Triangle Capital Corporation (NYSE: TCAP) (“Triangle†or the “Companyâ€), 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.â€
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.â€
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. Â 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 Brandsâ€) 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 (“VMIâ€) 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. (“KidKraftâ€). 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.
