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, 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 August 6, 2014 was 27,939,795.


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
 
 
June 30, 2014
 
December 31, 2013
 
(Unaudited)
 
 
Assets:
 
 
 
Investments at fair value:
 
 
 
Non-Control / Non-Affiliate investments (cost of $600,208,555 and $528,021,069 at June 30, 2014 and December 31, 2013, respectively)
$
612,117,936

 
$
546,043,946

Affiliate investments (cost of $109,139,313 and $107,418,051 at June 30, 2014 and December 31, 2013, respectively)
110,910,292

 
107,536,534

Control investments (cost of $18,241,876 and $18,378,665 at June 30, 2014 and December 31, 2013, respectively)
13,248,925

 
10,792,709

Total investments at fair value
736,277,153

 
664,373,189

Cash and cash equivalents
79,593,085

 
133,304,346

Interest and fees receivable
4,069,696

 
5,255,760

Prepaid expenses and other current assets
592,716

 
831,544

Deferred financing fees
10,263,133

 
11,063,716

Property and equipment, net
75,238

 
60,525

Total assets
$
830,871,021

 
$
814,889,080

Liabilities:
 
 
 
Accounts payable and accrued liabilities
$
3,216,190

 
$
7,493,928

Interest payable
3,022,415

 
3,017,645

Taxes payable
408,686

 
1,064,544

Deferred income taxes
4,317,331

 
3,514,376

Borrowings under credit facility
31,255,980

 
11,221,246

Notes
149,500,000

 
149,500,000

SBA-guaranteed debentures payable
193,376,003

 
193,285,211

Total liabilities
385,096,605

 
369,096,950

Commitments and contingencies (Note 6)
 
 
 
Net Assets:
 
 
 
Common stock, $0.001 par value per share (150,000,000 shares authorized, 27,939,795 and 27,697,483 shares issued and outstanding as of June 30, 2014 and December 31, 2013, respectively)
27,940

 
27,697

Additional paid in capital
410,823,140

 
409,042,893

Investment income in excess of distributions
6,132,527

 
8,610,735

Accumulated realized gains
24,051,059

 
20,665,371

Net unrealized appreciation
4,739,750

 
7,445,434

Total net assets
445,774,416

 
445,792,130

Total liabilities and net assets
$
830,871,021

 
$
814,889,080

Net asset value per share
$
15.95

 
$
16.10


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,
2014
 
June 30,
2013
 
June 30,
2014
 
June 30,
2013
Investment income:
 
 
 
 
 
 
 
Loan interest, fee and dividend income:
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
$
17,292,568

 
$
19,696,422

 
$
33,800,333

 
$
36,883,923

Affiliate investments
2,799,592

 
3,246,452

 
6,376,383

 
6,209,481

Control investments
643,835

 
46,194

 
789,195

 
95,565

Total loan interest, fee and dividend income
20,735,995

 
22,989,068

 
40,965,911

 
43,188,969

Payment-in-kind interest income:
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
3,404,283

 
3,234,925

 
6,402,060

 
6,485,473

Affiliate investments
736,516

 
981,731

 
1,467,173

 
1,940,110

Control investments
6,084

 
5,961

 
12,071

 
11,828

Total payment-in-kind interest income
4,146,883

 
4,222,617

 
7,881,304

 
8,437,411

Interest income from cash and cash equivalent investments
56,888

 
44,463

 
131,496

 
95,703

Total investment income
24,939,766

 
27,256,148

 
48,978,711

 
51,722,083

Operating expenses:
 
 
 
 
 
 
 
Interest and other financing fees
5,158,543

 
4,989,523

 
10,298,055

 
10,101,035

General and administrative expenses
5,122,875

 
5,994,702

 
10,178,967

 
10,115,660

Total operating expenses
10,281,418

 
10,984,225

 
20,477,022

 
20,216,695

Net investment income
14,658,348

 
16,271,923


28,501,689

 
31,505,388

Realized and unrealized gains (losses) on investments and foreign currency borrowings:
 
 
 
 
 
 
 
Net realized gains (losses):
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
11,462,275

 
2,428,668

 
11,734,476

 
3,007,450

Affiliate investments
228,252

 
3,321,999

 
228,252

 
4,595,999

Control investments

 
(2,290,919
)
 
(208,553
)
 
(2,290,919
)
Net realized gains (losses)
11,690,527

 
3,459,748

 
11,754,175

 
5,312,530

Net unrealized appreciation (depreciation):
 
 
 
 
 
 
 
Investments
(1,172,480
)
 
2,116,796

 
(2,670,950
)
 
3,883,341

Foreign currency borrowings
(395,269
)
 

 
(34,734
)
 

Net unrealized appreciation (depreciation)
(1,567,749
)
 
2,116,796

 
(2,705,684
)
 
3,883,341

Net realized and unrealized gains (losses) on investments and foreign currency borrowings
10,122,778

 
5,576,544

 
9,048,491

 
9,195,871

Loss on extinguishment of debt

 

 

 
(412,673
)
Provision for taxes
(586,788
)
 

 
(853,343
)
 
(20,303
)
Net increase in net assets resulting from operations
$
24,194,338


$
21,848,467

 
$
36,696,837

 
$
40,268,283

Net investment income per share—basic and diluted
$
0.53

 
$
0.59

 
$
1.02

 
$
1.15

Net increase in net assets resulting from operations per share—basic and diluted
$
0.87

 
$
0.79

 
$
1.32

 
$
1.46

Dividends per share
$
0.54

 
$
0.54

 
$
1.08

 
$
1.08

Capital gain distributions per share
$
0.15

 
$

 
$
0.30

 
$

Weighted average number of shares outstanding—basic and diluted
27,910,468

 
27,569,524

 
27,857,788

 
27,501,407


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

 

 

 
31,505,388

 

 

 
31,505,388

Stock-based compensation

 

 
1,675,896

 

 

 

 
1,675,896

Realized gain (loss) on investments

 

 

 

 
5,312,530

 
(3,863,315
)
 
1,449,215

Net unrealized gains on investments / foreign currency

 

 

 

 

 
7,746,656

 
7,746,656

Loss on extinguishment of debt

 

 

 
(412,673
)
 

 

 
(412,673
)
Provision for taxes

 

 

 
(20,303
)
 

 

 
(20,303
)
Dividends / distributions
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

 
 
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

 

 

 
28,501,689

 

 

 
28,501,689

Stock-based compensation

 

 
2,828,410

 

 

 

 
2,828,410

Realized gain (loss) on investments

 

 

 

 
11,754,175

 
(11,616,980
)
 
137,195

Net unrealized loss on investments / foreign currency

 

 

 

 

 
8,911,296

 
8,911,296

Provision for taxes

 

 

 
(853,343
)
 

 

 
(853,343
)
Dividends / distributions
53,577

 
54

 
1,426,147

 
(30,126,554
)
 
(8,368,487
)
 

 
(37,068,840
)
Issuance of restricted stock
282,630

 
282

 
(282
)
 

 

 

 

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

 

 

 
(2,474,121
)
Balance, June 30, 2014
27,939,795

 
$
27,940

 
$
410,823,140

 
$
6,132,527

 
$
24,051,059

 
$
4,739,750

 
$
445,774,416


See accompanying notes.


5

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Cash Flows
 
 
Six Months Ended
 
Six Months Ended
 
June 30, 2014
 
June 30, 2013
Cash flows from operating activities:
 
 
 
Net increase in net assets resulting from operations
$
36,696,837

 
$
40,268,283

Adjustments to reconcile net increase in net assets resulting from operations to net cash used in operating activities:
 
 
 
Purchases of portfolio investments
(164,840,342
)
 
(37,112,821
)
Repayments received/sales of portfolio investments
105,026,498

 
111,695,347

Loan origination and other fees received
2,838,426

 
621,440

Net realized gain on investments
(11,754,175
)
 
(5,312,530
)
Net unrealized depreciation (appreciation) on investments
1,867,995

 
(4,914,099
)
Net unrealized depreciation on foreign currency borrowings
34,734

 

Deferred income taxes
802,955

 
1,030,758

Payment-in-kind interest accrued, net of payments received
(2,614,188
)
 
(5,263,335
)
Amortization of deferred financing fees
800,583

 
766,221

Loss on extinguishment of debt

 
412,673

Accretion of loan origination and other fees
(1,783,603
)
 
(2,243,128
)
Accretion of loan discounts
(644,575
)
 
(765,628
)
Accretion of discount on SBA-guaranteed debentures payable
90,792

 
88,843

Depreciation expense
20,114

 
19,085

Stock-based compensation
2,828,410

 
1,675,896

Changes in operating assets and liabilities:
 
 
 
Interest and fees receivable
1,186,064

 
(1,528,838
)
Prepaid expenses and other current assets
238,828

 
(106,645
)
Accounts payable and accrued liabilities
(4,277,738
)
 
(1,954,469
)
Interest payable
4,770

 
(181,387
)
Taxes payable
(655,858
)
 
(2,976,193
)
Net cash (provided by) used in operating activities
(34,133,473
)
 
94,219,473

Cash flows from investing activities:
 
 
 
Purchases of property and equipment
(34,827
)
 
(17,145
)
Net cash used in investing activities
(34,827
)
 
(17,145
)
Cash flows from financing activities:
 
 
 
Repayments of SBA-guaranteed debentures payable

 
(20,500,000
)
Borrowings under credit facility
20,000,000

 

Financing fees paid

 
(684,294
)
Common stock withheld for payroll taxes upon vesting of restricted stock
(2,474,121
)
 

Cash dividends/distributions paid
(37,068,840
)
 
(28,187,394
)
Net cash used in financing activities
(19,542,961
)
 
(49,371,688
)
Net increase (decrease) in cash and cash equivalents
(53,711,261
)
 
44,830,640

Cash and cash equivalents, beginning of period
133,304,346

 
72,300,423

Cash and cash equivalents, end of period
$
79,593,085

 
$
117,131,063

Supplemental disclosure of cash flow information:
 
 
 
Cash paid for interest
$
9,008,748

 
$
9,084,547

Summary of non-cash financing transactions:
 
 
 
Dividends/distributions paid through DRIP share issuances
$
1,426,201

 
$
1,570,161


See accompanying notes.


6

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
June 30, 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 Producer
 
Subordinated Note (12% Cash, 1.5% PIK, Due 06/19)
 
$
12,794,010

 
$
12,585,954

 
$
12,585,954

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

 
1,961,000

 
 
 
12,794,010

 
13,835,954

 
14,546,954

 
 
 
 
 
 
 
 
 
 
 
AGM Automotive, LLC (6%)*
 
Auto Industry Interior Components Supplier
 
Subordinated Note (10% Cash, 3% PIK, Due 07/19)
 
25,195,122

 
24,711,960

 
24,711,960

 
Class A Units (1,500 units)
 
 
 
1,500,000

 
1,500,000

 
 
 
25,195,122

 
26,211,960

 
26,211,960

 
 
 
 
 
 
 
 
 
 
 
Applied-Cleveland Holdings, Inc. (6%)*
 
Oil and Gas Pipeline Infrastructure Inspection Services
 
Subordinated Note (10% Cash, 2% PIK, Due 06/19)
 
23,000,000

 
22,649,249

 
22,649,249

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

 
2,129,032

 
 
 
23,000,000

 
24,778,281

 
24,778,281

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

 
1,327,000

 
 
 
 
 
516,867

 
1,327,000

 
 
 
 
 
 
 
 
 
 
 
Audio and Video Labs Holdings, Inc. (3%)*
 
Manufacturer and Distributor for Independent Artists and Authors
 
Subordinated Note (12% Cash, 2% PIK, Due 06/18)
 
13,403,010

 
13,198,084

 
13,198,084

Common Stock (138 shares)
 
 
 
1,300,000

 
1,624,000

 
 
 
13,403,010

 
14,498,084

 
14,822,084

 
 
 
 
 
 
 
 
 
 
 
BFN Operations LLC (4%)*
 
Wholesale Grower and Distributor of Container Grown Shrubs, Trees and Plants
 
Subordinated Note (13% Cash, 4% PIK, Due 11/17)
 
17,905,495

 
17,590,096

 
17,590,096

 
 
 
17,905,495

 
17,590,096

 
17,590,096

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

 
240,000

 
 
 
 
 
237,301

 
240,000

 
 
 
 
 
 
 
 
 
 
 
Cafe Enterprises, Inc. (3%)*
 
Restaurant
 
Subordinated Note (12% Cash, 2% PIK, Due 09/19)
 
12,067,469

 
11,835,328

 
11,835,328

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

 
1,000,000

 
 
 
 
12,067,469

 
12,835,328

 
12,835,328

 
 
 
 
 
 
 
 
 
 
 
Capital Contractors, Inc. (2%)*
 
Janitorial and Facilities Maintenance Services
 
Subordinated Notes (12% Cash, 2% PIK, Due 12/15)
 
9,662,189

 
9,417,496

 
9,417,496

Common Stock Warrants (20 shares)
 
 
 
492,000

 
200,000

 
 
9,662,189

 
9,909,496

 
9,617,496

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

 
1,547,000

 
 
 
 
 
119,735

 
1,547,000

 
 
 
 
 
 
 
 
 
 
 
Chromaflo Technologies Parent LP (3%)*
 
Colorant Manufacturer and Distributor
 
Second Lien Term Loan (8.3% Cash, Due 06/20)
 
10,000,000

 
9,952,976

 
9,952,976

Class A Units (22,561 units)
 
 
 

 
2,245,000

 
 
 
10,000,000

 
9,952,976

 
12,197,976

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

 
15,276,415

 
15,276,415

Preferred Stock (900 shares)
 
 
 
900,000

 
987,000

Common Stock (1,000,000 shares)
 
 
 
100,000

 

 
 
 
15,505,583

 
16,276,415

 
16,263,415

 
 
 
 
 
 
 
 
 
 
 
Continental Anesthesia Management, LLC (2%)*
 
Physicians Management
Services
 
Subordinated Note (8% Cash, 6% PIK Due 09/14)
 
9,978,738

 
9,936,501

 
9,936,501

Warrant (263 shares)
 
 
 
276,100

 
164,000

 
 
9,978,738

 
10,212,601

 
10,100,501

 
 
 
 
 
 
 
 
 
 
 
CRS Reprocessing, LLC (6%)*
 
Fluid
Reprocessing
Services
 
Subordinated Note (12% Cash, 2% PIK, Due 11/15)
 
12,130,464

 
12,066,015

 
12,066,015

Subordinated Note (12% Cash, 2% PIK, Due 11/15)
 
13,377,627

 
12,705,812

 
12,705,812

Series C Preferred Units (30 units)
 
 
 
288,342

 
395,000

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

 
1,064,000

Series D Preferred Units (16 units)
 
 
 
107,074

 
147,000

 
Series E Preferred Units (5 units)
 
 
 
31,651

 
47,000

 
 
 
25,508,091

 
26,958,450

 
26,424,827

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

7

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
June 30, 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

 
$
7,853,531

 
$
7,853,531

 
Common Units (45,492 units)
 
 
 
500,000

 
500,000

 
 
 
8,000,000

 
8,353,531

 
8,353,531

 
 
 
 
 
 
 
 
 
 
 
DataSource Incorporated (1%)*
 
Print Supply Chain Management Services
 
Subordinated Note (12% Cash, 2% PIK, Due 01/18)
 
4,815,683

 
4,695,187

 
4,695,187

 
Common Units (47 units)
 
 
 
1,000,000

 
910,000

 
 
 
4,815,683

 
5,695,187

 
5,605,187

 
 
 
 
 
 
 
 
 
 
 
DCWV Acquisition Corporation (1%)*
 
Arts & Crafts and Home Decor Products Designer and Supplier
 
Subordinated Note (12% Cash, 3% PIK, Due 09/17) (5)
 
6,336,170

 
6,155,655

 
4,279,000

 
 
 
6,336,170

 
6,155,655

 
4,279,000

 
 
 
 
 
 
 
 
 
 
 
DialogueDirect, Inc. (5%)*
 
Business Process Outsourcing Provider
 
Subordinated Note (12% Cash, 2.5% PIK, Due 06/18)
 
23,811,621

 
23,468,952

 
23,468,952

 
 
 
 
23,811,621

 
23,468,952

 
23,468,952

 
 
 
 
 
 
 
 
 
 
 
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)
 
7,164,322

 
7,044,747

 
7,044,747

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

 
237,000

 
 
 
 
7,164,322

 
7,644,747

 
7,281,747

 
 
 
 
 
 
 
 
 
 
 
Eckler's Holdings, Inc. (2%)*
 
Restoration Parts and Accessories for Classic Cars and Trucks
 
Subordinated Note (11% Cash, 4% PIK, Due 07/18)
 
7,229,005

 
7,103,044

 
7,103,044

 
Common Stock (18,029 shares)
 
 
 
183,562

 

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

 
1,449,000

 
 
 
7,229,005

 
8,882,732

 
8,552,044

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

 
333,000

 
 
 
 
 
285,000

 
333,000

 
 
 
 
 
 
 
 
 
 
 
Flowchem Ltd. (2%)*
 
Provider of Support Services to Crude Oil Pipeline Operators
 
Subordinated Note (11% Cash, 2% PIK, Due 06/19)
 
7,838,205

 
7,693,791

 
7,693,791

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

 
938,000

 
 
 
7,838,205

 
8,693,791

 
8,631,791

 
 
 
 
 
 
 
 
 
 
 
FrontStream Payments, Inc. (3%)*
 
Payment and Donation Management Product Service Provider
 
Senior Note (8% Cash, 6% PIK, Due 08/18)
 
11,338,074

 
11,145,268

 
11,145,268

 
 
 
 
11,338,074

 
11,145,268

 
11,145,268

 
 
 
 
 
 
 
 
 
 
 
Frontstreet Facility Solutions, Inc. (2%)*
 
Retail, Restaurant and Commercial Facilities Maintenance
 
Subordinated Note (10% Cash, 3% PIK, Due 07/18)
 
8,462,629

 
8,356,936

 
7,108,000

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

 

 
 
 
 
8,462,629

 
8,606,936

 
7,108,000

 
 
 
 
 
 
 
 
 
 
 
Frozen Specialties, Inc. (2%)*
 
Frozen Foods Manufacturer
 
Subordinated Note (10% Cash, 4% PIK, Due 05/17) (5)
 
11,673,192

 
11,673,192

 
9,456,000

 
 
11,673,192

 
11,673,192

 
9,456,000

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

 
136,000

 
 
 
 
500,000

 
136,000

 
 
 
 
 
 
 
 
 
 
 
Grindmaster-Cecilware Corp. (2%)*
 
Food Services Equipment Manufacturer
 
Subordinated Note (12% Cash, 6% PIK, Due 04/16)
 
7,301,546

 
7,281,547

 
7,281,547

 
 
7,301,546

 
7,281,547

 
7,281,547

 
 
 
 
 
 
 
 
 
 
 
Hatch Chile Co., LLC (2%)*
 
Food Products Distributor
 
Subordinated Note (19% Cash, Due 11/18)
 
3,031,875

 
3,000,357

 
3,000,357

Subordinated Note (14% Cash, Due 11/18)
 
3,320,625

 
3,091,762

 
3,091,762

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

 
649,000

 
 
6,352,500

 
6,387,919

 
6,741,119

 
 
 
 
 
 
 
 
 
 
 
Hickman's Egg Ranch, Inc. (3%)*
 
Egg Producer
 
Subordinated Note (12% Cash, 1% PIK, Due 06/19)
 
15,004,583

 
14,704,583

 
14,704,583

 
 
15,004,583

 
14,704,583

 
14,704,583

 
 
 
 
 
 
 
 
 
 
 
HKW Capital Partners (0%)*(4)
 
Multi-Sector Holdings
 
Limited Partnership Interest
 
 
 
599,225

 
599,225

 
 
 
 
 
 
599,225

 
599,225

 
 
 
 
 
 
 
 
 
 
 

8

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
June 30, 2014
Portfolio Company
 
Industry
 
Type of Investment(1)(2)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
Infrastructure Corporation of America, Inc. (3%)*
 
Roadway Maintenance, Repair and Engineering Services
 
Subordinated Note (12% Cash, 2% PIK, Due 09/18)
 
$
11,305,509

 
$
9,941,421

 
$
9,941,421

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

 
2,390,000

 
 
11,305,509

 
12,352,421

 
12,331,421

 
 
 
 
 
 
 
 
 
 
 
Inland Pipe Rehabilitation Holding Company LLC (2%)*
 
Cleaning and Repair Services
 
Subordinated Note (13% Cash, 2.5% PIK, Due 12/16)
 
8,495,817

 
8,333,272

 
8,333,272

Membership Interest Purchase Warrant (3.0%)
 
 
 
853,500

 
835,000

 
 
8,495,817

 
9,186,772

 
9,168,272

 
 
 
 
 
 
 
 
 
 
 
IOS Acquisitions, Inc. (5%)*
 
Provider of Oil Country Tubular Goods Inspections and Repair Services
 
Subordinated Note (12% Cash, 3.5% PIK, Due 06/18)
 
19,860,456

 
19,555,765

 
19,555,765

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

 
1,438,000

 
 
19,860,456

 
21,255,612

 
20,993,765

 
 
 
 
 
 
 
 
 
 
 
Justrite Manufacturing Company, LLC (3%)*
 
Storage Product Developer and Supplier for Hazardous Materials
 
Subordinated Note (10% Cash, 2% PIK, Due 07/19)
 
14,627,550

 
14,425,310

 
14,425,310

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

 
118,110

 
 
Class A Preferred Units (132 units)
 
 
 
131,890

 
131,890

 
 
 
 
14,627,550

 
14,675,310

 
14,675,310

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

 
2,205,000

 
 
 
 
 
58,995

 
2,205,000

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

 
2,146,000

 
Common Units (30,000 units)
 
 
 
30,000

 
6,457,000

 
 
 
 
 
1,500,000

 
8,603,000

 
 
 
 
 
 
 
 
 
 
 
Media Storm, LLC (2%)*
 
Marketing Services
 
Subordinated Note (10% Cash, Due 08/19)
 
8,000,000

 
7,920,035

 
7,920,035

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

 
1,773,000

 
 
8,000,000

 
9,096,992

 
9,693,035

 
 
 
 
 
 
 
 
 
 
 
Micross Solutions LLC (3%)*
 
Provider of Semiconductor Products and Services
 
Subordinated Note (12% Cash, 2% PIK, Due 06/18)
 
10,941,962

 
10,816,642

 
10,816,642

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

 
1,563,000

 
 
10,941,962

 
12,397,241

 
12,379,642

 
 
 
 
 
 
 
 
 
 
 
Minco Technology Labs, LLC (1%)*
 
Semiconductor Distribution
 
Subordinated Note (6.5% Cash, 3.5% PIK, Due 12/16) (6)
 
6,030,557

 
5,484,627

 
3,000,000

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

 

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

 

 
 
6,030,557

 
5,988,534

 
3,000,000

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

 
1,947,000

 
 
 


 
2,000,000

 
1,947,000

 
 
 
 
 
 
 
 
 
 
 
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)
 
9,845,484

 
9,665,943

 
9,665,943

 
 
 
9,845,484

 
9,665,943

 
9,665,943

 
 
 
 
 
 
 
 
 
 
 
PCX Aerostructures, LLC (5%)*
 
Aerospace Component Manufacturer
 
Subordinated Note (11% Cash, 3% PIK, Due 04/19)
 
19,130,125

 
18,763,736

 
18,763,736

 
Series A Preferred Stock (3,980 shares)
 
 
 
3,980,000

 
3,980,000

 
Class A Common Stock (80,000 shares)
 
 
 
20,000

 
20,000

 
 
 
19,130,125

 
22,763,736

 
22,763,736

 
 
 
 
 
 
 
 
 
 
 
Performance Health & Wellness Holdings, Inc. (2%)*
 
Designer and Manufacturer of Rehabilitation and Wellness Products
 
Subordinated Note (12% Cash, 1% PIK, Due 04/19)
 
6,701,556

 
6,545,314

 
6,614,000

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

 
1,733,000

 
 
 
6,701,556

 
8,045,314

 
8,347,000

 
 
 
 
 
 
 
 
 
 
 
PetroLiance, LLC (3%)*
 
Lubricant, Fuel and Ancillary Products Distributor
 
Subordinated Note (12% Cash, 0.5% PIK, Due 08/19)
 
12,030,196

 
11,806,150

 
11,806,150

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

 
2,117,000

 
 
 
12,030,196

 
13,006,150

 
13,923,150

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

9

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
June 30, 2014
Portfolio Company
 
Industry
 
Type of Investment(1)(2)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
PowerDirect Marketing, LLC (1%)*
 
Marketing Services
 
Subordinated Note (13% Cash, 2% PIK, Due 12/16)
 
$
6,982,947

 
$
6,613,149

 
$
5,990,000

Common Unit Purchase Warrants
 
 
 
590,200

 

 
 
6,982,947

 
7,203,349

 
5,990,000

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

 
8,623,153

 
8,623,153

Subordinated Note (10% Cash, 7% PIK, Due 12/17)
 
4,467,763

 
4,425,657

 
4,425,657

 
 
 
13,217,763

 
13,048,810

 
13,048,810

 
 
 
 
 
 
 
 
 
 
 
Snacks Holding Corporation (3%)*
 
Trail Mixes and Nut Manufacturer and Marketer
 
Subordinated Note (12% Cash, 1% PIK, Due 05/20)
 
5,056,219

 
5,022,373

 
5,056,219

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

 
3,189,000

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

 
744,000

Common Units (190,935 units)
 
 
 
150,000

 
5,451,000

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

 
591,000

 
 
 
5,056,219

 
6,266,165

 
15,031,219

 
 
 
 
 
 
 
 
 
 
 
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 Note (12% Cash, 2% PIK, Due 03/19)
 
11,806,363

 
11,597,404

 
11,230,663

Class C Common Stock (2,000,000 shares)
 
 
 
1,937,421

 
2,699,000

 
 
 
11,806,363

 
13,534,825

 
13,929,663

 
 
 
 
 
 
 
 
 
 
 
Stella Environmental Services, LLC (0%)*
 
Waste Transfer Stations
 
Common Stock Purchase Warrants (2,500 shares)
 
 
 
20,000

 
819,000

 
 
 
 
 
 
20,000

 
819,000

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

 
3,338,000

 
 
 
 
 
 

 
3,338,000

 
 
 
 
 
 
 
 
 
 
 
Tomich Brothers, LLC (3%)*
 
Squid and Wetfish Processor and Distributor
 
Subordinated Note (7.5% Cash, 7.5% PIK, Due 04/16)
 
12,934,198

 
12,788,869

 
11,459,000

 
 
 
12,934,198

 
12,788,869

 
11,459,000

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

 
1,557,828

 
 
 
 
 
402,828

 
1,557,828

 
 
 
 
 
 
 
 
 
 
 
Trinity Consultants Holdings, Inc. (2%)*
 
Air Quality Consulting Services
 
Subordinated Note (12% Cash, 2% PIK, Due 04/19)
 
8,411,155

 
8,303,253

 
8,303,253

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

 
1,033,000

Common Stock (50,000 units)
 
 
 
50,000

 
764,000

 
 
 
8,411,155

 
9,139,028

 
10,100,253

 
 
 
 
 
 
 
 
 
 
 
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)
 
12,740,037

 
12,047,932

 
12,047,932

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

 
1,760,000

 
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

 
360,000

 
 
 
 
12,740,037

 
15,023,362

 
14,304,932

 
 
 
 
 
 
 
 
 
 
 
United Retirement Plan Consultants, Inc. (0%)*
 
Retirement Plan Administrator
 
Preferred A Units (90,000 units)
 
 
 
900,000

 
978,000

Common Units (10,000 units)
 
 
 
100,000

 
60,000

 
 
 


 
1,000,000

 
1,038,000