10-Q 1 a2018033110qtcap.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 March 31, 2018
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, a smaller reporting company, or an emerging growth 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 May 2, 2018 was 48,024,614.




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, 2018
 
December 31, 2017
 
(Unaudited)
 
 
Assets:
 
 
 
Investments at fair value:
 
 
 
Non-Control / Non-Affiliate investments (cost of $857,171,598 and $910,150,765 as of March 31, 2018 and December 31, 2017, respectively)
$
788,115,373

 
$
831,194,397

Affiliate investments (cost of $137,525,785 and $149,099,548 as of March 31, 2018 and December 31, 2017, respectively)
136,933,857

 
147,101,949

Control investments (cost of $64,694,407 and $62,375,532 as of March 31, 2018 and December 31, 2017, respectively)
38,936,000

 
37,988,000

Total investments at fair value
963,985,230

 
1,016,284,346

Cash and cash equivalents
207,911,913

 
191,849,697

Interest, fees and other receivables
7,806,038

 
7,806,887

Prepaid expenses and other current assets
2,413,115

 
1,854,861

Deferred financing fees
4,931,031

 
5,186,672

Property and equipment, net
67,442

 
81,149

Total assets
$
1,187,114,769

 
$
1,223,063,612

Liabilities:
 
 
 
Accounts payable and accrued liabilities
$
7,286,501

 
$
9,863,209

Interest payable
1,802,490

 
3,997,480

Taxes payable
126,587

 
796,111

Deferred income taxes
1,249,627

 
1,331,528

Borrowings under credit facility
125,001,284

 
156,070,484

Notes
163,578,086

 
163,408,301

SBA-guaranteed debentures payable
246,558,492

 
246,321,125

Total liabilities
545,603,067

 
581,788,238

Commitments and contingencies (Note 8)
 
 
 
Net Assets:
 
 
 
Common stock, $0.001 par value per share (150,000,000 shares authorized, 48,024,614 and 47,740,832 shares issued and outstanding as of March 31, 2018 and December 31, 2017, respectively)
48,025

 
47,741

Additional paid-in capital
823,786,656

 
823,614,881

Net investment income in excess of distributions
6,571,435

 
8,305,431

Accumulated realized losses
(92,138,783
)
 
(84,883,623
)
Net unrealized depreciation
(96,755,631
)
 
(105,809,056
)
Total net assets
641,511,702

 
641,275,374

Total liabilities and net assets
$
1,187,114,769

 
$
1,223,063,612

Net asset value per share
$
13.36

 
$
13.43


See accompanying notes.


3



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Operations
 
Three Months
Ended
 
Three Months
Ended
 
March 31,
2018
 
March 31,
2017
Investment income:
 
 
 
Interest income:
 
 
 
Non-Control / Non-Affiliate investments
$
19,006,050

 
$
20,470,837

Affiliate investments
2,660,187

 
3,372,135

Control investments
275,036

 
269,536

Total interest income
21,941,273

 
24,112,508

Dividend income:
 
 
 
Non-Control / Non-Affiliate investments
185,712

 
281,229

Affiliate investments
4,550

 

Total dividend income
190,262

 
281,229

Fee and other income:
 
 
 
Non-Control / Non-Affiliate investments
1,293,717

 
1,917,238

Affiliate investments
394,273

 
300,264

Control investments
100,000

 
100,000

Total fee and other income
1,787,990

 
2,317,502

Payment-in-kind interest income:
 
 
 
Non-Control / Non-Affiliate investments
1,306,581

 
2,639,382

Affiliate investments
422,140

 
738,466

Total payment-in-kind interest income
1,728,721

 
3,377,848

Interest income from cash and cash equivalents
427,841

 
101,683

Total investment income
26,076,087

 
30,190,770

Operating expenses:
 
 
 
Interest and other financing fees
7,590,548

 
6,910,303

Compensation expenses
4,092,852

 
4,250,413

General and administrative expenses
1,668,509

 
1,210,621

Total operating expenses
13,351,909

 
12,371,337

Net investment income
12,724,178

 
17,819,433

Realized and unrealized gains (losses) on investments and foreign currency borrowings:
 
 
 
Net realized gains (losses):
 
 
 
Non-Control / Non-Affiliate investments
(11,939,484
)
 
(12,360,335
)
Affiliate investments
3,257,198

 
3,532,816

Control investments
4,000

 
(4,491,440
)
Net realized losses on investments
(8,678,286
)
 
(13,318,959
)
Foreign currency borrowings
1,423,126

 

Net realized losses
(7,255,160
)
 
(13,318,959
)
Net unrealized appreciation (depreciation):
 
 
 
Non-Control / Non-Affiliate investments
9,932,384

 
5,416,936

Affiliate investments
1,455,331

 
(4,242,818
)
Control investments
(1,370,875
)
 
1,697,440

Net unrealized appreciation on investments
10,016,840

 
2,871,558

Foreign currency borrowings
(963,415
)
 
(178,792
)
Net unrealized appreciation
9,053,425

 
2,692,766

Net realized and unrealized gains (losses) on investments and foreign currency borrowings
1,798,265

 
(10,626,193
)
Provision for taxes
(50,790
)
 

Net increase in net assets resulting from operations
$
14,471,653

 
$
7,193,240

Net investment income per share—basic and diluted
$
0.27

 
$
0.42

Net increase in net assets resulting from operations per share—basic and diluted
$
0.30

 
$
0.17

Dividends/distributions per share:
 
 
 
Regular quarterly dividends/distributions
$
0.30

 
$
0.45

Total dividends/distributions per share
$
0.30

 
$
0.45

Weighted average shares outstanding—basic and diluted
47,898,859

 
42,743,469

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
 
Net 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

 

 

 
17,819,433

 

 

 
17,819,433

Stock-based compensation

 

 
1,453,904

 

 

 

 
1,453,904

Net realized gain (loss) on investments

 

 

 

 
(13,318,959
)
 
12,342,077

 
(976,882
)
Net unrealized depreciation on investments / foreign currency

 

 

 

 

 
(9,649,311
)
 
(9,649,311
)
Dividends / distributions
40,559

 
40

 
749,913

 
(21,438,377
)
 

 

 
(20,688,424
)
Public offering of common stock
7,000,000

 
7,000

 
132,198,931

 

 

 

 
132,205,931

Issuance of restricted stock
347,000

 
347

 
(347
)
 

 

 

 

Common stock withheld for payroll taxes upon vesting of restricted stock
(107,454
)
 
(107
)
 
(2,113,513
)
 

 

 

 
(2,113,620
)
Balance, March 31, 2017
47,681,397

 
$
47,681

 
$
819,123,942

 
$
2,265,568

 
$
(37,530,553
)
 
$
(54,699,349
)
 
$
729,207,289

 
 
Common Stock
 
Additional
Paid-In
Capital
 
Investment
Income
in Excess of
Distributions
 
Net Accumulated
Realized
Losses on Investments
 
Net
Unrealized
Depreciation
 
Total
Net
Assets
 
Number
of Shares
 
Par
Value
 
 
 
 
 
Balance, December 31, 2017
47,740,832

 
$
47,741

 
$
823,614,881

 
$
8,305,431

 
$
(84,883,623
)
 
$
(105,809,056
)
 
$
641,275,374

Net investment income

 

 

 
12,724,178

 

 

 
12,724,178

Stock-based compensation

 

 
1,455,543

 

 

 

 
1,455,543

Net realized gain (loss) on investments / foreign currency

 

 

 

 
(7,255,160
)
 
11,567,045

 
4,311,885

Net unrealized depreciation on investments / foreign currency

 

 

 

 

 
(2,513,620
)
 
(2,513,620
)
Provision for taxes

 

 

 
(50,790
)
 

 

 
(50,790
)
Dividends / distributions

 

 

 
(14,407,384
)
 

 

 
(14,407,384
)
Issuance of restricted stock
409,000

 
409

 
(409
)
 

 

 

 

Common stock withheld for payroll taxes upon vesting of restricted stock
(125,218
)
 
(125
)
 
(1,283,359
)
 

 

 

 
(1,283,484
)
Balance, March 31, 2018
48,024,614

 
$
48,025

 
$
823,786,656

 
$
6,571,435

 
$
(92,138,783
)
 
$
(96,755,631
)
 
$
641,511,702


See accompanying notes.


5



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Cash Flows 
 
Three Months Ended
 
Three Months Ended
 
March 31, 2018
 
March 31, 2017
Cash flows from operating activities:
 
 
 
Net increase in net assets resulting from operations
$
14,471,653

 
$
7,193,240

Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used in) operating activities:
 
 
 
Purchases of portfolio investments
(28,285,073
)
 
(161,518,093
)
Repayments received/sales of portfolio investments
81,440,184

 
53,770,711

Loan origination and other fees received
205,499

 
2,638,485

Net realized loss on investments
8,678,286

 
13,318,959

Net realized gain on foreign currency borrowings
(1,423,126
)
 

Net unrealized appreciation on investments
(9,934,939
)
 
(1,388,362
)
Net unrealized depreciation on foreign currency borrowings
963,415

 
178,792

Deferred income taxes
(81,901
)
 
(1,483,196
)
Payment-in-kind interest accrued, net of payments received
1,425,537

 
(690,432
)
Amortization of deferred financing fees
662,793

 
587,438

Accretion of loan origination and other fees
(1,224,392
)
 
(1,349,409
)
Accretion of loan discounts
(5,986
)
 
(83,480
)
Depreciation expense
13,707

 
17,790

Stock-based compensation
1,455,543

 
1,453,904

Changes in operating assets and liabilities:
 
 
 
Interest, fees and other receivables
849

 
4,695,274

Prepaid expenses and other current assets
(558,254
)
 
(188,608
)
Accounts payable and accrued liabilities
(2,576,708
)
 
(3,495,262
)
Interest payable
(2,194,990
)
 
(2,437,827
)
Taxes payable
(669,524
)
 
(489,691
)
Net cash provided by (used in) operating activities
62,362,573

 
(89,269,767
)
Cash flows from investing activities:
 
 
 
Purchases of property and equipment

 
(18,507
)
Net cash used in investing activities

 
(18,507
)
Cash flows from financing activities:
 
 
 
Borrowings under credit facility

 
50,000,000

Repayments of credit facility
(30,609,489
)
 
(86,100,000
)
Financing fees paid

 
(500,000
)
Net proceeds related to public offering of common stock

 
132,205,931

Common stock withheld for payroll taxes upon vesting of restricted stock
(1,283,484
)
 
(2,113,620
)
Cash dividends/distributions paid
(14,407,384
)
 
(20,688,424
)
Net cash provided by (used in) financing activities
(46,300,357
)
 
72,803,887

Net increase (decrease) in cash and cash equivalents
16,062,216

 
(16,484,387
)
Cash and cash equivalents, beginning of period
191,849,697

 
107,087,663

Cash and cash equivalents, end of period
$
207,911,913

 
$
90,603,276

Supplemental disclosure of cash flow information:
 
 
 
Cash paid for interest
$
8,748,005

 
$
8,541,314

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

 
$
749,953


See accompanying notes.


6



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
March 31, 2018
Portfolio Company
 
Industry
 
Type of Investment(1)(2)(7)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
Non–Control / Non–Affiliate Investments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Aden & Anais Holdings, Inc. (0%)*
 
Baby Products
 
Common Stock (20,000 shares)
 
 
 
$
2,000,000

 
$
793,000

 
 
 
 
 
 
2,000,000

 
793,000

 
 
 
 
 
 
 
 
 
 
 
AKKR-MVSC Member, LLC (F/K/A Motor Vehicle Software Corporation) (0%)*
 
Provider of EVR Services
 
Class A Units (1,000,000 units)
 
 
 
1,092,964

 
1,380,000

 
 
 
 
 
 
1,092,964

 
1,380,000

 
 
 
 
 
 
 
 
 
 
 
AM General, LLC (5%)*
 
Defense Manufacturing
 
Senior Note (LIBOR + 7.25%, 8.9% Cash,
Due 12/21)(8)
 
$
8,750,000

 
8,631,968

 
8,746,000

 
 
Second Lien Term Note (LIBOR +11.75%, 13.6% Cash, Due 06/22)(8)
 
20,000,000

 
19,502,500

 
20,800,000

 
 
 
 
28,750,000

 
28,134,468

 
29,546,000

 
 
 
 
 
 
 
 
 
 
 
Avantor, Inc. (0%)*
 
Life Sciences and Advanced Technologies
 
Subordinated Note (9.0% Cash, Due 10/25)
 
500,000

 
500,000

 
500,000

 
 
 
 
500,000

 
500,000

 
500,000

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

 
2,871,000

 
 
 
 
 
 
1,300,000

 
2,871,000

 
 
 
 
 
 
 
 
 
 
 
Baker Hill Acquisition, LLC (2%)*
 
Loan Origination Software Solutions Provider
 
Second Lien Term Notes (LIBOR + 11.0%, 12.7% Cash, Due 03/21)(8)
 
13,500,000

 
13,376,617

 
10,669,000

 
 
Delayed Draw Term Note (LIBOR + 11.0%, 12.7% Cash, Due 03/21)(8)
 
2,000,000

 
1,983,316

 
1,983,316

 
 
Limited Partnership Interest
 
 
 
1,498,500

 
106,000

 
 
 
 
15,500,000

 
16,858,433

 
12,758,316

 
 
 
 
 
 
 
 
 
 
 
Cafe Enterprises, Inc. (0%)*
 
Restaurant
 
Second Lien Term Note (Prime + 5.75%, 10.5% Cash, Due 03/19)(6)(8)
 
2,051,934

 
1,936,671

 

 
 
Subordinated Note (7% Cash, 7% PIK, Due 09/19)(6)
 
15,728,114

 
13,745,570

 

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

 

 
 
 
 
17,780,048

 
16,682,241

 

 
 
 
 
 
 
 
 
 
 
 
Captek Softgel International, Inc.
(5%)*
 
Nutraceuticals Manufacturer
 
Subordinated Note (10% Cash, 1.5% PIK, Due 01/23)
 
30,928,648

 
30,660,616

 
30,660,616

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

 
3,984,000

 
 
 
30,928,648

 
34,618,313

 
34,644,616

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

 
1,735,000

 
 
 
 
 
119,735

 
1,735,000

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

 
999,000

 
 
 
 
 
 
500,000

 
999,000

 
 
 
 
 
 
 
 
 
 
 
CIBT Global, Inc. (2%)*
 
Provider of Mobility Services
 
Second Lien Term Note (LIBOR + 7.75%, 10.1% Cash, Due 06/25)(8)
 
10,000,000

 
9,906,716

 
9,972,000

 
 
 
 
10,000,000

 
9,906,716

 
9,972,000

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

 
317,000

 
 
 
 
 
 
277,538

 
317,000

 
 
 
 
 
 
 
 
 
 
 
Community Intervention Services, Inc. (0%)*
 
Provider of Behavioral Health Services
 
Subordinated Note (7% Cash, 6% PIK, Due 01/21) (6)
 
21,650,530

 
17,732,558

 

 
 
 
 
21,650,530

 
17,732,558

 

 
 
 
 
 
 
 
 
 
 
 
Constellis Holdings, LLC (1%)*
 
Provider of Security and Risk Management Services
 
Second Lien Term Note (LIBOR + 9.0%, 11.3% Cash, Due 04/25)(8)
 
5,000,000

 
4,931,468

 
4,970,000

 
 
 
 
5,000,000

 
4,931,468

 
4,970,000

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

 
2,221,000

 
 
 
 
 
 
345,542

 
2,221,000

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

 
1,218,000

 
 
 
 
 
1,500,000

 
1,218,000

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

7



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments — (Continued)
March 31, 2018
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

 
$
720,000

 
 
 
 
 
1,000,000

 
720,000

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

 
13,768,309

 
13,768,309

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

 
3,382,000

 
 
 
 
14,000,000

 
16,768,309

 
17,150,309

 
 
 
 
 
 
 
 
 
 
 
Deva Holdings, Inc. (5%)*
 
Hair Products
 
Senior Note (LIBOR + 6.25%, 7.9% Cash, Due 10/23)(8)
 
32,418,750

 
31,765,980

 
31,765,980

 
 
 
 
32,418,750

 
31,765,980

 
31,765,980

 
 
 
 
 
 
 
 
 
 
 
Dimora Brands, Inc. (3%)*
 
Hardware Designer and Distributor
 
Second Lien Term Note (LIBOR + 8.5%, 10.4% Cash, Due 08/25)(8)
 
20,000,000

 
19,617,005

 
19,940,000

 
 
 
 
20,000,000

 
19,617,005

 
19,940,000

 
 
 
 
 
 
 
 
 
 
 
DLC Acquisition, LLC (6%)*
 
Staffing Firm
 
Senior Notes (LIBOR + 8.0%, 10% Cash, Due 12/20)(8)
 
21,434,375

 
21,293,747

 
21,293,747

 
Senior Note (10% Cash, 2% PIK, Due 12/20)
 
17,362,058

 
17,220,697

 
17,220,697

 
 
 
38,796,433

 
38,514,444

 
38,514,444

 
 
 
 
 
 
 
 
 
 
 
Dyno Acquiror, Inc. (1%)*
 
Sewing Products and Seasonal Decorative Products Supplier
 
Subordinated Note (10.5% Cash, 1.5% PIK, Due 08/20)
 
4,681,037

 
4,669,651

 
4,669,651

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

 
461,000

 
 
 
4,681,037

 
5,269,651

 
5,130,651

 
 
 
 
 
 
 
 
 
 
 
Eckler's Holdings, Inc. (0%)*
 
Restoration Parts and Accessories for Classic Cars and Trucks
 
Subordinated Note (17.5% Cash, Due 06/19)(6)
 
15,014,802

 
13,242,814

 
200,000

 
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

 

 
 
 
15,014,802

 
15,457,629

 
200,000

 
 
 
 
 
 
 
 
 
 
 
Frozen Specialties, Inc. (2%)*
 
Frozen Foods Manufacturer
 
Subordinated Note (10% Cash, 4% PIK, Due 07/18)
 
14,380,842

 
14,380,842

 
13,733,000

 
 
14,380,842

 
14,380,842

 
13,733,000

 
 
 
 
 
 
 
 
 
 
 
GST AutoLeather, Inc. (0%)*
 
Supplier of Automotive Interior Leather
 
Subordinated Note (0% Cash, Due 01/21)(6)
 
24,166,324

 
23,073,507

 
200,000

 
 
 
 
24,166,324

 
23,073,507

 
200,000

 
 
 
 
 
 
 
 
 
 
 
Halo Branded Solutions, Inc. (3%)*
 
Promotional Product Supply Chain Services
 
Subordinated Notes (11% Cash, 1% PIK, Due 10/22)
 
13,800,946

 
13,587,077

 
13,587,077

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

 
6,180,000

 
 
 
 
13,800,946

 
16,187,077

 
19,767,077

 
 
 
 
 
 
 
 
 
 
 
HemaSource, Inc. (2%)*
 
Medical Products Distributor
 
Subordinated Note (9.5% Cash, 1.5% PIK, Due 01/24)
 
10,107,044

 
9,924,395

 
9,924,395

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

 
1,118,000

 
 
 
 
10,107,044

 
10,924,395

 
11,042,395

 
 
 
 
 
 
 
 
 
 
 
HKW Capital Partners IV, L.P.
(0%)*(4)
 
Multi-Sector Holdings
 
0.6% Limited Partnership Interest
 
 
 
851,605

 
1,464,000

 
 
 
 
 
 
851,605

 
1,464,000

 
 
 
 
 
 
 
 
 
 
 
HTC Borrower, LLC (4%)*
 
Hunting and Outdoor Products
 
Subordinated Notes (10% Cash, 3% PIK, Due 09/20)
 
24,631,218

 
24,435,457

 
23,434,000

 
 
 
 
24,631,218

 
24,435,457

 
23,434,000

 
 
 
 
 
 
 
 
 
 
 
ICP Industrial, Inc. (4%)*
 
Coatings Formulator and Manufacturer
 
Second Lien Term Notes (LIBOR + 8.25%, 9.9% Cash, Due 05/24)(8)
 
25,000,000

 
24,411,011

 
24,411,011

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

 
1,783,000

 
 
 
 
25,000,000

 
26,162,494

 
26,194,011

 
 
 
 
 
 
 
 
 
 
 
IDERA, Inc. (2%)*
 
Software Provider
 
Second Lien Term Note (LIBOR + 9.0%, 10.9% Cash, Due 06/25)(8)
 
10,000,000

 
9,859,581

 
10,020,000

 
 
 
 
10,000,000

 
9,859,581

 
10,020,000

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

8



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments — (Continued)
March 31, 2018
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

 
$
1,120,000

 
 
 
 
853,500

 
1,120,000

 
 
 
 
 
 
 
 
 
 
 
Integrated Efficiency Solutions, Inc. (3%)*
 
Energy Services Contracting Firm
 
Senior Secured Term Note (LIBOR + 9.25%, 10.9% Cash, Due 06/22)(8)
 
$
18,037,500

 
17,752,509

 
17,752,509

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

 
239,000

 
 
18,037,500

 
18,052,509

 
17,991,509

 
 
 
 
 
 
 
 
 
 
 
Keystone Peer Review Organization, Inc. (0%)*
 
Healthcare - Managed Care
 
Second Lien Term Note (LIBOR + 9.25%, 11.6% Cash, Due 05/25)(8)
 
3,000,000

 
2,945,124

 
2,969,000

 
 
 
 
3,000,000

 
2,945,124

 
2,969,000

 
 
 
 
 
 
 
 
 
 
 
KidKraft, Inc. (4%)*
 
Children's Toy Manufacturer and Distributor
 
Second Lien Term Note (11% Cash, 1% PIK, Due 03/22)
 
28,015,253

 
27,582,780

 
27,582,780

 
 
 
 
28,015,253

 
27,582,780

 
27,582,780

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

 
779,000

 
 
 
 
 
 
638,260

 
779,000

 
 
 
 
 
 
 
 
 
 
 
Lakeview Health Holdings, Inc. (3%)*
 
Substance Abuse Treatment Service Provider
 
Senior Note (LIBOR + 7.0%, 9.5% Cash, Due 12/21)(8)
 
18,379,973

 
18,223,024

 
17,370,000

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

 
585,000

 
 
 
 
18,379,973

 
20,223,024

 
17,955,000

 
 
 
 
 
 
 
 
 
 
 
Media Storm, LLC (0%)*
 
Marketing Services
 
Subordinated Note (10% Cash, Due 08/19)(6)
 
6,545,455

 
6,541,519

 
1,617,000

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

 

 
 
6,545,455

 
7,718,476

 
1,617,000

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

 
3,566,000

 
 
Common Units (30,000 units)
 
 
 
30,000

 
5,088,000

 
 
 
 
 
 
1,500,000

 
8,654,000

 
 
 
 
 
 
 
 
 
 
 
Micross Solutions LLC (2%)*
 
Provider of Semiconductor Products and Services
 
Senior Note (LIBOR + 5.75%, 7.8% Cash,
Due 08/23)(8)
 
14,925,000

 
14,758,054

 
14,758,054

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

 
1,334,000

 
 
14,925,000

 
16,777,747

 
16,092,054

 
 
 
 
 
 
 
 
 
 
 
Nautic Partners VII, LP (0%)*(4)
 
Multi-Sector Holdings
 
0.4% Limited Partnership Interest
 
 
 
809,056

 
765,000

 
 
 
 
 
 
809,056

 
765,000

 
 
 
 
 
 
 
 
 
 
 
Navicure, Inc. (1%)*
 
Healthcare Revenue Cycle Management Software
 
Second Lien Term Note (LIBOR + 7.5%, 9.4% Cash, Due 11/25)(8)
 
6,000,000

 
5,942,685

 
6,047,000

 
 
 
 
6,000,000

 
5,942,685

 
6,047,000

 
 
 
 
 
 
 
 
 
 
 
OEConnection, LLC (0%)*
 
Automotive Parts Supply Chain Software
 
Second Lien Term Note (LIBOR + 8.0%, 10.5% Cash, Due 11/25)(8)
 
3,000,000

 
2,970,642

 
3,022,000

 
 
 
 
3,000,000

 
2,970,642

 
3,022,000

 
 
 
 
 
 
 
 
 
 
 
Orchid Underwriters Agency, LLC (1%)*
 
Insurance Underwriter
 
Subordinated Note (10% Cash, 1.5% PIK, Due 03/23)
 
2,143,233

 
2,105,117

 
2,105,117

Subordinated Note (13.5% PIK, Due 03/24)
 
839,877

 
825,789

 
825,789

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

 
988,000

Class A Common Units (15,000 units)
 
 
 

 
1,337,000

 
 
2,983,110

 
3,269,064

 
5,255,906

 
 
 
 
 
 
 
 
 
 
 
ProAmpac PG Borrower LLC (2%)*
 
Manufacturer of Flexible Packaging Products
 
Second Lien Term Note (LIBOR + 8.5%, 10.4% Cash, Due 11/24)(8)
 
15,000,000

 
14,800,030

 
15,150,000

 
 
 
 
15,000,000

 
14,800,030

 
15,150,000

 
 
 
 
 
 
 
 
 
 
 
Q International Courier, LLC (2%)*
 
Third-Party Logistics Provider
 
Second Lien Term Note (LIBOR + 8.25%, 10.1% Cash, Due 09/25)(8)
 
14,000,000

 
13,732,023

 
13,732,023

 
 
 
 
14,000,000

 
13,732,023

 
13,732,023

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

9



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments — (Continued)
March 31, 2018
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%, 10.7% Cash, Due 02/25)(8)
 
$
15,000,000

 
$
14,799,795

 
$
15,068,000

 
 
 
 
15,000,000

 
14,799,795

 
15,068,000

 
 
 
 
 
 
 
 
 
 
 
RMP Group, Inc. (2%)*
 
Healthcare Revenue Cycle Management Services
 
Subordinated Note (10.5% Cash, 1% PIK, Due 09/22)
 
10,108,677

 
9,937,103

 
9,937,103

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

 
802,000

 
 
 
 
10,108,677

 
10,937,103

 
10,739,103

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

 
111,000

 
 
 
 
 
 
111,000

 
111,000

 
 
 
 
 
 
 
 
 
 
 
Rotolo Consultants, Inc. (3%)*
 
Landscape Services
 
Subordinated Note (11% Cash, 3% PIK, Due 08/21)
 
7,690,320

 
7,594,155

 
7,594,155

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

 
8,464,000

 
 
 
 
7,690,320

 
11,248,408

 
16,058,155

 
 
 
 
 
 
 
 
 
 
 
SCA Pharmaceuticals, LLC (2%)*
 
Provider of Pharmaceutical Products
 
Subordinated Note (LIBOR + 9.0%, 11.0% Cash, Due 12/20)(8)
 
10,000,000

 
9,844,578

 
9,844,578

 
 
 
 
10,000,000

 
9,844,578

 
9,844,578

 
 
 
 
 
 
 
 
 
 
 
Schweiger Dermatology Group, LLC (6%)*
 
Provider of Dermatology Services
 
Senior Notes (LIBOR + 8.5%, 10.5% Cash,
Due 06/22)(8)
 
34,800,000

 
34,325,281

 
34,325,281

 
 
Class A-5 Units (1,976,284 units)
 
 
 
1,000,000

 
1,567,000

 
 
 
 
34,800,000

 
35,325,281

 
35,892,281

 
 
 
 
 
 
 
 
 
 
 
SCUF Gaming, Inc. (4%)*
 
Gaming Controller Manufacturer
 
Senior Notes (LIBOR + 8.5%, 10.2% Cash,
Due 12/21)(8)
 
24,757,920

 
24,361,718

 
24,361,718

 
 
Revolver Loan (LIBOR + 8.5%, 10.2% Cash,
Due 06/18)(8)
 
1,500,000

 
1,493,806

 
1,493,806

 
 
Common Stock (27,112 shares)
 
 
 
742,000

 
260,000

 
 
 
 
26,257,920

 
26,597,524

 
26,115,524

 
 
 
 
 
 
 
 
 
 
 
Smile Brands, Inc. (4%)*
 
Dental Service Organization
 
Subordinated Notes (10% Cash, 2% PIK, Due 02/23)
 
22,911,761

 
22,546,954

 
22,546,954

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

 
3,353,000

 
 
 
 
22,911,761

 
25,546,954

 
25,899,954

 
 
 
 
 
 
 
 
 
 
 
SPC Partners V, LP (0%)*(4)
 
Multi-Sector Holdings
 
0.7% Limited Partnership Interest
 
 
 
2,260,450

 
2,412,000

 
 
 
 
 
 
2,260,450

 
2,412,000

 
 
 
 
 
 
 
 
 
 
 
SPC Partners VI, LP (0%)*(4)
 
Multi-Sector Holdings
 
0.6% Limited Partnership Interest
 
 
 
475,450

 
475,450

 
 
 
 
 
 
475,450

 
475,450

 
 
 
 
 
 
 
 
 
 
 
St. Croix Hospice Acquisition Corp. (1%)*
 
Hospice Services Provider
 
Second Lien Term Note (LIBOR + 8.75%, 10.6% Cash, Due 03/24)(8)
 
9,200,000

 
9,069,764

 
9,069,764

 
 
Series A Preferred Units (500 units)
 
 
 
500,000

 
264,000

 
 
Class B Common Units (500 units)
 
 
 

 

 
 
 
 
9,200,000

 
9,569,764

 
9,333,764

 
 
 
 
 
 
 
 
 
 
 
Tate's Bake Shop (2%)*
 
Producer of Baked Goods
 
Senior Note (LIBOR + 6.25%, 8.6% Cash, Due 08/19)(8)
 
9,950,000

 
9,929,852

 
9,929,852

 
 
Limited Partnership Interest
 
 
 
534,280

 
1,827,000

 
 
 
 
9,950,000

 
10,464,132

 
11,756,852

 
 
 
 
 
 
 
 
 
 
 
Tax Advisors Group, LLC (2%)*
 
Tax Advisory Services
 
Subordinated Note (10% Cash, 2% PIK, Due 12/22)
 
12,400,000

 
12,178,426

 
12,178,426

 
 
Class A Units (386 units)
 
 
 
1,458,824

 
2,354,000

 
 
 
 
12,400,000

 
13,637,250

 
14,532,426

 
 
 
 
 
 
 
 
 
 
 
TCFI Merlin LLC ("Merlin") and TCFI CSG LLC ("CSG") (2%)*
 
Specialty Staffing Service Provider
 
Subordinated Notes (11.9% Cash, Due 11/22)(8)
 
14,184,192

 
13,999,058

 
13,999,058

 
 
Limited Partnership Units - Merlin (500,500 units)
 
 
 
285,485

 
1,606,000

 
 
Class A Units - CSG (100,000 units)
 
 
 
100,000

 
264,000

 
 
 
 
14,184,192

 
14,384,543

 
15,869,058

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

10



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments — (Continued)
March 31, 2018
Portfolio Company
 
Industry
 
Type of Investment(1)(2)(7)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
The Cook & Boardman Group, LLC (1%)*
 
Distributor of Doors and Related Products
 
Class A Units (1,400,000 units)
 
 
 
$
1,400,000

 
$
3,435,000

 
 
 
 
 
 
1,400,000

 
3,435,000

 
 
 
 
 
 
 
 
 
 
 
Trademark Global LLC (4%)*
 
Supplier to Mass Market Internet Retail
 
Senior Note (LIBOR + 5.5%, 7.4% Cash, Due 10/22)(8)
 
$
9,974,897

 
9,879,619

 
9,879,619

 
 
Subordinated Note (10% Cash, 1.3% PIK, Due 04/23)
 
14,800,000

 
14,617,380

 
14,617,380

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

 
1,500,000

 
 
Class B Units (1,500,000 units)
 
 
 

 
800,000

 
 
 
 
24,774,897

 
25,996,999

 
26,796,999

 
 
 
 
 
 
 
 
 
 
 
Travelpro Products, Inc. ("Travelpro") and TP - Holiday Group Limited ("TP") (3%)*
 
Luggage and Travel Bag Supplier
 
Second Lien Term Note - Travelpro (11% Cash, 2% PIK, Due 11/22)
 
10,384,620

 
10,212,850

 
10,212,850

 
 
Second Lien Term Note - TP (11% Cash, 2% PIK, Due 11/22)(4)
 
9,199,637

 
9,045,042

 
9,184,943

 
 
Common Units - Travelpro (2,000,000 units)
 
 
 
2,000,000

 
2,337,000

 
 
 
 
19,584,257

 
21,257,892

 
21,734,793

 
 
 
 
 
 
 
 
 
 
 
United Biologics, LLC (0%)*
 
Allergy Immunotherapy
 
Class A-1 Common Units (18,818 units)
 
 
 
137,324

 
137,325

 
Class A Common Units (177,935 units)
 
 
 
1,999,989

 
1,207,000

 
Class A-2 Common Kicker Units (444,003 units)
 
 
 

 

 
Class A-1 Common Kicker Units (14,114 units)
 
 
 

 

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

 
263,000

 
 
 
 


 
2,975,430

 
1,607,325