Form: 10-Q

Quarterly report pursuant to Section 13 or 15(d)

May 6, 2015

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, 2015
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, 2015 was 33,225,627.


Table of Contents

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

 
 
Page
 
PART I – FINANCIAL INFORMATION
Item 1.
 
 
 
 
 
 
 
 
 
Item 2.
Item 3.
Item 4.
 
PART II – OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
 


2

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

TRIANGLE CAPITAL CORPORATION
Consolidated Balance Sheets
 
 
March 31, 2015
 
December 31, 2014
 
(Unaudited)
 
 
Assets:
 
 
 
Investments at fair value:
 
 
 
Non-Control / Non-Affiliate investments (cost of $686,166,666 and $717,233,688 at March 31, 2015 and December 31, 2014, respectively)
$
651,682,278

 
$
693,312,886

Affiliate investments (cost of $210,307,952 and $175,182,171 at March 31, 2015 and December 31, 2014, respectively)
213,255,812

 
178,935,236

Control investments (cost of $29,636,763 and $29,636,763 at March 31, 2015 and December 31, 2014, respectively)
12,473,000

 
14,975,000

Total investments at fair value
877,411,090

 
887,223,122

Cash and cash equivalents
111,763,958

 
78,759,026

Interest and fees receivable
7,205,672

 
7,409,105

Prepaid expenses and other current assets
615,625

 
438,861

Property and equipment, net
115,427

 
108,753

Total assets
$
997,111,772

 
$
973,938,867

Liabilities:
 
 
 
Accounts payable and accrued liabilities
$
3,113,643

 
$
7,144,673

Interest payable
1,435,372

 
3,365,237

Taxes payable
56,002

 
2,506,031

Deferred income taxes
3,208,718

 
3,363,669

Borrowings under credit facility
20,323,357

 
61,389,306

Notes
229,425,841

 
145,646,224

SBA-guaranteed debentures payable
219,933,391

 
219,697,098

Total liabilities
477,496,324

 
443,112,238

Commitments and contingencies (Note 6)
 
 
 
Net Assets:
 
 
 
Common stock, $0.001 par value per share (150,000,000 shares authorized, 33,225,627 and 32,950,288 shares issued and outstanding as of March 31, 2015 and December 31, 2014, respectively)
33,226

 
32,950

Additional paid in capital
542,136,742

 
542,119,994

Investment income in excess of distributions
10,976,071

 
12,926,514

Accumulated realized gains
15,729,070

 
12,464,699

Net unrealized appreciation (depreciation)
(49,259,661
)
 
(36,717,528
)
Total net assets
519,615,448

 
530,826,629

Total liabilities and net assets
$
997,111,772

 
$
973,938,867

Net asset value per share
$
15.64

 
$
16.11


See accompanying notes.


3

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Operations
 
 
Three Months
Ended
 
Three Months
Ended
 
March 31,
2015
 
March 31,
2014
Investment income:
 
 
 
Loan interest, fee and dividend income:
 
 
 
Non-Control / Non-Affiliate investments
$
21,784,751

 
$
16,507,765

Affiliate investments
4,944,559

 
3,576,791

Control investments
100,000

 
145,360

Total loan interest, fee and dividend income
26,829,310

 
20,229,916

Payment-in-kind interest income:
 
 
 
Non-Control / Non-Affiliate investments
2,728,323

 
2,997,777

Affiliate investments
1,169,001

 
730,657

Control investments

 
5,987

Total payment-in-kind interest income
3,897,324

 
3,734,421

Interest income from cash and cash equivalent investments
52,936

 
74,608

Total investment income
30,779,570

 
24,038,945

Operating expenses:
 
 
 
Interest and other financing fees
6,432,455

 
5,139,512

General and administrative expenses
6,577,536

 
5,056,092

Total operating expenses
13,009,991

 
10,195,604

Net investment income
17,769,579

 
13,843,341

Realized and unrealized gains (losses) on investments and foreign currency borrowings:
 
 
 
Net realized gains (losses):
 
 
 
Non-Control / Non-Affiliate investments
3,236,669

 
272,201

Affiliate investments
27,702

 

Control investments

 
(208,553
)
Net realized gains (losses)
3,264,371

 
63,648

Net unrealized appreciation (depreciation):
 
 
 
Investments
(13,715,840
)
 
(1,498,470
)
Foreign currency borrowings
1,173,707

 
360,535

Net unrealized appreciation (depreciation)
(12,542,133
)
 
(1,137,935
)
Net realized and unrealized gains (losses) on investments and foreign currency borrowings
(9,277,762
)
 
(1,074,287
)
Provision for taxes
(137,875
)
 
(266,555
)
Net increase in net assets resulting from operations
$
8,353,942


$
12,502,499

Net investment income per share—basic and diluted
$
0.54

 
$
0.50

Net increase in net assets resulting from operations per share—basic and diluted
$
0.25

 
$
0.45

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

 
$
0.54

Supplemental dividends/distributions
0.05

 
0.15

Total dividends/distributions
$
0.59

 
$
0.69

 
 
 
 
Weighted average number of shares outstanding—basic and diluted
33,099,197

 
27,805,108


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, 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 gains (losses) 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

 
 
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, 2014
32,950,288

 
$
32,950

 
$
542,119,994

 
$
12,926,514

 
$
12,464,699

 
$
(36,717,528
)
 
$
530,826,629

Net investment income

 

 

 
17,769,579

 

 

 
17,769,579

Stock-based compensation

 

 
1,642,297

 

 

 

 
1,642,297

Realized gain (loss) on investments

 

 

 

 
3,264,371

 
(3,370,439
)
 
(106,068
)
Net unrealized loss on investments / foreign currency

 

 

 

 

 
(9,171,694
)
 
(9,171,694
)
Provision for taxes

 

 

 
(137,875
)
 

 

 
(137,875
)
Dividends / distributions
35,548

 
36

 
830,010

 
(19,582,147
)
 


 

 
(18,752,101
)
Expenses related to public offering of common stock

 

 
(54,967
)
 

 

 

 
(54,967
)
Issuance of restricted stock
350,000

 
350

 
(350
)
 

 

 

 

Common stock withheld for payroll taxes upon vesting of restricted stock
(110,209
)
 
(110
)
 
(2,400,242
)
 

 

 

 
(2,400,352
)
Balance, March 31, 2015
33,225,627

 
$
33,226

 
$
542,136,742

 
$
10,976,071

 
$
15,729,070

 
$
(49,259,661
)
 
$
519,615,448


See accompanying notes.


5

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Cash Flows
 
 
Three Months Ended
 
Three Months Ended
 
March 31, 2015
 
March 31, 2014
Cash flows from operating activities:
 
 
 
Net increase in net assets resulting from operations
$
8,353,942

 
$
12,502,499

Adjustments to reconcile net increase in net assets resulting from operations to net cash used in operating activities:
 
 
 
Purchases of portfolio investments
(98,213,197
)
 
(77,498,482
)
Repayments received/sales of portfolio investments
97,094,750

 
51,808,786

Loan origination and other fees received
1,606,861

 
1,367,819

Net realized gain on investments
(3,264,371
)
 
(63,648
)
Net unrealized depreciation on investments
13,870,791

 
1,402,236

Net unrealized appreciation on foreign currency borrowings
(1,173,707
)
 
(360,535
)
Deferred income taxes
(154,951
)
 
96,234

Payment-in-kind interest accrued, net of payments received
810,547

 
(1,472,204
)
Amortization of deferred financing fees
511,864

 
397,944

Accretion of loan origination and other fees
(1,960,200
)
 
(835,536
)
Accretion of loan discounts
(133,149
)
 
(346,201
)
Accretion of discount on SBA-guaranteed debentures payable
46,222

 
45,230

Depreciation expense
15,169

 
9,652

Stock-based compensation
1,642,297

 
1,338,072

Changes in operating assets and liabilities:
 
 
 
Interest and fees receivable
203,433

 
1,549,819

Prepaid expenses and other current assets
(176,764
)
 
(2,641,584
)
Accounts payable and accrued liabilities
(4,031,030
)
 
(5,750,369
)
Interest payable
(1,929,865
)
 
(1,924,058
)
Taxes payable
(2,450,029
)
 
(1,064,544
)
Net cash provided by (used in) operating activities
10,668,613

 
(21,438,870
)
Cash flows from investing activities:
 
 
 
Purchases of property and equipment
(21,843
)
 
(25,552
)
Net cash used in investing activities
(21,843
)
 
(25,552
)
Cash flows from financing activities:
 
 
 
Borrowings under credit facility
8,000,000

 

Repayments of credit facility
(48,000,000
)
 

Proceeds from notes
83,565,582

 

Expenses related to public offering of common stock
(54,967
)
 

Common stock withheld for payroll taxes upon vesting of restricted stock
(2,400,352
)
 
(2,474,121
)
Cash dividends/distributions paid
(18,752,101
)
 
(18,527,556
)
Net cash provided by (used in) financing activities
22,358,162

 
(21,001,677
)
Net increase (decrease) in cash and cash equivalents
33,004,932

 
(42,466,099
)
Cash and cash equivalents, beginning of period
78,759,026

 
133,304,346

Cash and cash equivalents, end of period
$
111,763,958

 
$
90,838,247

Supplemental disclosure of cash flow information:
 
 
 
Cash paid for interest
$
7,644,734

 
$
6,404,312

Summary of non-cash financing transactions:
 
 
 
Dividends/distributions paid through DRIP share issuances
$
830,046

 
$
707,290


See accompanying notes.


6

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
March 31, 2015
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)
 
$
12,940,632

 
$
12,756,508

 
$
12,756,508

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

 
2,164,000

 
 
 
12,940,632

 
14,006,508

 
14,920,508

 
 
 
 
 
 
 
 
 
 
 
AGM Automotive, LLC (0%)*
 
Auto Industry Interior Components Suppler
 
Class A Units (1,500,000 units)
 
 
 
630,134

 
1,736,000

 
 
 


 
630,134

 
1,736,000

 
 
 
 
 
 
 
 
 
 
 
Applied-Cleveland Holdings, Inc. (5%)*
 
Oil and Gas Pipeline Infrastructure Inspection Services
 
Subordinated Note (10% Cash, 2% PIK, Due 06/19)
 
23,115,192

 
22,810,632

 
22,810,632

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

 
2,183,000

 
 
 
23,115,192

 
24,939,664

 
24,993,632

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

 
1,102,000

 
 
 
 
 
516,867

 
1,102,000

 
 
 
 
 
 
 
 
 
 
 
Audio and Video Labs Holdings, Inc. (2%)*
 
Manufacturer and Distributor for Independent Artists and Authors
 
Subordinated Note (12% Cash, 2% PIK, Due 06/18)
 
10,348,844

 
10,211,191

 
10,211,191

Common Stock (138 shares)
 
 
 
1,300,000

 
1,546,000

 
 
 
10,348,844

 
11,511,191

 
11,757,191

 
 
 
 
 
 
 
 
 
 
 
BFN Operations LLC (3%)*
 
Wholesale Grower and Distributor of Container Grown Shrubs, Trees and Plants
 
Subordinated Note (13% Cash, 4% PIK, Due 03/16)
 
18,458,051

 
18,198,885

 
16,151,000

 
 
 
18,458,051

 
18,198,885

 
16,151,000

 
 
 
 
 
 
 
 
 
 
 
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)
 
12,251,729

 
12,044,609

 
12,044,609

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

 
1,000,000

 
 
 
 
12,251,729

 
13,044,609

 
13,044,609

 
 
 
 
 
 
 
 
 
 
 
Capital Contractors, Inc. (1%)*
 
Janitorial and Facilities Maintenance Services
 
Subordinated Notes (12% Cash, 2% PIK, Due 12/15) (5)
 
9,810,268

 
9,583,888

 
5,456,000

Common Stock Warrants (20 shares)
 
 
 
492,000

 

 
 
9,810,268

 
10,075,888

 
5,456,000

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

 
95,000

 
 
 
 
 
119,735

 
95,000

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

 
9,957,674

 
9,957,674

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

 
1,863,000

 
 
 
10,000,000

 
10,864,278

 
11,820,674

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

 
15,311,556

 
15,311,556

Preferred Stock (703 shares)
 
 
 
554,458

 
528,000

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

 

 
 
 
15,505,583

 
15,966,014

 
15,839,556

 
 
 
 
 
 
 
 
 
 
 
Continental Anesthesia Management, LLC (2%)*
 
Physicians Management
Services
 
Subordinated Note (10% Cash, 4% PIK Due 04/15)
 
10,360,133

 
10,353,525

 
10,353,525

Warrant (263 shares)
 
 
 
276,100

 
42,000

 
 
10,360,133

 
10,629,625

 
10,395,525

 
 
 
 
 
 
 
 
 
 
 
CPower Ultimate HoldCo, LLC (0%)*
 
Demand Response Business
 
Units (345,542 units)
 
 
 
345,542

 
345,542

 
 
 
 
 
 
345,542

 
345,542

 
 
 
 
 
 
 
 
 
 
 
CRS Reprocessing, LLC (2%)*
 
Fluid
Reprocessing
Services
 
Senior Note (3.7% cash, Due 06/15)
 
1,140,000

 
1,140,000

 
1,140,000

 
 
Subordinated Note (14% PIK, Due 11/15)(6)
 
16,103,741

 
14,726,015

 
5,631,000

Subordinated Note (14% PIK, Due 11/15)(6)
 
14,720,633

 
12,705,812

 
3,032,000

Series C Preferred Units (30 units)
 
 
 
288,342

 

Common Unit Warrant (1,406 units)
 
 
 
1,759,556

 

Series D Preferred Units (16 units)
 
 
 
107,074

 

 
Series E Preferred Units (5 units)
 
 
 
31,651

 

 
 
 
31,964,374

 
30,758,450

 
9,803,000

 
 
 
 
 
 
 
 
 
 
 

7

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
March 31, 2015
Portfolio Company
 
Industry
 
Type of Investment(1)(2)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
CWS Acquisition Corp. (3%)*
 
Manufacturer of Custom Windows and Sliding Doors
 
Subordinated Note (11% Cash, 2% PIK, Due 01/20)
 
$
16,319,218

 
$
16,066,731

 
$
16,066,731

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

 
1,500,000

 
 
16,319,218

 
17,566,731

 
17,566,731

 
 
 
 
 
 
 
 
 
 
 
Danville Materials, LLC (2%)*
 
Manufacturer of Dental Products
 
Subordinated Note (10% Cash, Due 12/18)
 
8,000,000

 
7,875,121

 
7,875,121

Common Units (45,492 units)
 
 
 
500,000

 
643,000

 
 
8,000,000

 
8,375,121

 
8,518,121

 
 
 
 
 
 
 
 
 
 
 
DataSource Incorporated (1%)*
 
Print Supply Chain Management Services
 
Subordinated Note (12% Cash, 2% PIK, Due 01/18)
 
4,889,360

 
4,840,630

 
4,840,630

 
Common Units (47 units)
 
 
 
1,000,000

 
973,000

 
 
 
4,889,360

 
5,840,630

 
5,813,630

 
 
 
 
 
 
 
 
 
 
 
DCWV Acquisition Corporation
(1%)*
 
Arts & Crafts and Home Decor Products Designer and Supplier
 
Subordinated Note (12% Cash, 3% PIK, Due 09/17) (5)
 
6,567,220

 
6,172,631

 
4,233,000

 
Series A Preferred Equity (1,200 shares)
 
 
 
1,200,000

 

 
 
 
6,567,220

 
7,372,631

 
4,233,000

 
 
 
 
 
 
 
 
 
 
 
DialogDirect, Inc. (5%)*
 
Business Process Outsourcing Provider
 
Subordinated Note (12% Cash, 1.5% PIK, Due 04/20)
 
24,157,449

 
23,933,506

 
23,933,506

 
 
 
24,157,449

 
23,933,506

 
23,933,506

 
 
 
 
 
 
 
 
 
 
 
DLC Acquisition, LLC (4%)*
 
Staffing Firm
 
Senior Note (10% Cash, Due 07/19)
 
22,750,000

 
22,334,936

 
22,334,936

 
 
 
22,750,000

 
22,334,936

 
22,334,936

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

 

 
 
 
 
 

 

 
 
 
 
 
 
 
 
 
 
 
Dyno Acquiror, Inc. (1%)*
 
Sewing Products and Seasonal Decorative Products Supplier
 
Subordinated Note (12% Cash, 2% PIK, Due 11/18)
 
7,272,506

 
7,169,915

 
7,169,915

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

 
365,000

 
 
 
7,272,506

 
7,769,915

 
7,534,915

 
 
 
 
 
 
 
 
 
 
 
Eckler's Holdings, Inc. (1%)*
 
Restoration Parts and Accessories for Classic Cars and Trucks
 
Subordinated Note (11% Cash, 4% PIK, Due 07/18) (6)
 
7,659,663

 
7,262,454

 
5,552,000

 
Common Stock (18,029 shares)
 
 
 
183,562

 

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

 

 
 
 
7,659,663

 
9,042,142

 
5,552,000

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

 
510,000

 
 
 
 
 
285,000

 
510,000

 
 
 
 
 
 
 
 
 
 
 
FCL Graphics, Inc. (0%)*
 
Commercial Printing Services
 
Senior Note (4.7% Cash, Due 09/16)
 
1,177,961

 
1,177,961

 
1,150,000

 
 
Senior Note (7.8% Cash, 2% PIK, Due 09/16) (5)
 
1,225,946

 
1,207,439

 

 
 
 
 
2,403,907

 
2,385,400

 
1,150,000

 
 
 
 
 
 
 
 
 
 
 
Flowchem Ltd. (2%)*
 
Provider of Support Services to Crude Oil Pipeline Operators
 
Subordinated Note (11% Cash, 2% PIK, Due 06/19)
 
7,956,475

 
7,829,058

 
7,829,058

 
Common Units (1,000,000 units)
 
 
 
914,835

 
1,305,000

 
 
 
7,956,475

 
8,743,893

 
9,134,058

 
 
 
 
 
 
 
 
 
 
 
FrontStream Payments, Inc. (2%)*
 
Payment and Donation Management Product Service Provider
 
Senior Note (12% Cash, 2% PIK, Due 08/18)
 
11,570,325

 
11,407,798

 
11,407,798

 
 
 
 
11,570,325

 
11,407,798

 
11,407,798

 
 
 
 
 
 
 
 
 
 
 
Frontstreet Facility Solutions, Inc. (1%)*
 
Retail, Restaurant and Commercial Facilities Maintenance
 
Subordinated Note (13% Cash Due 07/18)
 
8,462,629

 
8,373,882

 
4,219,000

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

 

 
 
Series B Convertible Preferred Units (5,556 units)
 
 
 
500,000

 

 
 
 
 
8,462,629

 
9,123,882

 
4,219,000

 
 
 
 
 
 
 
 
 
 
 
Frozen Specialties, Inc. (2%)*
 
Frozen Foods Manufacturer
 
Subordinated Note (10% Cash, 4% PIK, Due 05/17)
 
12,739,823

 
12,739,823

 
10,436,000

 
 
12,739,823

 
12,739,823

 
10,436,000

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

 
27,000

 
 
 
 
500,000

 
27,000

 
 
 
 
 
 
 
 
 
 
 
Gilchrist & Soames, Inc. (7%)*
 
Manufacturer of Personal Care Products
 
Split Collateral Term Loan (10% Cash, 1.5% PIK, Due 11/19)
 
35,020,657

 
34,516,209

 
34,516,209

 
 
 
 
35,020,657

 
34,516,209

 
34,516,209

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

8

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
March 31, 2015
Portfolio Company
 
Industry
 
Type of Investment(1)(2)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
GST AutoLeather, Inc. (4%)*
 
Supplier of Automotive Interior Leather
 
Subordinated Note (11% Cash, 2% PIK, Due 01/21)
 
$
22,324,245

 
$
21,917,045

 
$
21,917,045

 
 
 
 
22,324,245

 
21,917,045

 
21,917,045

 
 
 
 
 
 
 
 
 
 
 
Hatch Chile Co., LLC (1%)*
 
Food Products Distributor
 
Subordinated Note (19% Cash, Due 11/18)
 
2,913,750

 
2,905,314

 
2,905,314

Subordinated Note (14% Cash, Due 11/18)
 
3,191,250

 
3,020,811

 
3,020,811

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

 
540,000

 
 
6,105,000

 
6,221,925

 
6,466,125

 
 
 
 
 
 
 
 
 
 
 
Hickman's Egg Ranch, Inc. (3%)*
 
Egg Producer
 
Subordinated Note (12% Cash, Due 06/19)
 
15,049,229

 
14,783,739

 
14,783,739

 
 
15,049,229

 
14,783,739

 
14,783,739

 
 
 
 
 
 
 
 
 
 
 
HKW Capital Partners IV, L.P.
(0%)*(4)
 
Multi-Sector Holdings
 
0.6% Limited Partnership Interest
 
 
 
791,757

 
686,000

 
 
 
 
 
 
791,757

 
686,000

 
 
 
 
 
 
 
 
 
 
 
HTC Borrower, LLC (5%)*
 
Hunting and Outdoor Products
 
Subordinated Note, (10% Cash, 3% PIK, Due 09/20)
 
25,047,916

 
24,672,916

 
24,672,916

 
 
 
 
25,047,916

 
24,672,916

 
24,672,916

 
 
 
 
 
 
 
 
 
 
 
Huron, Inc. (3%)*
 
Parts Supplier to Automotive Industry
 
Subordinated Note (10% Cash, 3% PIK, Due 08/18)
 
13,854,096

 
13,795,784

 
13,795,784

 
 
 
 
13,854,096

 
13,795,784

 
13,795,784

 
 
 
 
 
 
 
 
 
 
 
Inland Pipe Rehabilitation Holding Company LLC (2%)*
 
Cleaning and Repair Services
 
Subordinated Note (13% Cash, 2.5% PIK, Due 12/16)
 
8,658,501

 
8,618,090

 
8,618,090

Membership Interest Purchase Warrant (3%)
 
 
 
853,500

 
1,445,000

 
 
8,658,501

 
9,471,590

 
10,063,090

 
 
 
 
 
 
 
 
 
 
 
IOS Holding Company, LLC (0%)*
 
Inspections and Repair Services for Oil Industry
 
Common Units (7,314 Class A Units)
 
 
 
356,074

 
301,000

 
 


 
356,074

 
301,000

 
 
 
 
 
 
 
 
 
 
 
Justrite Manufacturing Company, LLC (3%)*
 
Storage Product Developer and Supplier for Hazardous Materials
 
Subordinated Note (10% Cash, 2% PIK, Due 07/19)
 
14,851,345

 
14,673,455

 
14,673,455

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

 
180,000

 
 
Class A Preferred Units (132 units)
 
 
 
131,890

 
174,000

 
 
 
 
14,851,345

 
14,923,455

 
15,027,455

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

 
2,375,000

 
Common Units (30,000 units)
 
 
 
30,000

 
1,139,000

 
 
 
 
 
1,500,000

 
3,514,000

 
 
 
 
 
 
 
 
 
 
 
Media Storm, LLC (2%)*
 
Marketing Services
 
Subordinated Note (10% Cash, Due 08/19)
 
6,545,455

 
6,510,152

 
6,510,152

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

 
1,327,000

 
 
6,545,455

 
7,687,109

 
7,837,152

 
 
 
 
 
 
 
 
 
 
 
Micross Solutions LLC (5%)*
 
Provider of Semiconductor Products and Services
 
Subordinated Note (12% Cash, 3% PIK, Due 06/18)
 
23,165,653

 
22,983,382

 
22,983,382

Class A-2 Common Units (1,979,524 units)
 
 
 
2,019,693

 
2,019,693

 
 
23,165,653

 
25,003,075

 
25,003,075

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

 
1,890,000

 
 
 
 
 
2,000,000

 
1,890,000

 
 
 
 
 
 
 
 
 
 
 
Nautic Partners VII, LP (0%)*
 
Multi-Sector Holdings
 
0.4% Limited Partnership Interest
 
 
 
244,397

 
361,000

 
 
 
 
 
 
244,397

 
361,000

 
 
 
 
 
 
 
 
 
 
 
Nomacorc, LLC (4%)*
 
Synthetic Wine Cork Producer
 
Subordinated Note (10% Cash, 1.75% PIK, Due 07/21)
 
20,083,611

 
19,694,718

 
19,694,718

 
 
Limited Partnership Interest
 
 
 
1,940,588

 
1,940,588

 
 
 
 
20,083,611

 
21,635,306

 
21,635,306

 
 
 
 
 
 
 
 
 
 
 
On Event Services, LLC (3%)*
 
Equipment Rentals
 
Subordinated Note (10% Cash, 2% PIK, Due 02/20)
 
17,212,851

 
16,917,692

 
16,917,692

 
Warrant to Purchase Units (4%)
 
 
 
850,000

 
850,000

 
 
 
17,212,851

 
17,767,692

 
17,767,692

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

9

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
March 31, 2015
Portfolio Company
 
Industry
 
Type of Investment(1)(2)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
Orchid Underwriters Agency, LLC (5%)*
 
Insurance Underwriter
 
Subordinated Note (10% Cash, Due 11/19)
 
$
22,885,000

 
$
22,456,862

 
$
22,456,862

Class A Preferred Units (15,000 units)
 
 
 
1,500,000

 
1,500,000

Class A Common Units (15,000 units)
 
 
 

 

 
 
22,885,000

 
23,956,862

 
23,956,862

 
 
 
 
 
 
 
 
 
 
 
Performance Health & Wellness Holdings, Inc. (1%)*
 
Rehabilitation and Wellness Products
 
Class A Limited Partnership Units (15,000 units)
 
 
 
1,500,000

 
2,622,000

 
 
 


 
1,500,000

 
2,622,000

 
 
 
 
 
 
 
 
 
 
 
PowerDirect Marketing, LLC (1%)*
 
Marketing Services
 
Subordinated Note (13% Cash, 2% PIK, Due 12/16)(6)
 
7,821,994

 
6,627,482

 
3,595,000

Common Unit Purchase Warrants
 
 
 
590,200

 

 
 
7,821,994

 
7,217,682

 
3,595,000

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

 
8,657,015

 
8,657,015

Subordinated Note (10% Cash, 7% PIK, Due 12/17)
 
4,704,000

 
4,673,453

 
4,673,453

 
 
 
13,454,000

 
13,330,468

 
13,330,468

 
 
 
 
 
 
 
 
 
 
 
SPC Partners V, LP (0%)*(4)
 
Multi-Sector Holdings
 
0.7% Limited Partnership Interest
 
 
 
725,083

 
672,000

 
 
 
 
 
 
725,083

 
672,000

 
 
 
 
 
 
 
 
 
 
 
Specialized Desanders, Inc. (3%)* (4)
 
Sand and Particulate Removal Equipment Provider for Oil and Gas Companies
 
Subordinated Note (12% Cash, 2% PIK, Due 03/20)
 
16,110,043

 
15,884,925

 
13,221,059

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

 
4,554,000

 
 
 
16,110,043

 
17,822,346

 
17,775,059

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

 
1,734,000

 
 
 
 
 
 
20,000

 
1,734,000

 
 
 
 
 
 
 
 
 
 
 
TACH Holdings, Inc. (f/k/a Trinity Consultants Holdings, Inc.) (3%)*
 
Air Quality Consulting Services
 
Subordinated Note (10% Cash, 3% PIK, Due 08/20)
 
15,288,008

 
15,169,022

 
15,169,022

Series A1 Preferred Stock (10,000 units)
 
 
 

 
137,000

Common Stock (50,000 units)
 
 
 
50,000

 
1,231,000

 
 
 
15,288,008

 
15,219,022

 
16,537,022

 
 
 
 
 
 
 
 
 
 
 
Tate's Bake Shop (2%)*
 
Producer of Baked Goods
 
Subordinated Note (10% Cash, 3% PIK, Due 02/20)
 
10,181,006

 
9,995,038

 
9,995,038

 
 
Limited Partnership Investment
 
 
 
999,000

 
1,141,000

 
 
 
 
10,181,006

 
10,994,038

 
11,136,038

 
 
 
 
 
 
 
 
 
 
 
TCFI Merlin LLC (3%)*
 
Specialty Staffing Service Provider
 
Senior Note (10% Cash, 1% PIK, Due 09/19)
 
15,079,763

 
14,803,546

 
14,803,546

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

 
500,000

 
 
 
 
15,079,763

 
15,303,546

 
15,303,546

 
 
 
 
 
 
 
 
 
 
 
The Cook & Boardman Group, LLC (3%)*
 
Distributor of Doors and Related Products
 
Subordinated Note (10% Cash, 2.5% PIK, Due 03/20)
 
14,196,209

 
13,935,854

 
13,935,854

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

 
1,568,000

 
 
 
 
14,196,209

 
15,335,854

 
15,503,854

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

 
2,854,000

 
 
 
 
 
 
638,260

 
2,854,000

 
 
 
 
 
 
 
 
 
 
 
Top Knobs USA, Inc. (0%)*
 
Hardware Designer and Distributor
 
Common Stock (26,593 shares)
 
 
 
333,994

 
1,425,000

 
 
 
 
 
333,994

 
1,425,000

 
 
 
 
 
 
 
 
 
 
 
United Biologics, LLC (2%)*
 
Allergy Immunotherapy
 
Subordinated Note (12% Cash, 2% PIK, Due 03/17)
 
12,435,286

 
11,910,206

 
11,910,206

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

 
861,000

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

 
137,000

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

 

 
Class A, Class A-1, Class A-1 Kicker & Class B Unit Purchase Warrants
 
 
 
838,117

 
202,000

 
 
 
 
12,435,286

 
14,885,636

 
13,110,206

 
 
 
 
 
 
 
 
 
 
 
Water Pik, Inc. (2%)*
 
Oral Health and Shower Head Supplier
 
Second Lien Term Loan (9.8% Cash, Due 01/21)
 
8,315,789

 
8,023,702

 
8,023,702

 
 
 
 
8,315,789

 
8,023,702

 
8,023,702

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

10

Table of Contents

TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
March 31, 2015
Portfolio Company
 
Industry
 
Type of Investment(1)(2)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
 
 
 
 
 
 
 
 
 
 
 
Wheel Pros Holdings, Inc. (2%)*
 
Wheel/Rim and Performance Tire Distributor
 
Subordinated Note (11% Cash, Due 06/20)
 
$
9,500,000

 
$
9,306,001

 
$
9,306,001

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

 
2,432,000

 
 
 
 
9,500,000

 
11,306,001

 
11,738,001

 
 
 
 
 
 
 
 
 
 
 
WSO Holdings, LP (0%)*
 
Organic/Fair Trade Sugar, Syrup, Nectar and Honey Producer
 
Common Points (3,000 points)
 
 
 
3,000,000

 
2,057,000

 
 
 
 
 
3,000,000

 
2,057,000