamparts, LLC and Hallmark Lighting (1%)*
 
Lighting Wholesale and Distribution
 
Subordinated Note (12% Cash, 6% PIK, Due 6/16)
 
6,633,396

 
5,879,747

 
5,879,747

Membership Units (6,516 units)
 
 
 
620,653

 

 
 
 
6,633,396

 
6,500,400

 
5,879,747

 
 
 
 
 
 
 
 
 
 
 

10

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
June 30, 2013
Portfolio Company
 
Industry
 
Type of Investment(1)(2)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
AP Services, Inc. (0%)*
 
Fluid Sealing Supplies and Services
 
Class A Units (933 units)
 
 
 
$
302,886

 
$
556,618

Class B Units (496 units)
 
 
 

 
295,642

 
 
 


 
302,886

 
852,260

 
 
 
 
 
 
 
 
 
 
 
Asset Point, LLC (2%)*
 
Asset Management Software Provider
 
Senior Note (12% Cash, 5% PIK, Due 03/14)
 
$
6,466,015

 
6,466,013

 
6,466,013

Subordinated Note (12% Cash, 2% PIK, Due 07/15)
 
636,612

 
636,612