Capital Southwest ( (CSWC) ) has released its Q3 earnings. Here is a breakdown of the information Capital Southwest presented to its investors.
Capital Southwest Corporation is a Dallas-based business development company that offers flexible financing solutions to support the growth of middle market businesses. The company operates with a diverse investment portfolio focusing on first lien senior secured debt and equity co-investments.
In its latest earnings report for the third fiscal quarter ending December 31, 2024, Capital Southwest announced a pre-tax net investment income of $30.7 million, translating to $0.64 per share. The company continues to demonstrate robust financial performance with total investment income rising to $52.0 million, driven by increased prepayment and other fees.
Key highlights from the quarter include a total investment portfolio of $1.7 billion, with a significant focus on 1st Lien Senior Secured Debt, and new credit investments totaling $313.4 million. The company declared an increase in its total dividends to $0.64 per share for the upcoming quarter, reflecting confidence in its continued performance. Furthermore, the company successfully raised $230 million through convertible notes and received a ‘green light’ letter to apply for a second SBIC license, potentially unlocking additional capital.
Despite some net realized and unrealized losses amounting to $13.7 million, the company’s portfolio generated substantial income, supporting consistent dividend payouts. Capital Southwest’s financial strategy involves diversifying its balance sheet and maintaining efficient capital raising efforts, as evidenced by the significant proceeds from its Equity ATM Program.
Looking forward, Capital Southwest aims to sustain its dividend distribution strategy, bolstered by its strong investment portfolio and strategic initiatives. The management remains optimistic about future growth prospects, particularly with the potential acquisition of a second SBIC license to enhance its investment capabilities.