10-Q 1 a2017093010qtcap.htm 10-Q Document

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, 2017
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,” “smaller reporting company” and "emerging growth 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
¨
 
 
Emerging growth company
¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
   ¨
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 1, 2017 was 47,740,832.




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
 
September 30, 2017
 
December 31, 2016
 
(Unaudited)
 
 
Assets:
 
 
 
Investments at fair value:
 
 
 
Non-Control / Non-Affiliate investments (cost of $998,836,068 and $888,974,154 as of September 30, 2017 and December 31, 2016, respectively)
$
908,181,226

 
$
857,604,639

Affiliate investments (cost of $153,091,223 and $162,539,224 as of September 30, 2017 and December 31, 2016, respectively)
146,607,453

 
161,510,773

Control investments (cost of $86,861,024 and $45,418,113 as of September 30, 2017 and December 31, 2016, respectively)
36,403,000

 
18,791,769

Total investments at fair value
1,091,191,679

 
1,037,907,181

Cash and cash equivalents
81,003,756

 
107,087,663

Interest, fees and other receivables
9,744,381

 
10,189,788

Prepaid expenses and other current assets
1,827,994

 
1,659,570

Deferred financing fees
5,439,945

 
2,699,960

Property and equipment, net
91,195

 
106,494

Total assets
$
1,189,298,950

 
$
1,159,650,656

Liabilities:
 
 
 
Accounts payable and accrued liabilities
$
5,540,240

 
$
6,797,244

Interest payable
1,723,664

 
3,996,940

Taxes payable

 
489,691

Deferred income taxes
1,196,745

 
2,053,701

Borrowings under credit facility
141,118,837

 
127,011,475

Notes
163,241,179

 
162,755,381

SBA-guaranteed debentures payable
246,084,869

 
245,389,966

Total liabilities
558,905,534

 
548,494,398

Commitments and contingencies (Note 8)
 
 
 
Net Assets:
 
 
 
Common stock, $0.001 par value per share (150,000,000 shares authorized, 47,740,832 and 40,401,292 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively)
47,741

 
40,401

Additional paid-in capital
822,780,495

 
686,835,054

Net investment income in excess of (less than) distributions
(4,483,783
)
 
5,884,512

Accumulated realized losses
(41,242,051
)
 
(24,211,594
)
Net unrealized depreciation
(146,708,986
)
 
(57,392,115
)
Total net assets
630,393,416

 
611,156,258

Total liabilities and net assets
$
1,189,298,950

 
$
1,159,650,656

Net asset value per share
$
13.20

 
$
15.13


See accompanying notes.


3



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Operations
 
Three Months
Ended
 
Three Months
Ended
 
Nine Months Ended
 
Nine Months Ended
 
September 30,
2017
 
September 30,
2016
 
September 30,
2017
 
September 30,
2016
Investment income:
 
 
 
 
 
 
 
Interest income:
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
$
20,629,534

 
$
17,270,300

 
$
62,755,411

 
$
52,938,976

Affiliate investments
3,329,256

 
3,380,867

 
10,580,976

 
10,121,974

Control investments
281,147

 
303,708

 
861,294

 
764,622

Total interest income
24,239,937

 
20,954,875

 
74,197,681

 
63,825,572

Dividend income:
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
57,515

 
167,468

 
1,318,748

 
(1,030,703
)
Affiliate investments
137,470

 
244,233

 
241,714

 
706,495

Control investments

 

 

 
300,000

Total dividend income
194,985

 
411,701

 
1,560,462

 
(24,208
)
Fee and other income:
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
2,104,631

 
1,585,403

 
4,980,285

 
5,662,081

Affiliate investments
479,802

 
319,289

 
951,091

 
855,855

Control investments
107,292

 
110,000

 
307,292

 
310,000

Total fee and other income
2,691,725

 
2,014,692

 
6,238,668

 
6,827,936

Payment-in-kind interest income:
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
1,963,525

 
2,719,831

 
6,756,172

 
8,373,124

Affiliate investments
622,613

 
1,175,899

 
2,118,550

 
3,259,634

Total payment-in-kind interest income
2,586,138

 
3,895,730

 
8,874,722

 
11,632,758

Interest income from cash and cash equivalents
175,273

 
135,459

 
421,062

 
228,129

Total investment income
29,888,058

 
27,412,457

 
91,292,595

 
82,490,187

Operating expenses:
 
 
 
 
 
 
 
Interest and other financing fees
7,394,241

 
6,757,718

 
21,418,371

 
20,040,942

Compensation expenses
4,323,708

 
3,963,797

 
12,149,527

 
17,510,762

General and administrative expenses
1,019,192

 
859,785

 
3,403,385

 
3,170,330

Total operating expenses
12,737,141

 
11,581,300

 
36,971,283

 
40,722,034

Net investment income
17,150,917

 
15,831,157

 
54,321,312

 
41,768,153

Realized and unrealized gains (losses) on investments and foreign currency borrowings:
 
 
 
 
 
 
 
Net realized gains (losses):
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
4,066,263

 
(11,213,561
)
 
(3,036,048
)
 
(5,007,647
)
Affiliate investments
(4,443,680
)
 
2,106

 
(999,336
)
 
(1,680,198
)
Control investments
(8,503,633
)
 

 
(12,995,073
)
 

Net realized losses
(8,881,050
)
 
(11,211,455
)
 
(17,030,457
)
 
(6,687,845
)
Net unrealized appreciation (depreciation):
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
(64,601,974
)
 
11,731,534

 
(70,083,204
)
 
(596,458
)
Affiliate investments
(2,313,261
)
 
(303,939
)
 
(11,651,017
)
 
1,130,412

Control investments
2,047,411

 
(8,546,464
)
 
(5,981,149
)
 
(8,098,464
)
Net unrealized appreciation (depreciation) on investments
(64,867,824
)
 
2,881,131

 
(87,715,370
)
 
(7,564,510
)
Foreign currency borrowings
(897,734
)
 
342,409

 
(1,601,501
)
 
(569,382
)
Net unrealized appreciation (depreciation)
(65,765,558
)
 
3,223,540

 
(89,316,871
)
 
(8,133,892
)
Net realized and unrealized losses on investments and foreign currency borrowings
(74,646,608
)
 
(7,987,915
)
 
(106,347,328
)
 
(14,821,737
)
Tax benefit (provision)
(985
)
 
36,431

 
(305,166
)
 
47,342

Net increase (decrease) in net assets resulting from operations
$
(57,496,676
)
 
$
7,879,673

 
$
(52,331,182
)
 
$
26,993,758

Net investment income per share—basic and diluted
$
0.36

 
$
0.42

 
$
1.18

 
$
1.19

Net increase (decrease) in net assets resulting from operations per share—basic and diluted
$
(1.20
)
 
$
0.21

 
$
(1.14
)
 
$
0.77

Dividends/distributions per share:
 
 
 
 
 
 
 
Regular quarterly dividends/distributions
$
0.45

 
$
0.45

 
$
1.35

 
$
1.44

Total dividends/distributions per share
$
0.45

 
$
0.45

 
$
1.35

 
$
1.44

Weighted average shares outstanding—basic and diluted
47,743,990

 
38,115,449

 
46,079,139

 
35,199,704

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
Losses on Investments
 
Net
Unrealized
Depreciation
 
Total
Net
Assets
 
Number
of Shares
 
Par
Value
 
 
 
 
 
Balance, December 31, 2015
33,375,126

 
$
33,375

 
$
549,242,439

 
$
16,127,141

 
$
(25,813,329
)
 
$
(31,221,871
)
 
$
508,367,755

Net investment income

 

 

 
41,768,153

 

 

 
41,768,153

Stock-based compensation

 

 
7,502,500

 

 

 

 
7,502,500

Realized gain (loss) on investments

 

 

 

 
(6,687,845
)
 
7,532,502

 
844,657

Net unrealized loss on investments / foreign currency

 

 

 

 

 
(15,666,394
)
 
(15,666,394
)
Tax benefit

 

 

 
47,342

 

 

 
47,342

Dividends / distributions
120,562

 
120

 
2,325,851

 
(51,389,199
)
 

 

 
(49,063,228
)
Public offering of common stock
6,742,362

 
6,742

 
129,129,554

 

 

 

 
129,136,296

Issuance of restricted stock
364,605

 
365

 
(365
)
 

 

 

 

Common stock withheld for payroll taxes upon vesting of restricted stock
(197,252
)
 
(197
)
 
(3,581,675
)
 

 

 

 
(3,581,872
)
Balance, September 30, 2016
40,405,403

 
$
40,405

 
$
684,618,304

 
$
6,553,437

 
$
(32,501,174
)
 
$
(39,355,763
)
 
$
619,355,209

 
 
Common Stock
 
Additional
Paid-In
Capital
 
Investment
Income
in Excess of (Less Than)
Distributions
 
Accumulated
Realized
Losses on Investments
 
Net
Unrealized
Depreciation
 
Total
Net
Assets
 
Number
of Shares
 
Par
Value
 
 
 
 
 
Balance, December 31, 2016
40,401,292

 
$
40,401

 
$
686,835,054

 
$
5,884,512

 
$
(24,211,594
)
 
$
(57,392,115
)
 
$
611,156,258

Net investment income

 

 

 
54,321,312

 

 

 
54,321,312

Stock-based compensation

 

 
4,499,374

 

 

 

 
4,499,374

Realized gain (loss) on investments

 

 

 

 
(17,030,457
)
 
18,724,566

 
1,694,109

Net unrealized loss on investments / foreign currency

 

 

 

 

 
(108,041,437
)
 
(108,041,437
)
Tax provision

 

 

 
(305,166
)
 

 

 
(305,166
)
Dividends / distributions
91,366

 
91

 
1,637,467

 
(64,384,441
)
 

 

 
(62,746,883
)
Public offering of common stock
7,000,000

 
7,000

 
131,989,144

 

 

 

 
131,996,144

Issuance of restricted stock
360,470

 
361

 
(361
)
 

 

 

 

Common stock withheld for payroll taxes upon vesting of restricted stock
(112,296
)
 
(112
)
 
(2,180,183
)
 

 

 

 
(2,180,295
)
Balance, September 30, 2017
47,740,832

 
$
47,741

 
$
822,780,495

 
$
(4,483,783
)
 
$
(41,242,051
)
 
$
(146,708,986
)
 
$
630,393,416


See accompanying notes.


5



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Cash Flows 
 
Nine Months Ended
 
Nine Months Ended
 
September 30, 2017
 
September 30, 2016
Cash flows from operating activities:
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(52,331,182
)
 
$
26,993,758

Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
 
 
 
Purchases of portfolio investments
(391,502,625
)
 
(163,867,651
)
Repayments received/sales of portfolio investments
231,730,067

 
182,153,894

Loan origination and other fees received
5,733,890

 
3,205,460

Net realized loss on investments
17,030,457

 
6,687,845

Net unrealized depreciation on investments
88,572,326

 
9,525,827

Net unrealized depreciation on foreign currency borrowings
1,601,501

 
569,382

Deferred income taxes
(856,956
)
 
(1,961,317
)
Payment-in-kind interest accrued, net of payments received
(519,326
)
 
(4,177,550
)
Amortization of deferred financing fees
1,857,810

 
1,644,826

Accretion of loan origination and other fees
(3,863,096
)
 
(3,676,003
)
Accretion of loan discounts
(466,191
)
 
(307,081
)
Accretion of discount on SBA-guaranteed debentures payable

 
31,899

Depreciation expense
51,275

 
52,369

Stock-based compensation
4,499,374

 
7,502,500

Changes in operating assets and liabilities:
 
 
 
Interest, fees and other receivables
445,407

 
(2,074,332
)
Prepaid expenses and other current assets
(168,424
)
 
(743,114
)
Accounts payable and accrued liabilities
(1,257,004
)
 
(2,827,297
)
Interest payable
(2,273,276
)
 
(2,176,980
)
Taxes payable
(489,691
)
 
(735,498
)
Net cash provided by (used in) operating activities
(102,205,664
)
 
55,820,937

Cash flows from investing activities:
 
 
 
Purchases of property and equipment
(35,976
)
 
(69,177
)
Net cash used in investing activities
(35,976
)
 
(69,177
)
Cash flows from financing activities:
 
 
 
Borrowings under SBA-guaranteed debentures payable

 
32,800,000

Repayments of SBA-guaranteed debentures payable

 
(7,800,000
)
Borrowings under credit facility
106,700,000

 
68,901,849

Repayments of credit facility
(94,194,139
)
 
(109,300,000
)
Financing fees paid
(3,417,094
)
 
(1,123,400
)
Net proceeds related to public offering of common stock
131,996,144

 
129,136,296

Common stock withheld for payroll taxes upon vesting of restricted stock
(2,180,295
)
 
(3,581,872
)
Cash dividends/distributions paid
(62,746,883
)
 
(49,063,228
)
Net cash provided by financing activities
76,157,733

 
59,969,645

Net increase (decrease) in cash and cash equivalents
(26,083,907
)
 
115,721,405

Cash and cash equivalents, beginning of period
107,087,663

 
52,615,418

Cash and cash equivalents, end of period
$
81,003,756

 
$
168,336,823

Supplemental disclosure of cash flow information:
 
 
 
Cash paid for interest
$
20,955,808

 
$
19,929,857

Summary of non-cash financing transactions:
 
 
 
Dividends/distributions paid through DRIP share issuances
$
1,637,558

 
$
2,325,971


See accompanying notes.


6



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
September 30, 2017
Portfolio Company
 
Industry
 
Type of Investment(1)(2)(7)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
Non–Control / Non–Affiliate Investments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Access Medical Acquisition, Inc. (3%)*
 
Operator of Primary Care Clinics
 
Subordinated Notes (10% Cash, 2% PIK, Due 01/22)
 
$
13,819,514

 
$
13,620,530

 
$
13,620,530

 
 
Class A Units (1,500,000 units)
 
 
 
901,026

 
2,610,000

 
 
 
 
13,819,514

 
14,521,556

 
16,230,530

 
 
 
 
 
 
 
 
 
 
 
Aden & Anais Holdings, Inc. (0%)*
 
Baby Products
 
Common Stock (20,000 shares)
 
 
 
2,000,000

 
1,117,000

 
 
 
 
 
 
2,000,000

 
1,117,000

 
 
 
 
 
 
 
 
 
 
 
AM General, LLC (5%)*
 
Defense Manufacturing
 
Senior Note (LIBOR + 7.25%, 8.5% Cash,
Due 12/21)(8)
 
9,500,000

 
9,368,788

 
9,410,000

 
 
Second Lien Term Note (LIBOR +11.75%, 13.0% Cash, Due 06/22)(8)
 
20,000,000

 
19,459,561

 
19,641,000

 
 
 
 
29,500,000

 
28,828,349

 
29,051,000

 
 
 
 
 
 
 
 
 
 
 
Avantor Performance Materials Holdings, LLC (2%)*
 
Life Sciences and Advanced Technologies
 
Second Lien Term Note (LIBOR + 8.25%, 9.5% Cash, Due 03/25)(8)
 
15,000,000

 
14,856,508

 
14,976,000

 
 
 
 
15,000,000

 
14,856,508

 
14,976,000

 
 
 
 
 
 
 
 
 
 
 
AVL Holdings, Inc. (0%)*
 
Manufacturer and Distributor for Independent Artists and Authors
 
Common Stock (138 shares)
 
 
 
1,300,000

 
2,049,000

 
 
 
 
 
 
1,300,000

 
2,049,000

 
 
 
 
 
 
 
 
 
 
 
Baker Hill Acquisition, LLC (2%)*
 
Loan Origination Software Solutions Provider
 
Second Lien Term Notes (LIBOR + 11.0%, 12.3% Cash, Due 03/21)(8)
 
13,500,000

 
13,358,951

 
11,000,000

 
 
Delayed Draw Term Note (LIBOR + 11.0%, 12.3% Cash, Due 03/21)(8)
 
1,500,000

 
1,481,072

 
1,481,072

 
 
Limited Partnership Interest
 
 
 
1,498,500

 
103,000

 
 
 
 
15,000,000

 
16,338,523

 
12,584,072

 
 
 
 
 
 
 
 
 
 
 
Cafe Enterprises, Inc. (1%)*
 
Restaurant
 
Second Lien Term Note (Prime + 5.75%, 10.0% Cash, Due 03/19)(6)(8)
 
2,000,000

 
1,990,411

 
1,454,000

 
 
Subordinated Note (7% Cash, 7% PIK, Due 09/19)(6)
 
14,632,863

 
13,745,570

 
2,801,000

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

 

 
 
 
 
16,632,863

 
16,735,981

 
4,255,000

 
 
 
 
 
 
 
 
 
 
 
Captek Softgel International, Inc.
(5%)*
 
Nutraceuticals Manufacturer
 
Subordinated Note (10% Cash, 1.5% PIK, Due 01/23)
 
30,695,433

 
30,405,827

 
30,405,827

Common Stock (38,023 shares)
 
 
 
3,957,697

 
4,059,000

 
 
 
30,695,433

 
34,363,524

 
34,464,827

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

 
1,183,000

 
 
 
 
 
119,735

 
1,183,000

 
 
 
 
 
 
 
 
 
 
 
Centerfield Media Holding Company (0%)*
 
Digital Marketing
 
Common Shares (500 shares)
 
 
 
500,000

 
1,121,000

 
 
 
 


 
500,000

 
1,121,000

 
 
 
 
 
 
 
 
 
 
 
CIBT Global, Inc. (2%)*
 
Provider of Mobility Services
 
Second Lien Term Note (LIBOR + 7.75%, 9.1% Cash, Due 06/25)(8)
 
10,000,000

 
9,902,191

 
9,840,000

 
 
 
 
10,000,000

 
9,902,191

 
9,840,000

 
 
 
 
 
 
 
 
 
 
 
CIS Acquisition, LLC (0%)*
 
Secure Communications and Computing Solutions Provider
 
Units (1.09 units)
 
 
 
277,538

 
277,538

 
 
 
 
 
 
277,538

 
277,538

 
 
 
 
 
 
 
 
 
 
 
Community Intervention Services, Inc. (1%)*
 
Provider of Behavioral Health Services
 
Subordinated Note (7% Cash, 6% PIK, Due 01/21) (6)
 
20,294,798

 
17,732,558

 
3,717,000

 
 
 
 
20,294,798

 
17,732,558

 
3,717,000

 
 
 
 
 
 
 
 
 
 
 
Constellis Holdings, LLC (1%)*
 
Provider of Security and Risk Management Services
 
Second Lien Term Note (LIBOR + 9.0%, 10.3% Cash, Due 04/25)(8)
 
5,000,000

 
4,928,155

 
4,903,000

 
 
 
 
5,000,000

 
4,928,155

 
4,903,000

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

 
345,542

 
 
 
 
 
 
345,542

 
345,542

 
 
 
 
 
 
 
 
 
 
 
CWS Holding Company, LLC (0%)*
 
Manufacturer of Custom Windows and Sliding Doors
 
Class A Units (1,500,000 units)
 
 
 
1,500,000

 
1,624,000

 
 
 
 
 
1,500,000

 
1,624,000

 
 
 
 
 
 
 
 
 
 
 

7



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments — (Continued)
September 30, 2017
Portfolio Company
 
Industry
 
Type of Investment(1)(2)(7)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
Data Source Holdings, LLC (0%)*
 
Print Supply Chain Management Services
 
Common Units (47,503 units)
 
 
 
$
1,000,000

 
$
882,000

 
 
 
 
 
1,000,000

 
882,000

 
 
 
 
 
 
 
 
 
 
 
Del Real, LLC (3%)*
 
Hispanic Refrigerated Foods Company
 
Subordinated Note (11% Cash, Due 04/23)
 
$
14,000,000

 
13,751,325

 
13,751,325

 
 
Class A Units (3,000,000 units)
 
 
 
3,000,000

 
3,442,000

 
 
 
 
14,000,000

 
16,751,325

 
17,193,325

 
 
 
 
 
 
 
 
 
 
 
Dimora Brands, Inc. (3%)*
 
Hardware Designer and Distributor
 
Second Lien Term Note (LIBOR + 8.5%, 9.7% Cash, Due 08/25)(8)
 
20,000,000

 
19,600,000

 
19,600,000

 
 
 
 
20,000,000

 
19,600,000

 
19,600,000

 
 
 
 
 
 
 
 
 
 
 
DLC Acquisition, LLC (6%)*
 
Staffing Firm
 
Senior Notes (LIBOR + 8.0%, 10% Cash, Due 12/20)(8)
 
21,978,125

 
21,785,931

 
21,785,931

 
Senior Note (10% Cash, 2% PIK, Due 12/20)
 
17,187,831

 
17,024,644

 
17,024,644

 
 
 
39,165,956

 
38,810,575

 
38,810,575

 
 
 
 
 
 
 
 
 
 
 
Dyno Acquiror, Inc. (1%)*
 
Sewing Products and Seasonal Decorative Products Supplier
 
Subordinated Note (10.5% Cash, 1.5% PIK, Due 08/20)
 
4,646,082

 
4,623,967

 
4,623,967

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

 
591,000

 
 
 
4,646,082

 
5,223,967

 
5,214,967

 
 
 
 
 
 
 
 
 
 
 
Eckler's Holdings, Inc. (0%)*
 
Restoration Parts and Accessories for Classic Cars and Trucks
 
Subordinated Note (7.7% Cash, Due 06/19)(6)
 
13,941,700

 
13,242,814

 
3,126,000

 
Common Stock (18,029 shares)
 
 
 
183,562

 

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

 

 
Series B Preferred Stock (702 shares)
 
 
 
435,127

 

 
 
 
13,941,700

 
15,457,629

 
3,126,000

 
 
 
 
 
 
 
 
 
 
 
Fridababy Holdings, LLC (4%)*
 
Baby Products
 
Subordinated Notes (LIBOR + 9.0%, 10.3% Cash, Due 10/21)(8)
 
23,000,000

 
22,614,777

 
22,614,777

 
 
Class B Units (4,500 units)
 
 
 
273,401

 
288,000

 
 
 
 
23,000,000

 
22,888,178

 
22,902,777

 
 
 
 
 
 
 
 
 
 
 
FrontStream Holdings, LLC (1%)*
 
Payment and Donation Management Product Service Provider
 
Subordinated Note (LIBOR + 6.0%, 7.3% Cash, Due 12/20)(6)(8)
 
14,624,745

 
14,272,931

 
7,315,000

 
 
Series C-2 Preferred Shares (500 shares)
 
 
 
500,000

 

 
 
 
 
14,624,745

 
14,772,931

 
7,315,000

 
 
 
 
 
 
 
 
 
 
 
Frozen Specialties, Inc. (2%)*
 
Frozen Foods Manufacturer
 
Subordinated Note (10% Cash, 4% PIK, Due 3/18)
 
14,094,381

 
14,094,381

 
14,094,381

 
 
14,094,381

 
14,094,381

 
14,094,381

 
 
 
 
 
 
 
 
 
 
 
GST AutoLeather, Inc. (0%)*
 
Supplier of Automotive Interior Leather
 
Subordinated Note (11% Cash, 2% PIK, Due 01/21)(6)
 
24,140,883

 
23,073,507

 
2,450,000

 
 
 
 
24,140,883

 
23,073,507

 
2,450,000

 
 
 
 
 
 
 
 
 
 
 
Halo Branded Solutions, Inc. (2%)*
 
Supply Chain Services
 
Subordinated Notes (11% Cash, 1% PIK, Due 10/22)
 
10,490,124

 
10,292,192

 
10,292,192

 
 
Class A1 Units (2,600 units)
 
 
 
2,600,000

 
4,034,000

 
 
 
 
10,490,124

 
12,892,192

 
14,326,192

 
 
 
 
 
 
 
 
 
 
 
HemaSource, Inc. (2%)*
 
Medical Products Distributor
 
Subordinated Note (9.5% Cash, 1.5% PIK, Due 01/24)
 
10,030,833

 
9,836,481

 
9,836,481

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

 
1,000,000

 
 
 
 
10,030,833

 
10,836,481

 
10,836,481

 
 
 
 
 
 
 
 
 
 
 
HKW Capital Partners IV, L.P.
(0%)*(4)
 
Multi-Sector Holdings
 
0.6% Limited Partnership Interest
 
 
 
922,279

 
1,533,000

 
 
 
 
 
 
922,279

 
1,533,000

 
 
 
 
 
 
 
 
 
 
 
HTC Borrower, LLC (4%)*
 
Hunting and Outdoor Products
 
Subordinated Notes (10% Cash, 3% PIK, Due 09/20)
 
26,730,722

 
26,501,283

 
26,501,283

 
 
 
 
26,730,722

 
26,501,283

 
26,501,283

 
 
 
 
 
 
 
 
 
 
 
ICP Industrial, Inc. (4%)*
 
Coatings Formulator and Manufacturer
 
Second Lien Term Note (LIBOR + 8.5%, 9.7% Cash, Due 04/22)(8)
 
7,500,000

 
7,442,511

 
7,442,511

 
 
Subordinated Notes (10% Cash, 1% PIK, Due 10/22)
 
8,149,614

 
8,021,608

 
8,021,608

 
 
Subordinated Notes (14% PIK, Due 10/22)
 
6,374,723

 
6,325,018

 
6,325,018

 
 
Class A Units (1,289 units)
 
 
 
1,751,483

 
1,643,000

 
 
 
 
22,024,337

 
23,540,620

 
23,432,137

 
 
 
 
 
 
 
 
 
 
 
IDERA, Inc. (2%)*
 
Software Provider
 
Second Lien Term Note (LIBOR + 9.0%, 10.2% Cash, Due 06/25)(8)
 
10,000,000

 
9,853,115

 
9,853,115

 
 
 
 
10,000,000

 
9,853,115

 
9,853,115

 
 
 
 
 
 
 
 
 
 
 

8



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments — (Continued)
September 30, 2017
Portfolio Company
 
Industry
 
Type of Investment(1)(2)(7)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
Inland Pipe Rehabilitation Holding Company LLC (0%)*
 
Cleaning and Repair Services
 
Membership Interest Purchase Warrant (3%)
 
 
 
$
853,500

 
$
596,000

 
 
 
 
853,500

 
596,000

 
 
 
 
 
 
 
 
 
 
 
Integrated Efficiency Solutions, Inc. (3%)*
 
Energy Services Contracting Firm
 
Senior Secured Term Note (LIBOR + 9.25%, 10.6% Cash, Due 06/22)(8)
 
$
18,500,000

 
18,188,844

 
18,188,844

Series B Preferred Units (238,095 units)
 
 
 
300,000

 
300,000

 
 
18,500,000

 
18,488,844

 
18,488,844

 
 
 
 
 
 
 
 
 
 
 
IPS Structural Adhesives Holdings, Inc. (2%)*
 
Specialty Adhesives and Plumbing Products Manufacturer
 
Second Lien Term Note (LIBOR + 9.5%, 10.7% Cash, Due 12/24)(8)
 
15,000,000

 
14,718,778

 
14,903,000

 
 
 
 
15,000,000

 
14,718,778

 
14,903,000

 
 
 
 
 
 
 
 
 
 
 
Keystone Peer Review Organization, Inc. (0%)*
 
Healthcare - Managed Care
 
Second Lien Term Note (LIBOR + 9.25%, 10.6% Cash, Due 05/25)(8)
 
3,000,000

 
2,942,497

 
2,927,000

 
 
 
 
3,000,000

 
2,942,497

 
2,927,000

 
 
 
 
 
 
 
 
 
 
 
KidKraft, Inc. (4%)*
 
Children's Toy Manufacturer and Distributor
 
Second Lien Term Note (11% Cash, 1% PIK, Due 03/22)
 
27,876,081

 
27,401,586

 
27,401,586

 
 
 
 
27,876,081

 
27,401,586

 
27,401,586

 
 
 
 
 
 
 
 
 
 
 
K-Square Restaurant Partners, LP (0%)*
 
Restaurant
 
Class A Units of Limited Partnership (2,000 units)
 
 
 
638,260

 
2,759,000

 
 
 
 
 
 
638,260

 
2,759,000

 
 
 
 
 
 
 
 
 
 
 
Lakeview Health Holdings, Inc. (3%)*
 
Substance Abuse Treatment Service Provider
 
Senior Note (LIBOR + 6.75%, 8.1% Cash,
Due 12/21)(8)
 
18,473,037

 
18,298,370

 
18,298,370

 
 
Common Stock (2,000 shares)
 
 
 
2,000,000

 
1,149,000

 
 
 
 
18,473,037

 
20,298,370

 
19,447,370

 
 
 
 
 
 
 
 
 
 
 
Media Storm, LLC (1%)*
 
Marketing Services
 
Subordinated Note (10% Cash, Due 08/19)(6)
 
6,709,091

 
6,541,519

 
3,571,000

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

 

 
 
6,709,091

 
7,718,476

 
3,571,000

 
 
 
 
 
 
 
 
 
 
 
MIC Holding LLC (1%)*
 
Firearm Accessories Manufacturer and Distributor
 
Preferred Units (1,470 units)
 
 
 
1,470,000

 
3,333,000

 
 
Common Units (30,000 units)
 
 
 
30,000

 
5,572,000

 
 
 
 
 
 
1,500,000

 
8,905,000

 
 
 
 
 
 
 
 
 
 
 
Micross Solutions LLC (3%)*
 
Provider of Semiconductor Products and Services
 
Senior Note (LIBOR + 5.50%, 6.8% Cash,
Due 08/23)(8)
 
15,000,000

 
14,820,000

 
14,820,000

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

 
2,246,000

 
 
15,000,000

 
16,839,693

 
17,066,000

 
 
 
 
 
 
 
 
 
 
 
Motor Vehicle Software Corporation (3%)*
 
Provider of EVR Services
 
Subordinated Note (10% Cash, 0.5% PIK, Due 03/21)
 
20,321,960

 
20,043,031

 
20,043,031

 
 
Class A Units (1,000,000 units)
 
 
 
1,087,460

 
1,526,000

 
 
 
 
20,321,960

 
21,130,491

 
21,569,031

 
 
 
 
 
 
 
 
 
 
 
Nautic Partners VII, LP (0%)*(4)
 
Multi-Sector Holdings
 
0.4% Limited Partnership Interest
 
 
 
1,180,910

 
1,748,000

 
 
 
 
 
 
1,180,910

 
1,748,000

 
 
 
 
 
 
 
 
 
 
 
Nomacorc, LLC (3%)*
 
Synthetic Wine Cork Producer
 
Subordinated Note (10% Cash, 2.3% PIK, Due 07/21)
 
21,234,114

 
20,972,775

 
17,400,000

 
 
Limited Partnership Interest
 
 
 
2,161,185

 

 
 
 
 
21,234,114

 
23,133,960

 
17,400,000

 
 
 
 
 
 
 
 
 
 
 
Orchid Underwriters Agency, LLC (1%)*
 
Insurance Underwriter
 
Subordinated Note (10% Cash, 1.5% PIK, Due 03/23)
 
2,127,072

 
2,086,080

 
2,086,080

Subordinated Note (13.5% PIK, Due 03/24)
 
785,362

 
770,531

 
770,531

Class A Preferred Units (15,000 units)
 
 
 
338,158

 
927,000

Class A Common Units (15,000 units)
 
 
 

 
1,153,000

 
 
2,912,434

 
3,194,769

 
4,936,611

 
 
 
 
 
 
 
 
 
 
 
ProAmpac PG Borrower LLC (2%)*
 
Manufacturer of Flexible Packaging Products
 
Second Lien Term Note (LIBOR + 8.5%, 9.8% Cash, Due 11/24)(8)
 
15,000,000

 
14,789,664

 
14,982,000

 
 
 
 
15,000,000

 
14,789,664

 
14,982,000

 
 
 
 
 
 
 
 
 
 
 
Q International Courier, LLC (2%)*
 
Third-Party Logistics Provider
 
Second Lien Term Note (LIBOR + 8.25%, 9.6% Cash, Due 09/25)(8)
 
14,000,000

 
13,720,000

 
13,720,000

 
 
 
 
14,000,000

 
13,720,000

 
13,720,000

 
 
 
 
 
 
 
 
 
 
 

9



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments — (Continued)
September 30, 2017
Portfolio Company
 
Industry
 
Type of Investment(1)(2)(7)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
REP WWEX Acquisition Parent, LLC (2%)*
 
Third-Party Logistics Provider
 
Second Lien Term Note (LIBOR + 8.75%, 10.2% Cash, Due 02/25)(8)
 
$
15,000,000

 
$
14,789,517

 
$
14,920,000

 
 
 
 
15,000,000

 
14,789,517

 
14,920,000

 
 
 
 
 
 
 
 
 
 
 
RMP Group, Inc. (2%)*
 
Provider of RCM Services to Hospitals and Physician Groups
 
Subordinated Note (10.5% Cash, 1% PIK, Due 09/22)
 
10,058,460

 
9,872,305

 
9,872,305

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

 
706,000

 
 
 
 
10,058,460

 
10,872,305

 
10,578,305

 
 
 
 
 
 
 
 
 
 
 
RockYou, Inc. (0%)*
 
Mobile Game Advertising Network
 
Common Stock (67,585 shares)
 
 
 
111,000

 
111,000

 
 
 
 
 
 
111,000

 
111,000

 
 
 
 
 
 
 
 
 
 
 
Rotolo Consultants, Inc. (2%)*
 
Landscape Services
 
Subordinated Note (11% Cash, 3% PIK, Due 08/21)
 
7,574,709

 
7,467,551

 
7,467,551

 
 
Series A Preferred Units (39 units)
 
 
 
3,654,253

 
5,691,000

 
 
 
 
7,574,709

 
11,121,804

 
13,158,551

 
 
 
 
 
 
 
 
 
 
 
SCA Pharmaceuticals, LLC (2%)*
 
Provider of Pharmaceutical Products
 
Subordinated Note (LIBOR + 9.0%, 10.3% Cash, Due 12/20)(8)
 
10,000,000

 
9,820,631

 
9,820,631

 
 
 
 
10,000,000

 
9,820,631

 
9,820,631

 
 
 
 
 
 
 
 
 
 
 
Schweiger Dermatology Group, LLC (3%)*
 
Provider of Dermatology Services
 
Senior Notes (LIBOR + 8.5%, 9.8% Cash,
Due 06/22)(8)
 
20,000,000

 
19,639,784

 
19,639,784

 
 
 
 
20,000,000

 
19,639,784

 
19,639,784

 
 
 
 
 
 
 
 
 
 
 
SCUF Gaming, Inc. (4%)*
 
Gaming Controller Manufacturer
 
Senior Notes (LIBOR + 8.5%, 9.7% Cash,
Due 12/21)(8)
 
25,008,000

 
24,568,745

 
24,568,745

 
 
Revolver Loan (LIBOR + 8.5%, 9.7% Cash,
Due 06/18)(8)
 
1,500,000

 
1,500,000

 
1,500,000

 
 
Common Stock (27,112 shares)
 
 
 
742,000

 
316,000

 
 
 
 
26,508,000

 
26,810,745

 
26,384,745

 
 
 
 
 
 
 
 
 
 
 
Smile Brands, Inc. (4%)*
 
Dental Service Organization
 
Subordinated Notes (10% Cash, 2% PIK, Due 02/23)
 
22,681,843

 
22,289,511

 
22,289,511

 
 
Class A Units (3,000 units)
 
 
 
3,000,000

 
2,876,000

 
 
 
 
22,681,843

 
25,289,511

 
25,165,511

 
 
 
 
 
 
 
 
 
 
 
SPC Partners V, LP (0%)*(4)
 
Multi-Sector Holdings
 
0.7% Limited Partnership Interest
 
 
 
2,247,369

 
2,321,000

 
 
 
 
 
 
2,247,369

 
2,321,000

 
 
 
 
 
 
 
 
 
 
 
Specialized Desanders, Inc. (2%)*(4)
 
Sand and Particulate Removal Equipment Provider for Oil and Gas Companies
 
Subordinated Note (11% Cash, 2% PIK, Due 10/20)
 
10,117,769

 
10,053,062

 
7,463,727

Class C Partnership Units (2,000,000 units)
 
 
 
1,937,421

 
3,662,000

 
 
 
10,117,769

 
11,990,483

 
11,125,727

 
 
 
 
 
 
 
 
 
 
 
St. Croix Hospice Acquisition Corp. (1%)*
 
Hospice Services Provider
 
Second Lien Term Note (LIBOR + 8.75%, 10.0% Cash, Due 03/24)(8)
 
9,200,000

 
9,062,000

 
9,062,000

 
 
Series A Preferred Units (500 units)
 
 
 
500,000

 
500,000

 
 
Class B Common Units (500 units)
 
 
 

 

 
 
 
 
9,200,000

 
9,562,000

 
9,562,000

 
 
 
 
 
 
 
 
 
 
 
Tate's Bake Shop (2%)*
 
Producer of Baked Goods
 
Subordinated Note (10% Cash, 3% PIK, Due 02/20)
 
10,983,585

 
10,879,180

 
10,983,585

 
 
Limited Partnership Interest
 
 
 
925,000

 
1,760,000

 
 
 
 
10,983,585

 
11,804,180

 
12,743,585