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, 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 November 5, 2014 was 32,906,347.


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
 
 
September 30, 2014
 
December 31, 2013
 
(Unaudited)
 
 
Assets:
 
 
 
Investments at fair value:
 
 
 
Non-Control / Non-Affiliate investments (cost of $702,046,342 and $528,021,069 at September 30, 2014 and December 31, 2013, respectively)
$
683,606,374

 
$
546,043,946

Affiliate investments (cost of $143,870,717 and $107,418,051 at September 30, 2014 and December 31, 2013, respectively)
146,887,741

 
107,536,534

Control investments (cost of $17,223,222 and $18,378,665 at September 30, 2014 and December 31, 2013, respectively)
11,128,000

 
10,792,709

Total investments at fair value
841,622,115

 
664,373,189

Cash and cash equivalents
84,012,141

 
133,304,346

Interest and fees receivable
4,491,235

 
5,255,760

Prepaid expenses and other current assets
643,796

 
831,544

Deferred financing fees
10,639,376

 
11,063,716

Property and equipment, net
97,757

 
60,525

Total assets
$
941,506,420

 
$
814,889,080

Liabilities:
 
 
 
Accounts payable and accrued liabilities
$
3,800,689

 
$
7,493,928

Interest payable
1,089,844

 
3,017,645

Taxes payable
428,033

 
1,064,544

Deferred income taxes
3,751,194

 
3,514,376

Borrowings under credit facility
10,754,616

 
11,221,246

Notes
149,500,000

 
149,500,000

SBA-guaranteed debentures payable
224,732,468

 
193,285,211

Total liabilities
394,056,844

 
369,096,950

Commitments and contingencies (Note 6)
 
 
 
Net Assets:
 
 
 
Common stock, $0.001 par value per share (150,000,000 shares authorized, 32,906,347 and 27,697,483 shares issued and outstanding as of September 30, 2014 and December 31, 2013, respectively)
32,906

 
27,697

Additional paid in capital
540,704,815

 
409,042,893

Investment income in excess of distributions
13,283,742

 
8,610,735

Accumulated realized gains
17,826,437

 
20,665,371

Net unrealized appreciation (depreciation)
(24,398,324
)
 
7,445,434

Total net assets
547,449,576

 
445,792,130

Total liabilities and net assets
$
941,506,420

 
$
814,889,080

Net asset value per share
$
16.64

 
$
16.10


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,
2014
 
September 30,
2013
 
September 30,
2014
 
September 30,
2013
Investment income:
 
 
 
 
 
 
 
Loan interest, fee and dividend income:
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
$
17,482,268

 
$
19,933,576

 
$
51,282,601

 
$
56,817,499

Affiliate investments
3,436,198

 
2,710,338

 
9,812,581

 
8,919,819

Control investments
139,742

 
50,334

 
928,937

 
145,899

Total loan interest, fee and dividend income
21,058,208

 
22,694,248

 
62,024,119

 
65,883,217

Payment-in-kind interest income:
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
3,087,464

 
3,591,182

 
9,489,524

 
10,076,655

Affiliate investments
668,201

 
942,609

 
2,135,374

 
2,882,719

Control investments

 
6,058

 
12,071

 
17,886

Total payment-in-kind interest income
3,755,665

 
4,539,849

 
11,636,969

 
12,977,260

Interest income from cash and cash equivalent investments
61,897

 
81,071

 
193,393

 
176,774

Total investment income
24,875,770

 
27,315,168

 
73,854,481

 
79,037,251

Operating expenses:
 
 
 
 
 
 
 
Interest and other financing fees
5,292,967

 
4,997,620

 
15,591,022

 
15,098,655

General and administrative expenses
4,166,165

 
5,537,980

 
14,345,132

 
15,653,640

Total operating expenses
9,459,132

 
10,535,600

 
29,936,154

 
30,752,295

Net investment income
15,416,638

 
16,779,568


43,918,327

 
48,284,956

Realized and unrealized gains (losses) on investments and foreign currency borrowings:
 
 
 
 
 
 
 
Net realized gains (losses):
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
5,231,548

 
1,006,339

 
16,966,024

 
4,013,789

Affiliate investments
(200,000
)
 
17,811

 
28,252

 
4,613,810

Control investments

 

 
(208,553
)
 
(2,290,919
)
Net realized gains (losses)
5,031,548

 
1,024,150

 
16,785,723

 
6,336,680

Net unrealized appreciation (depreciation):
 
 
 
 
 
 
 
Investments
(29,639,438
)
 
4,892,807

 
(32,310,388
)
 
8,776,148

Foreign currency borrowings
501,364

 
(11,274
)
 
466,630

 
(11,274
)
Net unrealized appreciation (depreciation)
(29,138,074
)
 
4,881,533

 
(31,843,758
)
 
8,764,874

Net realized and unrealized gains (losses) on investments and foreign currency borrowings
(24,106,526
)
 
5,905,683

 
(15,058,035
)
 
15,101,554

Loss on extinguishment of debt

 

 

 
(412,673
)
Benefit (provision) for taxes
(122,439
)
 
486,413

 
(975,782
)
 
466,110

Net increase (decrease) in net assets resulting from operations
$
(8,812,327
)

$
23,171,664

 
$
27,884,510

 
$
63,439,947

Net investment income per share—basic and diluted
$
0.51

 
$
0.61

 
$
1.53

 
$
1.75

Net increase (decrease) in net assets resulting from operations per share—basic and diluted
$
(0.29
)
 
$
0.84

 
$
0.97

 
$
2.30

Dividends/distributions paid per share:
 
 
 
 
 
 
 
Regular quarterly dividends/distributions
$
0.54

 
$
0.54

 
$
1.62

 
$
1.62

Supplemental dividends/distributions
0.05

 

 
0.35

 

Total dividends/distributions
$
0.59

 
$
0.54

 
$
1.97

 
$
1.62

 
 
 
 
 
 
 
 
Weighted average number of shares outstanding—basic and diluted
30,412,036

 
27,619,464

 
28,718,753

 
27,541,442


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(Depreciation)
 
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

Realized gain (loss) on investments

 

 

 

 
6,336,680

 
(3,613,847
)
 
2,722,833

Net unrealized gains on investments / foreign currency

 

 

 

 

 
12,378,721

 
12,378,721

Loss on extinguishment of debt

 

 

 
(412,673
)
 

 

 
(412,673
)
Tax benefit

 

 

 
466,110

 

 

 
466,110

Dividends / distributions
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

 
 
Common Stock
 
Additional
Paid In
Capital
 
Investment
Income
in Excess of
Distributions
 
Accumulated
Realized
Gains on Investments
 
Net
Unrealized
Appreciation (Depreciation)
 
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

 

 

 
43,918,327

 

 

 
43,918,327

Stock-based compensation

 

 
4,334,437

 

 

 

 
4,334,437

Realized gain (loss) on investments

 

 

 

 
16,785,723

 
(15,977,182
)
 
808,541

Net unrealized loss on investments / foreign currency

 

 

 

 

 
(15,866,576
)
 
(15,866,576
)
Provision for taxes

 

 

 
(975,782
)
 

 

 
(975,782
)
Dividends / distributions
80,002

 
80

 
2,119,268

 
(38,269,538
)
 
(19,624,657
)
 

 
(55,774,847
)
Public offering of common stock
4,945,000

 
4,945

 
127,816,432

 

 

 

 
127,821,377

Issuance of restricted stock
282,630

 
282

 
(282
)
 

 

 

 

Common stock withheld for payroll taxes upon vesting of restricted stock
(98,768
)
 
(98
)
 
(2,607,933
)
 

 

 

 
(2,608,031
)
Balance, September 30, 2014
32,906,347

 
$
32,906

 
$
540,704,815

 
$
13,283,742

 
$
17,826,437

 
$
(24,398,324
)
 
$
547,449,576


See accompanying notes.


5

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Cash Flows
 
 
Nine Months Ended
 
Nine Months Ended
 
September 30, 2014
 
September 30, 2013
Cash flows from operating activities:
 
 
 
Net increase in net assets resulting from operations
$
27,884,510

 
$
63,439,947

Adjustments to reconcile net increase in net assets resulting from operations to net cash used in operating activities:
 
 
 
Purchases of portfolio investments
(345,617,501
)
 
(112,405,369
)
Repayments received/sales of portfolio investments
154,891,195

 
210,113,002

Loan origination and other fees received
5,669,609

 
1,221,431

Net realized gain on investments
(16,785,723
)
 
(6,336,680
)
Net unrealized depreciation (appreciation) on investments
32,073,570

 
(10,213,928
)
Net unrealized depreciation (appreciation) on foreign currency borrowings
(466,630
)
 
11,274

Deferred income taxes
236,818

 
1,437,780

Payment-in-kind interest accrued, net of payments received
(3,965,352
)
 
(1,459,624
)
Amortization of deferred financing fees
1,225,815

 
1,154,021

Loss on extinguishment of debt

 
412,673

Accretion of loan origination and other fees
(2,705,077
)
 
(3,447,435
)
Accretion of loan discounts
(809,647
)
 
(1,144,867
)
Accretion of discount on SBA-guaranteed debentures payable
137,257

 
134,310

Depreciation expense
33,412

 
30,417

Stock-based compensation
4,334,437

 
2,817,267

Changes in operating assets and liabilities:
 
 
 
Interest and fees receivable
764,525

 
(1,235,105
)
Prepaid expenses and other current assets
187,748

 
(382,869
)
Accounts payable and accrued liabilities
(3,693,239
)
 
723,138

Interest payable
(1,927,801
)
 
(2,063,979
)
Taxes payable
(636,511
)
 
(3,170,740
)
Net cash provided by (used in) operating activities
(149,168,585
)
 
139,634,664

Cash flows from investing activities:
 
 
 
Purchases of property and equipment
(70,644
)
 
(29,056
)
Net cash used in investing activities
(70,644
)
 
(29,056
)
Cash flows from financing activities:
 
 
 
Borrowings under SBA-guaranteed debentures payable
31,310,000

 

Repayments of SBA-guaranteed debentures payable

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

 
11,625,654

Repayments of credit facility
(20,000,000
)
 

Financing fees paid
(801,475
)
 
(684,294
)
Proceeds from public stock offerings, net of expenses
127,821,377

 

Common stock withheld for payroll taxes upon vesting of restricted stock
(2,608,031
)
 

Cash dividends/distributions paid
(55,774,847
)
 
(42,326,953
)
Net cash provided by (used in) financing activities
99,947,024

 
(51,885,593
)
Net increase (decrease) in cash and cash equivalents
(49,292,205
)
 
87,720,015

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

 
72,300,423

Cash and cash equivalents, end of period
$
84,012,141

 
$
160,020,438

Supplemental disclosure of cash flow information:
 
 
 
Cash paid for interest
$
15,625,243

 
$
15,374,816

Summary of non-cash financing transactions:
 
 
 
Dividends/distributions paid through DRIP share issuances
$
2,119,348

 
$
2,362,288


See accompanying notes.


6

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
September 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)
 
$
12,843,054

 
$
12,642,741

 
$
12,642,741

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

 
2,030,000

 
 
 
12,843,054

 
13,892,741

 
14,672,741

 
 
 
 
 
 
 
 
 
 
 
AGM Automotive, LLC (5%)*
 
Auto Industry Interior Components Supplier
 
Subordinated Note (10% Cash, 3% PIK, Due 07/19)
 
25,388,779

 
24,924,531

 
24,924,531

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

 
2,722,000

 
 
 
25,388,779

 
26,424,531

 
27,646,531

 
 
 
 
 
 
 
 
 
 
 
Applied-Cleveland Holdings, Inc. (5%)*
 
Oil and Gas Pipeline Infrastructure Inspection Services
 
Subordinated Note (10% Cash, 2% PIK, Due 06/19)
 
23,000,000

 
22,664,267

 
22,664,267

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

 
2,619,000

 
 
 
23,000,000

 
24,793,299

 
25,283,267

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

 
1,211,000

 
 
 
 
 
516,867

 
1,211,000

 
 
 
 
 
 
 
 
 
 
 
Audio and Video Labs Holdings, Inc. (3%)*
 
Manufacturer and Distributor for Independent Artists and Authors
 
Subordinated Note (12% Cash, 2% PIK, Due 06/18)
 
13,471,632

 
13,276,873

 
13,276,873

Common Stock (138 shares)
 
 
 
1,300,000

 
1,702,000

 
 
 
13,471,632

 
14,576,873

 
14,978,873

 
 
 
 
 
 
 
 
 
 
 
BFN Operations LLC (3%)*
 
Wholesale Grower and Distributor of Container Grown Shrubs, Trees and Plants
 
Subordinated Note (13% Cash, 4% PIK, Due 11/17)
 
18,089,153

 
17,791,902

 
17,791,902

 
 
 
18,089,153

 
17,791,902

 
17,791,902

 
 
 
 
 
 
 
 
 
 
 
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. (2%)*
 
Restaurant
 
Subordinated Note (12% Cash, 2% PIK, Due 09/19)
 
12,128,579

 
11,904,533

 
11,904,533

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

 
1,000,000

 
 
 
 
12,128,579

 
12,904,533

 
12,904,533

 
 
 
 
 
 
 
 
 
 
 
Capital Contractors, Inc. (1%)*
 
Janitorial and Facilities Maintenance Services
 
Subordinated Notes (12% Cash, 2% PIK, Due 12/15)
 
9,711,658

 
9,504,794

 
8,271,000

Common Stock Warrants (20 shares)
 
 
 
492,000

 

 
 
9,711,658

 
9,996,794

 
8,271,000

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

 
510,000

 
 
 
 
 
119,735

 
510,000

 
 
 
 
 
 
 
 
 
 
 
Chromaflo Technologies Parent LP (2%)*
 
Colorant Manufacturer and Distributor
 
Second Lien Term Loan (8.3% Cash, Due 06/20)
 
10,000,000

 
9,954,510

 
9,954,510

Class A Units (22,561 units)
 
 
 
906,604

 
2,276,000

 
 
 
10,000,000

 
10,861,114

 
12,230,510

 
 
 
 
 
 
 
 
 
 
 
Comverge, Inc. (3%)*
 
Provider of Intelligent Energy Management Solutions
 
Senior Note (12% Cash, Due 05/18)
 
15,505,583

 
15,287,784

 
15,287,784

Preferred Stock (900 shares)
 
 
 
900,000

 
937,000

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

 

 
 
 
15,505,583

 
16,287,784

 
16,224,784

 
 
 
 
 
 
 
 
 
 
 
Continental Anesthesia Management, LLC (2%)*
 
Physicians Management
Services
 
Subordinated Note (8% Cash, 6% PIK Due 04/15)
 
10,130,411

 
10,119,749

 
10,119,749

Warrant (263 shares)
 
 
 
276,100

 
115,000

 
 
10,130,411

 
10,395,849

 
10,234,749

 
 
 
 
 
 
 
 
 
 
 
CRS Reprocessing, LLC (3%)*
 
Fluid
Reprocessing
Services
 
Subordinated Note (12% Cash, 2% PIK, Due 11/15)(6)
 
12,441,321

 
12,066,015

 
9,723,000

Subordinated Note (12% Cash, 2% PIK, Due 11/15)(6)
 
13,720,445

 
12,705,812

 
5,236,000

Series C Preferred Units (30 units)
 
 
 
288,342

 

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

 

Series D Preferred Units (16 units)
 
 
 
107,074

 

 
Series E Preferred Units (5 units)
 
 
 
31,651

 

 
 
 
26,161,766

 
26,958,450

 
14,959,000

 
 
 
 
 
 
 
 
 
 
 
CWS Acquisition Corp. (3%)*
 
Manufacturer of Custom Windows and Sliding Doors
 
Subordinated Note (11% Cash, 2% PIK, Due 01/20)
 
16,155,456

 
15,883,197

 
15,883,197

1,500,000 Class A Units
 
 
 
1,500,000

 
1,500,000

 
 
16,155,456

 
17,383,197

 
17,383,197


7

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
September 30, 2014
Portfolio Company
 
Industry
 
Type of Investment(1)(2)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Danville Materials, LLC (2%)*
 
Manufacturer of Dental Products
 
Subordinated Note (10% Cash, Due 12/18)
 
$
8,000,000

 
$
7,860,551

 
$
7,860,551

 
 
Common Units (45,492 units)
 
 
 
500,000

 
558,000

 
 
 
 
8,000,000

 
8,360,551

 
8,418,551

 
 
 
 
 
 
 
 
 
 
 
DataSource Incorporated (1%)*
 
Print Supply Chain Management Services
 
Subordinated Note (12% Cash, 2% PIK, Due 01/18)
 
4,840,296

 
4,726,852

 
4,726,852

 
Common Units (47 units)
 
 
 
1,000,000

 
760,000

 
 
 
4,840,296

 
5,726,852

 
5,486,852

 
 
 
 
 
 
 
 
 
 
 
DCWV Acquisition Corporation (1%)*
 
Arts & Crafts and Home Decor Products Designer and Supplier
 
Subordinated Note (12% Cash, 5% PIK, Due 09/17) (5)
 
6,449,894

 
6,161,147

 
3,101,000

 
 
 
6,449,894

 
6,161,147

 
3,101,000

 
 
 
 
 
 
 
 
 
 
 
DialogDirect, Inc. (4%)*
 
Business Process Outsourcing Provider
 
Subordinated Note (12% Cash, 2.5% PIK, Due 06/18)
 
23,964,075

 
23,638,406

 
23,638,406

 
 
 
 
23,964,075

 
23,638,406

 
23,638,406

 
 
 
 
 
 
 
 
 
 
 
DLC Acquisition, LLC (4%)*
 
Staffing Firm
 
Senior Note (10% Cash, Due 07/19)
 
21,750,000

 
21,296,593

 
21,296,593

 
 
 
21,750,000

 
21,296,593

 
21,296,593

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

 
15,000

 
 
 
 
 
 

 
15,000

 
 
 
 
 
 
 
 
 
 
 
Dyno Acquiror, Inc. (1%)*
 
Sewing Products and Seasonal Decorative Products Supplier
 
Subordinated Note (12% Cash, 2% PIK, Due 11/18)
 
7,200,203

 
7,086,123

 
7,086,123

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

 
302,000

 
 
 
 
7,200,203

 
7,686,123

 
7,388,123

 
 
 
 
 
 
 
 
 
 
 
Eckler's Holdings, Inc. (2%)*
 
Restoration Parts and Accessories for Classic Cars and Trucks
 
Subordinated Note (11% Cash, 4% PIK, Due 07/18)
 
7,302,345

 
7,182,296

 
7,182,296

 
Common Stock (18,029 shares)
 
 
 
183,562

 

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

 
1,335,000

 
 
 
7,302,345

 
8,961,984

 
8,517,296

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

 
447,000

 
 
 
 
 
285,000

 
447,000

 
 
 
 
 
 
 
 
 
 
 
Flowchem Ltd. (2%)*
 
Provider of Support Services to Crude Oil Pipeline Operators
 
Subordinated Note (11% Cash, 2% PIK, Due 06/19)
 
7,877,718

 
7,738,817

 
7,738,817

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

 
902,000

 
 
 
7,877,718

 
8,738,817

 
8,640,817

 
 
 
 
 
 
 
 
 
 
 
FrontStream Payments, Inc. (2%)*
 
Payment and Donation Management Product Service Provider
 
Senior Note (8% Cash, 6% PIK, Due 08/18)
 
11,511,916

 
11,329,004

 
11,329,004

 
 
 
 
11,511,916

 
11,329,004

 
11,329,004

 
 
 
 
 
 
 
 
 
 
 
Frontstreet Facility Solutions, Inc. (1%)*
 
Retail, Restaurant and Commercial Facilities Maintenance
 
Subordinated Note (10% Cash, 3% PIK, Due 07/18)
 
8,527,509

 
8,427,334

 
4,780,000

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

 

 
 
 
 
8,527,509

 
8,677,334

 
4,780,000

 
 
 
 
 
 
 
 
 
 
 
Frozen Specialties, Inc. (2%)*
 
Frozen Foods Manufacturer
 
Subordinated Note (10% Cash, 4% PIK, Due 05/17)
 
11,792,518

 
11,792,518

 
9,705,000

 
 
11,792,518

 
11,792,518

 
9,705,000

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

 
74,000

 
 
 
 
500,000

 
74,000

 
 
 
 
 
 
 
 
 
 
 
Grindmaster-Cecilware Corp. (1%)*
 
Food Services Equipment Manufacturer
 
Subordinated Note (12% Cash, 6% PIK, Due 04/16)
 
7,414,076

 
7,400,564

 
7,400,564

 
 
7,414,076

 
7,400,564

 
7,400,564

 
 
 
 
 
 
 
 
 
 
 
GST AutoLeather, Inc. (4%)*
 
Supplier of Automotive Interior Leather
 
Subordinated Note (11% Cash, 2% PIK, Due 01/21)
 
22,100,222

 
21,670,860

 
21,670,860

 
 
 
 
22,100,222

 
21,670,860

 
21,670,860

 
 
 
 
 
 
 
 
 
 
 
Hatch Chile Co., LLC (1%)*
 
Food Products Distributor
 
Subordinated Note (19% Cash, Due 11/18)
 
2,992,500

 
2,968,322

 
2,968,322

Subordinated Note (14% Cash, Due 11/18)
 
3,277,500

 
3,067,445

 
3,067,445

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

 
643,000

 
 
6,270,000

 
6,331,567

 
6,678,767

 
 
 
 
 
 
 
 
 
 
 

8

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
September 30, 2014
Portfolio Company
 
Industry
 
Type of Investment(1)(2)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
Hickman's Egg Ranch, Inc. (3%)*
 
Egg Producer
 
Subordinated Note (12% Cash, 1% PIK, Due 06/19)
 
$
15,042,961

 
$
14,754,126

 
$
14,754,126

 
 
15,042,961

 
14,754,126

 
14,754,126

 
 
 
 
 
 
 
 
 
 
 
HKW Capital Partners IV, L.P.
(0%)*(4)
 
Multi-Sector Holdings
 
Limited Partnership Interest
 
 
 
714,895

 
754,000

 
 
 
 
 
 
714,895

 
754,000

 
 
 
 
 
 
 
 
 
 
 
Huron, Inc. (2%)*
 
Manufacturer for Automotive Industry
 
Subordinated Note (10% Cash, 3% PIK, Due 08/18)
 
13,750,964

 
13,685,848

 
13,685,848

 
 
 
 
13,750,964

 
13,685,848

 
13,685,848

 
 
 
 
 
 
 
 
 
 
 
Infrastructure Corporation of America, Inc. (2%)*
 
Roadway Maintenance, Repair and Engineering Services
 
Subordinated Note (12% Cash, 2% PIK, Due 09/18)
 
11,363,391
 
10,061,986
 
10,061,986
Common Stock Purchase Warrant (487,877 shares)
 
 
 
2,411,000

 
2,238,000

 
 
11,363,391

 
12,472,986

 
12,299,986

 
 
 
 
 
 
 
 
 
 
 
Inland Pipe Rehabilitation Holding Company LLC (2%)*
 
Cleaning and Repair Services
 
Subordinated Note (13% Cash, 2.5% PIK, Due 12/16)
 
8,550,095

 
8,401,566

 
8,401,566

Membership Interest Purchase Warrant (3.0%)
 
 
 
853,500

 
1,003,000

 
 
8,550,095

 
9,255,066

 
9,404,566

 
 
 
 
 
 
 
 
 
 
 
IOS Acquisitions, Inc. (4%)*
 
Provider of Oil Country Tubular Goods Inspections and Repair Services
 
Subordinated Note (12% Cash, 3.5% PIK, Due 06/18)
 
20,038,626

 
19,749,051

 
19,749,051

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

 
1,830,000

 
 
20,038,626

 
21,448,898

 
21,579,051

 
 
 
 
 
 
 
 
 
 
 
Justrite Manufacturing Company, LLC (3%)*
 
Storage Product Developer and Supplier for Hazardous Materials
 
Subordinated Note (10% Cash, 2% PIK, Due 07/19)
 
14,702,313

 
14,507,990

 
14,507,990

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

 
118,110

 
 
Class A Preferred Units (132 units)
 
 
 
131,890

 
168,000

 
 
 
 
14,702,313

 
14,757,990

 
14,794,100

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

 
2,673,000

 
 
 
 
 
58,995

 
2,673,000

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

 
2,220,000

 
Common Units (30,000 units)
 
 
 
30,000

 
4,296,000

 
 
 
 
 
1,500,000

 
6,516,000

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

 
7,924,431

 
7,924,431

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

 
1,923,000

 
 
8,000,000

 
9,101,388

 
9,847,431

 
 
 
 
 
 
 
 
 
 
 
Micross Solutions LLC (2%)*
 
Provider of Semiconductor Products and Services
 
Subordinated Note (12% Cash, 2% PIK, Due 06/18)
 
10,997,983

 
10,878,880

 
10,878,880

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

 
1,431,000

 
 
10,997,983

 
12,459,479

 
12,309,880

 
 
 
 
 
 
 
 
 
 
 
Minco Technology Labs, LLC (1%)*
 
Semiconductor Distribution
 
Subordinated Note (6.5% Cash, 3.5% PIK, Due 12/16) (6)
 
6,184,671

 
5,484,627

 
3,000,000

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

 

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

 

 
 
6,184,671

 
5,988,534

 
3,000,000

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

 
1,918,000

 
 
 


 
2,000,000

 
1,918,000

 
 
 
 
 
 
 
 
 
 
 
On Event Services, LLC (2%)*
 
Equipment Rentals to Conference Venues and Live Events
 
Subordinated Note (10% Cash, 2% PIK, Due 01/19)
 
9,895,720

 
9,724,199

 
9,724,199

 
 
 
9,895,720

 
9,724,199

 
9,724,199

 
 
 
 
 
 
 
 
 
 
 
PCX Aerostructures, LLC (4%)*
 
Aerospace Component Manufacturer
 
Subordinated Note (11% Cash, 3% PIK, Due 04/19)
 
19,277,164

 
18,924,761

 
18,924,761

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

 
3,980,000

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

 
20,000

 
 
 
19,277,164

 
22,924,761

 
22,924,761

 
 
 
 
 
 
 
 
 
 
 
Performance Health & Wellness Holdings, Inc. (2%)*
 
Designer and Manufacturer of Rehabilitation and Wellness Products
 
Subordinated Note (12% Cash, 1% PIK, Due 04/19)
 
6,718,681

 
6,568,660

 
6,631,000

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

 
2,253,000

 
 
 
6,718,681

 
8,068,660

 
8,884,000

 
 
 
 
 
 
 
 
 
 
 

9

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
September 30, 2014
Portfolio Company
 
Industry
 
Type of Investment(1)(2)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
PetroLiance, LLC (3%)*
 
Lubricant, Fuel and Ancillary Products Distributor
 
Subordinated Note (12% Cash, 0.5% PIK, Due 08/19)
 
$
12,045,575

 
$
11,829,867

 
$
11,829,867

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

 
2,117,000

 
 
 
12,045,575

 
13,029,867

 
13,946,867

 
 
 
 
 
 
 
 
 
 
 
PowerDirect Marketing, LLC (1%)*
 
Marketing Services
 
Subordinated Note (13% Cash, 2% PIK, Due 12/16)(6)
 
7,254,113

 
6,613,149

 
3,456,000

Common Unit Purchase Warrants
 
 
 
590,200

 

 
 
7,254,113

 
7,203,349

 
3,456,000

 
 
 
 
 
 
 
 
 
 
 
Sheplers, Inc. (2%)*
 
Western Apparel Retailer
 
Subordinated Note (13.2% Cash, Due 12/16)
 
8,750,000

 
8,634,079

 
8,634,079

Subordinated Note (10% Cash, 7% PIK, Due 12/17)
 
4,545,735

 
4,507,387

 
4,507,387

 
 
 
13,295,735

 
13,141,466

 
13,141,466

 
 
 
 
 
 
 
 
 
 
 
SPC Partners V, LP (0%)*(4)
 
Multi-Sector Holdings
 
0.7% Limited Partnership Interest
 
 
 
742,036

 
742,036

 
 
 
 
 
 
742,036

 
742,036

 
 
 
 
 
 
 
 
 
 
 
Specialized Desanders, Inc. (4%)* (4)
 
Sand and Particulate Removal Equipment Provider for Oil and Gas Companies
 
Subordinated Note (12% Cash, 2% PIK, Due 03/20)
 
16,110,043

 
15,864,548

 
14,990,211

LLP Units (2,000,000 units)
 
 
 
1,937,421

 
6,413,000

 
 
 
16,110,043

 
17,801,969

 
21,403,211

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

 
949,000

 
 
 
 
 
 
20,000

 
949,000

 
 
 
 
 
 
 
 
 
 
 
TACH Holdings, Inc. (f/k/a Trinity Consultants Holdings, Inc.) (3%)*
 
Air Quality Consulting Services
 
Subordinated Note (10% Cash, 3% PIK, Due 08/20)
 
15,058,750

 
14,931,328

 
14,931,328

Series A1 Preferred Stock (10,000 units)
 
 
 

 
101,000

Common Stock (50,000 units)
 
 
 
50,000

 
911,000

 
 
 
15,058,750

 
14,981,328

 
15,943,328

 
 
 
 
 
 
 
 
 
 
 
Tate's Bake Shop (2%)*
 
Producer of Gourmet Cookies and Other Baked Goods
 
Subordinated Note (10% Cash, 3% PIK, Due 02/20)
 
10,028,333

 
9,828,333

 
9,828,333

 
 
Limited Partnership Investment
 
 
 
999,000

 
999,000

 
 
 
 
10,028,333

 
10,827,333

 
10,827,333

 
 
 
 
 
 
 
 
 
 
 
TCFI Merlin LLC (3%)*
 
Specialty Staffing Service Provider
 
Senior Note (10% Cash, 1% PIK, Due 09./19)
 
15,003,750

 
14,703,750

 
14,703,750

 
 
Limited Partnership Units (500,000 units)
 
 
 
500,000

 
500,000

 
 
 
 
15,003,750

 
15,203,750

 
15,203,750

 
 
 
 
 
 
 
 
 
 
 
The Cook & Boardman Group, LLC (3%)*
 
Specialty Distributor of Doors and Related Products
 
Subordinated Note (10% Cash, 2.5% PIK, Due 03/20)
 
14,018,472

 
13,738,472

 
13,738,472

 
 
Class A Units (1,400,000 units)
 
 
 
1,400,000

 
1,400,000

 
 
 
 
14,018,472

 
15,138,472

 
15,138,472

 
 
 
 
 
 
 
 
 
 
 
The Krystal Company (1%)*
 
Restaurant
 
Class A Units of Limited Partnership (2,000 units)
 
 
 
638,260

 
3,119,000

 
 
 
 
 
 
638,260

 
3,119,000

 
 
 
 
 
 
 
 
 
 
 
Tomich Brothers, LLC (0%)*
 
Squid and Wetfish Processor and Distributor
 
Subordinated Note (9.5% Cash, 5.5% PIK, Due 04/16) (6)
 
13,206,424

 
12,807,836

 
2,713,000

 
 
 
13,206,424

 
12,807,836

 
2,713,000

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

 
1,647,000

 
 
 
 
 
402,828

 
1,647,000

 
 
 
 
 
 
 
 
 
 
 
United Biologics, LLC (2%)*
 
Allergy Immunotherapy
 
Subordinated Note (12% Cash, 2% PIK, Due 03/17)
 
12,805,264

 
12,167,196

 
12,167,196

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

 
820,000

 
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

 
195,000

 
 
 
 
12,805,264

 
15,142,626

 
13,319,196

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

 
1,050,000

Common Units (10,000 units)
 
 
 
100,000