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 March 31, 2014
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
ý
Accelerated filer
¨
 
 
 
 
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 May 6, 2014 was 27,903,696.


Table of Contents

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

 
 
Page
 
PART I – FINANCIAL INFORMATION
Item 1.
 
 
 
 
 
 
 
 
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
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
 
 
March 31, 2014
 
December 31, 2013
 
(Unaudited)
 
 
Assets:
 
 
 
Investments at fair value:
 
 
 
Non-Control / Non-Affiliate investments (cost of $565,681,884 and $528,021,069 at March 31, 2014 and December 31, 2013, respectively)
$
578,923,349

 
$
546,043,946

Affiliate investments (cost of $96,920,921 and $107,418,051 at March 31, 2014 and December 31, 2013, respectively)
97,897,491

 
107,536,534

Control investments (cost of $18,254,446 and $18,378,665 at March 31, 2014 and December 31, 2013, respectively)
13,189,579

 
10,792,709

Total investments at fair value
690,010,419

 
664,373,189

Cash and cash equivalents
90,838,247

 
133,304,346

Interest and fees receivable
3,705,941

 
5,255,760

Prepaid expenses and other current assets
3,473,128

 
831,544

Deferred financing fees
10,665,772

 
11,063,716

Property and equipment, net
76,425

 
60,525

Total assets
$
798,769,932

 
$
814,889,080

Liabilities:
 
 
 
Accounts payable and accrued liabilities
$
1,743,559

 
$
7,493,928

Interest payable
1,093,587

 
3,017,645

Taxes payable

 
1,064,544

Deferred income taxes
3,610,610

 
3,514,376

Borrowings under credit facility
10,860,711

 
11,221,246

Notes
149,500,000

 
149,500,000

SBA-guaranteed debentures payable
193,330,441

 
193,285,211

Total liabilities
360,138,908

 
369,096,950

Net Assets:
 
 
 
Common stock, $0.001 par value per share (150,000,000 shares authorized, 27,903,696 and 27,697,483 shares issued and outstanding as of March 31, 2014 and December 31, 2013, respectively)
27,904

 
27,697

Additional paid in capital
408,613,927

 
409,042,893

Investment income in excess of distributions
7,134,163

 
8,610,735

Accumulated realized gains
16,547,531

 
20,665,371

Net unrealized appreciation
6,307,499

 
7,445,434

Total net assets
438,631,024

 
445,792,130

Total liabilities and net assets
$
798,769,932

 
$
814,889,080

Net asset value per share
$
15.72

 
$
16.10


See accompanying notes.


3

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Operations

 
Three Months
Ended
 
Three Months
Ended
 
 
March 31,
2014
 
March 31,
2013
 
Investment income:
 
 
 
 
Loan interest, fee and dividend income:
 
 
 
 
Non-Control / Non-Affiliate investments
$
16,507,765

 
$
17,187,501

 
Affiliate investments
3,576,791

 
2,963,029

 
Control investments
145,360

 
49,371

 
Total loan interest, fee and dividend income
20,229,916

 
20,199,901

 
Payment-in-kind interest income:
 
 
 
 
Non-Control / Non-Affiliate investments
2,997,777

 
3,250,548

 
Affiliate investments
730,657

 
958,379

 
Control investments
5,987

 
5,867

 
Total payment-in-kind interest income
3,734,421

 
4,214,794

 
Interest income from cash and cash equivalent investments
74,608

 
51,240

 
Total investment income
24,038,945

 
24,465,935

 
Operating expenses:
 
 
 
 
Interest and other financing fees
5,139,512

 
5,111,512

 
General and administrative expenses
5,056,092

 
4,120,958

 
Total operating expenses
10,195,604

 
9,232,470

 
Net investment income
13,843,341

 
15,233,465


Realized and unrealized gains (losses) on investments and foreign currency borrowings:
 
 
 
 
Net realized gains (losses):
 
 
 
 
Non-Control / Non-Affiliate investments
272,201

 
578,782

 
Affiliate investments

 
1,274,000

 
Control investments
(208,553
)
 

 
Net realized gains (losses)
63,648

 
1,852,782

 
Net unrealized appreciation (depreciation):
 
 
 
 
Investments
(1,498,470
)
 
1,766,545

 
Foreign currency borrowings
360,535

 

 
Net unrealized appreciation (depreciation)
(1,137,935
)
 
1,766,545

 
Net realized and unrealized gains (losses) on investments and foreign currency borrowings
(1,074,287
)
 
3,619,327

 
Loss on extinguishment of debt

 
(412,673
)
 
Provision for taxes
(266,555
)
 
(20,303
)
 
Net increase in net assets resulting from operations
$
12,502,499


$
18,419,816

 
Net investment income per share—basic and diluted
$
0.50

 
$
0.56

 
Net increase in net assets resulting from operations per share—basic and diluted
$
0.45

 
$
0.67

 
Dividends per share
$
0.54

 
$
0.54

 
Capital gain distributions per share
$
0.15

 
$

 
Weighted average number of shares outstanding—basic and diluted
27,805,108

 
27,433,290

 

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
 
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

 

 

 
15,233,465

 

 

 
15,233,465

Stock-based compensation

 

 
630,006

 

 

 

 
630,006

Realized gain (loss) on investments

 

 

 

 
1,852,782

 
(1,274,000
)
 
578,782

Net unrealized gains on investments / foreign currency

 

 

 

 

 
3,040,545

 
3,040,545

Loss on extinguishment of debt

 

 

 
(412,673
)
 

 

 
(412,673
)
Provision for taxes

 

 

 
(20,303
)
 

 

 
(20,303
)
Dividends / distributions
28,577

 
28

 
796,999

 
(14,868,791
)
 

 

 
(14,071,764
)
Issuance of restricted stock
250,000

 
250

 
(250
)
 

 

 

 

Balance, March 31, 2013
27,563,375

 
$
27,563

 
$
404,748,852

 
$
6,714,859

 
$
3,825,722

 
$
6,996,306

 
$
422,313,302

 
 
Common Stock
 
Additional
Paid In
Capital
 
Investment
Income
in Excess of
Distributions
 
Accumulated
Realized
Gains on Investments
 
Net
Unrealized
Appreciation
 
Total
Net
Assets
 
Number
of Shares
 
Par
Value
 
 
 
 
 
Balance, December 31, 2013
27,697,483

 
$
27,697

 
$
409,042,893

 
$
8,610,735

 
$
20,665,371

 
$
7,445,434

 
$
445,792,130

Net investment income

 

 

 
13,843,341

 

 

 
13,843,341

Stock-based compensation

 

 
1,338,072

 

 

 

 
1,338,072

Realized gain (loss) on investments

 

 

 

 
63,648

 
(555,390
)
 
(491,742
)
Net unrealized loss on investments / foreign currency

 

 

 

 

 
(582,545
)
 
(582,545
)
Provision for taxes

 

 

 
(266,555
)
 

 

 
(266,555
)
Dividends / distributions
27,108

 
27

 
707,263

 
(15,053,358
)
 
(4,181,488
)
 

 
(18,527,556
)
Issuance of restricted stock
273,000

 
273

 
(273
)
 

 

 

 

Common stock withheld for payroll taxes upon vesting of restricted stock
(93,895
)
 
(93
)
 
(2,474,028
)
 

 

 

 
(2,474,121
)
Balance, March 31, 2014
27,903,696

 
$
27,904

 
$
408,613,927

 
$
7,134,163

 
$
16,547,531

 
$
6,307,499

 
$
438,631,024


See accompanying notes.


5

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Cash Flows
 
 
Three Months Ended
 
Three Months Ended
 
March 31, 2014
 
March 31, 2013
Cash flows from operating activities:
 
 
 
Net increase in net assets resulting from operations
$
12,502,499

 
$
18,419,816

Adjustments to reconcile net increase in net assets resulting from operations to net cash used in operating activities:
 
 
 
Purchases of portfolio investments
(77,498,482
)
 
(10,259,545
)
Repayments received/sales of portfolio investments
51,808,786

 
9,274,946

Loan origination and other fees received
1,367,819

 
255,159

Net realized gain on investments
(63,648
)
 
(1,852,782
)
Net unrealized (appreciation) depreciation on investments
1,402,236

 
(1,325,156
)
Net unrealized depreciation on foreign currency borrowings
(360,535
)
 

Deferred income taxes
96,234

 
(441,389
)
Payment-in-kind interest accrued, net of payments received
(1,472,204
)
 
(3,685,061
)
Amortization of deferred financing fees
397,944

 
389,394

Loss on extinguishment of debt

 
412,673

Accretion of loan origination and other fees
(835,536
)
 
(734,094
)
Accretion of loan discounts
(346,201
)
 
(396,661
)
Accretion of discount on SBA-guaranteed debentures payable
45,230

 
44,259

Depreciation expense
9,652

 
9,172

Stock-based compensation
1,338,072

 
630,006

Changes in operating assets and liabilities:
 
 
 
Interest and fees receivable
1,549,819

 
(1,481,469
)
Prepaid expenses and other current assets
(2,641,584
)
 
(190,613
)
Accounts payable and accrued liabilities
(5,750,369
)
 
(4,698,321
)
Interest payable
(1,924,058
)
 
(2,070,906
)
Taxes payable
(1,064,544
)
 
(2,976,193
)
Net cash used in operating activities
(21,438,870
)
 
(676,765
)
Cash flows from investing activities:
 
 
 
Purchases of property and equipment
(25,552
)
 
(10,220
)
Net cash used in investing activities
(25,552
)
 
(10,220
)
Cash flows from financing activities:
 
 
 
Repayments of SBA-guaranteed debentures payable

 
(20,500,000
)
Common stock withheld for payroll taxes upon vesting of restricted stock
(2,474,121
)
 

Cash dividends/distributions paid
(18,527,556
)
 
(14,071,764
)
Net cash used in financing activities
(21,001,677
)
 
(34,571,764
)
Net decrease in cash and cash equivalents
(42,466,099
)
 
(35,258,749
)
Cash and cash equivalents, beginning of period
133,304,346

 
72,300,423

Cash and cash equivalents, end of period
$
90,838,247

 
$
37,041,674

Supplemental disclosure of cash flow information:
 
 
 
Cash paid for interest
$
6,404,312

 
$
6,594,078

Summary of non-cash financing transactions:
 
 
 
Dividends/distributions paid through DRIP share issuances
$
707,290

 
$
797,027


See accompanying notes.


6

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
March 31, 2014
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)
 
$
12,745,683

 
$
12,530,110

 
$
12,530,110

Common Units (1,250 units)
 
 
 
1,250,000

 
1,565,000

 
 
 
12,745,683

 
13,780,110

 
14,095,110

 
 
 
 
 
 
 
 
 
 
 
AGM Automotive, LLC (3%)*
 
Auto Industry Interior Components Supplier
 
Subordinated Note (10% Cash, 3% PIK, Due 07/19)
 
12,060,075

 
11,828,390

 
11,828,390

 
Class A Units (500 units)
 
 
 
500,000

 
500,000

 
 
 
12,060,075

 
12,328,390

 
12,328,390

 
 
 
 
 
 
 
 
 
 
 
Ambient Air Corporation (0%)*
 
Specialty Trade Contractors
 
Subordinated Note (0% Cash, 8% PIK, Due 06/20)
 
483,500

 
66,993

 
142,000

 
 
 
483,500

 
66,993

 
142,000

 
 
 
 
 
 
 
 
 
 
 
Applied-Cleveland Holdings, Inc. (5%)*
 
Oil and Gas Pipeline Infrastructure Inspection Services
 
Subordinated Note (10% Cash, 2% PIK, Due 06/19)
 
18,000,000

 
17,712,461

 
17,712,461

 
Class A Preferred Units (2,129,032 units)
 
 
 
2,129,032

 
2,129,032

 
 
 
18,000,000

 
19,841,493

 
19,841,493

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

 
1,159,000

 
 
 
 
 
516,867

 
1,159,000

 
 
 
 
 
 
 
 
 
 
 
Audio and Video Labs Holdings, Inc. (3%)*
 
Manufacturer and Distributor for Independent Artists and Authors
 
Subordinated Note (12% Cash, 2% PIK, Due 06/18)
 
13,335,479

 
13,120,683

 
13,120,683

Common Units (138 units)
 
 
 
1,300,000

 
1,531,000

 
 
 
13,335,479

 
14,420,683

 
14,651,683

 
 
 
 
 
 
 
 
 
 
 
BFN Operations LLC (4%)*
 
Wholesale Grower and Distributor of Container Grown Shrubs, Trees and Plants
 
Subordinated Note (13% Cash, 4% PIK, Due 11/17)
 
17,725,664

 
17,392,688

 
17,392,688

 
 
 
17,725,664

 
17,392,688

 
17,392,688

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

 
240,000

 
 
 
 
 
237,301

 
240,000

 
 
 
 
 
 
 
 
 
 
 
Cafe Enterprises, Inc. (3%)*
 
Restaurant
 
Subordinated Note (12% Cash, 2% PIK, Due 09/19)
 
12,006,667

 
11,766,667

 
11,766,667

 
 
Series C Preferred Stock (10,000 shares)
 
 
 
1,000,000

 
1,000,000

 
 
 
 
12,006,667

 
12,766,667

 
12,766,667

 
 
 
 
 
 
 
 
 
 
 
Capital Contractors, Inc. (2%)*
 
Janitorial and Facilities Maintenance Services
 
Subordinated Notes (12% Cash, 2% PIK, Due 12/15)
 
9,613,505

 
9,332,086

 
9,332,086

Common Stock Warrants (20 shares)
 
 
 
492,000

 
250,000

 
 
9,613,505

 
9,824,086

 
9,582,086

 
 
 
 
 
 
 
 
 
 
 
Carepoint Resources, Inc. (5%)*
 
Business Process Outsourcing Provider
 
Subordinated Note (12% Cash, 2.5% PIK, Due 06/18)
 
23,661,777

 
23,302,602

 
23,302,602

 
 
 
 
23,661,777

 
23,302,602

 
23,302,602

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

 
1,549,000

 
 
 
 
 
119,735

 
1,549,000

 
 
 
 
 
 
 
 
 
 
 
Chromaflo Technologies Parent LP (3%)*
 
Colorant Manufacturer and Distributor
 
Subordinated Note (8.3% Cash, Due 06/20)
 
10,000,000

 
9,951,473

 
9,951,473

Class A Units (22,561 units)
 
 
 

 
2,239,000

 
 
 
10,000,000

 
9,951,473

 
12,190,473

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

 
15,265,377

 
15,265,377

Preferred Units (900 units)
 
 
 
900,000

 
1,001,000

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

 
138,000

 
 
 
15,505,583

 
16,265,377

 
16,404,377

 
 
 
 
 
 
 
 
 
 
 
Continental Anesthesia Management, LLC (2%)*
 
Physicians Management
Services
 
Subordinated Note (14% Cash, Due 09/14)
 
9,762,500

 
9,689,754

 
9,266,000

Warrant (263 shares)
 
 
 
276,100

 

 
 
9,762,500

 
9,965,854

 
9,266,000

 
 
 
 
 
 
 
 
 
 
 
CRS Reprocessing, LLC (6%)*
 
Fluid
Reprocessing
Services
 
Subordinated Note (12% Cash, 2% PIK, Due 11/15)
 
12,069,344

 
11,974,073

 
11,974,073

Subordinated Note (12% Cash, 2% PIK, Due 11/15)
 
13,310,223

 
12,539,268

 
12,539,268

Series C Preferred Units (30 units)
 
 
 
288,342

 
446,000

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

 
2,649,000

Series D Preferred Units (16 units)
 
 
 
107,074

 
174,000

 
Series E Preferred Units (5 units)
 
 
 
31,651

 
47,000

 
 
 
25,379,567

 
26,699,964

 
27,829,341


7

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
March 31, 2014
Portfolio Company
 
Industry
 
Type of Investment(1)(2)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
 
 
 
 
 
 
 
 
 
 
 
Danville Materials, LLC (2%)*
 
Manufacturer of Dental Products
 
Senior Note (10% Cash, Due 12/18)
 
$
8,000,000

 
$
7,846,682

 
$
7,846,682

 
Common Units (45,492 units)
 
 
 
500,000

 
500,000

 
 
 
8,000,000

 
8,346,682

 
8,346,682

 
 
 
 
 
 
 
 
 
 
 
DataSource Incorporated (1%)*
 
Print Supply Chain Management Services
 
Subordinated Note (12% Cash, 2% PIK, Due 01/18)
 
4,791,459

 
4,664,116

 
4,664,116

 
Common Units (47 units)
 
 
 
1,000,000

 
1,037,000

 
 
 
4,791,459

 
5,664,116

 
5,701,116

 
 
 
 
 
 
 
 
 
 
 
DCWV Acquisition Corporation (1%)*
 
Arts & Crafts and Home Decor Products Designer and Supplier
 
Subordinated Note (12% Cash, 3% PIK, Due 09/17)
 
6,288,363

 
6,150,322

 
3,962,000

 
 
 
6,288,363

 
6,150,322

 
3,962,000

 
 
 
 
 
 
 
 
 
 
 
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)
 
7,128,619

 
7,003,709

 
7,003,709

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

 
357,000

 
 
 
 
7,128,619

 
7,603,709

 
7,360,709

 
 
 
 
 
 
 
 
 
 
 
Eckler's Holdings, Inc. (2%)*
 
Restoration Parts and Accessories for Classic Cars and Trucks
 
Subordinated Note (11% Cash, 4% PIK, Due 07/18)
 
7,156,402

 
7,024,688

 
7,024,688

 
Common Stock (18,029 shares)
 
 
 
183,562

 

 
Preferred Stock A (1,596 shares)
 
 
 
1,596,126

 
1,569,000

 
 
 
7,156,402

 
8,804,376

 
8,593,688

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

 
296,000

 
 
 
 
 
285,000

 
296,000

 
 
 
 
 
 
 
 
 
 
 
Flowchem Ltd. (2%)*
 
Provider of Support Services to Crude Oil Pipeline Operators
 
Subordinated Note (11% Cash, 2% PIK, Due 06/19)
 
7,799,315

 
7,649,536

 
7,649,536

 
Common Units (1,000,000 Units)
 
 
 
1,000,000

 
1,000,000

 
 
 
7,799,315

 
8,649,536

 
8,649,536

 
 
 
 
 
 
 
 
 
 
 
Foodstate, Inc. (1%)*
 
Nutritional Supplement Manufacturing and Distribution
 
Subordinated Note (12% Cash, 3.8% PIK, Due 10/16)
 
5,745,066

 
5,684,976

 
5,684,976

 
 
 
5,745,066

 
5,684,976

 
5,684,976

 
 
 
 
 
 
 
 
 
 
 
FrontStream Payments, Inc. (3%)*
 
Payment and Donation Management Product Service Provider
 
Senior Note (8% Cash, 6% PIK, Due 08/18)
 
11,201,738

 
10,999,232

 
10,999,232

 
 
 
 
11,201,738

 
10,999,232

 
10,999,232

 
 
 
 
 
 
 
 
 
 
 
Frontstreet Facility Solutions, Inc. (2%)*
 
Retail, Restaurant and Commercial Facilities Maintenance
 
Subordinated Note (10% Cash, 3% PIK, Due 07/18)
 
8,398,937

 
8,287,852

 
6,955,000

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

 

 
 
 
 
8,398,937

 
8,537,852

 
6,955,000

 
 
 
 
 
 
 
 
 
 
 
Frozen Specialties, Inc. (2%)*
 
Frozen Foods Manufacturer
 
Subordinated Note (11% Cash, 5% PIK, Due 05/17)
 
11,059,204

 
10,912,118

 
7,427,000

 
 
11,059,204

 
10,912,118

 
7,427,000

 
 
 
 
 
 
 
 
 
 
 
Garden Fresh Restaurant Holding, LLC (0%)*
 
Restaurant
 
Class A Units (5,000 units)
 
 
 
500,000

 
246,000

 
 
 
 
500,000

 
246,000

 
 
 
 
 
 
 
 
 
 
 
Grindmaster-Cecilware Corp. (2%)*
 
Food Services Equipment Manufacturer
 
Subordinated Note (12% Cash, 6% PIK, Due 04/16)
 
7,191,916

 
7,165,604

 
7,165,604

 
 
7,191,916

 
7,165,604

 
7,165,604

 
 
 
 
 
 
 
 
 
 
 
Hatch Chile Co., LLC (2%)*
 
Food Products Distributor
 
Senior Note (19% Cash, Due 11/18)
 
3,071,250

 
3,032,725

 
3,032,725

Subordinated Note (14% Cash, Due 11/18)
 
3,363,750

 
3,116,715

 
3,116,715

Unit Purchase Warrant (7,817 units)
 
 
 
295,800

 
686,000

 
 
6,435,000

 
6,445,240

 
6,835,440

 
 
 
 
 
 
 
 
 
 
 
Infrastructure Corporation of America, Inc. (3%)*
 
Roadway Maintenance, Repair and Engineering Services
 
Subordinated Note (12% Cash, 2% PIK, Due 09/18)
 
11,248,546

 
9,823,600

 
9,823,600

Common Stock Purchase Warrant (487,877 shares)
 
 
 
2,411,000

 
2,201,000

 
 
11,248,546

 
12,234,600

 
12,024,600

 
 
 
 
 
 
 
 
 
 
 

8

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
March 31, 2014
Portfolio Company
 
Industry
 
Type of Investment(1)(2)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
Inland Pipe Rehabilitation Holding Company LLC (2%)*
 
Cleaning and Repair Services
 
Subordinated Note (13% Cash, 2.5% PIK, Due 12/16)
 
$
8,442,465

 
$
8,266,345

 
$
8,266,345

Membership Interest Purchase Warrant (3.0%)
 
 
 
853,500

 
1,127,000

 
 
8,442,465

 
9,119,845

 
9,393,345

 
 
 
 
 
 
 
 
 
 
 
IOS Acquisitions, Inc. (5%)*
 
Provider of Oil Country Tubular Goods Inspections and Repair Services
 
Subordinated Note (12% Cash, 3.8% PIK, Due 06/18)
 
19,685,778

 
19,366,411

 
19,366,411

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

 
1,325,000

 
 
19,685,778

 
21,066,258

 
20,691,411

 
 
 
 
 
 
 
 
 
 
 
Justrite Manufacturing Company, LLC (3%)*
 
Storage Product Developer and Supplier for Hazardous Materials
 
Subordinated Note (10% Cash, 2% PIK, Due 07/19)
 
14,553,972

 
14,344,008

 
14,344,008

 
 
Class A Common Units (1,268 Units)
 
 
 
118,110

 
118,110

 
 
Class A Preferred Units (132 Units)
 
 
 
131,890

 
131,890

 
 
 
 
14,553,972

 
14,594,008

 
14,594,008

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

 
1,884,000

 
 
 
 
 
58,995

 
1,884,000

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

 
2,074,000

 
Common Units (30,000 units)
 
 
 
30,000

 
7,771,000

 
 
 
 
 
1,500,000

 
9,845,000

 
 
 
 
 
 
 
 
 
 
 
Media Storm, LLC (3%)*
 
Marketing Services
 
Subordinated Note (10% Cash, Due 08/19)
 
11,000,000

 
10,915,763

 
10,915,763

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

 
1,688,000

 
 
11,000,000

 
12,092,720

 
12,603,763

 
 
 
 
 
 
 
 
 
 
 
Micross Solutions LLC (3%)*
 
Provider of Semiconductor Products and Services
 
Subordinated Note (12% Cash, 2% PIK, Due 06/18)
 
10,886,830

 
10,755,474

 
10,755,474

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

 
1,378,000

 
 
10,886,830

 
12,336,073

 
12,133,474

 
 
 
 
 
 
 
 
 
 
 
Minco Technology Labs, LLC (0%)*
 
Semiconductor Distribution
 
Subordinated Note (6.5% Cash, 3.5% PIK, Due 12/16)
 
5,881,876

 
5,478,942

 
1,994,000

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

 

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

 

 
 
5,881,876

 
5,982,849

 
1,994,000

 
 
 
 
 
 
 
 
 
 
 
My Alarm Center, LLC (0%)*
 
Security Company
 
Preferred Units (2,000,000 units)
 
 
 
2,000,000

 
2,079,000

 
 
 


 
2,000,000

 
2,079,000

 
 
 
 
 
 
 
 
 
 
 
Novolyte Technologies, Inc. (0%)*
 
Specialty Manufacturing
 
Common Units (24,522 units)
 
 
 
43,905

 
41,000

 
 
 
 
 
43,905

 
41,000

 
 
 
 
 
 
 
 
 
 
 
On Event Services, LLC (2%)*
 
Equipment Rentals to Conference Venues and Live Events
 
Subordinated Note (10% Cash, 2% PIK, Due 01/19)
 
9,796,042

 
9,608,676

 
9,608,676

 
 
 
9,796,042

 
9,608,676

 
9,608,676

 
 
 
 
 
 
 
 
 
 
 
Performance Health & Wellness Holdings, Inc. (2%)*
 
Designer and Manufacturer of Rehabilitation and Wellness Products
 
Subordinated Note (12% Cash, 1% PIK, Due 04/19)
 
6,684,660

 
6,522,378

 
6,522,378

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

 
1,604,000

 
 
 
6,684,660

 
8,022,378

 
8,126,378

 
 
 
 
 
 
 
 
 
 
 
PetroLiance, LLC (3%)*
 
Lubricant, Fuel and Ancillary Products Distributor
 
Subordinated Note (12% Cash, 1% PIK, Due 08/19)
 
12,015,004

 
11,782,863

 
11,782,863

 
Class A Units (1,142,857 Units)
 
 
 
1,200,000

 
1,200,000

 
 
 
12,015,004

 
12,982,863

 
12,982,863

 
 
 
 
 
 
 
 
 
 
 
PowerDirect Marketing, LLC (2%)*
 
Marketing Services
 
Subordinated Note (13% Cash, 2% PIK, Due 12/16)
 
7,346,980

 
6,937,261

 
6,937,261

Common Unit Purchase Warrants
 
 
 
590,200

 
644,000

 
 
7,346,980

 
7,527,461

 
7,581,261

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

 
8,612,574

 
8,612,574

Subordinated Note (10% Cash, 7% PIK, Due 12/17)
 
4,389,464

 
4,343,691

 
4,343,691

 
 
 
13,139,464

 
12,956,265

 
12,956,265

 
 
 
 
 
 
 
 
 
 
 

9

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
March 31, 2014
Portfolio Company
 
Industry
 
Type of Investment(1)(2)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
Snacks Holding Corporation (2%)*
 
Trail Mixes and Nut Manufacturer and Marketer
 
Subordinated Note (12% Cash, 1% PIK, Due 05/20)
 
$
5,043,470

 
$
5,008,670

 
$
5,008,670

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

 
2,588,000

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

 
226,000

Common Units (190,935 units)
 
 
 
150,000

 
1,654,000

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

 
179,000

 
 
 
5,043,470

 
6,252,462

 
9,655,670

 
 
 
 
 
 
 
 
 
 
 
SPC Partners V, LP (0%)*(4)
 
Multi-Sector Holdings
 
0.7% Limited Partnership Interest
 
 
 
545,801

 
545,801

 
 
 
 
 
 
545,801

 
545,801

 
 
 
 
 
 
 
 
 
 
 
Specialized Desanders, Inc. (3%)* (4)
 
Sand and Particulate Removal Equipment Provider for Oil and Gas Companies
 
Subordinated Notes (12% Cash, 2% PIK, Due 03/19)
 
11,750,144

 
11,533,108

 
11,129,920

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

 
1,832,000

 
 
 
11,750,144

 
13,470,529

 
12,961,920

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

 
478,000

 
 
 
 
 
 
20,000

 
478,000

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

 
2,075,000

 
 
 
 
 
 

 
2,075,000

 
 
 
 
 
 
 
 
 
 
 
Tomich Brothers, LLC (3%)*
 
Squid and Wetfish Processor and Distributor
 
Subordinated Note (5% Cash, 10% PIK, Due 04/16)
 
12,699,312

 
12,535,569

 
11,065,000

 
 
 
12,699,312

 
12,535,569

 
11,065,000

 
 
 
 
 
 
 
 
 
 
 
Top Knobs USA, Inc. (0%)*
 
Hardware Designer and Distributor
 
Common Stock (26,593 shares)
 
 
 
402,828

 
1,428,828

 
 
 
 
 
402,828

 
1,428,828

 
 
 
 
 
 
 
 
 
 
 
Trinity Consultants Holdings, Inc. (2%)*
 
Air Quality Consulting Services
 
Subordinated Note (12% Cash, 2% PIK, Due 04/19)
 
8,368,775

 
8,254,742

 
8,254,742

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

 
989,000

Common Stock (50,000 units)
 
 
 
50,000

 
787,000

 
 
 
8,368,775

 
9,090,517

 
10,030,742

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

 
195,881

 
Class B Units (82 units)
 
 
 
3,647

 
7,089

 
Class E Units (838 units)
 
 
 
101,532

 
112,555

 
 
 
 
 
 
174,481

 
315,525

 
 
 
 
 
 
 
 
 
 
 
United Biologics, LLC (3%)*
 
Allergy Immunotherapy
 
Subordinated Note (12% Cash, 2% PIK, Due 03/17)
 
12,675,846

 
11,931,277

 
11,931,277

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

 
851,000

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

 
137,000

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

 

 
Class A & Class B Unit Purchase Warrants
 
 
 
838,117

 
200,000

 
 
 
 
12,675,846

 
14,906,707

 
13,119,277

 
 
 
 
 
 
 
 
 
 
 
United Retirement Plan Consultants, Inc. (3%)*
 
Retirement Plan Administrator
 
Subordinated Note (12% Cash, 4% PIK, Due 09/16)
 
12,976,436

 
12,827,752

 
12,827,752

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

 
978,000

 
Common Units (10,000 units)
 
 
 
100,000

 

 
 
 
 
12,976,436

 
13,827,752

 
13,805,752

 
 
 
 
 
 
 
 
 
 
 
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

 
9,673,630

 
9,673,630

 
 
 
 
10,000,000

 
9,673,630

 
9,673,630

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

 
7,293,099

 
8,000,000

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

 
1,214,000

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

 
2,739,000

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

 
10,000,000

 
 
 
 
8,000,000

 
10,515,399

 
21,953,000

 
 
 
 
 
 
 
 
 
 
 

10

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
March 31, 2014
Portfolio Company
 
Industry
 
Type of Investment(1)(2)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
WSO Holdings, LP (5%)*
 
Organic/Fair Trade Sugar, Syrup, Nectar and Honey Producer
 
Subordinated Note (12% Cash, 2% PIK, Due 10/17)
 
$
20,198,264

 
$
19,985,624

 
$
19,985,624

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

 
2,306,000

 
 
20,198,264

 
22,985,624

 
22,291,624

 
 
 
 
 
 
 
 
 
 
 
Xchange Technology Group, LLC (0%)*
 
Used and Refurbished IT Asset Supplier
 
Subordinated Note (8% Cash, Due 06/15)
 
6,658,231

 
5,904,000

 

Royalty Rights
 
 
 

 

 
 
6,658,231

 
5,904,000

 

 
 
 
 
 
 
 
 
 
 
 
Yellowstone Landscape Group, Inc. (5%)*
 
Landscaping Services
 
Subordinated Note (10% Cash, 2.5% PIK, Due 02/19)
 
20,000,001

 
20,020,643

 
20,020,643

 
 
20,000,001

 
20,020,643

 
20,020,643

 
 
 
 
 
 
 
Subtotal Non–Control / Non–Affiliate Investments
 
530,528,115

 
565,681,884

 
578,923,349

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Affiliate Investments:
 
 
 
 
 
 
 
 
 
 
All Aboard America! Holdings Inc. (2%)*
 
Motor Coach Operator
 
Subordinated Note (12% Cash, 3% PIK, Due (10/17)
 
8,964,289

 
8,839,713

 
8,839,713

 
Convertible Preferred Interest in LLC
 
 
 
1,500,000

 
1,500,000

 
 
 
8,964,289

 
10,339,713

 
10,339,713

 
 
 
 
 
 
 
 
 
 
 
American De-Rosa Lamparts, LLC and Hallmark Lighting (2%)*
 
Lighting Wholesale and Distribution
 
Subordinated Note (12% Cash, 6% PIK, Due 06/16)
 
6,942,541

 
6,920,471

 
6,920,471

Membership Units (8,364 units)
 
 
 
620,653

 

 
 
 
6,942,541

 
7,541,124

 
6,920,471

 
 
 
 
 
 
 
 
 
 
 
AP Services, Inc. (0%)*
 
Fluid Sealing Supplies and Services
 
Class A Units (933 units)
 
 
 
156,953

 
253,004

Class B Units (496 units)
 
 
 

 
134,381

 
 
 
 
156,953

 
387,385

 
 
 
 
 
 
 
 
 
 
 
Asset Point, LLC (2%)*
 
Asset Management Software Provider
 
Senior Note (12% Cash, 5% PIK, Due 03/14)
 
6,716,285

 
6,716,283

 
6,716,283

Subordinated Note (12% Cash, 2% PIK, Due 07/15)
 
646,368