PHOENIX, May 6, 2021 /PRNewswire/ -- Trinity
Capital Inc. (Nasdaq: TRIN) ("Trinity Capital" or the
"Company"), a leading specialty lending company that provides debt,
including loans and equipment financing, to growth stage companies
backed by technology banks, venture capital and private equity
firms, today announced its financial results for the first quarter
ended March 31, 2021.
First Quarter 2021 Highlights:
- Completed our IPO raising net proceeds of $104.2 million
- Total investment income of $17.3
million
- Net investment income of $7.3
million, or $0.31 per
share
- Aggregate debt and equity investment commitments of
$124.4 million
- Total gross investments funded of $87.1
million, comprised of $44.5
million across 6 new portfolio companies and $42.6 million across 13 existing portfolio
companies
- Investment portfolio of $535.7
million at fair value
- Net Asset Value ("NAV") per share increased to $13.69 from $13.03
at December 31, 2020.
- Declared a dividend distribution during the first quarter of
$0.28 per share
Steven Brown, Chairman and Chief
Executive Officer of Trinity Capital, commented, "During the first
quarter of 2021 Trinity continued to capitalize on its
differentiated value proposition in the venture lending space as
reflected in the successful completion of our IPO in February. Our
growing originations team continued executing at a strong pace, as
we entered into gross commitments of $124.4
million and funded $87.1
million providing a tremendous start to 2021. Investment
Income increased by 41% year-over-year allowing us to increase our
first quarter dividend to $0.28 per
share and NAV per share increased by 5% to $13.69 per share. Our portfolio continues to
perform well with over 99 percent of our portfolio current,
reflecting our disciplined underwriting. Altogether, the results
set a strong foundation for the rest of 2021."
First Quarter 2021 Operating Results
For the three months ended March 31,
2021, total investment income was $17.3 million compared to $12.2 million for the quarter ended March 31, 2020. This represents an effective
yield on the average debt investments at cost of 15.5% and 15.0%
for the periods ended March 31, 2021
and 2020, respectively. Effective yields generally include
the effects of fees and income accelerations attributed to early
loan repayments, and other one-time events and may fluctuate
quarter-to-quarter depending on the amount of prepayment
activity.
Total expenses, excluding interest expense, for the first
quarter 2021 were $5.5 million
compared to $2.3 million during the
first quarter of 2020. The increase was primarily attributable to
increased headcount, higher variable compensation and D&O
insurance costs. Interest expense was $4.6
million compared to $4.3
million during the first quarter of 2020.
Net investment income was approximately $7.3 million, or $0.31 per share for the first quarter 2021,
compared to $5.7 million or
$0.32 per share for the first quarter
2020. Net investment income per share during the first quarter of
2021 reflects Trinity's larger weighted average share count for the
quarter as a result of approximately 8.0 million shares issued in
connection with its initial public offering.
First quarter 2021 realized net gains on investments were
approximately $2.6 million, compared
to a net realized loss of $0.9
million during the first quarter of 2020.
Net unrealized appreciation was $15.5
million during the first quarter of 2021, compared to net
unrealized depreciation of $24.3
million during the first quarter of 2020.
First quarter 2021 net increase in net assets resulting from
operations was $25.3 million, or
$1.08 per share. This compares to a
net decrease in net assets resulting from operations of
$35.5 million or $1.97 per share for the first quarter 2020.
Net Asset Value
As of March 31, 2021, NAV per
share increased by $0.66 per share to
$13.69, compared to $13.03 as of December 31,
2020. The increase in NAV per share was attributed to net
investment income, net realized gains and unrealized appreciation
on our investment portfolio. Total net assets as of March 31, 2021 were $361.6
million, an increase of $122.8
million as compared to December 31,
2020 primarily attributable to the net proceeds of
$104.2 million from our IPO.
Portfolio and Investment Activity
As of March 31, 2021, Trinity
Capital's investment portfolio had an aggregate fair value of
approximately $535.7 million and was
comprised of approximately $335.7
million in secured loans, $128.0
million in equipment financings, and $72.0 million in equity and equity-related
investments, including warrants across 80 portfolio companies.
During the first quarter, the Company originated $124.4 million of total new commitments. First
quarter investments funded totaled approximately $87.1 million, which was comprised of
$44.5 million of investments in 6 new
portfolio companies and approximately $42.6
million of investments in 13 existing portfolio
companies. The Company continues to shift its portfolio to
floating rate loans with approximately 32.1% of its debt portfolio
at floating rates at March 31, 2021
compared to 25.4% at December 31,
2020.
Proceeds received from repayments of the Company's investments
during the first quarter totaled approximately $67.0 million, which included $40.8 million from early debt repayments. The
portfolio increased by $26.9 million
on a cost basis, and by $42.1 million
at fair value as compared to December 31,
2020.
At the end of the first quarter, loans to three portfolio
companies were on non-accrual status with a total fair value of
approximately $1.4 million and cost
basis of $2.3 million, or 0.3% and
0.5% of our debt investment portfolio, respectively.
The following table shows the distribution of our loan and
equipment financing investments on the 1 to 5 investment risk
rating scale at fair value as of March 31,
2021 and December 31, 2020
(dollars in thousands):
|
|
March 31,
2021
|
|
|
December 31,
2020
|
|
|
|
|
|
|
Investment
Risk
Rating Scale Range
|
Designation
|
Investments
at
Fair Value
|
Percentage
of
Total Portfolio
|
|
|
Investments
at
Fair Value
|
Percentage
of
Total Portfolio
|
4.0 - 5.0
|
Very Strong
Performance
|
$
|
110,278
|
23.8%
|
|
$
|
92,519
|
20.9%
|
3.0 - 3.9
|
Strong
Performance
|
|
164,709
|
35.4%
|
|
|
212,969
|
48.0%
|
2.0 - 2.9
|
Performing
|
|
148,691
|
32.1%
|
|
|
116,895
|
26.4%
|
1.6 - 1.9
|
Watch
|
|
39,194
|
8.5%
|
|
|
19,230
|
4.3%
|
1.0 - 1.5
|
Default/Workout
|
|
812
|
0.2%
|
|
|
1,606
|
0.4%
|
Total
|
|
$
|
463,684
|
100.0%
|
|
$
|
443,219
|
100.0%
|
For the periods ending March 31,
2021 and December 31, 2020,
our loan and equipment financing investments had a weighted average
risk rating score of 3.2. Trinity will generally adjust the risk
rating down as a portfolio company approaches a need to raise
additional capital to maintain operations. We anticipate that
various companies in our portfolio will need to raise additional
capital on a periodic basis as they emerge from the early growth
stage of operations.
Liquidity and Capital Resources
As of March 31, 2021 the Company
had approximately $108.5 million in
available liquidity, excluding $15.3
million in restricted cash and cash equivalents. At the end
of the period, the Company had $72.5
million in available borrowing capacity under its credit
facility, subject to existing terms and advance rates and
regulatory and covenant requirements.
As of March 31, 2021, the
Company's leverage was 60.8% as compared to 130.0% as of
December 31, 2020. The decrease
in the leverage ratio was attributable to the repayment of
$90.0 million under our credit
facility from the proceeds of our IPO.
Distributions
On March 24, 2021, the Company's
Board of Directors declared a distribution of $0.28 per share with respect to the quarter
ending March 31, 2021, which was paid
on April 16, 2021 to shareholders of
record as of March 31, 2021.
Trinity Capital's distribution reinvestment plan provides for
the reinvestment of distributions in the form of common stock on
behalf of its stockholders unless a stockholder has elected to
receive distributions in cash.
Portfolio Company M&A Activity in Q1 2021
In February 2021, Trinity
Capital's portfolio company Matterport, Inc., a spatial data
company, announced that it has entered into a definitive merger
agreement with Gores Holding VI (NASDAQ: GHVI, GHVIU and GHVIW), a
special purpose acquisition company. Trinity Capital initially
committed $10.0 million in debt
financing beginning in 2018 and held warrants for 143,813 shares of
common stock as of March 31,
2021.
In February 2021, Trinity
Capital's portfolio company Atieva, Inc., (d/b/a Lucid Motors), a
luxury electric vehicle company, announced that it has entered into
a definitive merger agreement with Churchill Capital IV Corp.
(NYSE: CCIV), a special purpose acquisition company. Trinity
Capital initially committed $30.0
million in debt financing beginning in 2017 and held 585,022
shares of Series D preferred stock as of March 31, 2021.
There can be no assurances that companies that have yet to
complete their mergers will do so.
Conference Call
Trinity Capital will hold a conference call to discuss its first
quarter 2021 financial results at 2:00 p.m.
Pacific Time (5:00 p.m. Eastern
Time) on Thursday, May 6,
2021. To listen to the call, please dial (888)- 285-0969, or
(706)-758-9224 internationally, and reference Conference ID:
4999186 if asked, approximately 10 minutes prior to the start of
the call.
A taped replay will be made available approximately three hours
after the conclusion of the call and will remain available for
seven days. To access the replay, please dial (800)-585-8367 or
(404)-537-3406 and enter the passcode 4999186.
A live webcast of the first quarter 2021 financial results
conference call will also be available on the investor relations
section of the Company's website at https://trincapinvestment.com/.
A replay will be available on the Company's website for 90 days
following the conference call.
About Trinity Capital Inc.
Trinity Capital (Nasdaq: TRIN), an internally managed specialty
lending company that has elected to be regulated as a business
development company under the Investment Company Act of 1940, as
amended, is a leading provider of debt, including loans and
equipment financing, to growth stage companies, including
venture-backed companies and companies with institutional equity
investors. Trinity's investment objective is to generate current
income and, to a lesser extent, capital appreciation through
investments consisting primarily of term loans and equipment
financings and, to a lesser extent, working capital loans, equity
and equity-related investments. Trinity believes it is one of only
a select group of specialty lenders that has the depth of
knowledge, experience, and track record in lending to growth stage
companies.
Forward-Looking Statements
This press release may contain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995. Statements other than statements of historical facts
included in this press release may constitute forward-looking
statements and are not guarantees of future performance or results
and involve a number of risks and uncertainties. Actual results may
differ materially from those in the forward-looking statements as a
result of a number of factors, including those described from time
to time in filings with the Securities and Exchange Commission
("SEC"). The Company undertakes no duty to update any
forward-looking statement made herein. All forward-looking
statements speak only as of the date of this press release. More
information on risks and other potential factors that could affect
the Company's financial results, including important factors that
could cause actual results to differ materially from plans,
estimates or expectations included herein or on the
webcast/conference call, is included in the Company's filings with
the SEC, including in the "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" sections of the Company's most recently filed annual
report on Form 10-K and subsequent SEC filings.
TRINITY
CAPITAL INC.
|
Consolidated
Statements of Assets and Liabilities
|
(In thousands,
except share and per share data)
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
|
2021
|
|
2020
|
|
|
(Unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Investments at fair
value:
|
|
|
|
|
|
|
Control
investments (cost of $62,573 and $57,072, respectively)
|
|
$
|
46,677
|
|
$
|
48,730
|
Affiliate
investments (cost of $20,425 and $20,653, respectively)
|
|
|
21,110
|
|
|
27,650
|
Non-control /
Non-affiliate investments (cost of $442,233 and $420,611,
respectively)
|
|
|
467,954
|
|
|
417,271
|
Total
investments (cost of $525,231 and $498,336,
respectively)
|
|
|
535,741
|
|
|
493,651
|
Cash and cash
equivalents
|
|
|
36,026
|
|
|
44,656
|
Restricted
cash
|
|
|
15,259
|
|
|
16,445
|
Interest
receivable
|
|
|
3,924
|
|
|
3,468
|
Prepaid
expenses
|
|
|
1,851
|
|
|
744
|
Other assets
|
|
|
1,186
|
|
|
744
|
Total
assets
|
|
$
|
593,987
|
|
$
|
559,708
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
Credit Facility, net of
$1,583 and $2,107, respectively, of unamortized deferred financing
costs
|
|
$
|
43,420
|
|
$
|
132,893
|
2025 Notes, net of
$4,406, and $4,697, respectively, of unamortized deferred financing
costs
|
|
|
120,594
|
|
|
120,303
|
Convertible Notes, net
of $2,887, and $3,448, respectively, of unamortized deferred
financing costs and discount
|
|
|
47,113
|
|
|
46,552
|
Distribution
payable
|
|
|
7,396
|
|
|
4,947
|
Accounts payable and
accrued liabilities
|
|
|
3,802
|
|
|
7,309
|
Other
liabilities
|
|
|
10,099
|
|
|
8,956
|
Total
liabilities
|
|
|
232,424
|
|
|
320,960
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
ASSETS
|
|
|
|
|
|
|
Common stock, $0.001
par value per share (200,000,000 authorized, 26,415,275 and
18,321,274 shares issued and outstanding as of
March 31, 2021 and December 31, 2020,
respectively)
|
|
|
26
|
|
|
18
|
Paid-in capital in
excess of par
|
|
|
368,245
|
|
|
263,366
|
Distributable
earnings/(accumulated loss)
|
|
|
(6,708)
|
|
|
(24,636)
|
Total net
assets
|
|
|
361,563
|
|
|
238,748
|
Total
liabilities and net assets
|
|
$
|
593,987
|
|
$
|
559,708
|
NET ASSET VALUE
PER SHARE
|
|
$
|
13.69
|
|
$
|
13.03
|
TRINITY
CAPITAL INC.
|
Consolidated
Statements of Operations
|
(In thousands,
except share and per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
March 31, 2021
|
|
March 31,
2020
|
INVESTMENT
INCOME:
|
|
|
|
|
|
|
Interest
income:
|
|
|
|
|
|
|
Control
investments
|
|
$
|
1,307
|
|
$
|
59
|
Affiliate
investments
|
|
|
438
|
|
|
116
|
Non-Control /
Non-Affiliate investments
|
|
|
14,600
|
|
|
10,639
|
Total interest
income
|
|
|
16,345
|
|
|
10,814
|
Fee income:
|
|
|
|
|
|
|
Non-Control /
Non-Affiliate investments
|
|
|
975
|
|
|
1,434
|
Total fee
income
|
|
|
975
|
|
|
1,434
|
Total investment
income
|
|
|
17,320
|
|
|
12,248
|
|
|
|
|
|
|
|
EXPENSES:
|
|
|
|
|
|
|
Interest expense and
other debt financing costs
|
|
|
4,616
|
|
|
4,259
|
Compensation and
benefits
|
|
|
3,996
|
|
|
1,389
|
Professional
fees
|
|
|
647
|
|
|
479
|
General and
administrative
|
|
|
808
|
|
|
414
|
Total
expenses
|
|
|
10,067
|
|
|
6,541
|
|
|
|
|
|
|
|
NET INVESTMENT
INCOME
|
|
|
7,253
|
|
|
5,707
|
|
|
|
|
|
|
|
NET REALIZED
GAIN/(LOSS) FROM INVESTMENTS:
|
|
|
|
|
|
|
Control
investments
|
|
|
—
|
|
|
—
|
Affiliate
investments
|
|
|
—
|
|
|
—
|
Non-Control /
Non-Affiliate investments
|
|
|
2,595
|
|
|
(882)
|
Net realized loss
from investments
|
|
|
2,595
|
|
|
(882)
|
|
|
|
|
|
|
|
NET CHANGE IN
UNREALIZED APPRECIATION/(DEPRECIATION) FROM
INVESTMENTS:
|
|
|
|
|
|
|
Control
investments
|
|
|
(7,554)
|
|
|
(7,128)
|
Affiliate
investments
|
|
|
(6,312)
|
|
|
(1,507)
|
Non-Control /
Non-Affiliate investments
|
|
|
29,342
|
|
|
(15,655)
|
Net change in
unrealized appreciation/(depreciation) from
investments
|
|
|
15,476
|
|
|
(24,290)
|
|
|
|
|
|
|
|
NET
INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS BEFORE
FORMATION COSTS
|
|
|
25,324
|
|
|
(19,465)
|
Costs related to the
acquisition of Trinity Capital Holdings and Legacy Funds
|
|
|
—
|
|
|
(15,586)
|
NET
INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS
|
|
$
|
25,324
|
|
$
|
(35,051)
|
|
|
|
|
|
|
|
NET INVESTMENT
INCOME PER SHARE - BASIC AND DILUTED
|
|
$
|
0.31
|
|
$
|
0.32
|
|
|
|
|
|
|
|
NET
INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS PER
SHARE - BASIC AND DILUTED
|
|
$
|
1.08
|
|
|
(1.97)
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE
SHARES OUTSTANDING - BASIC AND DILUTED
|
|
|
23,554,950
|
|
|
17,821,790
|
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SOURCE Trinity Capital Inc.