Financial Data and Key Metrics Changes - Pre-tax net investment income was $30.7 million or $0.64 per share, compared to $30 million or $0.64 per share in the prior quarter [30] - Total investment income increased to $52 million from $48.7 million in the prior quarter, driven primarily by a $3.2 million increase in fees and other income [30] - The company maintained a regular dividend of $0.58 per share and increased the supplemental dividend to $0.06 per share for the March quarter [31][33] Business Line Data and Key Metrics Changes - The company generated $317.5 million in new commitments to nine new portfolio companies and 20 existing portfolio companies during the quarter [8][22] - Over 41% of total capital commitments were follow-on financings in performing companies [9] - The credit portfolio ended the quarter at $1.5 billion, representing year-over-year growth of 31% from $1.2 billion as of December 2023 [20] Market Data and Key Metrics Changes - The company reported a weighted average yield of 12.1% in its credit portfolio, with a weighted average leverage of 3.6x EBITDA [26] - The number of portfolio upgrades significantly exceeded downgrades, with approximately 95% of the portfolio rated in the top two categories [27] - Cash flow coverage of debt service obligations across the portfolio remained healthy at 3.5x [27] Company Strategy and Development Direction - The company focuses on lending and investing in the lower middle market, with approximately 94% of its credit portfolio backed by private equity firms [16] - The company aims to maintain a conservative posture regarding overall risk management while growing its balance sheet [21] - The company is excited about its continued participation in the SBA program, which is a key component of its capitalization strategy [11] Management's Comments on Operating Environment and Future Outlook - Management noted that the M&A market has been active and is expected to continue into 2025, with visibility on exits from the portfolio [50][51] - The company is monitoring the impact of tariffs and immigration policies on its portfolio, with preliminary analysis indicating that around 10% of the portfolio could be affected [63][64] - Management expressed confidence in the ability to continue distributing quarterly supplemental dividends based on the current UTI balance and expected realized gains [33] Other Important Information - The company issued $230 million in convertible notes with a coupon of 5.125% to redeem $140 million in January 2026 notes and pay down its revolving credit facility [10][36] - The company raised approximately $54 million in gross equity proceeds through its Equity ATM Program at a weighted average share price of $22.68 per share [12] - The company expects to receive final approval for its second SBIC license imminently [41] Q&A Session Summary Question: Insights on new investment M&A activity trends - Management noted that the M&A market was active in the fourth quarter and has continued into the first quarter, with early signs of increased activity in 2025 [50][51] Question: Impact of call protection on prepayments - Management expects to see some level of prepayments in the future, estimating that 10% to 15% of the portfolio may rotate in 2025 [60] Question: Exposure to tariffs and their impact - Approximately 10% of the portfolio could see some impact from tariffs, but the first lien senior secured position is expected to mitigate risks [64] Question: Update on SBA license and funding costs - The company expects to ramp up quickly once the SBA license is received, with anticipated borrowing costs between 4% and 5% [75] Question: Competition and spread compression - The market has seen spread compression of about 50 to 100 basis points over the past nine months, but loan-to-value ratios remain consistent [84][87] Question: Changes in non-accrual relationships - One non-accrual was restructured, and the company is monitoring the performance of others for potential improvements [89][92] Question: Staffing levels and deal activity - The company is continually assessing staffing needs to accommodate growing deal activity, with plans to add professionals as necessary [100][102] Question: Future dividend distribution strategy - The company anticipates climbing UTI to the $0.80 range by next quarter and plans to distribute more than the current run rate [112]

Capital Southwest Corporation Q3 2025 Earnings Presentation February 4, 2025 8333 Douglas Avenue, Suite 1100 | Dallas, Texas 75225 | 214.238.5700 | capitalsouthwest.com Important Notices Page 2 • These materials and any presentation of which they form a part are neither an offer to sell, nor a solicitation of an offer to purchase, any securities of Capital Southwest. • These materials and the presentations of which they are a part, and the summaries contained herein, do not purport to be complete and no obl ...

DALLAS, Feb. 03, 2025 (GLOBE NEWSWIRE) -- Capital Southwest Corporation (“Capital Southwest,” “CSWC” or the “Company”) (Nasdaq: CSWC), an internally managed business development company focused on providing flexible financing solutions to support the acquisition and growth of middle market businesses, today announced its financial results for the third fiscal quarter ended December 31, 2024. Third Quarter Fiscal Year 2025 Financial Highlights Total Investment Portfolio: $1.7 billion Credit Portfolio of $1.5 ...

DALLAS, Jan. 31, 2025 (GLOBE NEWSWIRE) -- Capital Southwest Corporation ("Capital Southwest" or the "Company") (NASDAQ:CSWC), an internally managed business development company focused on providing flexible financing solutions to support the acquisition and growth of middle market businesses, announced today the U.S. federal income tax treatment of its 2024 dividends. U.S. Federal Income Tax Treatment of 2024 Dividends Capital Southwest paid dividends totaling $2.53 per share that are attributable to the ta ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of report (Date of earliest event reported): January 15, 2025 CAPITAL SOUTHWEST CORPORATION (Exact Name Of Registrant As Specified In Charter) Texas 814-00061 75-1072796 (Commission File Number) (IRS Employer Identification No.) (State or Other Jurisdiction of Incorporation) 8333 Douglas Avenue, Suite 1100 Dallas, Texas 75225 (Address of ...

DALLAS, Jan. 15, 2025 (GLOBE NEWSWIRE) -- Capital Southwest Corporation (“Capital Southwest”) (Nasdaq: CSWC), an internally managed business development company focused on providing flexible financing solutions to support the acquisition and growth of middle market businesses, is pleased to announce its preliminary operating results for the third quarter of its 2025 fiscal year (quarter ended December 31, 2024) and its third quarter 2025 earnings release and conference call schedule. Capital Southwest’s pre ...

I have been bullish on Capital Southwest (NASDAQ: CSWC ) since March 2024, when I issued my first article on this high quality and equity focused BDC. The total return performance has not been that good, with the returns (includingRoberts Berzins has over a decade of experience in the financial management helping top-tier corporates shape their financial strategies and execute large-scale financings. He has also made significant efforts to institutionalize REIT framework in Latvia to boost the liquidity of ...

Dividend Increase and Financial Performance - Capital Southwest raised its base dividend by $0.01 per share to $0.58 per share in the last quarter [1] - The company experienced a substantial increase in its dividend pay-out ratio due to lower net income [1] Analyst and Author Background - The author is a financial researcher and investor with a focus on innovation, disruption, growth buyouts, and value stocks [1] - The author writes about current events and industry news, providing research and investment opportunities [1]

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Capital Southwest (NASDAQ: CSWC ) has provided investors with quite a lot of volatility over the last six months, when its stock price has decreased by over 10%. Lower valuation combined with an attractive dividend yield leaves investors wondering whether the recentWelcome to Cash Flow Venue, where dividends do the heavy lifting! Blending my financial chops with the timeless wisdom of value investing (and love for steady income), I’ve built a rock-solid pillar in my financial foundation through dividend inv ...