Core Viewpoint - Capital Southwest Corporation has announced preliminary operating results for the fourth quarter of its 2025 fiscal year, highlighting its financial performance and upcoming earnings release schedule [1]. Financial Performance - For the quarter ended March 31, 2025, Capital Southwest incurred one-time net expenses of $2.8 million, equating to $0.05 per share, due to the departure of its former President and CEO [2]. - The preliminary estimate for fourth quarter 2025 pre-tax net investment income is projected to be between $0.55 and $0.56 per share, while the net investment income is estimated to be between $0.54 and $0.55 per share [2]. - Adjusted pre-tax net investment income, excluding the one-time expenses, is estimated to be between $0.60 and $0.61 per share, with adjusted net investment income projected between $0.59 and $0.60 per share [3]. Asset Valuation - The preliminary estimate of net asset value per share as of March 31, 2025, is in the range of $16.65 to $16.75 [4]. - Non-accruals as a percentage of the total investment portfolio are estimated at 3.5% at cost and 1.7% at fair value [4]. Upcoming Events - Capital Southwest will release its finalized fourth quarter 2025 results on May 14, 2025, after market close, followed by a live webcast on May 15, 2025, at 11:00 a.m. Eastern Time [5].

Group 1 - Capital Southwest Corporation has increased its total commitments under its senior secured credit facility by $25 million, raising the total from $485 million to $510 million [1] - The increase in commitments was provided by two existing lenders within a lender group that consists of 11 participants [1] - The Corporate Credit Facility has an existing accordion feature that allows for maximum commitments of up to $750 million [1] Group 2 - Capital Southwest Corporation is a Dallas-based business development company with approximately $1.7 billion in investments at fair value as of December 31, 2024 [2] - The company focuses on middle market lending, supporting acquisitions and growth of businesses with investments ranging from $5 million to $50 million across various capital structures [2] - As a public company with a permanent capital base, Capital Southwest has the flexibility to provide creative financing solutions and support the long-term growth of its portfolio companies [2]

Group 1 - The market is currently experiencing extreme fear, evidenced by the Dow Jones Industrial Index (DJI) dropping by 3,910 points over the past week, reaching 38,315 [2] - The Fear & Greed Index indicates a high level of fear among investors, which is influencing market behavior [2] Group 2 - iREIT+HOYA Capital focuses on income-producing asset classes that provide sustainable portfolio income, diversification, and inflation hedging [1]

Group 1 - Capital Southwest (NASDAQ: CSWC) has experienced a decline of approximately 10% over the past six months [1] - Despite the recent stock performance, technical analysis indicates a strong outlook for the company [1] - The author emphasizes a commitment to high-quality technical analysis and values such as excellence, integrity, transparency, and respect [1] Group 2 - The article does not provide any specific financial metrics or performance indicators related to Capital Southwest [2]

Core Viewpoint - Moody's Investors Service has affirmed Capital Southwest Corporation's long-term issuer rating of Baa3 with a stable outlook, highlighting the company's strong capitalization, diverse funding profile, and recurring earnings generation [1] Group 1: Company Overview - Capital Southwest Corporation is an internally managed business development company based in Dallas, Texas, with approximately $1.7 billion in investments at fair value as of December 31, 2024 [2] - The company focuses on providing flexible financing solutions to support the acquisition and growth of middle market businesses, making investments ranging from $5 million to $50 million across various capital structures [2] Group 2: Financial Strengths - Moody's cited several factors supporting the Baa3 rating, including Capital Southwest's strong capitalization, diverse funding profile, and first-lien oriented investment portfolio [1] - The company generates recurring earnings and operates under an internally managed structure, which contributes to its financial stability [1]

Group 1 - Capital Southwest (NASDAQ: CSWC) is highlighted as one of the top Business Development Companies (BDCs) for income generation, with a strong position in the author's investment portfolio [1] - The company is recognized for its long-standing performance and reliability in providing dividends, appealing to buy-and-hold investors [1] Group 2 - The author emphasizes the importance of quality over quantity in investment choices, particularly in dividend-paying stocks, BDCs, and REITs [2] - There is a focus on helping lower and middle-class workers build investment portfolios that prioritize high-quality, dividend-paying companies [2]

Group 1 - The article emphasizes the importance of creating a portfolio that generates income without the need for selling assets, which can significantly reduce financial stress during retirement [2] - It highlights a specific investment strategy, referred to as the Income Method, which aims to deliver strong returns and targets a yield of 9-10% [2] - The company offers a month-long paid trial for $49, along with a promotional discount of 5%, to attract potential investors to their investment model [2]

Core Points - Capital Southwest Corporation has appointed Michael Sarner as the new President and Chief Executive Officer, succeeding Bowen Diehl, effective February 17, 2025 [1][3] - Chris Rehberger has been promoted to Chief Financial Officer, Treasurer & Secretary, while Tabitha Geiger has been promoted to Chief Compliance Officer, both effective February 17, 2025 [2] - Bowen Diehl will continue to serve in an advisory role for at least another year, emphasizing the importance of succession planning within the company [3] - Michael Sarner has over thirty years of experience in financial and BDC roles, having raised over $2 billion in debt and equity for Capital Southwest [3][4] - Chris Rehberger has twenty years of experience in corporate finance within the BDC space and has worked closely with Sarner for two decades [4] - Tabitha Geiger has nearly a decade of experience in compliance, previously working in compliance consulting for private equity and hedge fund managers [5] - As of December 31, 2024, Capital Southwest has approximately $1.7 billion in investments at fair value, focusing on middle market businesses with investments ranging from $5 million to $50 million [6]

Group 1 - The Cash Flow Kingdom Income Portfolio aims to achieve an overall yield in the range of 7% to 10% by combining various income streams for a steady payout [1] - Capital Southwest (NASDAQ: CSWC) is identified as a quality Business Development Company (BDC) with a strong dividend yield of approximately 11%, and its shares have recently become less expensive due to a pullback over the last six months [1] - The portfolio includes features such as access to a leader's personal income portfolio targeting yields over 6%, community chat, a "Best Opportunities" List, and coverage of sectors like energy midstream, commercial mREITs, BDCs, and shipping [1]

Investment Portfolio - The total fair value of the investment portfolio increased to $1,701.3 million as of December 31, 2024, from $1,476.6 million as of March 31, 2024[344]. - The company had investments in 125 portfolio companies with an aggregate cost of $1,713.3 million as of December 31, 2024, compared to 116 companies with a cost of $1,476.7 million as of March 31, 2024[344]. - Investments on non-accrual status represented approximately 2.7% of the total investment portfolio's fair value as of December 31, 2024, compared to 2.3% as of March 31, 2024[341]. - The fair value of the investment portfolio at the end of the nine months ended December 31, 2024, was $1,701.3 million, compared to $1,365.0 million at the end of the same period in 2023[358]. - The company received distributions-in-kind of investments totaling $6.4 million in connection with the dissolution of I-45 SLF LLC[358]. Debt Investments - Approximately 97.8% of the debt investment portfolio bore interest at floating rates as of December 31, 2024, with a weighted average contractual minimum interest rate of 1.46%[345]. - The weighted average annual effective yield on debt investments was 12.1% as of December 31, 2024, down from 13.3% as of March 31, 2024[346]. - As of December 31, 2024, the total debt portfolio was valued at $1,542.5 million, with Investment Rating 1 at $414.0 million (26.9%), Rating 2 at $1,047.9 million (67.9%), Rating 3 at $78.7 million (5.1%), and Rating 4 at $2.0 million (0.1%)[353]. - The average monthly cost basis of debt investments increased by 24.3% from $1,154.4 million to $1,435.1 million year-over-year[375]. - The company specializes in providing customized debt and equity financing to lower middle market (LMM) companies, targeting those with annual EBITDA between $3.0 million and $25.0 million[333]. Investment Income - Total investment income for the three months ended December 31, 2024, was approximately $52.0 million, a 7.0% increase from $48.6 million in the same period of 2023[361]. - Interest income for the three months ended December 31, 2024, totaled $41.2 million, up from $36.6 million in the same period of 2023, driven by a 24.6% increase in the average monthly cost basis of debt investments[363]. - Net investment income for the three months ended December 31, 2024, was $30.3 million, a 5.0% increase from $28.9 million in the same period of 2023[360]. - For the nine months ended December 31, 2024, total investment income was approximately $152.0 million, a $20.3 million, or 15.4%, increase compared to the same period in 2023[374]. - Net investment income for the nine months ended December 31, 2024, increased by $9.7 million, or 12.1%, to $90.3 million, attributed to a $20.3 million increase in total investment income[379]. Expenses and Losses - The ratio of last twelve months operating expenses as a percentage of average total assets improved to 1.61% for the nine months ended December 31, 2024, from 1.84% for the same period in 2023[336]. - Employee compensation expense decreased by $1.2 million, or 23.0%, to $4.0 million for the three months ended December 31, 2024, primarily due to a decrease in accrued bonus compensation[366]. - The company recorded a net realized loss on investments of $12.8 million for the three months ended December 31, 2024, compared to a loss of $7.8 million in the same period of 2023[360]. - Total net realized loss on investments for the nine months ended December 31, 2024, was $22.4 million, compared to a loss of $20.2 million for the same period in 2023, indicating a year-over-year increase in losses of approximately 10.9%[380][382]. - The net unrealized depreciation on investments for the nine months ended December 31, 2024, was $14.6 million, while for the same period in 2023, it was a net unrealized appreciation of $9.9 million, reflecting a significant decline in investment value[381][382]. Cash Flow and Liquidity - Cash and cash equivalents as of December 31, 2024, were approximately $36.0 million, an increase from $23.6 million as of December 31, 2023, representing a year-over-year increase of about 52.5%[387][388]. - Operating activities used $158.5 million in cash during the nine months ended December 31, 2024, primarily due to new portfolio investments of $466.9 million, partially offset by $226.9 million from sales and repayments[387]. - Financing activities provided cash of $163.5 million during the same period, mainly from net proceeds of $223.1 million from the issuance of 2029 Convertible Notes and $111.0 million from the Equity ATM Program[387]. - The Company had $376.2 million of unused capacity under its Credit Facilities as of December 31, 2024, indicating strong liquidity to support investment and operating activities[389]. - The asset coverage ratio as of December 31, 2024, was 209%, well above the minimum requirement of 150% set by the 1940 Act[386]. Equity and Shareholder Activities - The Equity ATM Program was increased to allow for the sale of up to $1.0 billion in common stock, reflecting the Company's strategy to enhance capital resources[400]. - In Q4 2024, the company sold 2,364,147 shares under the Equity ATM Program, generating gross proceeds of $53.62 million, a decrease from $66.55 million in Q4 2023[401]. - For the nine months ended December 31, 2024, the company sold 4,702,227 shares, raising gross proceeds of $112.54 million, compared to $134.97 million in the same period of 2023[401]. - Cumulatively, the company has sold 30,048,664 shares under the Equity ATM Program, raising $641.4 million in gross proceeds and $631.5 million in net proceeds after commissions[401]. - As of December 31, 2024, the company had $358.6 million available under the Equity ATM Program[401]. Dividends and Commitments - The company declared a total dividend of $0.64 per share for the quarter ending March 31, 2025, with a record date of March 14, 2025[409]. - The company had total unfunded commitments of approximately $192.8 million as of December 31, 2024[404]. Risk Factors - The company continues to monitor supply chain disruptions, labor shortages, and geopolitical instability, which may impact portfolio companies[350]. - Interest rate risk is significant, with a potential decrease in net investment income of $24.01 million per share if interest rates decrease by 200 basis points[415].