Slide 1: Second Quarter 2024 Investor Presentation
Second Quarter 2024 Investor Presentation
Slide 2: Forward-Looking Statements | Disclaimer
FORWARD-LOOKING STATEMENTS | DISCLAIMER Trinity Capital Inc. (the “Company”) cautions that this presentation may contain forward-looking statements that are based on current expectations and assumptions about future events, and which are not based in historical fact. The forward-looking statements i
Slide 3: Company Overview
COMPANY OVERVIEW
Slide 4: Trinity Capital Overview
TRINITY CAPITAL OVERVIEW Diversified financial solutions to growth-stage companies | NASDAQ – TRIN, TRINL, TRINZ, TRINI 15-YEAR MARKET CAP / TRACK P O R T F O L I O (4) L I Q U I D I T Y (4) R E C O R D (1) DIVIDEND YIELD $1,002.6M $3.4B Fundings $751.5M $141.4M Secured Loans Market C a p (3) Availa
Slide 5: The Trinity Platform
THE TRINITY PLATFORM Unique internal management structure and capitalization diversification fortifies the TRIN platform and produces enhanced value proposition T R I N I T Y C A P I TA L ( N A S D A Q : T R I N ) Internally Managed BDC Te c h L e n d i n g | E q u i p m e n t F i n a n c i n g | L
Slide 6: Why Is Trinity Different
WHY IS TRINITY DIFFERENT We understand the growth-stage world and provide more than money to our portfolio company partners § Highly experienced executive team with startup experience Deep Operating § Decades of in-depth high-tech experience Experience § Numerous U.S. and international patents issue
Slide 7: Entrenched Industry Relationships
ENTRENCHED INDUSTRY RELATIONSHIPS Multiple shared portfolio companies with top venture capital firms Relationships with top market share banks catering to majority of VC-backed companies We have established intercreditor agreements with the banks Combining with bank debt results in a lower blended c
Slide 8: Underwriting Approach and Risk Mitigation
UNDERWRITING APPROACH AND RISK MITIGATION Disciplined investment approach keeps our annualized loss rate at 26 bps, which is more than offset by realized gains on warrant and equity investments (1) CAPITALIZATION FINANCIALS DEBT STRUCTURE Investor Syndicate Revenue & Collateral Gross Margins Cash Li
Slide 9: Secured Term Loans
SECURED TERM LOANS Select Examples Axiom Space is developing the world’s first Term Loans commercial space station. § Investor Syndicate C5 Capital, TQS Advisors, Declaration Partners, 01 SECURED LOANS Boryung Pharma, Aljazira Capital Lien on all assets including IP § Use of Loan General corporate p
Slide 10: Equipment Financings
EQUIPMENT FINANCINGS Select Examples Athletic Brewing brews high-quality, great-tasting Equipment Financings non-alcoholic craft beer. § Investor Syndicate Alliance Consumer Growth, TRB Advisors, Keurig Dr 01 COMPANIES WITH Pepper CAPEX REQUIREMENTS § Use of Equipment Financing Mission-critical hard
Slide 11: Financial Highlights
FINANCIAL HIGHLIGHTS
Slide 12: Q2 2024 Highlights
Q2 2024 HIGHLIGHTS § Total Investment Income of $54.6M Robust § § Net Investment Income (“NII”) of $26.7M Net Interest Margin (“NIM”) of 12.2% Earnings § NII per share of $0.53 provides 103.9% of regular distribution coverage § Consistent second quarter regular dividend distribution of $0.51 per sha
Slide 13: Solid Shareholder Returns
SOLID SHAREHOLDER RETURNS DIVIDEND GROWTH $8.50 $0.55 $0.51 $0.51 $8.00 $0.50 $0.49 $0.48 $0.50 $7.50 $0.47 $0.46 $0.70 $0.45 $7.00 $0.45 $0.42 $0.70 $6.50 $0.40 $0.70 $0.40 $6.00 $0.36 $0.70 $5.50 $0.33 $0.35 Net Investment Income covered $0.65 $5.00 regular dividend by 103.9% in 2Q24 $0.29 $0.60 $
Slide 14: Quarterly Income Statement
QUARTERLY INCOME STATEMENT For the three months ended (In thousands, except per share amounts) 06/30/2024 03/31/2024 12/31/2023 09/30/2023 06/30/2023 Total Investment Income $ 54,641 $ 50,453 $ 47,834 $ 46,438 $ 46,045 Interest expense and other debt financing costs 13,885 12,144 10,446 10,783 11,98
Slide 15: Income Source & Portfolio Yield Trends
INCOME SOURCE & PORTFOLIO YIELD TRENDS Strong Yields Produce Solid Investment Income SOURCES OF INVESTMENT INCOME PORTFOLIO YIELDS $55,000 10.1% $50,000 4.8% 16.7% 16.7% $1,400 17.0% 16.2% 16.0% $45,000 8.4% 11.2% 17.6% 15.8% 9.7% 16.0% 22.7% $1,200 $40,000 14.8% 16.4% 14.7% 18.0% 15.5% 15.3% 15.0%
Slide 16: NII Returns and Use of Leverage
NII RETURNS AND USE OF LEVERAGE N I I R E T U R N O N AV E R A G E A S S E T S ( R O A A ) (1) & N I I R E T U R N O N AV E R A G E E Q U I T Y ( R O A E ) (2) 20.0% 17.9% 18.4% 17.6% 16.9% 16.5% 16.1% 16.3% 15.4% 14.3% 15.0% 13.5% 12.0% 10.9% 11.4% 9.7% 10.2% 9.5% 8.9% 10.0% 8.2% 8.3% 7.7% 7.6% 8.0
Slide 17: Net Investment Income (NII) per Share Bridge
NET INVESTMENT INCOME (NII) PER SHARE BRIDGE R E C O N C IL IAT IO N O F Q U A R T E R LY N II P E R S H A R E Increase Decrease Total $0.70 $0.09 $0.60 $0.54 $(0.04) $(0.02) $0.53 $0.50 $(0.04) $0.40 $0.30 $0.20 $0.10 $- 1Q24 NII Change in Change in Change in Impact of 2Q24 NII per Share Investment
Slide 18: Quarterly Balance Sheet
QUARTERLY BALANCE SHEET (In thousands, except per share amounts) 06/30/2024 03/31/2024 12/31/2023 09/30/2023 06/30/2023 Assets Total investments at fair value $ 1,424,815 $ 1,363,862 $ 1,275,180 $ 1,116,552 $ 1,148,018 Cash and cash equivalents 46,102 11,967 4,761 7,230 12,268 Interest receivable 13
Slide 19: Net Asset Value (NAV) per Share Bridge
NET ASSET VALUE (NAV) PER SHARE BRIDGE R E C ON C IL IAT ION OF QU A R T E R LY N AV P E R S H A R E Increase Decrease Total $14.00 $13.50 $0.53 $0.36 $0.14 $13.12 $13.00 $12.88 ($0.15) ($0.51) ($0.13) $12.50 $12.00 Earnings and Investment Portfolio Share Distributions Performance Impact(1) $11.50 $
Slide 20: Debt Capital Structure
DEBT CAPITAL STRUCTURE Diversified Borrowings ($ in millions) as of June 30, 2024 Debt Outstanding Undrawn Funding Source Stated Maturity Interest Rate Commitment Principal Commitment Notes: 2025 Unsecured Notes(1) $152.5 $152.5 - January 16, 2025(2) 7.00% Convertible Notes $50.0 $50.0 - December 11
Slide 21: Portfolio Highlights
J//////// -- PORTFOLIO HIGHLIG
Slide 22: Portfolio Diversification
PORTFOLIO DIVERSIFICATION Diversified across investment type, transaction size, industry and geography Investment Type(1) Transaction Size(1)(2) 6.3% 34.8% 29.5% Loans Greater than $30M 70.4% Equipment Financing $15M - $30M Equity & Warrants Less than $15M 23.3% 35.7% Industry Type(1) Geographic All
Slide 23: Portfolio Trends
PORTFOLIO TRENDS FIXED VS FLOATING DEBT INVESTMENTS ( 1 ) TOTAL PORTFOLIO BY INVESTMENT TYPE ( 2 ) Floating Fixed Loans Equipment Financing Equity & Warrants $1,400,000 6.3% 24.6% 5.5% 27.9% 26.2% 30.1% 31.0% 4.2% $1,200,000 23.3% 4.2% 20.4% 4.7% 26.4% $1,000,000 21.3% 20.0% IN THOUSANDS $800,000 $6
Slide 24: Disciplined Credit Rating
DISCIPLINED CREDIT RATING Consistent and Disciplined Underwriting Standards $1,500 3.5 $1,250 2.8 3.0 2.8 2.7 2.7 2.7 $1,000 2.5 $750 Total Debt Investments (FV, $ in million) (1) $1,279 $1,324 $1,214 2.0 Weighted Investment Credit Rating $500 $1,094 $1,056 $250 1.5 $0 1.0 2Q23 3Q23 4Q23 1Q24 2Q24 C
Slide 25: Interest Rate Sensitivity
INTEREST RATE SENSITIVITY ANNUALIZED INTEREST RATE SENSITIVITY ($ in thousands, except per share data) $15,000 $0.24 $0.30 69.9% floating rate debt $10,000 $0.12 $0.20 investment portfolio as $12,454 $5,000 $6,227 $0.10 of June 30, 2024 (1) $- $- $(4,885) $(7,175) $(5,000) $(0.10) $(0.09) $(0.14) 33
Slide 26: Hypothetical Warrant Upside
HYPOTHETICAL WARRANT UPSIDE For Illustration Purposes Only 2X MULTIPLE 156 Warrant Positions in 102 Portfolio Companies • Proceeds of $63.4 million (2X) • Potential gain of $16.4 million § GAAP fair value ~ $37.4 million or $0.32 per share § GAAP cost ~ $30.5 million § ~ $63.4 million in nominal exe
Slide 27: Diversified Portfolio
DIVERSIFIED PORTFOLIO Select List of Current & Historical Investments © 2024 Trinity Capital Inc. | 27
Slide 28: Analyst Coverage
ANALYST COVERAGE
Slide 29: Extensive Industry Analyst Coverage
EXTENSIVE INDUSTRY ANALYST COVERAGE Followed by eight firms Paul Johnson Fi ni an O’ Shea Mi tchel l Penn Dougl as Har ter (initiated coverage 2/23/2021) (initiated coverage 2/23/2021) (initiated coverage 5/3/2021) (initiated coverage 2/23/2021) Br yce Rowe Chr i stopher Nol an Casey Al exander Matt
Slide 30: Supplemental Information
SUPPLEMENTAL INFORMATION
Slide 31: Regulation & Structure
REGULATION & STRUCTURE Trinity Capital Inc. is an Internally Managed BDC regulated under the 1940 Act and has elected to be treated as a RIC for Federal Income Tax Purposes beginning with its Taxable Year ending December 31, 2020 BUSINESS DEVELOPMENT COMPANY (BDC) § Regulated by the SEC under the In
Slide 32: Thank You
THANK YOU We look forward to our growing partnership. T R I N I T Y C A P. C O M 3 2