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Jun 30, 2020
Capital Southwest Q1 2021 Earnings Report
Reported pre-tax net investment income of $0.40 per share.
Key Takeaways
Capital Southwest Corporation reported financial results for the first fiscal quarter ended June 30, 2020. The company saw some stabilization in both the Upper and Lower Middle Market portfolios, with very few draws on revolver commitments, several repayments of previous revolver draws, and limited amendments and waivers in the portfolio. The company recorded net appreciation of $2.1 million this quarter.
Total Investment Portfolio: $587.2 million
Pre-Tax Net Investment Income: $7.2 million, or $0.40 per weighted average diluted share
Dividends: Paid $0.41 per share Regular Dividend, $0.10 per share Supplemental Dividend
Net Realized and Unrealized Portfolio Appreciation: $2.1 million
Capital Southwest
Capital Southwest
Forward Guidance
The company recently announced a $0.51 per share dividend for the quarter ended September 30, 2020, which was flat from the prior quarter.
Positive Outlook
- Raised $5.7 million in equity capital under our existing at-the-market program in June.
- Significantly broaden our sources of capital and strengthen our balance sheet over the long term.
- Received a 'green light' letter from the U.S. Small Business Administration.
- Hopeful to have our formal license application reviewed and approved by the end of this calendar year.
- Will allow us to access $175 million in cost effective debt capital to deploy in our lower middle market strategy.
Challenges Ahead
- Risks related to whether the SBA ultimately issues the SBIC license and the timing thereof.
- Changes in the markets in which Capital Southwest invests.
- Changes in the financial, capital, and lending markets.
- Regulatory changes.
- Tax treatment and general economic and business conditions.