Trinity Capital Inc. Reports First Quarter 2023 Financial Results
First Quarter 2023 Highlights
- Total investment income of
$41.5 million , an increase of 30.5% year-over-year - Net investment income ("NII") of
$19.3 million , or$0.55 per basic share, an increase of 23.7% year-over-year - Net increase in net assets resulting from operations of
$22.5 million , or$0.64 per basic share - Aggregate debt and equity investment commitments of
$43.2 million - Total gross investments funded of
$70.4 million , comprised of$5.0 million in one new portfolio company,$60.2 million across 11 existing portfolio companies, and$5.2 million into the recently formed joint venture (the "JV") - 16.5% Return on Average Equity "ROAE" (NII/Average Equity)
- 6.8% Return on Average Assets "ROAA" (NII/Average Assets)
- Debt principal repayments of
$82.8 million , including$13.1 million from early repayments and$42.1 million of assets sold to the JV - Declared a dividend distribution of
$0.47 per share for the first quarter of 2023, an increase of 2.2% from the regular dividend declared in the fourth quarter of 2022
"Our performance in the first quarter generated record NII results, providing 117% coverage on our regular dividend," said
First Quarter 2023 Operating Results
For the three months ended March 31, 2023, total investment income was $41.5 million compared to $31.8 million for the quarter ended March 31, 2022. This represents an effective yield on the average debt investments at cost of 15.2% and 16.3% for the periods ended March 31, 2023 and 2022, respectively. The decrease in the effective yield is attributed to lower fees and income acceleration as a result of lower early repayments. 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 operating expenses and excise taxes, excluding interest expense, for the first quarter of 2023 were $11.1 million compared to $9.4 million during the first quarter of 2022. The increase was primarily attributable to higher compensation associated with additional headcount, variable compensation, amortization of restricted stock grants and higher professional fees.
Interest expense for the first quarter of 2023 was $11.1 million compared to $6.8 million during the first quarter of 2022. The increase is primarily attributable to an increase in borrowings under the 2025 Notes and the KeyBank Credit Facility, and increased interest rates under the credit facility due to an increase in SOFR.
Net investment income was approximately $19.3 million, or $0.55 per share based on 35.1 million basic weighted average shares outstanding for the first quarter of 2023, compared to $15.6 million or $0.57 per share for the first quarter of 2022 based on 27.4 million basic weighted average shares outstanding.
Net unrealized appreciation of $3.5 million during the first quarter of 2023 was primarily attributable to
First quarter 2023 net realized loss on investments was approximately $0.4 million, primarily attributable to a loss in one portfolio company.
First quarter 2023 net increase in net assets resulting from operations was $22.5 million, or $0.64 per share based on 35.1 million basic weighted average shares outstanding. This compares to a net decrease in net assets resulting from operations of $9.1 million or $0.33 per share based on 27.4 million basic weighted average shares outstanding for the first quarter of 2022.
Net Asset Value
Total net assets at the end of the first quarter of 2023 increased by 2.2% to
Portfolio and Investment Activity
As of
During the first quarter, the Company originated approximately
Proceeds received from repayments of the Company's debt investments during the first quarter totaled approximately
As of the end of the first quarter and consistent with the prior quarter, loans to two portfolio companies and equipment financings to two portfolio companies were on non-accrual status with a total fair value of approximately
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
|
|
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Investment Risk Rating |
Designation |
Investments at |
Percentage of |
Investments at |
Percentage of |
|||||||
4.0 - 5.0 |
Very Strong |
$ |
2,513 |
0.2 % |
$ |
2,729 |
0.3 % |
|||||
3.0 - 3.9 |
Strong |
285,484 |
27.3 % |
239,872 |
22.9 % |
|||||||
2.0 - 2.9 |
Performing |
719,752 |
68.8 % |
756,596 |
72.1 % |
|||||||
1.6 - 1.9 |
Watch |
19,270 |
1.8 % |
39,315 |
3.7 % |
|||||||
1.0 - 1.5 |
Default/Workout |
16,450 |
1.6 % |
10,317 |
1.0 % |
|||||||
Total Debt Investments excluding i40, |
1,043,469 |
99.7 % |
1,048,829 |
100.0 % |
||||||||
i40, LLC |
3,629 |
0.3 % |
— |
0.0 % |
||||||||
Total Debt Investments |
$ |
1,047,098 |
100.0 % |
$ |
1,048,829 |
100.0 % |
As of
Liquidity and Capital Resources
As of
As of
Distributions
On
Conference Call
To listen to the call, please dial (800) 343-4849, or (203) 518-9856 internationally, and reference Conference ID: TRINQ123 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) 839-9145 or (402) 220-6080.
About
Trinity Capital Inc. (Nasdaq: TRIN and TRINL), an internally managed business development company, is a leading provider of diversified financial solutions to growth-stage companies with institutional equity investors. Trinity Capital's investment objective is to generate current income and, to a lesser extent, capital appreciation through investments, including term loans and equipment financings and equity-related investments. Trinity Capital 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. For more information, please visit the Company's website at www.trinitycap.com.
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. Trinity 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.
TRINITY CAPITAL INC |
||||||||
Consolidated Statements of Assets and Liabilities |
||||||||
(In thousands, except share and per share data) |
||||||||
|
|
|||||||
2023 |
2022 |
|||||||
(Unaudited) |
||||||||
ASSETS |
||||||||
Investments at fair value: |
||||||||
Control investments (cost of |
$ |
38,442 |
$ |
37,313 |
||||
Affiliate investments (cost of |
7,688 |
1,528 |
||||||
Non-control / Non-affiliate investments (cost of |
1,045,401 |
1,055,545 |
||||||
Total investments (cost of |
1,091,531 |
1,094,386 |
||||||
Cash and cash equivalents |
8,344 |
10,612 |
||||||
Interest receivable |
10,450 |
9,971 |
||||||
Deferred credit facility costs |
2,713 |
2,903 |
||||||
Other assets |
10,264 |
8,567 |
||||||
Total assets |
$ |
1,123,302 |
$ |
1,126,439 |
||||
LIABILITIES |
||||||||
KeyBank Credit Facility |
$ |
183,500 |
$ |
187,500 |
||||
2025 Notes, net of |
179,035 |
178,552 |
||||||
|
123,041 |
122,897 |
||||||
|
73,619 |
73,526 |
||||||
Convertible Notes, net of |
48,278 |
48,118 |
||||||
Distribution payable |
16,885 |
21,326 |
||||||
Security deposits |
15,277 |
15,100 |
||||||
Accounts payable, accrued expenses and other liabilities |
13,997 |
19,771 |
||||||
Total liabilities |
653,632 |
666,790 |
||||||
NET ASSETS |
||||||||
Common stock, |
36 |
35 |
||||||
Paid-in capital in excess of par |
484,951 |
480,532 |
||||||
Distributable earnings/(accumulated deficit) |
(15,317) |
(20,918) |
||||||
Total net assets |
469,670 |
459,649 |
||||||
Total liabilities and net assets |
$ |
1,123,302 |
$ |
1,126,439 |
||||
NET ASSET VALUE PER SHARE |
$ |
13.07 |
$ |
13.15 |
TRINITY CAPITAL INC. |
||||||||||
Consolidated Statements of Operations |
||||||||||
(In thousands, except share and per share data) |
||||||||||
(Unaudited) |
||||||||||
Three Months |
Three Months |
|||||||||
|
|
|||||||||
INVESTMENT INCOME: |
||||||||||
Interest income: |
||||||||||
Control investments |
$ |
1,116 |
$ |
1,373 |
||||||
Affiliate investments |
34 |
428 |
||||||||
Non-Control / Non-Affiliate investments |
39,381 |
26,605 |
||||||||
Total interest income |
40,531 |
28,406 |
||||||||
Fee income: |
||||||||||
Affiliate investments |
453 |
— |
||||||||
Non-Control / Non-Affiliate investments |
554 |
3,439 |
||||||||
Total fee income |
1,007 |
3,439 |
||||||||
Total investment income |
41,538 |
31,845 |
||||||||
EXPENSES: |
||||||||||
Interest expense and other debt financing costs |
11,081 |
6,798 |
||||||||
Compensation and benefits |
7,617 |
6,455 |
||||||||
Professional fees |
1,417 |
832 |
||||||||
General and administrative |
1,495 |
1,477 |
||||||||
Total expenses |
21,610 |
15,562 |
||||||||
NET INVESTMENT INCOME/(LOSS) BEFORE TAXES |
19,928 |
16,283 |
||||||||
Excise tax expense |
597 |
674 |
||||||||
NET INVESTMENT INCOME |
19,331 |
15,609 |
||||||||
NET REALIZED GAIN/(LOSS) FROM INVESTMENTS: |
||||||||||
Non-Control / Non-Affiliate investments |
(365) |
52,644 |
||||||||
Net realized gain/(loss) from investments |
(365) |
52,644 |
||||||||
NET CHANGE IN UNREALIZED APPRECIATION/(DEPRECIATION) FROM |
||||||||||
Control investments |
408 |
(4,331) |
||||||||
Affiliate investments |
976 |
(3,264) |
||||||||
Non-Control / Non-Affiliate investments |
2,136 |
(69,723) |
||||||||
Net change in unrealized appreciation/(depreciation) from investments |
3,520 |
(77,318) |
||||||||
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM |
$ |
22,486 |
$ |
(9,065) |
||||||
NET INVESTMENT INCOME PER SHARE - BASIC |
$ |
0.55 |
$ |
0.57 |
||||||
NET INVESTMENT INCOME PER SHARE - DILUTED |
$ |
0.52 |
$ |
0.54 |
||||||
NET CHANGE IN NET ASSETS RESULTING FROM OPERATIONS PER SHARE |
$ |
0.64 |
$ |
(0.33) |
||||||
NET CHANGE IN NET ASSETS RESULTING FROM OPERATIONS PER SHARE |
$ |
0.60 |
$ |
(0.33) |
||||||
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC |
35,074,076 |
27,416,943 |
||||||||
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED |
38,740,871 |
30,768,333 |
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SOURCE
Vibhor Garg, Managing Director, Marketing, Trinity Capital, Inc., ir@trincapinvestment.com