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, 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 November 5, 2013 was 27,678,286.

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, 2013
 
December 31, 2012
 
(Unaudited)
 
 
Assets:
 
 
 
Investments at fair value:
 
 
 
Non-Control / Non-Affiliate investments (cost of $499,409,391 and $565,737,092 at September 30, 2013 and December 31, 2012, respectively)
$
519,185,426

 
$
579,078,939

Affiliate investments (cost of $106,302,777 and $123,019,204 at September 30, 2013 and December 31, 2012, respectively)
108,028,880

 
123,408,445

Control investments (cost of $7,977,878 and $11,474,208 at September 30, 2013 and December 31, 2012, respectively)
3,261,887

 
4,315,339

Total investments at fair value
630,476,193

 
706,802,723

Cash and cash equivalents
160,020,438

 
72,300,423

Interest and fees receivable
3,885,283

 
2,650,178

Prepaid expenses and other current assets
785,992

 
403,123

Deferred financing fees
11,441,030

 
12,323,430

Property and equipment, net
54,174

 
55,535

Total assets
$
806,663,110

 
$
794,535,412

Liabilities:
 
 
 
Accounts payable and accrued liabilities
$
7,128,708

 
$
6,405,570

Interest payable
1,072,595

 
3,136,574

Taxes payable
40,249

 
3,210,989

Deferred income taxes
2,780,236

 
1,342,456

Borrowings under credit facility
11,636,928

 
—

Notes
149,500,000

 
149,500,000

SBA-guaranteed debentures payable
193,238,889

 
213,604,579

Total liabilities
365,397,605

 
377,200,168

Net Assets:
 
 
 
Common stock, $0.001 par value per share (150,000,000 shares authorized, 27,678,286 and 27,284,798 shares issued and outstanding as of September 30, 2013 and December 31, 2012, respectively)
27,678

 
27,285

Additional paid in capital
408,501,259

 
403,322,097

Investment income in excess of distributions
10,432,313

 
6,783,161

Accumulated realized gains
8,309,620

 
1,972,940

Net unrealized appreciation
13,994,635

 
5,229,761

Total net assets
441,265,505

 
417,335,244

Total liabilities and net assets
$
806,663,110

 
$
794,535,412

Net asset value per share
$
15.94

 
$
15.30


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,
2013
 
September 30,
2012
 
September 30,
2013
 
September 30,
2012
Investment income:
 
 
 
 
 
 
 
Loan interest, fee and dividend income:
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
$
19,933,576

 
$
16,376,768

 
$
56,817,499

 
$
44,401,267

Affiliate investments
2,710,338

 
3,838,341

 
8,919,819

 
9,508,295

Control investments
50,334

 
49,384

 
145,899

 
161,375

Total loan interest, fee and dividend income
22,694,248

 
20,264,493

 
65,883,217

 
54,070,937

Payment-in-kind interest income:
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
3,591,182

 
3,017,120

 
10,076,655

 
8,454,799

Affiliate investments
942,609

 
946,345

 
2,882,719

 
2,470,663

Control investments
6,058

 
20,250

 
17,886

 
60,221

Total payment-in-kind interest income
4,539,849

 
3,983,715

 
12,977,260

 
10,985,683

Interest income from cash and cash equivalent investments
81,071

 
78,500

 
176,774

 
344,407

Total investment income
27,315,168

 
24,326,708

 
79,037,251

 
65,401,027

Operating expenses:
 
 
 
 
 
 
 
Interest and other debt financing fees
4,997,620

 
4,046,885

 
15,098,655

 
11,502,245

General and administrative expenses
5,537,980

 
4,403,469

 
15,653,640

 
11,778,156

Total operating expenses
10,535,600

 
8,450,354

 
30,752,295

 
23,280,401

Net investment income
16,779,568

 
15,876,354


48,284,956

 
42,120,626

Realized and unrealized gains (losses) on investments and foreign currency borrowings:
 
 
 
 
 
 
 
Net realized gains (losses):
 
 
 
 
 
 
 
Non-Control / Non-Affiliate
1,006,339

 
816,393

 
4,013,789

 
3,600,501

Affiliate
17,811

 
785,132

 
4,613,810

 
785,132

Control
—

 
—

 
(2,290,919
)
 
838,039

Net realized gains (losses)
1,024,150

 
1,601,525

 
6,336,680

 
5,223,672

Net unrealized appreciation (depreciation):
 
 
 
 
 
 
 
Investments
4,892,807

 
(586,937
)
 
8,776,148

 
(2,011,835
)
Foreign currency borrowings
(11,274
)
 
—

 
(11,274
)
 
—

Net unrealized appreciation (depreciation)
4,881,533

 
(586,937
)
 
8,764,874

 
(2,011,835
)
Net realized and unrealized gains (losses) on investments and foreign currency borrowings
5,905,683

 
1,014,588

 
15,101,554

 
3,211,837

Loss on extinguishment of debt
—

 
(624,768
)
 
(412,673
)

(829,811
)
Income tax benefit (provision)
486,413

 
(34,388
)
 
466,110


(27,157
)
Net increase in net assets resulting from operations
$
23,171,664


$
16,231,786

 
$
63,439,947

 
$
44,475,495

Net investment income per share—basic and diluted
$
0.61

 
$
0.58

 
$
1.75

 
$
1.59

Net increase in net assets resulting from operations per share—basic and diluted
$
0.84

 
$
0.59

 
$
2.30

 
$
1.68

Dividends declared per common share
$
0.54

 
$
0.52

 
$
1.62

 
$
1.49

Weighted average number of shares outstanding—basic and diluted
27,619,464

 
27,290,493

 
27,541,442

 
26,545,542


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
 
Net
Unrealized
Appreciation
 
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
—

 
—

 
—

 
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 benefit
—

 
—

 
—

 
(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

 
 
Common Stock
 
Additional
Paid In
Capital
 
Investment
Income
in Excess of
Distributions
 
Accumulated
Realized
Gains
 
Net
Unrealized
Appreciation
 
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
—

 
—

 
—

 
48,284,956

 
—

 
—

 
48,284,956

Stock-based compensation
—

 
—

 
2,817,267

 
—

 
—

 
—

 
2,817,267

Net realized gain on investments
—

 
—

 
—

 
—

 
6,336,680

 
(3,613,847
)
 
2,722,833

Net unrealized appreciation of investments
—

 
—

 
—

 
—

 
—

 
12,378,721

 
12,378,721

Loss on extinguishment of debt
—

 
—

 
—

 
(412,673
)
 
—

 
—

 
(412,673
)
Income tax benefit
—

 
—

 
—

 
466,110

 
—

 
—

 
466,110

Dividends/distributions declared
84,058

 
84

 
2,362,204

 
(44,689,241
)
 
—

 
—

 
(42,326,953
)
Issuance of restricted stock
309,430

 
309

 
(309
)
 
—

 
—

 
—

 
—

Balance, September 30, 2013
27,678,286

 
$
27,678

 
$
408,501,259

 
$
10,432,313

 
$
8,309,620

 
$
13,994,635

 
$
441,265,505


See accompanying notes.


5
Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Cash Flows
 
 
Nine Months Ended
 
Nine Months Ended
 
September 30, 2013
 
September 30, 2012
Cash flows from operating activities:
 
 
 
Net increase in net assets resulting from operations
$
63,439,947

 
$
44,475,495

Adjustments to reconcile net increase in net assets resulting from operations to net cash used in operating activities:
 
 
 
Purchases of portfolio investments
(112,405,369
)
 
(228,510,522
)
Repayments received/sales of portfolio investments
210,113,002

 
113,898,080

Loan origination and other fees received
1,221,431

 
3,565,896

Net realized gain on investments
(6,336,680
)
 
(5,223,672
)
Net unrealized (appreciation) depreciation on investments
(10,213,928
)
 
1,420,124

Net unrealized depreciation on foreign currency borrowings
11,274

 
—

Deferred income taxes
1,437,780

 
591,712

Payment-in-kind interest accrued, net of payments received
(1,459,624
)
 
(5,501,302
)
Amortization of deferred financing fees
1,154,021

 
789,479

Loss on extinguishment of debt
412,673

 
829,811

Accretion of loan origination and other fees
(3,447,435
)
 
(2,397,275
)
Accretion of loan discounts
(1,144,867
)
 
(1,482,707
)
Accretion of discount on SBA-guaranteed debentures payable
134,310

 
131,748

Depreciation expense
30,417

 
24,145

Stock-based compensation
2,817,267

 
2,074,927

Changes in operating assets and liabilities:
 
 
 
Interest and fees receivable
(1,235,105
)
 
(2,086,562
)
Prepaid expenses
(382,869
)
 
172,301

Accounts payable and accrued liabilities
723,138

 
768,607

Interest payable
(2,063,979
)
 
(2,664,482
)
Taxes payable
(3,170,740
)
 
(1,095,866
)
Net cash provided by (used in) operating activities
139,634,664

 
(80,220,063
)
Cash flows from investing activities:
 
 
 
Purchases of property and equipment
(29,056
)
 
(20,667
)
Net cash used in investing activities
(29,056
)
 
(20,667
)
Cash flows from financing activities:
 
 
 
Repayments of SBA-guaranteed debentures payable
(20,500,000
)
 
(40,810,000
)
Borrowings under credit facility
11,625,654

 
26,000,000

Repayments of credit facility
—

 
(15,000,000
)
Proceeds from notes
—

 
69,000,000

Financing fees paid
(684,294
)
 
(3,572,059
)
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
(42,326,953
)
 
(38,146,302
)
Net cash provided by (used in) financing activities
(51,885,593
)
 
73,483,169

Net increase in cash and cash equivalents
87,720,015

 
(6,757,561
)
Cash and cash equivalents, beginning of period
72,300,423

 
66,868,340

Cash and cash equivalents, end of period
$
160,020,438

 
$
60,110,779

Supplemental disclosure of cash flow information:
 
 
 
Cash paid for interest
$
15,374,816

 
$
12,999,240

Summary of non-cash financing transactions:
 
 
 
Dividends paid through DRIP share issuances
$
2,362,288

 
$
2,462,947


See accompanying notes.


6
Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
September 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)
 
$
12,649,575

 
$
12,419,618

 
$
12,419,618

Common Units (1,250 units)
 
 
 
1,250,000
 
1,273,000
 
 
 
12,649,575
 
13,669,618
 
13,692,618
 
 
 
 
 
 
 
 
 
 
 
Ambient Air Corporation (0%)*
 
Specialty Trade Contractors
 
Subordinated Note (0% Cash, 8% PIK, Due 06/20)
 
464,399
 
66,993
 
187,000
 
 
 
464,399

 
66,993

 
187,000

 
 
 
 
 
 
 
 
 
 
 
Applied Consultants, Inc. (3%)*
 
Oil and Gas Pipeline Infrastructure Inspection Services
 
Subordinated Note (10% Cash, 2% PIK, Due 01/19)
 
13,058,586

 
12,838,968

 
12,838,968

 
Class A Preferred (2,000,000 units)
 
 
 
2,000,000

 
2,000,000

 
 
 
 
13,058,586
 
14,838,968
 
14,838,968
 
 
 
 
 
 
 
 
 
 
 
Assurance Operations Corporation (0%)*
 
Metal Fabrication
 
Common Stock (517 shares)
 
 
 
516,867

 
925,000

 
 
 
 
 
516,867

 
925,000

 
 
 
 
 
 
 
 
 
 
 
Audio and Video Labs Holdings, Inc. (3%)*
 
Manufacturer and Distributor for Independent Artists and Authors
 
Subordinated Note (12% Cash, 2% PIK, Due 06/18)
 
13,201,434

 
12,967,751

 
12,967,751

Common Units (134 units)
 
 
 
1,300,000

 
1,206,000

 
 
 
13,201,434

 
14,267,751

 
14,173,751

 
 
 
 
 
 
 
 
 
 
 
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)
 
9,516,873

 
9,165,179

 
9,165,179

Common Stock Warrants (20 shares)
 
 
 
492,000

 
362,000

 
 
9,516,873

 
9,657,179

 
9,527,179

 
 
 
 
 
 
 
 
 
 
 
Carolina Beverage Group, LLC (0%)*
 
Beverage
Manufacturing
and Packaging
 
Class B Units (11,974 units)
 
 
 
119,735

 
1,930,000

 
 
 
 
 
 
119,735

 
1,930,000

 
 
 
 
 
 
 
 
 
 
 
Charter Facilities Services, Inc. (2%)*
 
Retail, Restaurant, and Commercial Facilities Maintenance
 
Subordinated Note (10% Cash, 3% PIK, Due 07/18)
 
8,272,988

 
8,151,488

 
8,151,488

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

 
462,000

 
 
 
8,272,988

 
8,401,488

 
8,613,488

 
 
 
 
 
 
 
 
 
 
 
Chromaflo Technologies, LLC (0%)*
 
Colorant
Manufacturer
and Distributor
 
Preferred A Units (22,561 units)
 
 
 
2,071,224

 
2,036,000

 
 
 


 
2,071,224

 
2,036,000

 
 
 
 
 
 
 
 
 
 
 
Comverge, Inc. (4%)*
 
Provider of Intelligent Energy Management Solutions
 
Senior Note (12% Cash, 1% PIK, Due 05/18)
 
15,505,583

 
15,244,256

 
15,244,256

Preferred Units (900 units)
 
 
 
900,000

 
825,000

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

 
—

 
 
 
15,505,583

 
16,244,256

 
16,069,256

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

 
9,694,288

 
9,008,000

Warrant (263 shares)
 
 
 
276,100

 
—

 
 
9,825,000

 
9,970,388

 
9,008,000

 
 
 
 
 
 
 
 
 
 
 
CRS Reprocessing, LLC (6%)*
 
Fluid
Reprocessing
Services
 
Subordinated Note (12% Cash, 2% PIK, Due 11/15)
 
11,948,026

 
11,827,620

 
11,827,620

Subordinated Note (12% Cash, 2% PIK, Due 11/15)
 
13,176,432

 
12,180,550

 
12,180,550

Series C Preferred Units (30 units)
 
 
 
288,342

 
431,000

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

 
2,566,000

Series D Preferred Units (16 units)
 
 
 
107,074

 
169,000

 
 
 
25,124,458

 
26,163,142

 
27,174,170

 
 
 
 
 
 
 
 
 
 
 
DataSource Incorporated (2%)*
 
Print Supply Chain Management Services
 
Subordinated Note (12% Cash, 2% PIK, Due 01/18)
 
8,715,117

 
8,574,673

 
8,574,673

 
Common Units (47 units)
 
 
 
1,000,000

 
1,159,000

 

 
8,715,117

 
9,574,673

 
9,733,673

 
 
 
 
 
 
 
 
 
 
 
DCWV Acquisition Corporation (1%)*
 
Arts & Crafts and Home Decor Products Designer and Supplier
 
Subordinated Note (12% Cash, 3% PIK, Due 09/17)
 
6,193,828

 
6,092,512

 
4,399,000

 

 
6,193,828

 
6,092,512

 
4,399,000

 
 
 
 
 
 
 
 
 
 
 
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)
 
7,057,746

 
6,922,628

 
6,922,628

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

 
600,000

 
 
 
7,057,746

 
7,522,628

 
7,522,628


7
Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
September 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)
 
$
7,013,376

 
$
6,870,614

 
$
6,870,614

 
Common Stock (18,029 shares)
 


 
183,562

 
204,000

 
Preferred Stock A (1,596 shares)
 


 
1,596,126

 
1,758,000

 

 
7,013,376

 
8,650,302

 
8,832,614

 
 
 
 
 
 
 
 
 
 
 
Electronic Systems Protection, Inc. (0%)*
 
Power Protection Systems Manufacturing
 
Common Stock (570 shares)
 
 
 
285,000

 
339,000

 
 
 
 


 
285,000

 
339,000

 
 
 
 
 
 
 
 
 
 
 
Foodstate, Inc. (1%)*
 
Nutritional Supplement Manufacturing and Distribution
 
Subordinated Note (12% Cash, 3.8% PIK, Due 10/16)
 
5,637,678

 
5,568,611

 
5,568,611

 
 
 
5,637,678

 
5,568,611

 
5,568,611

 
 
 
 
 
 
 
 
 
 
 
FrontStream Payments, Inc. (2%)*
 
Payment and Donation Management Product Service Provider
 
Senior Note (8% Cash, 6% PIK, Due 08/18)
 
7,053,667
 
6,913,667
 
6,913,667
 
 
 
 
7,053,667

 
6,913,667

 
6,913,667

 
 
 
 
 
 
 
 
 
 
 
Frozen Specialties, Inc. (2%)*
 
Frozen Foods Manufacturer
 
Subordinated Note (11% Cash, 4% PIK, Due 05/17)
 
10,783,729

 
10,754,687

 
10,754,687

 
 
10,783,729

 
10,754,687

 
10,754,687

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

 
250,000

 
 
 
 
500,000

 
250,000

 
 
 
 
 
 
 
 
 
 
 
Glencoe Business Services Holdings (5%)*
 
Business Process Outsourcing Provider
 
Subordinated Note (12% Cash, 2.5% PIK, Due 06/18)
 
20,383,790

 
20,024,276

 
20,024,276

 
 
20,383,790

 
20,024,276

 
20,024,276

 
 
 
 
 
 
 
 
 
 
 
Grindmaster-Cecilware Corp. (1%)*
 
Food Services Equipment Manufacturer
 
Subordinated Note (12% Cash, 6% PIK, Due 04/16)
 
6,977,571

 
6,939,136

 
6,134,000

 
 
6,977,571

 
6,939,136

 
6,134,000

 
 
 
 
 
 
 
 
 
 
 
Hatch Chile Co., LLC (1%)*
 
Food Products Distributor
 
Senior Note (19% Cash, Due 07/15)
 
3,150,000

 
3,098,400

 
3,098,400

Subordinated Note (14% Cash, Due 07/15)
 
700,000

 
624,797

 
624,797

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

 
336,000

 
 
3,850,000

 
3,872,997

 
4,059,197

 
 
 
 
 
 
 
 
 
 
 
Infrastructure Corporation of America, Inc. (3%)*
 
Roadway Maintenance, Repair and Engineering Services
 
Subordinated Note (12% Cash, 2% PIK, Due 09/18)
 
11,135,478

 
9,594,083

 
9,594,083

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

 
2,409,000

 
 
11,135,478

 
12,005,083

 
12,003,083

 
 
 
 
 
 
 
 
 
 
 
Inland Pipe Rehabilitation Holding Company LLC
(2%)*
 
Cleaning and Repair Services
 
Subordinated Note (13% Cash, 2% PIK, Due 12/16)
 
8,320,902

 
8,118,900

 
8,118,900

Membership Interest Purchase Warrant (3.0%)
 
 
 
853,500

 
2,028,000

 
 
8,320,902

 
8,972,400

 
10,146,900

 
 
 
 
 
 
 
 
 
 
 
IOS Acquisitions, Inc. (4%)*
 
Provider of Oil Country Tubular Goods Inspections and Repair Services
 
Subordinated Note (12% Cash, 2% PIK, Due 06/18)
 
17,264,366

 
16,958,780

 
16,958,780

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

 
1,262,000

 
 
17,264,366

 
18,658,627

 
18,220,780

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

 
1,754,000

 
 


 
58,995

 
1,754,000

 
 
 
 
 
 
 
 
 
 
 
Magpul Industries Corp. (2%)*
 
Firearm Accessories Manufacturer and Distributor
 
Preferred Units (1,470 units)
 
 
 
1,470,000

 
1,939,000

Common Units (30,000 units)
 
 
 
30,000

 
5,961,000

 
 


 
1,500,000

 
7,900,000

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

 
11,775,430

 
11,775,430

 
 
 
12,000,000

 
11,775,430

 
11,775,430

 
 
 
 
 
 
 
 
 
 
 
Media Storm, LLC (2%)*
 
Marketing Services
 
Subordinated Note (12% Cash, 2% PIK, Due 10/17)
 
8,178,118

 
8,115,073

 
8,115,073

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

 
1,331,000

 
 
8,178,118

 
9,292,030

 
9,446,073

 
 
 
 
 
 
 
 
 
 
 
Media Temple, Inc. (3%)*
 
Web Hosting Services
 
Convertible Note (8% Cash, 6% PIK, Due 04/15)
 
4,000,001
 
4,626,721
 
8,312,000
Common Stock Purchase Warrant (35,000 shares)
 
 
 
1,251,000

 
3,636,000

 
 
4,000,001

 
5,877,721

 
11,948,000

 
 
 
 
 
 
 
 
 
 
 
Micross Solutions LLC (3%)*
 
Provider of Semiconductor Products and Services
 
Subordinated Note (12% Cash, 2% PIK, Due 06/18)
 
10,777,399

 
10,634,493

 
10,634,493

Class A-2 Common Units (1,580,559 units)
 
 
 
1,580,599

 
1,444,000

 
 
10,777,399

 
12,215,092

 
12,078,493

 
 
 
 
 
 
 
 
 
 
 

8
Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
September 30, 2013
Portfolio Company
 
Industry
 
Type of Investment(1)(2)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
Minco Technology Labs, LLC (0%)*
 
Semiconductor Distribution
 
Subordinated Note (6.5% Cash, 3.5% PIK, Due 12/16)
 
$
5,685,558

 
$
5,468,103

 
$
2,064,000

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

 
—

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

 
—

 
 
5,685,558

 
5,972,010

 
2,064,000

 
 
 
 
 
 
 
 
 
 
 
My Alarm Center, LLC (3%)*
 
Security Company
 
Subordinated Note (12% Cash, 2.5% PIK, Due 09/17)
 
10,264,194

 
10,180,740

 
10,180,740

 
Preferred Units (2,000,000 units)
 


 
2,000,000

 
2,100,000

 
 
 
10,264,194

 
12,180,740

 
12,280,740

 
 
 
 
 
 
 
 
 
 
 
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)
 
13,128,317

 
12,954,478

 
12,954,478

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

 
1,297,000

 
 
 
13,128,317

 
14,454,478

 
14,251,478

 
 
 
 
 
 
 
 
 
 
 
PowerDirect Marketing, LLC (2%)*
 
Marketing Services
 
Subordinated Note (12% Cash, 2% PIK, Due 12/16)
 
7,273,117

 
6,787,285

 
6,787,285

Common Unit Purchase Warrants
 
 
 
590,200

 
718,000

 
 
7,273,117

 
7,377,485

 
7,505,285

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

 
8,592,412

 
8,592,412

Subordinated Note (10% Cash, 7% PIK, Due 12/17)
 
4,241,781

 
4,188,941

 
4,188,941

 
 
 
12,991,781

 
12,781,353

 
12,781,353

 
 
 
 
 
 
 
 
 
 
 
Snacks Holding Corporation (2%)*
 
Trail Mixes and Nut Manufacturer and Marketer
 
Subordinated Note (12% Cash, 1% PIK, Due 5/20)
 
5,017,930

 
4,981,303

 
4,981,303

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

 
2,366,000

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

 
160,000

Common Units (190,935 units)
 
 
 
150,000

 
1,175,000

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

 
127,000

 
 
 
5,017,930

 
6,225,095

 
8,809,303

 
 
 
 
 
 
 
 
 
 
 
Specialized Tech, Inc. (3%)*(4)
 
Sand and Particulate Removal Equipment Provider for Oil and Gas Companies
 
Subordinated Note (12% Cash, 2% PIK, Due 03/19)
 
11,636,828

 
11,404,337

 
11,416,720

 
Common C Shares (2,000,000 shares)
 
 
 
1,937,421

 
1,939,488

 
 
 
11,636,828

 
13,341,758

 
13,356,208

 
 
 
 
 
 
 
 
 
 
 
SRC, Inc. (1%)*
 
Specialty Chemical Manufacturer
 
Subordinated Notes (12% Cash, 2% PIK, Due 09/14)
 
6,114,680

 
5,977,952

 
2,827,000

Common Stock Purchase Warrants
 
 
 
123,800

 
—

 
 
 
6,114,680

 
6,101,752

 
2,827,000

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

 
301,000

 
 
 


 
20,000

 
301,000

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

 
201,281

 
 
 
 
111,037

 
201,281

 
 
 
 
 
 
 
 
 
 
 
The Krystal Company (0%)*
 
Quick Service Restaurant
 
Class A Units of Limited Partnership (2,000 units)
 
 
 
—

 
1,375,000

 
 
 


 
—

 
1,375,000

 
 
 
 
 
 
 
 
 
 
 
TMR Automotive Service Supply, LLC (1%)*
 
Automotive Supplies
 
Subordinated Note (12% Cash, 1% PIK, Due 03/16)
 
4,250,000

 
4,080,857

 
4,080,857

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

 
360,000

 
 
 
4,250,000

 
4,275,857

 
4,440,857

 
 
 
 
 
 
 
 
 
 
 
Tomich Brothers, LLC (3%)*
 
Squid and Wetfish Processor and Distributor
 
Subordinated Note (12% Cash, 3% PIK, Due 04/16)
 
12,221,591

 
12,022,613

 
12,022,613

 
 
12,221,591

 
12,022,613

 
12,022,613

 
 
 
 
 
 
 
 
 
 
 
Top Knobs USA, Inc. (0%)*
 
Hardware Designer and Distributor
 
Common Stock (26,593 shares)
 
 
 
750,000
 
1,325,000
 
 
 
 
 
750,000

 
1,325,000

 
 
 
 
 
 
 
 
 
 
 
Trinity Consultants Holdings, Inc. (2%)*
 
Air Quality Consulting Services
 
Subordinated Note (12% Cash, 2.0% PIK, Due 04/19)
 
8,284,654

 
8,158,889

 
8,158,889

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

 
928,000

Common Stock (50,000 units)
 
 
 
50,000

 
531,000

 
 
 
8,284,654

 
8,994,664

 
9,617,889

 
 
 
 
 
 
 
 
 
 
 

9
Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
September 30, 2013
Portfolio Company
 
Industry
 
Type of Investment(1)(2)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
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. (3%)*
 
Pipeline Inspection Services
 
Subordinated Note (14%-17.5% Cash, Due 03/14)
 
$
5,810,588

 
5,751,505

 
5,751,505

Common Units (2 units)
 
 
 
337,925

 
897,000

Common Stock Warrants (8 shares)
 
 
 
321,000

 
4,578,000

 
 
 
5,810,588

 
6,410,430

 
11,226,505

 
 
 
 
 
 
 
 
 
 
 
United Biologics, LLC (2%)*
 
Allergy Immunotherapy
 
Subordinated Note (12% Cash, 2% PIK, Due 03/17)
 
10,071,773

 
9,283,557

 
9,283,557

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

 
807,000

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

 
193,000

 
 
10,071,773

 
12,258,987

 
10,420,881

 
 
 
 
 
 
 
 
 
 
 
United Retirement Plan Consultants, Inc. (3%)*
 
Retirement Plan Administrator
 
Subordinated Note (12% Cash, 4% PIK, Due 09/16)
 
12,717,950

 
12,544,070

 
12,544,070

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

 
1,065,000

Common Units (10,000 units)
 
 
 
100,000

 
—

 
 
12,717,950

 
13,544,070

 
13,609,070

 
 
 
 
 
 
 
 
 
 
 
Water Pik, Inc. (2%)*
 
Branded Oral Health and Replacement Shower Head Supplier
 
Second Lien Term Loan (9.8% Cash, Due 01/21)
 
10,000,000
 
9,657,688
 
9,657,688
 
 
 
10,000,000

 
9,657,688

 
9,657,688

 
 
 
 
 
 
 
 
 
 
 
Workforce Software, LLC (4%)*
 
Software Provider
 
Subordinated Note (11% Cash, 5% PIK, Due 11/16)
 
8,000,000

 
7,185,735

 
7,185,735

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

 
1,217,000

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

 
2,285,000

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

 
8,539,000

 
 
 
8,000,000

 
10,408,035

 
19,226,735

 
 
 
 
 
 
 
 
 
 
 
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

 
20,063,926

 
20,063,926

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

 
2,385,000

 
 
20,300,379

 
23,063,926

 
22,448,926

 
 
 
 
 
 
 
 
 
 
 
Xchange Technology Group, LLC (0%)*
 
Used and Refurbished IT Asset Supplier
 
Subordinated Note (8% Cash, Due 06/15)
 
6,389,456

 
5,904,000

 
250,000

Royalty Rights
 
 
 
—

 
—

 
 
6,389,456

 
5,904,000

 
250,000

 
 
 
 
 
 
 
 
 
 
 
Yellowstone Landscape Group, Inc. (7%)*
 
Landscaping Services
 
Subordinated Note (10% Cash, 2.5% PIK, Due 02/19)
 
30,056,250

 
30,056,250

 
30,056,250

 
 
30,056,250

 
30,056,250

 
30,056,250

 
 
 
 
 
 
 
Subtotal Non–Control / Non–Affiliate Investments
 
463,176,708

 
499,409,391

 
519,185,426

 
 
 
 
 
 
 
 
 
 
 
Affiliate Investments:
 
 
 
 
 
 
 
 
 
 
All Aboard America! Holdings Inc. (2%)*
 
Motor Coach Operator
 
Subordinated Note (12% Cash, 3% PIK, Due 10/17)
 
8,829,526

 
8,690,999

 
8,690,999

 
Convertible Preferred Interest in LLC
 
 
 
1,500,000

 
1,653,000

 
 
 
8,829,526

 
10,190,999

 
10,343,999

 
 
 
 
 
 
 
 
 
 
 
American De-Rosa Lamparts, LLC and Hallmark Lighting (1%)*
 
Lighting Wholesale and Distribution
 
Subordinated Note (12% Cash, 6% PIK, Due 6/16)
 
6,735,629

 
5,983,968

 
5,983,968

Membership Units (6,516 units)
 
 
 
620,653

 
—

 
 
 
6,735,629

 
6,604,621

 
5,983,968

 
 
 
 
 
 
 
 
 
 
 
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

 
 
 
 
 
 
 
 
 
 
 

10