Triangle Capital Corporation Reports First Quarter Results, Declares First Dividend, and Announces Completion of Investments Totaling $23.4 Million
RALEIGH, N.C., May 9, 2007 (PRIME NEWSWIRE) -- Triangle Capital Corporation (Nasdaq:TCAP) ("Triangle" or "the Company"), a leading specialty finance company that provides customized financing solutions to lower middle market companies located throughout the United States, today announced the following: its results for the quarter ended March 31, 2007, its first quarterly dividend, and the completion of three investments totaling $23.4 million in the aggregate.
In describing the Company's first quarter activities, President and CEO, Garland S. Tucker, III, stated, "The most significant event during the first quarter was the successful completion of our initial public offering which occurred on February 21, 2007. Since that time we have been actively screening new transactions and beginning to establish Triangle in the marketplace as a premier provider of capital to lower middle market companies." In discussing recent investment closings, Tucker added, "Though it has been less than three months since the completion of our IPO, we have successfully invested approximately thirty-five percent of the net proceeds from the offering, which is a very encouraging investment pace."
The Company's results of operations and cash flows for the three months ended March 31, 2007, are presented as if the Company's initial public offering and related formation transactions had occurred as of January 1, 2007. In addition, in accordance with Statement of Financial Accounting Standards No. 141, Business Combinations, the results of the Company's operations and its cash flows for the three months ended March 31, 2006, and the Company's financial position as of December 31, 2006, have been presented on a combined basis in order to provide comparative information with respect to prior periods.
Total investment income during the first quarter of 2007 was $2.1 million, compared to total investment income of $1.4 million during the first quarter of 2006, representing an increase of 50.7%. Net investment income during the first quarter of 2007 was $0.8 million, compared to net investment income of $0.5 million during the first quarter of 2006, representing an increase of 59.2%. Net investment income per share during the first quarter of 2007 was $0.12.
The Company's net increase in net assets resulting from operations was $1.1 million during the first quarter of 2007 as compared to $0.5 million during the first quarter of 2006. The net increase in net assets resulting from operations per share was $0.16 during the first quarter of 2007.
The Company's net asset value per share at March 31, 2007, was $13.57 as compared to the Company's net asset value per share at the time of its initial public offering of $13.07. As of March 31, 2007, the Company's weighted average yield on all of its outstanding debt investments was 14.0%.
Dividend Information
Triangle's board of directors has declared a cash dividend of $0.15 per share for the first quarter of 2007. The dividend will be payable as follows:
Record Date: May 31, 2007
Payment Date: June 28, 2007
Steven C. Lilly, Chief Financial Officer, commented regarding the Company's quarterly dividend, "We are pleased to offer our shareholders an immediate, annualized yield on their investment in the amount of 4.00%, based on our initial public offering price of $15.00 per share. The strength of our existing portfolio of assets, coupled with the brisk investment activity we have seen since our IPO puts us in excellent financial position as we begin operating as a publicly traded company."
Triangle has adopted a dividend reinvestment plan ("DRIP") that provides for reinvestment of dividends on behalf of its shareholders, unless a shareholder elects to receive cash. As a result, when the Company declares a cash dividend, shareholders who have not opted out of the DRIP will have their cash dividends automatically reinvested in additional shares of the Company's common stock, rather than receiving cash dividends.
Recent Portfolio Investments
On April 2, 2007, the Company invested $4,250,000 in subordinated debt of APO Newco LLC ("APO"), a niche provider of commercial and consumer marketing products based in Bartlett, Tennessee. Under the terms of the loan, APO will pay 14.0% interest per annum. The Company also received a warrant to purchase up to 5.5% of APO's common units of membership interest.
On April 18, 2007, the Company invested $6,000,000 in subordinated debt of Equisales, LLC ("Equisales"), a niche provider of energy products and services based in Houston, Texas. Under the terms of the loan, Equisales will pay 15.0% interest per annum. In addition, the Company invested $500,000 in exchange for a 9.0% equity interest in Equisales.
On May 1, 2007, the Company invested $8,400,000 in subordinated debt of Fischbein LLC ("Fischbein"), a global manufacturer of flexible packaging and materials handling equipment based in Statesville, North Carolina. Under the terms of the loan, Fischbein will pay 16.5% interest per annum. In addition, the Company invested $4,200,000 in exchange for a 37.4% equity interest in Fischbein.
About Triangle Capital Corporation
Triangle Capital Corporation (www.TCAP.com) is a specialty finance company organized to provide customized financing solutions to lower middle market companies located throughout the United States. Our investment objective is to seek attractive returns by generating current income from our debt investments and capital appreciation from our equity related investments. Our investment philosophy is to partner with business owners, management teams and financial sponsors to provide flexible financing solutions to fund growth, changes of control, or other corporate events.
Triangle has elected to be treated as a business development company under the Investment Company Act of 1940 ("1940 Act"). We are required to comply with a series of regulatory requirements under the 1940 Act as well as applicable NASDAQ, federal and state laws and regulations. We intend to elect to be treated as a regulated investment company under the Internal Revenue Code of 1986. Failure to comply with any of the laws and regulations that apply to Triangle could have a material adverse effect on Triangle and its shareholders.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any such statements, other than statements of historical fact, are likely to be affected by other unknowable future events and conditions, including elements of the future that are or are not under the Company's control, and that the Company may or may not have considered; accordingly, such statements cannot be guarantees or assurances of any aspect of future performance. Actual developments and results are highly likely to vary materially from these estimates and projections of the future. Such statements speak only as of the time when made, and the Company undertakes no obligation to update any such statement now or in the future.
TRIANGLE CAPITAL CORPORATION
Balance Sheets
March 31, December 31,
2007 2006
(Consolidated) (Combined)
-------------- -------------
(Unaudited)
Assets
Investments at fair value:
Non-Control / Non-Affiliate
investments (cost of
$37,861,493 and $40,592,972 at
March 31, 2007 and
December 31, 2006,
respectively) $ 41,045,654 $ 42,370,348
Affiliate investments (cost of
$9,512,102 and $9,453,445 at
March 31, 2007 and
December 31, 2006,
respectively) 10,388,346 10,011,145
Control investments (cost of
$2,657,884 and $2,614,935 at
March 31, 2007 and
December 31, 2006,
respectively) 2,657,884 2,614,935
------------- -------------
Total investments at fair value 54,091,884 54,996,428
Deferred loan origination
revenue (754,659) (774,216)
Cash and cash equivalents 72,791,346 2,556,502
Interest and fees receivable 181,601 134,819
Prepaid expenses 70,892 --
Receivable from Triangle
Capital Partners, LLC 18,687 --
Deferred offering costs -- 1,020,646
Deferred financing fees 1,055,369 985,477
Property and equipment, net 12,547 --
------------- -------------
Total assets $ 127,467,667 $ 58,919,656
============= =============
Liabilities
Accounts payable and accrued
liabilities $ 560,144 $ 794,983
Interest payable 156,840 606,296
Partners tax distribution
payable 220,047 531,566
Payable to Triangle Capital
Partners, LLC -- 30,000
SBA guaranteed debentures
payable 35,800,000 31,800,000
------------- -------------
Total liabilities 36,737,031 33,762,845
Net Assets
General partner's capital -- 100
Limited partners' capital -- 21,250,000
Common stock, $0.001 par
value per share
(150,000,000 shares
authorized, 6,686,760 and
100 shares issued and
outstanding as of March 31,
2007 and December 31, 2006,
respectively) 6,687 --
Additional paid-in capital 85,972,950 1,500
Accumulated undistributed
net realized earnings 690,594 1,570,135
Net unrealized appreciation
of investments 4,060,405 2,335,076
------------- -------------
Total net assets 90,730,636 25,156,811
------------- -------------
Total liabilities and net assets $ 127,467,667 $ 58,919,656
============= =============
Net asset value per share $ 13.57 N/A
=============
TRIANGLE CAPITAL CORPORATION
Unaudited Statements of Operations
Three Months Three Months
Ended Ended
March 31, 2007 March 31, 2006
(Consolidated) (Combined)
-------------- --------------
Investment income:
Loan interest, fee and dividend
income:
Non-Control / Non-Affiliate
investments $ 1,155,622 $ 913,520
Affiliate investments 274,614 --
Control investments 75,718 209,872
----------- -----------
Total loan interest, fee and
dividend income 1,505,954 1,123,392
Paid-in-kind interest income:
Non-Control / Non-Affiliate
investments 174,796 169,961
Affiliate investments 29,250 --
Control investments 42,948 48,693
----------- -----------
Total paid-in-kind interest
income 246,994 218,654
Interest income from cash and
cash equivalent investments 359,168 59,919
----------- -----------
Total investment income 2,112,116 1,401,965
----------- -----------
Expenses:
Interest expense 499,691 456,731
Amortization of deferred
financing fees 27,108 24,443
Management fees 232,423 393,752
General and administrative
expenses 548,164 21,401
----------- -----------
Total expenses 1,307,386 896,327
----------- -----------
Net investment income 804,730 505,638
Net realized loss on
investment - Non Control /
Non-Affiliate (1,464,224) --
Net unrealized appreciation
of investments 1,725,329 --
----------- -----------
Total net gain on investments 261,105 --
----------- -----------
Net increase in net assets
resulting from operations $ 1,065,835 $ 505,638
=========== ===========
Net investment income per
share - basic and diluted $ 0.12 N/A
=========== ===========
Net increase in net assets
resulting from operations
per share - basic and diluted $ 0.16 N/A
=========== ===========
Weighted average number of
shares outstanding - basic
and diluted 6,686,760 N/A
=========== ===========
Allocation of net increase in
net assets resulting from
operations to:
General partner N/A $ 101,128
Limited partners N/A 404,510
----------- -----------
N/A $ 505,638
=========== ===========
TRIANGLE CAPITAL CORPORATION
Unaudited Statements of Cash Flows
Three Months Three Months
Ended Ended
March 31, March 31,
2007 2006
(Consolidated) (Combined)
-------------- -------------
Cash flows from operating
activities:
Net increase in net assets
resulting from operations $ 1,065,835 $ 505,638
Adjustments to reconcile net
increase in net assets
resulting from operations
to net cash provided by
(used in) operating
activities:
Purchases of portfolio
investments (63,602) (11,150,000)
Repayments received/sales
of portfolio investments 1,424,112 --
Loan origination and other
fees received 27,500 354,837
Net realized loss on
investments 1,464,224 --
Net unrealized appreciation
of investments (1,725,329) --
Paid-in-kind interest
accrued, net of payments
received (142,908) (218,654)
Amortization of deferred
financing fees 27,108 24,443
Recognition of loan
origination and other
fees (47,057) (59,113)
Accretion of loan
discounts (51,953) (34,496)
Depreciation expense 358 --
Changes in operating
assets and liabilities:
Interest and fees
receivable (46,782) (19,135)
Prepaid expenses (70,892) --
Accounts payable and
accrued liabilities (234,839) 77,911
Interest payable (449,456) (411,982)
Receivable from /
payable to Triangle
Capital Partners, LLC (48,687) --
------------ ------------
Net cash provided by (used in)
operating activities 1,127,632 (10,930,551)
------------ ------------
Cash flows from investing
activities:
Purchases of property and
equipment (12,905) --
------------ ------------
Net cash used in investing
activities (12,905) --
------------ ------------
Cash flows from financing
activities:
Borrowings under SBA
guaranteed debentures
payable 4,000,000 --
Financing fees paid (97,000) --
Proceeds from initial public
offering, net of expenses 64,728,037 --
Change in deferred offering
costs 1,020,646 --
Partners' capital
contributions -- 10,625,000
Tax distribution to partners (531,566) --
------------ ------------
Net cash provided by financing
activities 69,120,117 10,625,000
------------ ------------
Net increase (decrease) in
cash and cash equivalents 70,234,844 (305,551)
Cash and cash equivalents,
beginning of period 2,556,502 6,067,164
------------ ------------
Cash and cash equivalents,
end of period $ 72,791,346 $ 5,761,613
============ ============
Supplemental disclosure of
cash flow information:
Cash paid for interest $ 949,148 $ 868,713
============ ============
Summary of non-cash financing
transactions:
Accrued tax distribution to
partners $ 220,047 $ --
============ ============
CONTACT: Triangle Capital Corporation
Sheri B. Colquitt, Vice President, Investor Relations
919-719-4784
scolquitt@tcap.com
Steven C. Lilly, Chief Financial Officer
919-719-4789
slilly@tcap.com
Released May 9, 2007