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Capital Southwest
🇺🇸 NASDAQ:CSWC
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Mar 31, 2023

Capital Southwest Q4 2023 Earnings Report

Capital Southwest reported pre-tax net investment income of $0.65 per share for the quarter ended March 31, 2023.

Key Takeaways

Capital Southwest Corporation announced its financial results for the fourth fiscal quarter and fiscal year ended March 31, 2023. The company reported a pre-tax net investment income of $0.65 per share for the quarter. The Board of Directors declared an increase in the regular quarterly dividend to $0.54 per share and a supplemental dividend of $0.05 per share for the June 30, 2023 quarter.

Total Investment Portfolio reached $1.2 billion, with a credit portfolio of $1.0 billion, 96% of which is 1st Lien Senior Secured Debt.

Pre-Tax Net Investment Income was $22.8 million, or $0.65 per weighted average share outstanding.

Dividends paid were $0.53 per share Regular Dividend and $0.05 per share Supplemental Dividend, resulting in 113% LTM Pre-Tax NII Regular Dividend Coverage.

The company received a Baa3 Investment Grade Rating from Moody's Investors Service with a Stable Outlook.

Total Revenue
$37.2M
Previous year: $21M
+76.9%
EPS
$0.65
Previous year: $0.5
+30.0%
NAV per Share
$16.4
Yield on Debt Investments
12.8%
Previous year: 9.3%
+37.6%
Cash and Equivalents
$21.6M
Previous year: $11.4M
+89.5%
Free Cash Flow
-$33.6M
Previous year: -$45.6M
-26.3%
Total Assets
$1.26B
Previous year: $974M
+29.1%

Capital Southwest

Capital Southwest

Forward Guidance

The Board of Directors has declared an increase in our regular quarterly dividend to $0.54 per share for the June 30, 2023 quarter, and a supplemental dividend of $0.05 per share for the June 30, 2023 quarter, resulting in total dividends for the June quarter of $0.59 per share.

Positive Outlook

  • Increase in regular quarterly dividend to $0.54 per share.
  • Declaration of a supplemental dividend of $0.05 per share for the June 30, 2023 quarter.
  • Total dividends for the June quarter of $0.59 per share.
  • Intent to continue to distribute quarterly supplemental dividends for the foreseeable future while base rates remain materially above long-term historical averages.
  • Meaningful Undistributed Taxable Income (UTI) balance.

Challenges Ahead

  • Future dividend declarations are at the discretion of the Board of Directors.
  • Net Realized and Unrealized Depreciation: $4.2 million
  • $2.4 million of net depreciation related to the credit portfolio
  • $1.2 million of net depreciation related to I-45 SLF
  • $0.6 million of net depreciation related to the equity portfolio

Company Overview

Full financial data and analysis

View Capital Southwest