Capital Southwest Announces Financial Results for Second Fiscal Quarter Ended September 30, 2024, Declares Regular Dividend of $0.58 per share and Supplemental Dividend of $0.05 per share for the Quarter Ending December 31, 2024
Capital Southwest (CSWC) reported financial results for Q2 FY2025 ended September 30, 2024. The company achieved pre-tax net investment income of $0.64 per share, fully covering both regular dividend of $0.58 and supplemental dividend of $0.06. Total investment portfolio reached $1.5 billion, with 98% in first-lien senior secured debt. The company originated $89.8 million in new commitments during the quarter, including investments in four new portfolio companies. Net Asset Value (NAV) per share was $16.59. The Board declared a regular dividend of $0.58 and supplemental dividend of $0.05 per share for Q4 2024.
Capital Southwest (CSWC) ha riportato i risultati finanziari per il secondo trimestre dell'anno fiscale 2025, conclusosi il 30 settembre 2024. L'azienda ha raggiunto un reddito netto da investimenti ante imposte di $0.64 per azione, coprendo completamente sia il dividendo regolare di $0.58 che il dividendo supplementare di $0.06. Il portafoglio complessivo di investimenti ha raggiunto $1.5 miliardi, con il 98% in debito senior garantito di primo grado. Durante il trimestre, l'azienda ha originato $89.8 milioni in nuovi impegni, inclusi investimenti in quattro nuove società del portafoglio. Il valore patrimoniale netto (NAV) per azione era di $16.59. Il Consiglio ha dichiarato un dividendo regolare di $0.58 e un dividendo supplementare di $0.05 per azione per il quarto trimestre del 2024.
Capital Southwest (CSWC) reportó resultados financieros para el segundo trimestre del año fiscal 2025, concluido el 30 de septiembre de 2024. La empresa logró ingresos netos de inversión antes de impuestos de $0.64 por acción, cubriendo completamente tanto el dividendo regular de $0.58 como el dividendo suplementario de $0.06. El portafolio total de inversiones alcanzó $1.5 mil millones, con un 98% en deuda senior garantizada de primer nivel. Durante el trimestre, la empresa originó $89.8 millones en nuevos compromisos, incluidos inversiones en cuatro nuevas empresas del portafolio. El Valor Neto de Activos (NAV) por acción fue de $16.59. La Junta declaró un dividendo regular de $0.58 y un dividendo suplementario de $0.05 por acción para el cuarto trimestre de 2024.
Capital Southwest (CSWC)는 2024년 9월 30일로 종료된 2025 회계연도 2분기 재무 결과를 보고했습니다. 회사는 주당 $0.64의 세전 순 투자 수익을 달성하여 정기 배당금 $0.58 및 추가 배당금 $0.06을 완전히 덮었습니다. 총 투자 포트폴리오는 $1.5억 달러에 도달하였으며, 98%는 1순위 담보 대출에 해당합니다. 이 분기 동안 회사는 네 개의 새로운 포트폴리오 기업에 대한 투자를 포함하여 $89.8백만 달러의 신규 약정을 체결했습니다. 주당 순자산가치(NAV)는 $16.59였습니다. 이사회는 2024년 4분기에 대해 주당 $0.58의 정기 배당금과 $0.05의 추가 배당금을 선언했습니다.
Capital Southwest (CSWC) a publié ses résultats financiers pour le deuxième trimestre de l'exercice 2025, se terminant le 30 septembre 2024. L'entreprise a réalisé un revenu net d'investissement avant impôts de $0.64 par action, couvrant ainsi entièrement à la fois le dividende régulier de $0.58 et le dividende complémentaire de $0.06. Le portefeuille total d'investissements a atteint $1.5 milliard, avec 98% en dette senior garantie de premier rang. Au cours du trimestre, l'entreprise a originé $89.8 millions en nouveaux engagements, y compris des investissements dans quatre nouvelles entreprises du portefeuille. La valeur nette d'inventaire (NAV) par action était de $16.59. Le Conseil a déclaré un dividende régulier de $0.58 et un dividende complémentaire de $0.05 par action pour le quatrième trimestre de 2024.
Capital Southwest (CSWC) berichtete über die finanziellen Ergebnisse des 2. Quartals des Geschäftsjahres 2025, das am 30. September 2024 endete. Das Unternehmen erzielte ein steuerliches Nettoinvestitionseinkommen von $0.64 pro Aktie, das sowohl die reguläre Dividende von $0.58 als auch die supplemental Dividende von $0.06 vollständig abdeckte. Das gesamte Investitionsportfolio belief sich auf $1,5 Milliarden, wobei 98% in erstklassigen Senior-Debt investiert wurden. Im Laufe des Quartals hat die Firma $89.8 Millionen an neuen Verpflichtungen eingegangen, einschließlich Investitionen in vier neue Portfoliounternehmen. Der Nettoinventarwert (NAV) je Aktie betrug $16.59. Der Vorstand erklärte eine reguläre Dividende von $0.58 und eine supplemental Dividende von $0.05 pro Aktie für das 4. Quartal 2024.
- Pre-tax net investment income of $0.64 per share fully covered dividends
- Strong portfolio yield of 12.9% on debt investments
- 119% LTM Pre-Tax NII Regular Dividend Coverage
- New commitments of $89.8 million during the quarter
- Increased credit facility commitments by $25 million to $485 million
- Net realized and unrealized depreciation of $8.5 million
- Non-accruals at 3.5% of total investment portfolio ($52.2 million)
- Slight decrease in NAV from $16.60 to $16.59 per share
- Decrease in total investment income from $51.4M to $48.7M quarter-over-quarter
Insights
Capital Southwest delivered strong Q2 2025 results with
Key positives include robust origination activity of
The
CSWC Reports Pre-Tax Net Investment Income of
DALLAS, Oct. 28, 2024 (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 second fiscal quarter ended September 30, 2024.
Second Quarter Fiscal Year 2025 Financial Highlights
- Total Investment Portfolio:
$1.5 billion - Credit Portfolio of
$1.4 billion :98% 1st Lien Senior Secured Debt$88.0 million in new committed credit investments during the quarter- Weighted Average Yield on Debt Investments:
12.9% - Current non-accruals with a fair value of
$52.2 million , representing3.5% of the total investment portfolio
- Equity Portfolio of
$134.5 million $1.8 million in new equity co-investments during the quarter
- Credit Portfolio of
- Pre-Tax Net Investment Income:
$30.0 million , or$0.64 per weighted average share outstanding - LTM Operating Leverage:
1.7% for the quarter ended September 30, 2024 - Dividends: Paid
$0.58 per share Regular Dividend and$0.06 per share Supplemental Dividend119% LTM Pre-Tax NII Regular Dividend Coverage- Total Dividends for the quarter ended September 30, 2024 of
$0.64 per share
- Net Realized and Unrealized Depreciation:
$8.5 million , or0.6% of total investments at fair value$1.3 million of net depreciation related to the equity portfolio$7.2 million of net depreciation related to the credit portfolio
- Balance Sheet:
- Cash and Cash Equivalents:
$47.2 million - Total Net Assets:
$791.3 million - Net Asset Value (“NAV”) per Share:
$16.59
- Cash and Cash Equivalents:
In commenting on the Company’s results, Bowen Diehl, President and Chief Executive Officer, stated, “The September quarter was another strong quarter for Capital Southwest. Our portfolio continued to perform well, producing
Second Quarter Fiscal Year Investment Activities
Originations
During the quarter ended September 30, 2024, the Company originated
InSure Home Corporation,
Campany Roof Maintenance, LLC,
LEHR Upfitters, LLC,
UPS Intermediate, LLC,
Prepayments and Exits
During the quarter ended September 30, 2024, the Company received full prepayments on four debt investments totaling
Acceleration, LLC: Proceeds of
South Coast Terminals, LLC: Proceeds of
Retail Services WIS Corporation: Proceeds of
ADS Tactical, Inc.: Proceeds of
Second Fiscal Quarter 2025 Operating Results
For the quarter ended September 30, 2024, Capital Southwest reported total investment income of
For the quarter ended September 30, 2024, total operating expenses (excluding interest expense) were
For the quarter ended September 30, 2024, interest expense was
For the quarter ended September 30, 2024, total pre-tax net investment income was
For the quarter ended September 30, 2024, there was a tax benefit of
During the quarter ended September 30, 2024, Capital Southwest recorded total net realized and unrealized losses on investments of
The Company’s NAV at September 30, 2024 was
Liquidity and Capital Resources
At September 30, 2024, Capital Southwest had approximately
As of September 30, 2024, Capital Southwest had the following borrowings outstanding:
$200.0 million of total debt outstanding on the Corporate Credit Facility$78.0 million of total debt outstanding on the SPV Credit Facility$139.6 million , net of unamortized debt issuance costs, of the4.50% Notes due January 2026$148.5 million , net of unamortized debt issuance costs, of the3.375% Notes due October 2026$69.9 million , net of unamortized debt issuance costs, of the7.75% Notes due August 2028$149.1 million , net of unamortized debt issuance costs, of SBA Debentures (as defined below)
In August 2016, CSWC entered into a senior secured credit facility (the “Corporate Credit Facility”) to provide additional liquidity to support its investment and operational activities. Borrowings under the Corporate Credit Facility accrue interest on a per annum basis at a rate equal to the applicable SOFR rate plus
On March 1, 2024, the Company entered into Amendment No. 1 to the Credit Agreement (the "Amendment"). The Amendment amended the Credit Agreement and other related loan documents to, among other things, permit the Company to enter into special purpose vehicle financings and exclude assets held by any such special purpose vehicle from the assets pledged as collateral securing the Corporate Credit Facility.
On September 12, 2024, the Company entered into an Incremental Commitment and Assumption Agreement that increased the total commitments under the accordion feature of the Credit Agreement by
On February 2, 2024, the Company formed Capital Southwest SPV LLC ("SPV"). SPV is a wholly owned special purpose vehicle that was formed to hold investments for the SPV Credit Facility (as defined below) to support our investment and operating activities. On March 20, 2024, SPV entered into a special purpose vehicle financing credit facility (the "SPV Credit Facility"). The SPV Credit Facility included an initial commitment of
The Company has an "at-the-market" offering (the "Equity ATM Program"), pursuant to which the Company may offer and sell, from time to time through sales agents, shares of its common stock. On May 21, 2024, the Company increased the maximum amount of shares of its common stock to be sold through the Equity ATM Program from
On April 20, 2021, our wholly owned subsidiary, Capital Southwest SBIC I, LP (“SBIC I”), received a license from the Small Business Administration (the "SBA") to operate as a Small Business Investment Company ("SBIC") under Section 301(c) of the Small Business Investment Act of 1958, as amended. The SBIC license allows SBIC I to obtain leverage by issuing SBA-guaranteed debentures ("SBA Debentures"), subject to the issuance of a leverage commitment by the SBA. SBA debentures are loans issued to an SBIC that have interest payable semi-annually and a ten-year maturity. The interest rate is fixed shortly after issuance at a market-driven spread over U.S. Treasury Notes with ten-year maturities. On December 20, 2023, SBIC I received an additional leverage commitment in the amount of
Share Repurchase Program
On July 28, 2021, the Company's board of directors (the "Board") approved a share repurchase program authorizing the Company to repurchase up to
Regular Dividend of
On October 23, 2024, the Board declared a total dividend of
The Company's dividend will be payable as follows:
| Regular Dividend | |
| Amount Per Share: | |
| Ex-Dividend Date: | December 13, 2024 |
| Record Date: | December 13, 2024 |
| Payment Date: | December 31, 2024 |
| Supplemental Dividend | |
| Amount Per Share: | |
| Ex-Dividend Date: | December 13, 2024 |
| Record Date: | December 13, 2024 |
| Payment Date: | December 31, 2024 |
When declaring dividends, the Board reviews estimates of taxable income available for distribution, which may differ from net investment income under generally accepted accounting principles. The final determination of taxable income for each year, as well as the tax attributes for dividends in such year, will be made after the close of the tax year.
Capital Southwest maintains a dividend reinvestment plan ("DRIP") that provides for the reinvestment of dividends on behalf of its registered stockholders who hold their shares with Capital Southwest’s transfer agent and registrar, American Stock Transfer and Trust Company. Under the DRIP, if the Company declares a dividend, registered stockholders who have opted into the DRIP by the dividend record date will have their dividend automatically reinvested into additional shares of Capital Southwest common stock.
Second Quarter 2025 Earnings Results Conference Call and Webcast
Capital Southwest has scheduled a conference call on Tuesday, October 29, 2024, at 11:00 a.m. Eastern Time to discuss the second quarter 2025 financial results. You may access the call by using the Investor Relations section of Capital Southwest's website at www.capitalsouthwest.com, or by using http://edge.media-server.com/mmc/p/gwbdghtk.
An audio archive of the conference call will also be available on the Investor Relations section of Capital Southwest’s website.
For a more detailed discussion of the financial and other information included in this press release, please refer to the Capital Southwest's Form 10-Q for the period ended September 30, 2024 to be filed with the Securities and Exchange Commission (the "SEC") and Capital Southwest’s Second Fiscal Quarter 2025 Earnings Presentation to be posted on the Investor Relations section of Capital Southwest’s website at www.capitalsouthwest.com.
About Capital Southwest
Capital Southwest Corporation (Nasdaq: CSWC) is a Dallas, Texas-based, internally managed business development company with approximately
Forward-Looking Statements
This press release contains historical information and forward-looking statements with respect to the business and investments of Capital Southwest, including, but not limited to, the statements about Capital Southwest's future performance and financial performance and financial condition, Capital Southwest's ability to continue to grow its balance sheet, and the timing, form and amount of any distributions or supplemental dividends in the future. Forward-looking statements are statements that are not historical statements and can often be identified by words such as "will," "believe," "expect" and similar expressions and variations or negatives of these words. These statements are based on management's current expectations, assumptions and beliefs. They are not guarantees of future results and are subject to numerous risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statement. These risks include risks related to: changes in the markets in which Capital Southwest invests; changes in the financial, capital, and lending markets; changes in the interest rate environment and its impact on our business and our portfolio companies; regulatory changes; tax treatment; our ability to operate our wholly owned subsidiary, Capital Southwest SBIC I, LP, as a small business investment company; an economic downturn and its impact on the ability of our portfolio companies to operate and the investment opportunities available to us; the impact of supply chain constraints and labor shortages on our portfolio companies; and the elevated levels of inflation and its impact on our portfolio companies and the industries in which we invests.
Readers should not place undue reliance on any forward-looking statements and are encouraged to review Capital Southwest's Annual Report on Form 10-K for the year ended March 31, 2024 and any subsequent filings with the SEC, including the "Risk Factors" sections therein, for a more complete discussion of the risks and other factors that could affect any forward-looking statements. Except as required by the federal securities laws, Capital Southwest does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changing circumstances or any other reason after the date of this press release.
Investor Relations Contact:
Michael S. Sarner, Chief Financial Officer
214-884-3829
| CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES | |||||||
| CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES | |||||||
| (In thousands, except shares and per share data) | |||||||
| September 30, | March 31, | ||||||
| 2024 | 2024 | ||||||
| (Unaudited) | |||||||
| Assets | |||||||
| Investments at fair value: | |||||||
| Non-control/Non-affiliate investments (Cost: | $ | 1,297,261 | $ | 1,286,355 | |||
| Affiliate investments (Cost: | 201,870 | 190,206 | |||||
| Control investments (Cost: | 9,376 | — | |||||
| Total investments (Cost: | 1,508,507 | 1,476,561 | |||||
| Cash and cash equivalents | 47,237 | 32,273 | |||||
| Receivables: | |||||||
| Dividends and interest | 29,981 | 22,928 | |||||
| Escrow | — | 16 | |||||
| Other | 1,477 | 7,276 | |||||
| Income tax receivable | 484 | 336 | |||||
| Debt issuance costs (net of accumulated amortization of | 10,611 | 10,928 | |||||
| Other assets | 6,201 | 6,440 | |||||
| Total assets | $ | 1,604,498 | $ | 1,556,758 | |||
| Liabilities | |||||||
| SBA Debentures (net of | $ | 149,064 | $ | 148,695 | |||
| January 2026 Notes (net of | 139,557 | 139,388 | |||||
| October 2026 Notes (net of | 148,462 | 148,077 | |||||
| August 2028 Notes (net of | 69,948 | 69,693 | |||||
| Credit Facilities | 278,000 | 265,000 | |||||
| Other liabilities | 14,259 | 17,381 | |||||
| Accrued restoration plan liability | 561 | 570 | |||||
| Income tax payable | 799 | 281 | |||||
| Deferred tax liability | 12,590 | 11,997 | |||||
| Total liabilities | 813,240 | 801,082 | |||||
| Commitments and contingencies (Note 10) | |||||||
| Net Assets | |||||||
| Common stock, | 11,922 | 11,263 | |||||
| Additional paid-in capital | 855,177 | 796,945 | |||||
| Total distributable (loss) earnings | (75,841 | ) | (52,532 | ) | |||
| Total net assets | 791,258 | 755,676 | |||||
| Total liabilities and net assets | $ | 1,604,498 | $ | 1,556,758 | |||
| Net asset value per share (47,686,685 shares outstanding at September 30, 2024 and 45,050,759 shares outstanding at March 31, 2024) | $ | 16.59 | $ | 16.77 | |||
| CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES | |||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
| (Unaudited) | |||||||||||||||
| (In thousands, except shares and per share data) | |||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Investment income: | |||||||||||||||
| Interest income: | |||||||||||||||
| Non-control/Non-affiliate investments | $ | 38,621 | $ | 33,657 | $ | 76,557 | $ | 64,297 | |||||||
| Affiliate investments | 4,727 | 4,298 | 9,486 | 8,477 | |||||||||||
| Control investments | 350 | — | 642 | — | |||||||||||
| Payment-in-kind interest income: | |||||||||||||||
| Non-control/Non-affiliate investments | 1,835 | 963 | 4,308 | 1,877 | |||||||||||
| Affiliate investments | 563 | 563 | 1,141 | 1,305 | |||||||||||
| Dividend income: | |||||||||||||||
| Non-control/Non-affiliate investments | 572 | 287 | 2,939 | 786 | |||||||||||
| Affiliate investments | — | 31 | 51 | 91 | |||||||||||
| Control investments | — | 2,166 | — | 4,310 | |||||||||||
| Fee income: | |||||||||||||||
| Non-control/Non-affiliate investments | 954 | 349 | 2,918 | 1,294 | |||||||||||
| Affiliate investments | 584 | 360 | 918 | 517 | |||||||||||
| Control investments | 9 | 21 | 67 | 45 | |||||||||||
| Other income | 491 | 82 | 1,033 | 139 | |||||||||||
| Total investment income | 48,706 | 42,777 | 100,060 | 83,138 | |||||||||||
| Operating expenses: | |||||||||||||||
| Compensation | 1,990 | 2,333 | 5,456 | 4,843 | |||||||||||
| Share-based compensation | 1,538 | 1,236 | 2,762 | 2,199 | |||||||||||
| Interest | 12,587 | 10,481 | 25,034 | 20,162 | |||||||||||
| Professional fees | 1,095 | 989 | 2,452 | 1,944 | |||||||||||
| General and administrative | 1,482 | 1,327 | 3,056 | 2,576 | |||||||||||
| Total operating expenses | 18,692 | 16,366 | 38,760 | 31,724 | |||||||||||
| Income before taxes | 30,014 | 26,411 | 61,300 | 51,414 | |||||||||||
| Federal income, excise and other taxes | 325 | (150 | ) | 542 | 449 | ||||||||||
| Deferred taxes | (1,476 | ) | (633 | ) | 734 | (785 | ) | ||||||||
| Total income tax (benefit) provision | (1,151 | ) | (783 | ) | 1,276 | (336 | ) | ||||||||
| Net investment income | $ | 31,165 | $ | 27,194 | $ | 60,024 | $ | 51,750 | |||||||
| Realized (loss) gain | |||||||||||||||
| Non-control/Non-affiliate investments | $ | (10,289 | ) | $ | 210 | $ | (9,485 | ) | $ | (5,596 | ) | ||||
| Affiliate investments | — | 152 | 167 | (6,503 | ) | ||||||||||
| Control investments | — | — | (260 | ) | — | ||||||||||
| Income tax provision | — | 28 | — | (293 | ) | ||||||||||
| Total net realized (loss) gain on investments, net of tax | (10,289 | ) | 390 | (9,578 | ) | (12,392 | ) | ||||||||
| Net unrealized appreciation (depreciation) on investments | |||||||||||||||
| Non-control/Non-affiliate investments | (1,866 | ) | (6,204 | ) | (14,226 | ) | (3,921 | ) | |||||||
| Affiliate investments | 3,669 | (1,038 | ) | (552 | ) | 8,131 | |||||||||
| Control investments | (8 | ) | 1,560 | 762 | 2,166 | ||||||||||
| Income tax benefit (provision) | 13 | 1,083 | 289 | 1,063 | |||||||||||
| Total net unrealized appreciation (depreciation) on investments, net of tax | 1,808 | (4,599 | ) | (13,727 | ) | 7,439 | |||||||||
| Net realized and unrealized (losses) gains on investments | (8,481 | ) | (4,209 | ) | (23,305 | ) | (4,953 | ) | |||||||
| Realized loss on extinguishment of debt | — | (361 | ) | — | (361 | ) | |||||||||
| Net increase in net assets from operations | $ | 22,684 | $ | 22,624 | $ | 36,719 | $ | 46,436 | |||||||
| Pre-tax net investment income per share - basic and diluted | $ | 0.64 | $ | 0.67 | $ | 1.32 | $ | 1.33 | |||||||
| Net investment income per share – basic and diluted | $ | 0.66 | $ | 0.69 | $ | 1.29 | $ | 1.34 | |||||||
| Net increase in net assets from operations – basic and diluted | $ | 0.48 | $ | 0.57 | $ | 0.79 | $ | 1.20 | |||||||
| Weighted average shares outstanding – basic and diluted | 47,242,863 | 39,698,396 | 46,458,435 | 38,653,879 | |||||||||||
FAQ
What was Capital Southwest's (CSWC) pre-tax net investment income per share in Q2 2025?
What dividends did CSWC declare for Q4 2024?
What was CSWC's total investment portfolio value as of September 30, 2024?
What was CSWC's NAV per share as of September 30, 2024?
