10-Q 1 a2013033110qtcap.htm 10-Q 20130331 10Q TCAP
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, 2013
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
¨
Accelerated filer
ý
 
 
 
 
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, 2013 was 27,563,375.



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


PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

TRIANGLE CAPITAL CORPORATION
Consolidated Balance Sheets
 
 
March 31, 2013
 
December 31, 2012
 
(Unaudited)
 
 
Assets:
 
 
 
Investments at fair value:
 
 
 
Non-Control / Non-Affiliate investments (cost of $571,951,156 and $565,737,092 at March 31, 2013 and December 31, 2012, respectively)
$
587,495,700

 
$
579,078,939

Affiliate investments (cost of $124,090,454 and $123,019,204 at March 31, 2013 and December 31, 2012, respectively)
123,444,532

 
123,408,445

Control investments (cost of $11,586,932 and $11,474,208 at March 31, 2013 and December 31, 2012, respectively)
4,585,685

 
4,315,339

Total investments at fair value
715,525,917

 
706,802,723

Cash and cash equivalents
37,041,674

 
72,300,423

Interest and fees receivable
4,131,647

 
2,650,178

Prepaid expenses and other current assets
593,736

 
403,123

Deferred financing fees
11,521,363

 
12,323,430

Property and equipment, net
56,583

 
55,535

Total assets
$
768,870,920

 
$
794,535,412

Liabilities:
 
 
 
Accounts payable and accrued liabilities
$
1,707,249

 
$
6,405,570

Interest payable
1,065,668

 
3,136,574

Taxes payable
234,796

 
3,210,989

Deferred income taxes
901,067

 
1,342,456

Notes
149,500,000

 
149,500,000

SBA-guaranteed debentures payable
193,148,838

 
213,604,579

Total liabilities
346,557,618

 
377,200,168

Net Assets:
 
 
 
Common stock, $0.001 par value per share (150,000,000 shares authorized, 27,563,375 and 27,284,798 shares issued and outstanding as of March 31, 2013 and December 31, 2012, respectively)
27,563

 
27,285

Additional paid-in-capital
404,748,852

 
403,322,097

Investment income in excess of distributions
6,714,859

 
6,783,161

Accumulated realized gains on investments
3,825,722

 
1,972,940

Net unrealized appreciation of investments
6,996,306

 
5,229,761

Total net assets
422,313,302

 
417,335,244

Total liabilities and net assets
$
768,870,920

 
$
794,535,412

Net asset value per share
$
15.32

 
$
15.30


See accompanying notes.


3


TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Operations

 
Three Months
Ended
 
Three Months
Ended
 
 
March 31,
2013
 
March 31,
2012
 
Investment income:
 
 
 
 
Loan interest, fee and dividend income:
 
 
 
 
Non-Control / Non-Affiliate investments
$
17,187,501

 
$
12,963,602

 
Affiliate investments
2,963,029

 
2,717,149

 
Control investments
49,371

 
59,773

 
Total loan interest, fee and dividend income
20,199,901

 
15,740,524

 
Payment-in-kind interest income:
 
 
 
 
Non-Control / Non-Affiliate investments
3,250,548

 
2,587,267

 
Affiliate investments
958,379

 
654,233

 
Control investments
5,867

 
19,971

 
Total payment-in-kind interest income
4,214,794

 
3,261,471

 
Interest income from cash and cash equivalent investments
51,240

 
109,858

 
Total investment income
24,465,935

 
19,111,853

 
Expenses:
 
 
 
 
Interest and other debt financing fees
5,111,512

 
3,310,737

 
General and administrative expenses
4,120,958

 
3,607,267

 
Total expenses
9,232,470

 
6,918,004

 
Net investment income
15,233,465

 
12,193,849

 
Net realized gains:
 
 
 
 
Net realized gain on investments – Non-Control / Non-Affiliate
578,782

 

 
Net realized gain on investments – Affiliate
1,274,000

 

 
Net unrealized appreciation of investments
1,766,545

 
621,471

 
Total net gain on investments
3,619,327

 
621,471

 
Loss on extinguishment of debt
(412,673
)
 
(205,043
)
 
Income tax benefit (provision)
(20,303
)
 
7,231

 
Net increase in net assets resulting from operations
$
18,419,816

 
$
12,617,508

 
Net investment income per share—basic and diluted
$
0.56

 
$
0.49

 
Net increase in net assets resulting from operations per share—basic and diluted
$
0.67

 
$
0.50

 
Dividends declared per common share
$
0.54

 
$
0.47

 
Weighted average number of shares outstanding—basic and diluted
27,433,290

 
25,075,300

 

See accompanying notes.


4


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
of Investments
 
Total
Net
Assets
 
Number
of Shares
 
Par
Value
 
 
 
 
 
Balance, December 31, 2011
22,774,726

 
$
22,775

 
$
318,297,269

 
$
6,847,486

 
$
1,011,649

 
$
8,107,776

 
$
334,286,955

Net investment income

 

 

 
12,193,849

 

 

 
12,193,849

Stock-based compensation

 

 
648,750

 

 

 

 
648,750

Net unrealized appreciation of investments

 

 

 

 

 
621,471

 
621,471

Loss on extinguishment of debt

 

 

 
(205,043
)
 

 

 
(205,043
)
Income tax benefit

 

 

 
7,231

 

 

 
7,231

Dividends/distributions declared
52,717

 
52

 
1,028,467

 
(12,788,904
)
 

 

 
(11,760,385
)
Public offering of common stock
4,255,000

 
4,255

 
77,243,819

 

 

 

 
77,248,074

Issuance of restricted stock
227,631

 
228

 
(228
)
 

 

 

 

Common stock withheld for payroll taxes upon vesting of restricted stock
(46,923
)
 
(47
)
 
(897,590
)
 

 

 

 
(897,637
)
Balance, March 31, 2012
27,263,151

 
$
27,263

 
$
396,320,487

 
$
6,054,619

 
$
1,011,649

 
$
8,729,247

 
$
412,143,265

 
 
Common Stock
 
Additional
Paid In
Capital
 
Investment
Income
in Excess of
Distributions
 
Accumulated
Realized
Gains on
Investments
 
Net
Unrealized
Appreciation
of Investments
 
Total
Net
Assets
 
Number
of Shares
 
Par
Value
 
 
 
 
 
Balance, December 31, 2012
27,284,798

 
$
27,285

 
$
403,322,097

 
$
6,783,161

 
$
1,972,940

 
$
5,229,761

 
$
417,335,244

Net investment income

 

 

 
15,233,465

 

 

 
15,233,465

Stock-based compensation

 

 
630,006

 

 

 

 
630,006

Net realized gain on investments

 

 

 

 
1,852,782

 
(1,274,000
)
 
578,782

Net unrealized appreciation of investments

 

 

 

 

 
3,040,545

 
3,040,545

Loss on extinguishment of debt

 

 

 
(412,673
)
 

 

 
(412,673
)
Income tax provision

 

 

 
(20,303
)
 

 

 
(20,303
)
Dividends/distributions declared
28,577

 
28

 
796,999

 
(14,868,791
)
 

 

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

 
250

 
(250
)
 

 

 

 

Balance, March 31, 2013
27,563,375

 
$
27,563

 
$
404,748,852

 
$
6,714,859

 
$
3,825,722

 
$
6,996,306

 
$
422,313,302


See accompanying notes.


5


TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Cash Flows
 
 
Three Months
Ended
 
Three Months
Ended
 
March 31, 2013
 
March 31, 2012
Cash flows from operating activities:
 
 
 
Net increase in net assets resulting from operations
$
18,419,816

 
$
12,617,508

Adjustments to reconcile net increase in net assets resulting from operations to net cash used in operating activities:
 
 
 
Purchases of portfolio investments
(10,259,545
)
 
(41,952,989
)
Repayments received/sales of portfolio investments
9,274,946

 
8,253,844

Loan origination and other fees received
255,159

 
666,420

Net realized gain on investments
(1,852,782
)
 

Net unrealized appreciation of investments
(1,325,156
)
 
(768,682
)
Deferred income taxes
(441,389
)
 
147,211

Payment-in-kind interest accrued, net of payments received
(3,685,061
)
 
(2,704,362
)
Amortization of deferred financing fees
389,394

 
222,917

Loss on extinguishment of debt
412,673

 
205,043

Accretion of loan origination and other fees
(734,094
)
 
(476,512
)
Accretion of loan discounts
(396,661
)
 
(374,341
)
Accretion of discount on SBA-guaranteed debentures payable
44,259

 
43,629

Depreciation expense
9,172

 
7,349

Stock-based compensation
630,006

 
648,750

Changes in operating assets and liabilities:
 
 
 
Interest and fees receivable
(1,481,469
)
 
(861,679
)
Prepaid expenses
(190,613
)
 
153,192

Accounts payable and accrued liabilities
(4,698,321
)
 
(2,606,598
)
Interest payable
(2,070,906
)
 
(2,316,068
)
Taxes payable
(2,976,193
)
 
(1,198,973
)
Net cash used in operating activities
(676,765
)
 
(30,294,341
)
Cash flows from investing activities:
 
 
 
Purchases of property and equipment
(10,220
)
 
(9,656
)
Net cash used in investing activities
(10,220
)
 
(9,656
)
Cash flows from financing activities:
 
 
 
Repayments of SBA-guaranteed debentures payable
(20,500,000
)
 
(10,410,000
)
Repayments of credit facility

 
(15,000,000
)
Proceeds from notes

 
69,000,000

Financing fees paid

 
(2,230,237
)
Proceeds from public stock offerings, net of expenses

 
77,248,074

Common stock withheld for payroll taxes upon vesting of restricted stock

 
(897,637
)
Cash dividends paid
(14,071,764
)
 
(11,760,385
)
Net cash provided by (used in) financing activities
(34,571,764
)
 
105,949,815

Net increase (decrease) in cash and cash equivalents
(35,258,749
)
 
75,645,818

Cash and cash equivalents, beginning of period
72,300,423

 
66,868,340

Cash and cash equivalents, end of period
$
37,041,674

 
$
142,514,158

Supplemental disclosure of cash flow information:
 
 
 
Cash paid for interest
$
6,594,078

 
$
5,289,789

Summary of non-cash financing transactions:
 
 
 
Dividends paid through DRIP share issuances
$
797,027

 
$
1,028,519


See accompanying notes.


6


TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
March 31, 2013
Portfolio Company
 
Industry
 
Type of Investment(1)(2)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
Non–Control / Non–Affiliate Investments:
 
 
 
 
 
 
Agilex Flavors & Fragrances, Inc. (3%)*
 
Custom Fragrance Producers
 
Subordinated Note (12% Cash, 1.5% PIK, Due 06/19)
 
$
12,553,671

 
$
12,310,156

 
$
12,310,156

Common Units (1,250 units)
 
 
 
1,250,000
 
1,250,000
 
 
 
12,553,671
 
13,560,156
 
13,560,156
 
 
 
 
 
 
 
 
 
 
 
Ambient Air Corporation (“AA”) and Peaden-Hobbs Mechanical, LLC (“PHM”) (1%)*
 
Specialty Trade Contractors
 
Subordinated Note-AA (15% Cash, 3% PIK, Due 06/13)
 
4,077,549
 
4,073,083
 
4,073,083
Subordinated Note-PHM (12% Cash, Due 09/12)
 
12,857

 
12,857

 
12,857

Common Stock-PHM (128,571 shares)
 
 
 
128,571

 
128,571

Common Stock Warrants-AA (455 shares)
 
 
 
142,361

 
220,000

 
 
 
4,090,406

 
4,356,872

 
4,434,511

 
 
 
 
 
 
 
 
 
 
 
Aramsco, Inc. (0%)*
 
Environmental Emergency Preparedness Products Distributor
 
Subordinated Note (12% Cash, 2% PIK, Due 03/14)
 
1,180,506

 
1,119,533

 
1,119,533

 
 
 
1,180,506

 
1,119,533

 
1,119,533

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

 
961,000

 
 
 
 
 
516,867

 
961,000

 
 
 
 
 
 
 
 
 
 
 
Audio and Video Labs Holdings, Inc. (3%)*
 
Manufacturer and Distributor for Independent Artists and Authors
 
Subordinated Note (12% Cash, 2% PIK, Due 06/18)
 
13,068,012

 
12,816,526

 
12,816,526

Common Units (134 units)
 
 
 
1,300,000

 
1,300,000

 
 
 
13,068,012

 
14,116,526

 
14,116,526

 
 
 
 
 
 
 
 
 
 
 
Botanical Laboratories, Inc. (0%)*
 
Nutritional Supplement Manufacturing and Distribution
 
Common Unit Warrants (998,680 units)
 
 
 
474,600

 
1,031,000

 
 
 


 
474,600

 
1,031,000

 
 
 
 
 
 
 
 
 
 
 
Capital Contractors, Inc. (2%)*
 
Janitorial and Facilities Maintenance Services
 
Subordinated Notes (12% Cash, 2% PIK, Due
12/15)
 
9,420,689

 
9,002,754

 
9,002,754

Common Stock Warrants (20 shares)
 
 
 
492,000

 
448,000

 
 
9,420,689

 
9,494,754

 
9,450,754

 
 
 
 
 
 
 
 
 
 
 
Carolina Beverage Group, LLC (1%)*
 
Beverage
Manufacturing
and Packaging
 
Class A Units (11,974 units)
 
 
 
1,077,615

 
1,400,000

 
Class B Units (11,974 units)
 
 
 
119,735

 
1,360,000

 
 
 
 
 
1,197,350

 
2,760,000

 
 
 
 
 
 
 
 
 
 
 
Charter Facilities Services, Inc. (1%)*
 
Retail, Restaurant, and Commercial Facilities Maintenance
 
Subordinated Note (9% Cash, 4% PIK, Due 07/18)
 
5,152,072

 
5,073,130

 
5,073,130

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

 
279,000

 
 
 
5,152,072

 
5,323,130

 
5,352,130

 
 
 
 
 
 
 
 
 
 
 
Chromaflo Technologies, LLC (5%)*
 
Colorant
Manufacturer
and Distributor
 
Subordinated Note (12% Cash, 2% PIK, Due 10/17)
 
16,549,234

 
16,268,865

 
16,268,865

Preferred A Units (22,561 units)
 
 
 
2,256,098

 
2,937,000

 
 
 
16,549,234

 
18,524,963

 
19,205,865

 
 
 
 
 
 
 
 
 
 
 
Comverge, Inc. (4%)*
 
Provider of Intelligent Energy Management Solutions
 
Subordinated Note (12% Cash, 3% PIK, Due 05/18)
 
15,155,319

 
14,874,084

 
14,874,084

Preferred Units (900 units)
 
 
 
900,000

 
900,000

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

 
100,000

 
 
 
15,155,319

 
15,874,084

 
15,874,084

 
 
 
 
 
 
 
 
 
 
 
Continental Anesthesia Management, LLC (2%)*
 
Physicians
Management
Services
 
Senior Note (14.0% Cash, Due 11/14)
 
9,950,000

 
9,765,167

 
8,831,000

Warrant (263 shares)
 
 
 
276,100

 

 
 
9,950,000

 
10,041,267

 
8,831,000

 
 
 
 
 
 
 
 
 
 
 
CRS Reprocessing, LLC (6%)*
 
Fluid
Reprocessing
Services
 
Subordinated Note (12% Cash, 2% PIK, Due 11/15)
 
11,827,272

 
11,617,433

 
11,617,433

Subordinated Note (12% Cash, 2% PIK, Due 11/15)
 
13,043,263

 
11,899,345

 
11,899,345

Series C Preferred Units (30 units)
 
 
 
288,342

 
430,000

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

 
2,849,000

Series D Preferred Units (16 units)
 
 
 
107,074

 
171,000

 
 
 
24,870,535

 
25,671,750

 
26,966,778

 
 
 
 
 
 
 
 
 
 
 
DataSource Incorporated (2%)*
 
Print Supply Chain Management Services
 
Subordinated Note (12% Cash, 2% PIK, Due 01/18)
 
8,627,184

 
8,474,391

 
8,474,391

 
Common Units (47 units)
 
 
 
1,000,000

 
1,089,000

 

 
8,627,184

 
9,474,391

 
9,563,391

 
 
 
 
 
 
 
 
 
 
 
DCWV Acquisition Corporation (1%)*
 
Arts & Crafts and Home Decor Products Designer and Supplier
 
Subordinated Note (12% Cash, 3% PIK, Due 09/17)
 
6,100,207

 
5,989,273

 
5,346,000

 

 
6,100,207

 
5,989,273

 
5,346,000

 
 
 
 
 
 
 
 
 
 
 

7


TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
March 31, 2013
Portfolio Company
 
Industry
 
Type of Investment(1)(2)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
DLR Restaurants, LLC (3%)*
 
Restaurant
 
Subordinated Note (12% Cash, 2% PIK, Due 03/16)
 
$
12,495,114

 
$
12,337,031

 
$
12,337,031

Subordinated Note (12% Cash, 4% PIK, Due 03/16)
 
791,102

 
776,102

 
776,102

Royalty Rights
 
 
 

 
44,000

 
 
 
13,286,216

 
13,113,133

 
13,157,133

 
 
 
 
 
 
 
 
 
 
 
Eckler's Holdings, Inc. (2%)*
 
Restoration Parts and Accessories for Classic Cars and Trucks
 
Subordinated Note (11% Cash, 4% PIK, Due 07/18)
 
6,870,925

 
6,717,698

 
6,717,698

 
Common Stock (18,029 shares)
 


 
183,562

 

 
Preferred Stock A (1,596 shares)
 


 
1,596,126

 
1,638,003

 

 
6,870,925

 
8,497,386

 
8,355,701

 
 
 
 
 
 
 
 
 
 
 
Electronic Systems Protection, Inc. (1%)*
 
Power Protection Systems Manufacturing
 
Subordinated Note (12% Cash, 2% PIK, Due 12/15)
 
4,267,913

 
4,242,543

 
4,242,543

Common Stock (570 shares)
 
 
 
285,000

 
308,000

 
 
 
4,267,913

 
4,527,543

 
4,550,543

 
 
 
 
 
 
 
 
 
 
 
Foodstate, Inc. (1%)*
 
Nutritional Supplement Manufacturing and Distribution
 
Subordinated Note (12% Cash, 3.8% PIK, Due 10/16)
 
5,531,727

 
5,454,198

 
5,454,198

 
 
 
5,531,727

 
5,454,198

 
5,454,198

 
 
 
 
 
 
 
 
 
 
 
Frozen Specialties, Inc. (1%)*
 
Frozen Foods Manufacturer
 
Subordinated Note (13% Cash, 5% PIK, Due 05/16)
 
6,324,276

 
6,277,364

 
6,277,364

 
 
6,324,276

 
6,277,364

 
6,277,364

 
 
 
 
 
 
 
 
 
 
 
Garden Fresh Restaurant Corp. (0%)*
 
Restaurant
 
Membership Units (5,000 units)
 
 
 
500,000

 
62,000

 
 
 
 
500,000

 
62,000

 
 
 
 
 
 
 
 
 
 
 
Glencoe Business Services Holdings (5%)*
 
Business Process Outsourcing Provider
 
Subordinated Note (12% Cash, 2.5% PIK, Due 06/18)
 
20,126,654

 
19,739,752

 
19,739,752

 
 
20,126,654

 
19,739,752

 
19,739,752

 
 
 
 
 
 
 
 
 
 
 
Grindmaster-Cecilware Corp. (1%)*
 
Food Services Equipment Manufacturer
 
Subordinated Note (12% Cash, 6% PIK, Due 04/16)
 
6,768,491

 
6,718,573

 
5,997,000

 
 
6,768,491

 
6,718,573

 
5,997,000

 
 
 
 
 
 
 
 
 
 
 
Hatch Chile Co., LLC (1%)*
 
Food Products Distributor
 
Senior Note (19% Cash, Due 07/15)
 
3,395,454

 
3,331,938

 
3,331,938

Subordinated Note (14% Cash, Due 07/15)
 
754,546

 
660,978

 
660,978

Unit Purchase Warrant (5,265 units)
 
 
 
149,800

 
285,000

 
 
4,150,000

 
4,142,716

 
4,277,916

 
 
 
 
 
 
 
 
 
 
 
Home Physicians, LLC (“HP”) and Home Physicians Holdings, LP (“HPH”) (3%)*
 
In-home Primary Care Physician Services
 
Subordinated Note-HP (12% Cash, 5% PIK, Due 03/16)
 
11,349,166

 
10,638,781

 
10,425,000

Subordinated Note-HPH (4% Cash, 6% PIK, Due 03/16)
 
1,384,898

 
1,303,361

 

Senior Subordinated Note-HP (14% Cash, 2% PIK, Due 03/16)
 
1,367,897

 
1,344,580

 
1,344,580

Preferred Units (0%)
 
 
 
1,100,000

 

Preferred Unit Purchase Warrants (25%)
 
 
 

 

Royalty Rights
 
 
 

 

 
 
14,101,961

 
14,386,722

 
11,769,580

 
 
 
 
 
 
 
 
 
 
 
Infrastructure Corporation of America, Inc. (3%)*
 
Roadway Maintenance, Repair and Engineering Services
 
Subordinated Note (12% Cash, 2% PIK, Due 09/18)
 
11,022,936

 
9,371,776

 
9,371,776

Common Stock Purchase Warrant (417,593 shares)
 
 
 
2,411,000

 
2,862,000

 
 
11,022,936

 
11,782,776

 
12,233,776

 
 
 
 
 
 
 
 
 
 
 
Inland Pipe Rehabilitation Holding Company LLC
(5%)*
 
Cleaning and Repair Services
 
Subordinated Note (13% Cash, 2.5% PIK, Due 12/16)
 
20,927,777

 
20,701,499

 
20,701,499

Membership Interest Purchase Warrant (3.0%)
 
 
 
853,500

 
2,328,000

 
 
20,927,777

 
21,554,999

 
23,029,499

 
 
 
 
 
 
 
 
 
 
 
IOS Acquisitions, Inc. (4%)*
 
Provider of Oil Country Tubular Goods Inspections and Repair Services
 
Subordinated Note (12% Cash, 2% PIK, Due 06/18)
 
17,089,881

 
16,761,015

 
16,761,015

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

 
1,699,847

 
 
17,089,881

 
18,460,862

 
18,460,862

 
 
 
 
 
 
 
 
 
 
 
Library Systems & Services, LLC (1%)*
 
Municipal Business Services
 
Subordinated Note (12.5% Cash, 4.5% PIK, Due 06/15)
 
4,256,702

 
4,173,803

 
4,173,803

Common Stock Warrants (112 shares)
 
 
 
58,995

 
1,267,000

 
 
4,256,702

 
4,232,798

 
5,440,803

 
 
 
 
 
 
 
 
 
 
 
Magpul Industries Corp. (5%)*
 
Firearm Accessories Manufacturer and Distributor
 
Subordinated Note (12% Cash, 3% PIK, Due 03/17)
 
13,300,000

 
13,090,346

 
13,090,346

Preferred Units (1,470 units)
 
 
 
1,470,000

 
1,812,000

Common Units (30,000 units)
 
 
 
30,000

 
4,433,000

 
 
13,300,000

 
14,590,346

 
19,335,346

 
 
 
 
 
 
 
 
 
 
 

8


TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
March 31, 2013
Portfolio Company
 
Industry
 
Type of Investment(1)(2)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
Marine Acquisition Corp. (3%)*
 
Boat Steering System and Driver Control Provider
 
Subordinated Note (11.50% Cash, 2% PIK, Due 05/17)
 
$
12,000,000

 
$
11,752,071

 
$
11,752,071

 
 
 
12,000,000

 
11,752,071

 
11,752,071

 
 
 
 
 
 
 
 
 
 
 
Media Storm, LLC (2%)*
 
Marketing Services
 
Subordinated Note (12% Cash, 2% PIK, Due 10/17)
 
8,096,946

 
8,027,916

 
8,027,916

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

 
1,390,000

 
 
8,096,946

 
9,204,873

 
9,417,916

 
 
 
 
 
 
 
 
 
 
 
Media Temple, Inc. (5%)*
 
Web Hosting Services
 
Subordinated Note (12% Cash, 3% PIK, Due 04/15)
 
11,000,000

 
10,906,578

 
10,906,578

Convertible Note (8% Cash, 6% PIK, Due 04/15)
 
4,000,000

 
4,562,615

 
8,001,000

Common Stock Purchase Warrant (28,000 shares)
 
 
 
1,251,000

 
3,500,000

 
 
15,000,000

 
16,720,193

 
22,407,578

 
 
 
 
 
 
 
 
 
 
 
Micross Solutions LLC (3%)*
 
Provider Semiconductor Products and Services
 
Subordinated Note (12% Cash, 2% PIK, Due 06/18)
 
10,668,476

 
10,514,683

 
10,514,683

Class A-2 Common Units (1,500,000 units)
 
 
 
1,500,000

 
1,500,000

 
 
10,668,476

 
12,014,683

 
12,014,683

 
 
 
 
 
 
 
 
 
 
 
Minco Technology Labs, LLC (1%)*
 
Semiconductor Distribution
 
Subordinated Note (6.5% Cash, 3.5% PIK, Due 05/16)
 
5,585,737

 
5,457,936

 
3,253,000

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

 

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

 

 
 
5,585,737

 
5,961,843

 
3,253,000

 
 
 
 
 
 
 
 
 
 
 
My Alarm Center, LLC (3%)*
 
Security Company
 
Subordinated Note (12% Cash, 2.5% PIK, Due 09/17)
 
10,135,685

 
10,044,308

 
10,044,308

 
Preferred Units (2,000,000 units)
 


 
2,000,000

 
1,993,000

 
 
 
10,135,685

 
12,044,308

 
12,037,308

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


 
43,905

 
178,801

 
 
 


 
43,905

 
178,801

 
 
 
 
 
 
 
 
 
 
 
Performance Health & Wellness Holdings, Inc. (3%)*
 
Designer and Manufacturer of Rehabilitation and Wellness Products
 
Subordinated Note (12% Cash, 1% PIK, Due 04/19)
 
13,061,834

 
12,877,102

 
12,877,102

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

 
1,500,000

 
 
 
13,061,834

 
14,377,102

 
14,377,102

 
 
 
 
 
 
 
 
 
 
 
PowerDirect Marketing, LLC (2%)*
 
Marketing Services
 
Subordinated Note (12% Cash, 2% PIK, Due 05/16)
 
7,598,981

 
7,041,753

 
7,041,753

Common Unit Purchase Warrants
 
 
 
590,200

 
1,992,000

 
 
7,598,981

 
7,631,953

 
9,033,753

 
 
 
 
 
 
 
 
 
 
 
ROM Acquisition Corporation (3%)*
 
Military and Industrial Vehicles Equipment Manufacturing
 
Subordinated Note (12% Cash, 3% PIK, Due 03/17)
 
13,256,685

 
13,142,383

 
13,142,383

 
 
13,256,685

 
13,142,383

 
13,142,383

 
 
 
 
 
 
 
 
 
 
 
Sheplers, Inc. (3%)*
 
Western Apparel Retailer
 
Subordinated Note (13.15% Cash, Due 12/16)
 
8,750,000

 
8,573,508

 
8,573,508

Subordinated Note (10% Cash, 7% PIK, Due 12/17)
 
4,095,960

 
4,036,393

 
4,036,393

 
 
 
12,845,960

 
12,609,901

 
12,609,901

 
 
 
 
 
 
 
 
 
 
 
Snacks Holding Corporation (3%)*
 
Trail Mixes and Nut Manufacturer and Marketer
 
Subordinated Note (12% Cash, 1% PIK, Due 11/17)
 
7,170,790

 
6,866,187

 
6,866,187

Preferred A Units (22,368 units)
 
 
 
2,124,957

 
3,185,000

Preferred B Units (10,380 units)
 
 
 
986,059

 
1,546,000

Common Units (190,935 units)
 
 
 
150,000

 
938,000

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

 
91,000

 
 
 
7,170,790

 
10,141,761

 
12,626,187

 
 
 
 
 
 
 
 
 
 
 
SRC, Inc. (1%)*
 
Specialty Chemical Manufacturer
 
Subordinated Notes (12% Cash, 2% PIK, Due 12/14)
 
6,053,888

 
5,906,509

 
5,567,000

Common Stock Purchase Warrants
 
 
 
123,800

 

 
 
 
6,053,888

 
6,030,309

 
5,567,000

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

 
316,000

 
 
 


 
20,000

 
316,000

 
 
 
 
 
 
 
 
 
 
 
Syrgis Holdings, Inc. (0%)*
 
Specialty Chemical Manufacturer
 
Class C Units (2,114 units)
 
 
 
111,037

 
201,281

 
 
 
 
111,037

 
201,281

 
 
 
 
 
 
 
 
 
 
 
The Krystal Company (4%)*
 
Quick Service Restaurant
 
Subordinated Note (12% Cash, 3% PIK, Due 06/17)
 
12,608,531

 
12,399,769

 
12,399,769

Class A Units of Limited Partnership (2,000 units)
 
 
 
2,000,000

 
3,044,000

 
 
 
12,608,531

 
14,399,769

 
15,443,769

 
 
 
 
 
 
 
 
 
 
 

9


TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
March 31, 2013
Portfolio Company
 
Industry
 
Type of Investment(1)(2)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
TMR Automotive Service Supply, LLC (1%)*
 
Automotive Supplies
 
Subordinated Note (12% Cash, 1% PIK, Due 03/16)
 
$
4,500,000

 
$
4,302,625

 
$
4,302,625

Unit Purchase Warrant (316,858 units)
 
 
 
195,000

 
388,000

 
 
 
4,500,000

 
4,497,625

 
4,690,625

 
 
 
 
 
 
 
 
 
 
 
Tomich Brothers, LLC (2%)*
 
Squid and Wetfish Processor and Distributor
 
Subordinated Note (12% Cash, 3% PIK, Due 04/16)
 
7,200,309

 
7,089,368

 
7,089,368

Royalty Rights
 
 
 

 

 
 
7,200,309

 
7,089,368

 
7,089,368

 
 
 
 
 
 
 
 
 
 
 
Top Knobs USA, Inc. (3%)*
 
Hardware Designer and Distributor
 
Common Stock (26,593 shares)
 
 
 
750,000

 
1,115,000

 
 
 
 
 
750,000

 
1,115,000

 
 
 
 
 
 
 
 
 
 
 
Trinity Consultants Holdings, Inc. (2%)*
 
Air Quality Consulting Services
 
Subordinated Note (12% Cash, 2.5% PIK, Due 11/17)
 
7,448,430

 
7,326,637

 
7,326,637

Series A Preferred Stock (10,000 units)
 
 
 
950,000

 
1,149,000

Common Stock (50,000 units)
 
 
 
50,000

 
647,000

 
 
 
7,448,430

 
8,326,637

 
9,122,637

 
 
 
 
 
 
 
 
 
 
 
TrustHouse Services Group, Inc. (7%)*
 
Food Management Services
 
Subordinated Note (12% Cash, 2.25% PIK, Due 06/19)
 
25,476,664

 
25,200,236

 
25,200,236

Class A Units (1,557 units)
 
 
 
512,124

 
1,796,000

Class B Units (82 units)
 
 
 
26,954

 
65,000

Class E Units (838 units)
 
 
 
750,406

 
1,032,000

 
 
 
25,476,664

 
26,489,720

 
28,093,236

 
 
 
 
 
 
 
 
 
 
 
Tulsa Inspection Resources, Inc. (2%)*
 
Pipeline Inspection Services
 
Subordinated Note (14%-17.5% Cash, Due 03/14)
 
5,810,588

 
5,696,398

 
5,696,398

Common Units (2 units)
 
 
 
337,925

 
707,000

Common Stock Warrants (8 shares)
 
 
 
321,000

 
2,717,000

 
 
 
5,810,588

 
6,355,323

 
9,120,398

 
 
 
 
 
 
 
 
 
 
 
United Biologics, LLC (2%)*
 
Allergy Immunotherapy
 
Subordinated Note (12% Cash, 2% PIK, Due 03/17)
 
9,969,981

 
9,093,494

 
9,093,494

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

 
1,143,000

Class A & Class B Unit Purchase Warrants
 
 
 
838,117

 
201,000

 
 
 
9,969,981

 
11,931,600

 
10,437,494

 
 
 
 
 
 
 
 
 
 
 
United Retirement Plan Consultants, Inc. (3%)*
 
Retirement Plan Administrator
 
Subordinated Note (12% Cash, 5% PIK, Due 09/16)
 
12,463,243

 
12,265,497

 
12,265,497

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

 
931,000

Common Units (10,000 units)
 
 
 
100,000

 

 
 
12,463,243

 
13,265,497

 
13,196,497

 
 
 
 
 
 
 
 
 
 
 
Wholesale Floors, Inc. (1%)*
 
Commercial Services
 
Subordinated Note (12.5% Cash, 3.5% PIK, Due 06/14)
 
3,853,796

 
3,807,968

 
3,807,968

Membership Interest Purchase Warrant (4.0%)
 
 
 
132,800

 

 
 
 
3,853,796

 
3,940,768

 
3,807,968

 
 
 
 
 
 
 
 
 
 
 
Workforce Software, LLC (3%)*
 
Software Provider
 
Subordinated Note (11% Cash, 5% PIK, Due 11/16)
 
8,000,000

 
7,084,042

 
7,084,042

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

 
1,160,000

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

 
2,336,000

 
 
 
8,000,000

 
9,056,342

 
10,580,042

 
 
 
 
 
 
 
 
 
 
 
WSO Holdings, LP (5%)*
 
Organic/Fair Trade Sugar, Syrup, Nectar and Honey Producer
 
Subordinated Note (12% Cash, 2% PIK, Due 10/17)
 
20,299,258

 
20,040,359

 
20,040,359

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

 
2,976,000

 
 
20,299,258

 
23,040,359

 
23,016,359

 
 
 
 
 
 
 
 
 
 
 
Xchange Technology Group, LLC (0%)*
 
Used and Refurbished IT Asset Supplier
 
Subordinated (8% Cash, Due 06/15)
 
6,144,480

 
5,904,000

 
750,000

Royalty Rights
 
 
 

 

 
 
6,144,480

 
5,904,000

 
750,000

 
 
 
 
 
 
 
 
 
 
 
Yellowstone Landscape Group, Inc. (4%)*
 
Landscaping Services
 
Subordinated Note (10% Cash, 6% PIK, Due 04/14)
 
15,476,540

 
15,383,142

 
15,383,142

 
 
15,476,540

 
15,383,142

 
15,383,142

 
 
 
 
 
 
 
Subtotal Non–Control / Non–Affiliate Investments
 
535,470,096

 
571,951,156

 
587,495,700

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

10


TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
March 31, 2013
Portfolio Company
 
Industry
 
Type of Investment(1)(2)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
Affiliate Investments:
 
 
 
 
 
 
 
 
 
 
All Aboard America! Holdings Inc. (2%)*
 
Motor Coach Operator
 
Subordinated Note (12% Cash, 3% PIK, Due 10/17)
 
$
8,696,065

 
$
8,544,388

 
$
8,544,388

 
Convertible Preferred Interest in LLC
 
 
 
1,500,000

 
1,979,000

 
 
 
8,696,065

 
10,044,388

 
10,523,388

 
 
 
 
 
 
 
 
 
 
 
American De-Rosa Lamparts, LLC and Hallmark Lighting (1%)*
 
Wholesale and Distribution
 
Subordinated Note (12% Cash, 6% PIK, Due 10/13)
 
6,533,798

 
5,778,219

 
5,778,219

Membership Units (6,516 units)
 
 
 
620,653

 

 
 
 
6,533,798

 
6,398,872

 
5,778,219

 
 
 
 
 
 
 
 
 
 
 
AP Services, Inc. (0%)*
 
Fluid Sealing Supplies and Services
 
Class A Units (933 units)
 
 
 
302,886

 
556,618

Class B Units (496 units)
 
 
 

 
295,642

 
 
 


 
302,886

 
852,260

 
 
 
 
 
 
 
 
 
 
 
Asset Point, LLC (2%)*
 
Asset Management Software Provider
 
Senior Note (12% Cash, 5% PIK, Due 03/13)
 
6,384,976

 
6,384,974

 
6,384,974

Senior Note (12% Cash, 2% PIK, Due 07/15)
 
633,404

 
633,404

 
585,000

Subordinated Note (7% Cash, Due 03/13)
 
941,798

 
941,798

 
706,000

Membership Units (1,000,000 units)
 
 
 
8,203

 
817,000

Options to Purchase Membership Units (342,407 units)
 
 
 
500,000

 
189,000

Membership Unit Warrants (356,506 units)
 
 
 

 

 
 
 
7,960,178

 
8,468,379

 
8,681,974

 
 
 
 
 
 
 
 
 
 
 
Captek Softgel International, Inc. (2%)*
 
Nutraceutical Manufacturer
 
Subordinated Note (12% Cash, 4% PIK, Due 08/16)