PHOENIX, Aug. 5, 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 quarter ended June 30, 2021.
Second Quarter 2021 Highlights
- Total investment income of $19.5
million, an increase of 40.7% year-over-year
- Net investment income ("NII") of $10.1
million, or $0.38 per share,
an increase of 49.1% year-over-year
- Aggregate debt and equity investment commitments of
$126.5 million
- Total gross investments funded of $122.4
million, comprised of $77.1
million across seven new portfolio companies and
$45.3 million across 10 existing
portfolio companies
- Unscheduled early principal repayments of $51.1 million
- Investment portfolio of $597.7
million at fair value, an increase of 11.6% from Q1
2021
- Net asset value ("NAV") per share increased to $14.33 from $13.69
on March 31, 2021
- Declared a dividend distribution of $0.29 per share for the second quarter
Year-to-Date 2021 Highlights
- Total investment income of $36.8
million, an increase of 41.0% year-over-year
- Net investment income of $17.3
million, or $0.69 per share,
an increase of 39.0% year-over-year
- Total gross investments funded of $209.5
million, an increase of 105.0% year-over-year
Steven Brown, Chairman and Chief
Executive Officer of Trinity Capital, commented, "Trinity Capital
achieved strong Q2 2021 financial results and continued to execute
on its strategy to expand its venture lending and equipment
financing platform. In particular, we set a new record with total
commitments of $126.5 million and
fundings of $122.4 million, which led
to our fifth consecutive quarter of net portfolio growth since
becoming a BDC as we approached an investment portfolio of
$600 million at fair value. Our
operating performance generated GAAP NII of $0.38 per share, which covered our dividend by
131%. This performance is a testament to the notable strong
contributions from the five new investment professionals that have
joined Trinity since the beginning of 2020."
Brown continued, "Looking forward, I am very encouraged by the
overall health and resiliency in the venture capital industry. As
fundraising activity remains strong through the first half of 2021,
we expect to continue to see a strong pipeline of emerging growth
companies that meet our disciplined sourcing criteria. With total
liquidity exceeding $107 million, we
remain well-positioned from a financial position to deploy capital,
grow our investment portfolio and effectively increase our
leverage."
Second Quarter 2021 Operating Results
For the three months ended June 30, 2021, total investment
income was $19.5 million compared to $13.8
million for the quarter ended June 30, 2020. This
represents an effective yield on the average debt investments at
costs of 15.9% and 14.6% for the periods ended June 30,
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 second
quarter of 2021 were $5.0 million compared to $2.8
million during the second quarter of 2020. The increase was
primarily attributable to increased employee headcount, higher
variable compensation and higher D&O insurance costs as a new
public company. Interest expense for the second quarter of 2021
was $4.4 million compared to $4.3
million during the second quarter of 2020.
Net investment income was approximately $10.1 million,
or $0.38 per share for the second quarter of 2021,
compared to $6.8 million or $0.37 per share for
the second quarter of 2020. Net investment income per share during
the second 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.
Second quarter 2021 realized net gains on investments were
approximately $2.0 million, compared to a net realized loss
of $2.0 million during the second quarter of 2020.
Net unrealized appreciation was $12.6 million during
the second quarter of 2021, compared to net unrealized appreciation
of $2.1 million during the second quarter of 2020.
Second quarter 2021 net increase in net assets resulting from
operations was $24.7 million, or $0.93 per share. This
compares to a net increase in net assets resulting from operations
of $6.9 million or $0.38 per share for the
second quarter of 2020.
Net Asset Value
As of June 30, 2021, NAV per share
increased to $14.33, compared to
$13.69 at March 31, 2021. The improvement in NAV was
primarily driven by the increase in net investment income, net
realized gains and unrealized appreciation on its investment
portfolio. Total net assets at the end of the second quarter of
2021 were $379.7 million, compared to
$361.6 million at the end of Q1
2021.
Portfolio and Investment Activity
As of June 30, 2021, Trinity
Capital's investment portfolio had an aggregate fair value of
approximately $597.7 million and was
comprised of approximately $397.5
million in secured loans, $120.9
million in equipment financings, $79.3 million in equity and equity-related
investments, including warrants across 60 portfolio companies.
During the second quarter, the Company originated $126.5 million of total new commitments. Second
quarter investments funded totaled approximately $122.4
million, which was comprised of $77.1 million of
investments in seven new portfolio companies and
approximately $45.3 million of investments in 10 existing
portfolio companies. The Company continues to shift its
portfolio to floating rate loans with approximately 49.3% of its
debt portfolio at floating rates on June 30,
2021, compared to 32.1% in Q1 2021.
Proceeds received from repayments of the Company's investments
during the second quarter totaled approximately $79.9 million, which included $51.1 million from early debt repayments. The
portfolio increased by $49.3 million
or approximately 9.4% on a cost basis, and by $62.0 million or approximately 11.6% at fair
value as compared to March 31,
2021.
As of the end of the second quarter, loans to two portfolio
companies were on non-accrual status with a total fair value of
approximately $0.9 million, or just
18 basis points of the Company's debt investment portfolio.
The following table shows the distribution of the Company's loan
and equipment financing investments on the 1 to 5 investment risk
rating scale at fair value as of June 30,
2021 (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2021
|
|
December 31,
2020
|
|
Investment Risk
Rating
|
|
|
|
Investments
at
|
|
Percentage
of
|
|
Investments
at
|
|
Percentage
of
|
|
Scale
Range
|
|
Designation
|
|
Fair
Value
|
|
Total
Portfolio
|
|
Fair
Value
|
|
Total
Portfolio
|
|
4.0 - 5.0
|
|
Very Strong
Performance
|
|
$
|
83,915
|
|
16.2%
|
|
$
|
92,519
|
|
20.9%
|
|
3.0 - 3.9
|
|
Strong
Performance
|
|
|
206,852
|
|
39.9%
|
|
|
212,969
|
|
48.0%
|
|
2.0 - 2.9
|
|
Performing
|
|
|
197,503
|
|
38.1%
|
|
|
116,895
|
|
26.4%
|
|
1.6 - 1.9
|
|
Watch
|
|
|
29,820
|
|
5.7%
|
|
|
19,230
|
|
4.3%
|
|
1.0 - 1.5
|
|
Default/Workout
|
|
|
343
|
|
0.1%
|
|
|
1,606
|
|
0.4%
|
|
Total
|
|
|
|
$
|
518,433
|
|
100.0%
|
|
$
|
443,219
|
|
100.0%
|
|
As of June 30, 2021, and in line
with the first quarter of 2021, the Company's loan and equipment
financing investments had a weighted average risk rating score of
3.1.
Liquidity and Capital Resources
As of June 30, 2021, the Company
had approximately $107.7 million in
available liquidity, including $19.1 million in cash and
cash equivalents. At the end of the period, the Company had
$88.6 million in available borrowing
capacity under its credit facility subject to existing terms and
advance rates and regulatory and covenant requirements.
As of June 30, 2021, Trinity's leverage was approximately
64.5% as compared to 60.8% as of March 31, 2021. The
increase in the leverage ratio was attributable to borrowings under
the Company's credit facility.
Distributions
Trinity Capital's distribution reinvestment plan provides for
the reinvestment of dividends in the form of common stock on behalf
of its stockholders unless a stockholder has elected to receive
dividends in cash.
On June 15, 2021, the Company's
Board of Directors declared a dividend of $0.29 per share with respect to the quarter ended
June 30, 2021, which was paid on
July 15, 2021, to shareholders of
record as of June 30, 2021.
Portfolio Company M&A Activity
As of August 4, 2021, Trinity held
equity investments in two portfolio companies that recently
completed mergers with special purpose acquisition companies
("SPACs").
In July 2021, Lucid, Inc.
(formerly Atieva, Inc.), a luxury electric vehicle company, closed
its merger with Churchill Capital IV Corp. (NYSE: CCIV) and
commenced trading on Nasdaq (symbol: LCID). Trinity holds
approximately 1.9 million shares of common stock in Lucid Motors as
of August 4, 2021.
In July 2021, Matterport, Inc., a
spatial data company, completed a merger with Gores Holding VI
(NASDAQ: GHVI, GHVIU and GHVIW) and commenced trading on Nasdaq
(symbol: MTTR). Trinity holds approximately 572,000 shares of
common stock in Matterport as of August 4,
2021.
Conference Call
Trinity Capital will hold a conference call to discuss its
second quarter 2021 financial results at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) on Thursday, August 5, 2021.
To listen to the call, please dial (877) 876-9176, or (785)
424-1670 internationally, and reference Conference ID: TRINQ221 if
asked, 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 for
seven days. To access the replay, please dial 800-839-7410 or (402)
220-6067.
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, including the
impact of the COVID 19 pandemic on the economy, financial markets,
our business, our portfolio companies and our industry. 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.
Contact
Vibhor
Garg
Director, Marketing
Trinity Capital, Inc.
vgarg@trincapinvestment.com
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|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June 30, 2021
|
|
June 30, 2020
|
|
June 30, 2021
|
|
June 30, 2020
|
INVESTMENT
INCOME:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
Control
investments
|
|
$
|
1,266
|
|
$
|
832
|
|
$
|
2,572
|
|
$
|
1,627
|
Affiliate
investments
|
|
|
443
|
|
|
604
|
|
|
882
|
|
|
733
|
Non-Control /
Non-Affiliate investments
|
|
|
16,405
|
|
|
12,004
|
|
|
31,004
|
|
|
21,894
|
Total interest
income
|
|
|
18,114
|
|
|
13,440
|
|
|
34,458
|
|
|
24,254
|
Fee
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Control /
Non-Affiliate investments
|
|
|
1,362
|
|
|
407
|
|
|
2,337
|
|
|
1,841
|
Total fee
income
|
|
|
1,362
|
|
|
407
|
|
|
2,337
|
|
|
1,841
|
Total investment
income
|
|
|
19,476
|
|
|
13,847
|
|
|
36,795
|
|
|
26,095
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense and
other debt financing costs
|
|
|
4,425
|
|
|
4,281
|
|
|
9,041
|
|
|
8,539
|
Compensation and
benefits
|
|
|
3,370
|
|
|
1,690
|
|
|
7,366
|
|
|
3,079
|
Professional
fees
|
|
|
570
|
|
|
700
|
|
|
1,216
|
|
|
1,180
|
General and
administrative
|
|
|
1,031
|
|
|
415
|
|
|
1,838
|
|
|
827
|
Total
expenses
|
|
|
9,396
|
|
|
7,086
|
|
|
19,461
|
|
|
13,625
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INVESTMENT
INCOME
|
|
|
10,080
|
|
|
6,761
|
|
|
17,334
|
|
|
12,470
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET REALIZED
GAIN/(LOSS) FROM INVESTMENTS:
|
|
|
|
|
|
|
|
|
|
|
|
|
Control
investments
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Affiliate
investments
|
|
|
1,491
|
|
|
—
|
|
|
—
|
|
|
—
|
Non-Control /
Non-Affiliate investments
|
|
|
504
|
|
|
(2,002)
|
|
|
4,590
|
|
|
(2,884)
|
Net realized
gain/(loss) from investments
|
|
|
1,995
|
|
|
(2,002)
|
|
|
4,590
|
|
|
(2,884)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET CHANGE IN
UNREALIZED APPRECIATION/(DEPRECIATION) FROM
INVESTMENTS:
|
|
|
|
|
|
|
|
|
|
|
|
|
Control
investments
|
|
|
(4,530)
|
|
|
1,342
|
|
|
(12,084)
|
|
|
(8,234)
|
Affiliate
investments
|
|
|
(1,892)
|
|
|
(969)
|
|
|
(8,204)
|
|
|
(2,136)
|
Non-Control /
Non-Affiliate investments
|
|
|
19,052
|
|
|
1,750
|
|
|
48,394
|
|
|
(11,799)
|
Net change in
unrealized appreciation/(depreciation) from
investments
|
|
|
12,630
|
|
|
2,123
|
|
|
28,106
|
|
|
(22,169)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS BEFORE
FORMATION COSTS
|
|
|
24,705
|
|
|
6,882
|
|
|
50,030
|
|
|
(12,583)
|
Costs related to the
acquisition of Trinity Capital Holdings and Legacy Funds
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,586)
|
NET
INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS
|
|
$
|
24,705
|
|
$
|
6,882
|
|
$
|
50,030
|
|
$
|
(28,169)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INVESTMENT
INCOME PER SHARE - BASIC AND DILUTED
|
|
$
|
0.38
|
|
$
|
0.37
|
|
$
|
0.69
|
|
$
|
0.69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS PER
SHARE - BASIC AND DILUTED
|
|
$
|
0.93
|
|
$
|
0.38
|
|
$
|
2.00
|
|
$
|
(1.57)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE
SHARES OUTSTANDING - BASIC AND DILUTED
|
|
|
26,478,747
|
|
|
18,074,929
|
|
|
25,024,925
|
|
|
17,959,728
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
December 31,
|
|
|
2021
|
|
2020
|
|
|
(Unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Investments at fair
value:
|
|
|
|
|
|
|
Control investments
(cost of $62,363 and $57,072, respectively)
|
|
$
|
41,938
|
|
$
|
48,730
|
Affiliate investments
(cost of $13,001 and $20,653, respectively)
|
|
|
11,795
|
|
|
27,650
|
Non-control /
Non-affiliate investments (cost of $499,191 and $420,611,
respectively)
|
|
|
543,963
|
|
|
417,271
|
Total investments
(cost of $574,555 and $498,336, respectively)
|
|
|
597,696
|
|
|
493,651
|
Cash and cash
equivalents
|
|
|
19,124
|
|
|
44,656
|
Restricted
cash
|
|
|
15,341
|
|
|
16,445
|
Interest
receivable
|
|
|
4,065
|
|
|
3,468
|
Deferred financing
costs
|
|
|
—
|
|
|
—
|
Deferred offering
costs
|
|
|
—
|
|
|
—
|
Prepaid
expenses
|
|
|
1,298
|
|
|
744
|
Other
assets
|
|
|
3,923
|
|
|
744
|
Total
assets
|
|
$
|
641,447
|
|
$
|
559,708
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
Credit Facility, net
of $1,053 and $2,107, respectively, of unamortized deferred
financing costs
|
|
$
|
68,947
|
|
$
|
132,893
|
2025 Notes, net of
$4,168, and $4,697, respectively, of unamortized deferred financing
costs
|
|
|
120,832
|
|
|
120,303
|
Convertible Notes,
net of $2,786, and $3,448, respectively, of unamortized deferred
financing costs and discount
|
|
|
47,214
|
|
|
46,552
|
Distribution
payable
|
|
|
7,682
|
|
|
4,947
|
Security
deposits
|
|
|
8,812
|
|
|
7,874
|
Accounts payable,
accrued expenses and other liabilities
|
|
|
8,240
|
|
|
8,391
|
Total
liabilities
|
|
|
261,727
|
|
|
320,960
|
|
|
|
|
|
|
|
Commitments and
contingencies (Note 6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
ASSETS
|
|
|
|
|
|
|
Common stock, $0.001
par value per share (200,000,000 authorized, 26,491,274 and
18,321,274 shares issued and outstanding as of
June 30, 2021 and December 31, 2020,
respectively)
|
|
|
26
|
|
|
18
|
Paid-in capital in
excess of par
|
|
|
369,379
|
|
|
263,366
|
Distributable
earnings/(accumulated loss)
|
|
|
10,315
|
|
|
(24,636)
|
Total net
assets
|
|
|
379,720
|
|
|
238,748
|
Total liabilities
and net assets
|
|
$
|
641,447
|
|
$
|
559,708
|
NET ASSET VALUE
PER SHARE
|
|
$
|
14.33
|
|
$
|
13.03
|
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SOURCE Trinity Capital Inc.