FOR IMMEDIATE RELEASE
November 02, 2016


Contact
E. Ashton Poole, Chairman and CEO (919) 747-8618
Steven C. Lilly, Chief Financial Officer (919) 719-4789


3700 Glenwood Avenue, Suite 530
Raleigh, NC 27612
Tel (919) 719-4770
Fax (919) 719-4777

www.TCAP.com

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Triangle Capital Corporation Reports Third Quarter 2016 Results

RALEIGH, N.C., Nov. 02, 2016 (GLOBE NEWSWIRE) -- Triangle Capital Corporation (NYSE:TCAP) ("Triangle" or the "Company"), a leading provider of capital to lower middle market companies, today announced its financial and operating results for the third quarter of 2016.

Highlights

  • Total Investment Portfolio: $947.7 million
  • Total Net Assets (Equity): $619.4 million
  • Net Asset Value Per Share (Book Value): $15.33
  • Weighted Average Yield on Debt Investments: 12.3%
  • Efficiency Ratio (Compensation and G&A Expenses/Total Investment Income): 17.6%
  • Investment Portfolio Activity for the Quarter Ended September 30, 2016
    • Cost of investments made during the period: $88.4 million
    • Principal repayments (excluding PIK interest repayments) during the period: $53.1 million
    • Proceeds related to the sale of equity investments during the period: $9.5 million
  • Non-Accrual Assets as a Percentage of Total Portfolio Cost and Fair Value: 3.9% and 2.1%, respectively
  • Financial Results for the Quarter Ended September 30, 2016
    • Total investment income: $27.4 million
    • Net investment income: $15.8 million
    • Net investment income per share: $0.42
    • Net realized losses: $11.2 million
    • Net increase in net assets resulting from operations: $7.9 million
    • Net increase in net assets resulting from operations per share: $0.21

In commenting on the Company's third quarter investment activity and outlook, E. Ashton Poole, President and CEO, stated, "The third quarter was a very active quarter for Triangle on numerous fronts. During the quarter we raised approximately $129 million of growth equity capital, we successfully deployed over $88 million of capital, and, since quarter-end, we have deployed almost $58 million of additional capital. In addition to our investing activities, we strengthened our operational focus through the promotion of three longstanding Triangle team members and strengthened our Board of Directors with the recent appointment of Mark Mulhern. 2016 has been an exciting time of forward momentum at Triangle. As we begin to focus on 2017 and beyond, I am extremely pleased with the operational and strategic team we have assembled."

Third Quarter 2016 Results

Total investment income during the third quarter of 2016 was $27.4 million, compared to total investment income of $30.8 million for the third quarter of 2015, representing a decrease of 11.1%. This decrease was primarily attributable to a $1.8 million decrease in non-recurring fee income, a $0.8 million decrease in investment income related to non-accrual assets and a decrease in the weighted average yield on our debt investments from September 30, 2015 to September 30, 2016.

Net investment income during the third quarter of 2016 was $15.8 million, compared to net investment income of $18.5 million for the third quarter of 2015, representing a decrease of 14.5%. Net investment income per share during the third quarter of 2016 was $0.42, based on weighted average shares outstanding during the quarter of 38.1 million, compared to $0.56 per share during the third quarter of 2015, based on weighted average shares outstanding of 33.3 million.

The Company's net increase in net assets resulting from operations was $7.9 million during the third quarter of 2016, compared to a $17.9 million net increase during the third quarter of 2015.  The Company's net increase in net assets resulting from operations was $0.21 per share during the third quarter of 2016, based on weighted average shares outstanding of 38.1 million, compared to a net increase in net assets resulting from operations of $0.54 per share during the third quarter of 2015, based on weighted average shares outstanding of 33.3 million.

The Company's net asset value, or NAV, at September 30, 2016, was $15.33 per share as compared to $15.23 per share at December 31, 2015. As of September 30, 2016, the Company's weighted average yield on its outstanding, currently yielding debt investments was approximately 12.3%.

Liquidity and Capital Resources

Commenting on the Company's liquidity position, Steven C. Lilly, Chief Financial Officer, stated, "With over $375 million of available liquidity through a combination of cash on hand and availability under our senior credit facility, Triangle has the capacity and flexibility to support our investing activities in the fourth quarter and as we enter 2017."

At September 30, 2016, the Company had cash and cash equivalents totaling $168.3 million and $208.6 million of remaining borrowing capacity under its $300.0 million senior credit facility.

Dividend Information

On August 24, 2016, Triangle announced that its board of directors had declared a cash dividend of $0.45 per share. This was the Company's 39th consecutive quarterly dividend since its initial public offering in February, 2007.  The record date for the dividend was September 7, 2016, and the payment date was September 21, 2016.

Recent Portfolio Activity

During the quarter ended September 30, 2016, the Company made three new investments totaling approximately $83.9 million, debt investments in three existing portfolio companies totaling $2.9 million and equity investments in six existing portfolio companies totaling $1.7 million.  The Company had three portfolio company loans repaid at par totaling $45.3 million resulting in realized gains totaling $0.7 million and received normal principal repayments and partial loan prepayments totaling $7.9 million. The Company wrote-off a debt investment in one portfolio company and recognized a realized loss on the write-off of $16.1 million. In addition, the Company received proceeds related to the sales of certain equity securities totaling $9.5 million and recognized net realized gains on such sales totaling $4.2 million.

New portfolio investments which occurred during the third quarter of 2016 are summarized as follows:

In August, 2016, the Company made a $25.2 million investment in Smile Brands Group ("Smile Brands") consisting of subordinated debt and equity. Smile Brands provides general dentistry, dental hygiene and specialty services, as well as centralized scheduling, billing, marketing and financing for its office locations.

In September, 2016, the Company made a $31.1 million investment in Vantage Mobility International ("VMI") consisting of subordinated debt and equity.  VMI manufactures wheelchair accessible vehicles and related accessories.

In September, 2016, the Company made a $27.6 million second lien debt investment in KidKraft, Inc. ("KidKraft"). KidKraft is a designer and distributor of toys and playsets for children.

New portfolio investments subsequent to quarter end are summarized as follows:

In October, 2016, the Company made a $23.5 million investment in Fridababy, LLC ("Fridababy") consisting of unitranche debt and equity.  Fridababy markets and distributes baby products.

In October, 2016, the Company made a $17.0 million investment in Del Real, LLC ("Del Real") consisting of subordinated debt and equity.  Del Real is a leading Hispanic refrigerated foods company.

In October, 2016, the Company made a $16.3 million investment in TG MIDCO, LLC ("TG MIDCO") consisting of subordinated debt and equity. TG MIDCO is a distributor of consumer products through various e-commerce platforms.

Conference Call to Discuss Third Quarter 2016 Results

Triangle has scheduled a conference call to discuss third quarter 2016 operating and financial results for Thursday, November 3, 2016, at 9:00 a.m. (Eastern Time).

To listen to the call, please dial 877-312-5521 or 253-237-1143 approximately 10 minutes prior to the start of the call. A taped replay will be made available approximately two hours after the conclusion of the call and will remain available until November 7, 2016. To access the replay, please dial 855-859-2056 or 404-537-3406 and enter the passcode 93570780.

Triangle's quarterly results conference call will also be available via a live webcast on the investor relations section of its website at http://ir.tcap.com/events.cfm. Access the website 15 minutes prior to the start of the call to download and install any necessary audio software. An archived webcast replay will be available on the Company's website until November 30, 2016.

Triangle will post a brief, pre-recorded on-demand podcast on the investor relations section of the Company's website after 4:00 p.m. (Eastern Time) on Wednesday, November 2, 2016, in conjunction with the filing of Triangle's Form 10-Q. The purpose of the podcast is to provide interested analysts and investors with meaningful statistical and financial information in advance of the participatory earnings call on Thursday, November 3, 2016.

About Triangle Capital Corporation

Triangle Capital Corporation (www.TCAP.com) invests capital in established companies in the lower middle market to fund growth, changes of control and other corporate events.  Triangle offers a wide variety of investment structures with a primary focus on mezzanine financing with equity components.  Triangle's investment objective is to seek attractive returns by generating current income from debt investments and capital appreciation from equity related investments.  Triangle's investment philosophy is to partner with business owners, management teams and financial sponsors to provide flexible financing solutions.  Triangle typically invests $5.0 million - $35.0 million per transaction in companies with annual revenues between $20.0 million and $200.0 million and EBITDA between $3.0 million and $35.0 million.

Triangle has elected to be treated as a business development company under the Investment Company Act of 1940, as amended ("1940 Act").  Triangle is required to comply with a series of regulatory requirements under the 1940 Act as well as applicable NYSE, federal and state laws and regulations.  Triangle has elected to be treated as a regulated investment company under the Internal Revenue Code of 1986, as amended.  Failure to comply with any of the laws and regulations that apply to Triangle could have a material adverse effect on Triangle and its stockholders.

Forward Looking Statements

This press release may contain forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Any such statements, other than statements of historical fact, are likely to be affected by other unknowable future events and conditions, including elements of the future that are or are not under the Company's control, and that the Company may or may not have considered; accordingly, such statements cannot be guarantees or assurances of any aspect of future performance.  Actual developments and results are highly likely to vary materially from these estimates and projections of the future and some of these uncertainties are enumerated in Triangle's filings with the Securities and Exchange Commission.  Certain factors that could cause actual results to differ materially from those contained in the forward-looking statements are included in our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, each as filed with the Securities and Exchange Commission. Copies are available on the SEC's website at www.sec.gov and stockholders may receive a hard copy of the completed audited financial statements free of charge upon request to the Company at 3700 Glenwood Avenue, Suite 530, Raleigh, NC 27612. Such statements speak only as of the time when made, and the Company undertakes no obligation to update any such statement now or in the future.

TRIANGLE CAPITAL CORPORATION
Consolidated Balance Sheets
 
 September 30, 2016  December 31, 2015
 (Unaudited)  
Assets:   
Investments at fair value:   
Non-Control / Non-Affiliate investments (cost of $771,052,767 and $795,244,907 as of September 30, 2016 and December 31, 2015, respectively)$748,363,034  $774,238,518 
Affiliate investments (cost of $163,759,331 and $171,486,103 as of September 30, 2016 and December 31, 2015, respectively)170,111,172  177,581,965 
Control investments (cost of $52,518,113 and $40,618,113 as of September 30, 2016 and December 31, 2015, respectively)29,257,769  25,456,233 
Total investments at fair value947,731,975  977,276,716 
Cash and cash equivalents168,336,823  52,615,418 
Interest, fees and other receivables6,966,478  4,892,146 
Prepaid expenses and other current assets1,690,182  947,068 
Deferred financing fees2,897,224  3,480,444 
Property and equipment, net122,506  105,698 
Total assets $1,127,745,188  $1,039,317,490 
Liabilities:   
Accounts payable and accrued liabilities$4,636,217  $7,463,514 
Interest payable1,537,490  3,714,470 
Taxes payable  735,498 
Deferred income taxes3,027,000  4,988,317 
Borrowings under credit facility91,427,900   131,256,669 
Notes162,598,503  162,142,478 
SBA-guaranteed debentures payable245,162,869  220,648,789 
Total liabilities508,389,979  530,949,735 
Commitments and contingencies   
Net Assets:   
Common stock, $0.001 par value per share (150,000,000 shares authorized, 40,405,403 and 33,375,126 shares issued and outstanding as of September 30, 2016 and December 31, 2015, respectively)40,405  33,375 
Additional paid-in capital684,618,304  549,242,439 
Investment income in excess of distributions6,553,437  16,127,141 
Accumulated realized losses(32,501,174) (25,813,329)
Net unrealized depreciation(39,355,763) (31,221,871)
Total net assets619,355,209  508,367,755 
Total liabilities and net assets$1,127,745,188  $1,039,317,490 
Net asset value per share$15.33  $15.23 
        


TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Operations
 
  Three Months
Ended
September 30,
 2016

 Three Months
Ended
September 30,
 2015

 Nine Months
Ended

September 30,
 2016
 Nine Months
Ended

September 30,
2015

    
Investment income:       
Interest income:       
Non-Control / Non-Affiliate investments$17,270,300  $18,051,486  $52,938,976  $51,993,071 
Affiliate investments3,380,867  4,294,512  10,121,974  12,685,241 
Control investments303,708  248,609  764,622  298,090 
Total interest income20,954,875  22,594,607   63,825,572  64,976,402 
Dividend income:       
Non-Control / Non-Affiliate investments 167,468  259,431  (1,030,703) 1,893,825 
Affiliate investments244,233  323,291  706,495  860,913 
Control investments    300,000   
Total dividend income411,701   582,722  (24,208) 2,754,738 
Fee and other income:        
Non-Control / Non-Affiliate investments1,585,403  3,308,427  5,662,081  7,380,865 
Affiliate investments319,289  337,343  855,855  2,334,396 
Control investments110,000  100,000  310,000  300,000 
Total fee and other income2,014,692  3,745,770  6,827,936  10,015,261 
Payment-in-kind interest income:       
Non-Control / Non-Affiliate investments2,719,831  2,735,701  8,373,124  8,077,552 
Affiliate investments1,175,899  1,126,244  3,259,634  3,445,253 
Total payment-in-kind interest income3,895,730  3,861,945  11,632,758  11,522,805 
Interest income from cash and cash equivalents135,459  58,401  228,129  178,713 
Total investment income27,412,457  30,843,445  82,490,187  89,447,919 
Operating expenses:       
Interest and other financing fees6,757,718  6,561,298  20,040,942  20,319,093 
Compensation expenses3,963,797   4,951,026  17,510,762  13,876,141 
General and administrative expenses859,785  813,125  3,170,330  2,798,925 
Total operating expenses11,581,300   12,325,449  40,722,034  36,994,159 
Net investment income15,831,157  18,517,996  41,768,153  52,453,760 
Realized and unrealized gains (losses) on investments and foreign currency borrowings:       
Net realized gains (losses):       
Non-Control / Non-Affiliate investments(11,213,561) 2,331,742  (5,007,647) 8,746,844 
Affiliate investments2,106  (503,907) (1,680,198) (237,399)
Control investments  (18,323,508)   (38,807,152)
Net realized gains (losses)(11,211,455) (16,495,673) (6,687,845) (30,297,707)
Net unrealized appreciation (depreciation):       
Investments2,881,131  14,375,221  (7,564,510) 15,441,528 
Foreign currency borrowings342,409  1,081,391  (569,382) 1,942,776 
Net unrealized appreciation (depreciation)3,223,540  15,456,612  (8,133,892) 17,384,304 
Net realized and unrealized losses on investments and foreign currency borrowings(7,987,915) (1,039,061)  (14,821,737) (12,913,403)
Loss on extinguishment of debt      (1,394,017)
Tax benefit36,431  393,437  47,342  255,562 
Net increase in net assets resulting from operations$7,879,673  $17,872,372   $26,993,758  $38,401,902 
Net investment income per share—basic and diluted$0.42  $0.56  $1.19  $1.58 
Net increase in net assets resulting from operations per share—basic and diluted$0.21  $0.54  $0.77  $1.16 
Dividends/distributions per share:       
Regular quarterly dividends/distributions$0.45  $0.54  $1.44  $1.62 
Supplemental dividends/distributions  0.05    0.15 
Total dividends/distributions per share$0.45  $0.59  $1.44  $1.77 
Weighted average shares outstanding—basic and diluted38,115,449  33,274,586  35,199,704  33,203,414 
 


TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Cash Flows
    
 Nine Months Ended Nine Months Ended
 September 30, 2016 September 30, 2015
Cash flows from operating activities:   
Net increase in net assets resulting from operations$26,993,758  $38,401,902 
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used in) operating activities:   
Purchases of portfolio investments(163,867,651) (352,445,028)
Repayments received/sales of portfolio investments182,153,894  261,002,599 
Loan origination and other fees received3,205,460  5,741,331 
Net realized loss on investments6,687,845  30,297,707 
Net unrealized depreciation (appreciation) on investments9,525,827  (18,127,974)
Net unrealized depreciation (appreciation) on foreign currency borrowings569,382  (1,942,776)
Deferred income taxes(1,961,317 ) 2,686,444 
Payment-in-kind interest accrued, net of payments received(4,177,550) (2,084,305)
Amortization of deferred financing fees1,644,826  1,636,224 
Loss on extinguishment of debt  1,394,017 
Accretion of loan origination and other fees(3,676,003) (4,897,834)
Accretion of loan discounts(307,081) (362,424)
Accretion of discount on SBA-guaranteed debentures payable31,899   140,185 
Depreciation expense52,369  44,552 
Stock-based compensation7,502,500  5,200,761  
Changes in operating assets and liabilities:   
Interest, fees and other receivables(2,074,332) 1,823,785 
Prepaid expenses and other current assets(743,114) (538,708)
Accounts payable and accrued liabilities(2,827,297) (1,847,069)
Interest payable(2,176,980 ) (2,098,783)
Taxes payable(735,498) (2,451,879)
Net cash provided by (used in) operating activities55,820,937  (38,427,273)
Cash flows from investing activities:   
Purchases of property and equipment(69,177) (55,035)
Net cash used in investing activities(69,177) (55,035)
Cash flows from financing activities:   
Borrowings under SBA-guaranteed debentures payable32,800,000   
Repayments of SBA-guaranteed debentures payable(7,800,000)   
Borrowings under credit facility68,901,849  174,000,000 
Repayments of credit facility(109,300,000) (114,000,000)
Proceeds from notes  83,372,640 
Redemption of notes  (69,000,000)
Financing fees paid(1,123,400) (2,919,436)
Net proceeds (expenses) related to public offering of common stock129,136,296  (54,967)
Common stock withheld for payroll taxes upon vesting of restricted stock(3,581,872) (2,497,712)
Cash dividends/distributions paid(49,063,228)  (56,142,936)
Net cash provided by financing activities59,969,645  12,757,589 
Net increase (decrease) in cash and cash equivalents115,721,405   (25,724,719)
Cash and cash equivalents, beginning of period52,615,418  78,759,026 
Cash and cash equivalents, end of period$168,336,823  $53,034,307 
Supplemental disclosure of cash flow information:    
Cash paid for interest$19,929,857  $19,798,265 
Summary of non-cash financing transactions:   
Dividends/distributions paid through DRIP share issuances$2,325,971  $2,676,433 
 

 

Contacts



E. Ashton Poole

President & Chief Executive Officer

919-719-8618

apoole@tcap.com



Steven C. Lilly

Chief Financial Officer

919-719-4789

slilly@tcap.com

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Source: Triangle Capital Corporation

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