Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - Barings BDC, Inc. | g27111e8vk.htm |
Exhibit 99.1
|
3700 Glenwood Ave., Ste.
530 Raleigh, NC 27612 |
TRIANGLE CAPITAL CORPORATION REPORTS FIRST QUARTER
2011 RESULTS AND ANNOUNCES $12.2 MILLION GAIN ON SALE OF
PORTFOLIO COMPANY
2011 RESULTS AND ANNOUNCES $12.2 MILLION GAIN ON SALE OF
PORTFOLIO COMPANY
RALEIGH, NC — May 4, 2011, Triangle Capital Corporation (NYSE: TCAP) (“Triangle”
or the “Company”), a leading specialty finance company that provides customized
financing solutions to lower middle market companies located throughout the United
States, today announced its financial results for the first quarter of 2011.
Commenting on the quarter, Garland S. Tucker, III, President and CEO, stated, “Our
investment pipeline remained robust during the first quarter as we closed five new
investments totaling approximately $51.5 million. From a capital markets perspective,
our February equity offering appears to have been very well timed in terms of
providing fresh growth capital at an opportune time. As a result of this fortunate
timing, we not only were able to generate significantly higher net investment income
per share than we originally had anticipated, but we also believe it positions us to
continue increasing our dividend over the next several quarters.”
First Quarter 2011 Results
Total investment income during the first quarter of 2011 was $12.4 million, compared
to total investment income of $7.5 million for the first quarter of 2010, representing
an increase of 66.0%. The Company’s increase in investment income is primarily
attributable to new portfolio investments made during 2010 and 2011 which resulted in
an increase in total loan interest, fee, dividend and paid-in-kind interest income of
approximately $5.0 million, partially offset by a decrease in non-recurring fee income
of $0.1 million.
Net investment income during the first quarter of 2011 was $7.7 million, compared to
net investment income of $3.8 million for the first quarter of 2010, representing an
increase of 103.7%. The Company’s net investment income per share during the first
quarter of 2011 was $0.46, based on a weighted average share count of 16,848,570, as
compared to $0.32 during the first quarter of 2010, based on a weighted average share
count of 11,877,688.
The Company’s net increase in net assets resulting from operations was $12.4 million
during the first quarter of 2011, as compared to a net increase in net assets
resulting from operations of $4.1 million during the first quarter of 2010. The
Company’s net increase in net assets resulting from operations was $0.73 per share
during the first quarter of 2011 based on a weighted average share count of
16,848,570, as compared to a net increase in net assets resulting from operations of
$0.35 per share during the first quarter of 2010, based on a weighted average share
count of 11,877,688.
The Company’s net asset value per share at March 31, 2011, was $13.42 as compared to
$12.09 per share at December 31, 2010. As of March 31, 2011, the Company’s weighted
average yield on its outstanding, currently yielding, debt investments was
approximately 15.2%.
Liquidity and Capital Resources
At March 31, 2011, the Company had cash and cash equivalents totaling $73.4 million.
During the first quarter of 2011, the Company completed a public offering of 3.5
million shares of common stock with net proceeds of approximately $63.1 million.
Also during the first quarter of 2011, Triangle pre-paid $9.5 million in Small
Business Administration (“SBA”) guaranteed debentures that had a maturity date of
September 1, 2015, and which bore interest at a weighted average interest rate of
5.8%. As of March 31, 2011, the Company had non-callable, fixed rate SBA guaranteed
debentures outstanding totaling $214.6 million. Under current SBA limits, the Company
has the ability to issue up to a total of $9.5 million in additional SBA-guaranteed
debentures.
Commenting on the Company’s liquidity position, Steven C. Lilly, Chief Financial
Officer, stated, “Given the amount of investment activity we experienced during the
first quarter, we are pleased to still have sufficient liquidity available to us as of
March 31, 2011. In addition, we expect to close on our senior credit facility before
June 30, 2011, which will provide significant additional liquidity as we continue to
look for attractive investment opportunities.”
Gain on Sale of Portfolio Company
On May 2, 2011, Triangle recognized a long term capital gain of approximately $12.2
million, or approximately $0.66 per share, in connection with the sale of certain
assets of Fischbein, LLC (“Fischbein”). Triangle’s investment in Fischbein consisted
of $8.4 million in subordinated debt and $4.8 million in equity. The total investment
yielded an internal rate of return of 33.7%. Fischbein is a global manufacturer of
flexible packaging and materials handling equipment.
Dividend and Distribution Information
On February 23, 2011, Triangle announced that its board of directors had declared a
cash dividend of $0.42 per share. This was the Company’s seventeenth consecutive
quarterly dividend since its initial public offering in February, 2007. The dividend
was payable as follows:
Record Date: March 16, 2011
Payment Date: March 30, 2011
Payment Date: March 30, 2011
Triangle has adopted a dividend reinvestment plan (“DRIP”) that provides for
reinvestment of dividends on behalf of its stockholders, unless a stockholder elects
to receive cash. As a result, when the Company declares a cash dividend, stockholders
who have not opted out of the DRIP will have their cash dividends automatically
reinvested in additional shares of the Company’s common stock, rather than receiving
cash dividends.
When the Company declares and pays dividends, it determines the allocation of the
distribution between current income, accumulated income and return of capital on the
basis of accounting principles generally accepted in the United States (“GAAP”). At
each year end, the Company is required for tax purposes to determine the dividend
allocation based on tax accounting principles. Due to differences between GAAP and
tax accounting principles, the portion of each dividend distribution that is ordinary
income, capital gain or return of capital may differ for GAAP and tax purposes.
Recent Portfolio Activity
During the first quarter of 2011, Triangle made five new investments totaling
approximately $51.5 million, three debt investments in existing portfolio companies
totaling approximately $16.6 million, and two equity investments in existing portfolio
companies of approximately $0.1 million. Also during the first quarter of 2011, two
portfolio company loans repaid at par totaling approximately $11.5 million and the
Company received normal principal repayments and partial loan prepayments totaling
approximately $3.4 million.
Investment transactions which occurred during the first quarter of 2011 are summarized
as follows:
On February 11, 2011, Triangle made a $10.0 million subordinated debt investment in
Pomeroy IT Solutions, Inc. (“Pomeroy”). Headquartered in Hebron, KY, Pomeroy is a
provider of information technology infrastructure outsourcing services.
On February 28, 2011, Triangle made an $8.8 million investment in Captek Softgels,
Inc. (“Captek”) consisting of subordinated debt and equity. Captek is an integrated
manufacturer, packager and marketer of custom designed softgel nutraceutical products.
Captek provides standard and customized formulations under contract manufacturing
relationships for leading global brands in the United States.
On March 11, 2011, Triangle made a senior subordinated debt investment of $9.0 million
in DLR Restaurants, LLC (“DLR”). DLR operates Dick’s Last Resort restaurants with
multiple locations throughout the United States. DLR offers a unique dining experience
with an interactive wait staff that entertains customers throughout the meal with
tasteful humor.
On March 21, 2011, Triangle made a $12.3 million investment in National Investment
Managers, Inc. (“NIM”) consisting of subordinated debt and equity. NIM is a national
provider of retirement plan design, consulting, administration and pension actuarial
services for small and medium-sized businesses. NIM subsequently announced a name
change to United Retirement Plan Consultants, Inc.
On March 25, 2011, Triangle made an $11.5 million investment in Home Physicians
Management, LLC (“Home Physicians”) consisting of senior and junior subordinated debt.
Home Physicians is a provider of primary care physician services and podiatry
services in homes and assisted living facilities.
Investments subsequent to quarter end are summarized as follows:
On April 2, 2011, Triangle made a $5.0 million investment in The Main Resource (“TMR”)
consisting of subordinated debt with warrants. TMR sells a wide range of automotive
supplies, repair items and replacement parts used in automotive service garages.
On April 8, 2011, Triangle made $5.3 million investment in Main Street Gourmet (“MSG”)
consisting of subordinated debt, junior subordinated debt with warrants and equity.
MSG is a wholesale bakery that develops, produces and sells a broad line of bakery
products. Customers include fast casual restaurants, bakery/cafes, coffee chains,
family restaurants, grocery retailers, and broad-line distributors.
Conference Call to Discuss First Quarter 2011 Results
Triangle has scheduled a conference call to discuss first quarter results for
Thursday, May 5, 2011, at 9:00 a.m. ET.
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 August 5, 2011. To access the replay, please dial 800-642-1687 or 706-645-9291
and enter the passcode 61858980.
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 July 31, 2011.
Annual Meeting of Stockholders
The 2011 Annual Meeting of Stockholders of Triangle convened at The Woman’s Club of Raleigh, 3300
Woman’s Club Drive, Raleigh, NC 27612 on Wednesday, May 4, 2011, at 8:30 a.m. (Eastern Time) for
stockholders of record as of the close of business on March 3, 2011, and a quorum was present.
Five of the six proposals were approved on May 4, 2011. The 2011 Annual Meeting of Stockholders
was adjourned until Monday, June 13, 2011, at 8:30 a.m. (Eastern Time), in order to provide
additional time to solicit proxies for Proposal Number 2, the approval to authorize Triangle,
pursuant to the approval of its Board of Directors, to sell shares of its common stock during the
next year at a price below Triangle’s then current net asset value, or book value, per share. The
meeting will be reconvened at 3700 Glenwood Avenue, Suite 530, Raleigh, North Carolina 27612. The
results of the proposals that were voted on will be reported through a current report on Form 8-K
within four days of the 2011 Annual Meeting of Stockholders.
About Triangle Capital Corporation
Triangle Capital Corporation (www.TCAP.com) is a specialty finance company organized
to provide customized financing solutions to lower middle market companies located
throughout the United States. 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 to fund growth, changes of control, or other corporate events. Triangle
typically invests $5.0 million — $15.0 million per transaction in companies with
annual revenues between $20.0 million and $100.0 million and EBITDA between $3.0
million and $20.0 million.
Triangle has elected to be treated as a business development company under the
Investment Company Act of 1940 (“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. 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. 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.
Contacts
Sheri Blair Colquitt
Vice President, Investor Relations
919-719-4784
scolquitt@tcap.com
Vice President, Investor Relations
919-719-4784
scolquitt@tcap.com
Steven C. Lilly
Chief Financial Officer
919-719-4789
slilly@tcap.com
Chief Financial Officer
919-719-4789
slilly@tcap.com
# # #
TRIANGLE CAPITAL CORPORATION
Consolidated Balance Sheets
Consolidated Balance Sheets
| March 31, | December 31, | |||||||
| 2011 | 2010 | |||||||
| (Unaudited) | ||||||||
Assets |
||||||||
Investments at fair value: |
||||||||
Non—Control / Non—Affiliate investments
(cost of $287,830,346 and $244,197,828 at
March 31, 2011 and December 31, 2010,
respectively) |
$ | 290,736,361 | $ | 245,392,144 | ||||
Affiliate investments (cost of $66,285,172
and $60,196,084 at March 31, 2011 and
December 31, 2010, respectively) |
63,438,848 | 55,661,878 | ||||||
Control investments (cost of $23,332,268
and $19,647,795 at March 31, 2011 and
December 31, 2010, respectively) |
30,011,421 | 24,936,571 | ||||||
Total investments at fair value |
384,186,630 | 325,990,593 | ||||||
Cash and cash equivalents |
73,420,711 | 54,820,222 | ||||||
Interest and fees receivable |
1,400,613 | 867,627 | ||||||
Prepaid expenses and other current assets |
338,094 | 119,151 | ||||||
Deferred financing fees |
6,414,292 | 6,200,254 | ||||||
Property and equipment, net |
58,698 | 47,647 | ||||||
Total assets |
$ | 465,819,038 | $ | 388,045,494 | ||||
Liabilities |
||||||||
Accounts payable and accrued liabilities |
$ | 927,738 | $ | 2,268,898 | ||||
Interest payable |
613,677 | 2,388,505 | ||||||
Taxes payable |
6,307 | 197,979 | ||||||
Deferred revenue |
42,787 | 37,500 | ||||||
Deferred income taxes |
402,787 | 208,587 | ||||||
SBA-guaranteed debentures payable |
214,607,244 | 202,464,866 | ||||||
Total liabilities |
216,600,540 | 207,566,335 | ||||||
Net Assets |
||||||||
Common stock, $0.001 par value per share
(150,000,000 shares authorized, 18,569,856
and 14,928,987 shares issued and
outstanding as of March 31, 2011 and
December 31, 2010, respectively) |
18,570 | 14,929 | ||||||
Additional paid-in-capital |
247,760,609 | 183,602,755 | ||||||
Investment income in excess of distributions |
3,347,637 | 3,365,548 | ||||||
Accumulated realized losses on investments |
(8,244,376 | ) | (8,244,376 | ) | ||||
Net unrealized appreciation of investments |
6,336,058 | 1,740,303 | ||||||
Total net assets |
249,218,498 | 180,479,159 | ||||||
Total liabilities and net assets |
$ | 465,819,038 | $ | 388,045,494 | ||||
Net asset value per share |
$ | 13.42 | $ | 12.09 | ||||
TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Operations
Unaudited Consolidated Statements of Operations
| Three Months | Three Months | |||||||
| Ended | Ended | |||||||
| March 31, 2011 | March 31, 2010 | |||||||
Investment income: |
||||||||
Loan interest, fee and dividend income: |
||||||||
Non—Control / Non—Affiliate investments |
$ | 8,749,449 | $ | 4,801,642 | ||||
Affiliate investments |
1,374,243 | 1,030,596 | ||||||
Control investments |
258,268 | 353,145 | ||||||
Total loan interest, fee and dividend income |
10,381,960 | 6,185,383 | ||||||
Paid—in—kind interest income: |
||||||||
Non—Control / Non—Affiliate investments |
1,481,820 | 827,601 | ||||||
Affiliate investments |
395,171 | 262,677 | ||||||
Control investments |
65,297 | 125,948 | ||||||
Total paid—in—kind interest income |
1,942,288 | 1,216,226 | ||||||
Interest income from cash and cash equivalent investments |
101,149 | 83,298 | ||||||
Total investment income |
12,425,397 | 7,484,907 | ||||||
Expenses: |
||||||||
Interest expense |
1,989,984 | 1,739,980 | ||||||
Amortization of deferred financing fees |
309,763 | 96,431 | ||||||
General and administrative expenses |
2,397,523 | 1,854,812 | ||||||
Total expenses |
4,697,270 | 3,691,223 | ||||||
Net investment income |
7,728,127 | 3,793,684 | ||||||
Net realized gain on investments—Non Control / Non—Affiliate |
— | 199,200 | ||||||
Net unrealized appreciation of investments |
4,595,755 | 209,343 | ||||||
Total net gain on investments before income taxes |
4,595,755 | 408,543 | ||||||
Income tax benefit (provision) |
27,359 | (52,898 | ) | |||||
Net increase in net assets resulting from operations |
$ | 12,351,241 | $ | 4,149,329 | ||||
Net investment income per share—basic and diluted |
$ | 0.46 | $ | 0.32 | ||||
Net increase in net assets resulting from operations per
share—basic and diluted |
$ | 0.73 | $ | 0.35 | ||||
Dividends declared per common share |
$ | 0.42 | $ | 0.41 | ||||
Weighted average number of shares outstanding—basic and diluted |
16,848,570 | 11,877,688 | ||||||
TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Cash Flows
Unaudited Consolidated Statements of Cash Flows
| Three | Three | |||||||
| Months | Months | |||||||
| Ended | Ended | |||||||
| March 31, | March 31, | |||||||
| 2011 | 2010 | |||||||
Cash flows from operating activities: |
||||||||
Net increase in net assets resulting from operations |
$ | 12,351,241 | $ | 4,149,329 | ||||
Adjustments to reconcile net increase in net assets resulting
from operations to net cash used in operating activities: |
||||||||
Purchases of portfolio investments |
(68,275,512 | ) | (14,143,949 | ) | ||||
Repayments received/sales of portfolio investments |
14,936,864 | 6,520,580 | ||||||
Loan origination and other fees received |
1,466,292 | 301,875 | ||||||
Net realized gain on investments |
— | (199,200 | ) | |||||
Net unrealized appreciation of investments |
(4,789,955 | ) | (246,344 | ) | ||||
Deferred income taxes |
194,200 | 37,000 | ||||||
Payment—in—kind interest accrued, net of payments received |
(857,493 | ) | (1,059,516 | ) | ||||
Amortization of deferred financing fees |
309,763 | 96,431 | ||||||
Accretion of loan origination and other fees |
(415,247 | ) | (215,033 | ) | ||||
Accretion of loan discounts |
(260,986 | ) | (117,201 | ) | ||||
Accretion of discount on SBA-guaranteed debentures payable |
42,378 | — | ||||||
Depreciation expense |
7,064 | 5,478 | ||||||
Stock-based compensation |
414,329 | 248,556 | ||||||
Changes in operating assets and liabilities: |
||||||||
Interest and fees receivable |
(532,986 | ) | (563,354 | ) | ||||
Prepaid expenses |
(218,943 | ) | (62,373 | ) | ||||
Accounts payable and accrued liabilities |
(1,341,160 | ) | (1,192,113 | ) | ||||
Interest payable |
(1,774,828 | ) | (1,738,084 | ) | ||||
Deferred revenue |
5,287 | (37,500 | ) | |||||
Taxes payable |
(191,672 | ) | (27,245 | ) | ||||
Net cash used in operating activities |
(48,931,364 | ) | (8,242,663 | ) | ||||
Cash flows from investing activities: |
||||||||
Purchases of property and equipment |
(18,115 | ) | — | |||||
Net cash used in investing activities |
(18,115 | ) | — | |||||
Cash flows from financing activities: |
||||||||
Borrowings under SBA-guaranteed debentures payable |
21,600,000 | — | ||||||
Repayments of SBA-guaranteed debentures payable |
(9,500,000 | ) | — | |||||
Financing fees paid |
(523,801 | ) | — | |||||
Proceeds from public stock offerings, net of expenses |
63,138,255 | (2,255 | ) | |||||
Common stock withheld for payroll taxes upon vesting of
restricted stock |
(485,595 | ) | (123,840 | ) | ||||
Cash dividends paid |
(6,678,891 | ) | (3,558,973 | ) | ||||
Net cash provided by (used in) financing activities |
67,549,968 | (3,685,068 | ) | |||||
Net increase (decrease) in cash and cash equivalents |
18,600,489 | (11,927,731 | ) | |||||
Cash and cash equivalents, beginning of period |
54,820,222 | 55,200,421 | ||||||
Cash and cash equivalents, end of period |
$ | 73,420,711 | $ | 43,272,690 | ||||
Supplemental disclosure of cash flow information: |
||||||||
Cash paid for interest |
$ | 3,722,434 | $ | 3,478,064 | ||||