Capital Southwest Corp (CSWC) Announces Q2 2024 Financial Results
Capital Southwest Corp (NASDAQ:CSWC) reports a total investment portfolio of $1.4 billion for Q2 2024.
The company's pre-tax net investment income stands at $26.4 million, or $0.67 per weighted average share outstanding.
CSWC announces an increase in total dividends to $0.63 per share for Q4 2023.
The company's net asset value (NAV) per share is reported at $16.46.
Capital Southwest Corp (NASDAQ:CSWC), a business development company focused on providing flexible financing solutions to middle market businesses, announced its financial results for the second fiscal quarter ended September 30, 2023, on October 30, 2023.
Financial Highlights
The company's total investment portfolio for the quarter stood at $1.4 billion, with a credit portfolio of $1.2 billion. The credit portfolio included $107.5 million in new committed credit investments and had a weighted average yield on debt investments of 13.5%. The equity portfolio, excluding investment in I-45 Senior Loan Fund ("I-45 SLF"), was $121.1 million, with $2.5 million in new equity co-investments.
Capital Southwest reported pre-tax net investment income of $26.4 million, or $0.67 per weighted average share outstanding. The company paid dividends of $0.56 per share Regular Dividend and $0.06 per share Supplemental Dividend, with total dividends for the quarter ended September 30, 2023, of $0.62 per share.
The company's balance sheet showed cash and cash equivalents of $23.0 million and total net assets of $657.8 million. The net asset value (NAV) per share was $16.46.
Company's Performance and Dividend Announcement
Commenting on the company's performance, Bowen Diehl, President and Chief Executive Officer, stated,
The September quarter was another strong quarter for Capital Southwest, with $110 million of originations in five new and six existing portfolio companies. Our portfolio continued to perform well, producing $0.67 of pre-tax net investment income for the quarter, which more than earned both our $0.56 per share regular dividend and our $0.06 per share supplemental dividend paid for the quarter."
Diehl also announced an increase in the regular quarterly dividend to $0.57 per share for the December 31, 2023 quarter, and a supplemental dividend of $0.06 per share, resulting in total dividends for the December 31, 2023 quarter of $0.63 per share.
Investment Activities and Operating Results
During the quarter, Capital Southwest originated $110.0 million in new commitments, consisting of investments in five new portfolio companies totaling $81.7 million and add-on commitments in six portfolio companies totaling $28.3 million.
For the quarter ended September 30, 2023, Capital Southwest reported total investment income of $42.8 million, compared to $40.4 million in the prior quarter. The increase in investment income was primarily attributable to an increase in average debt investments outstanding and an increase in the weighted average yield on debt investments from 12.9% to 13.5%.
Liquidity and Capital Resources
As of September 30, 2023, Capital Southwest had approximately $23.0 million in unrestricted cash and money market balances, $250.0 million of total debt outstanding on the Credit Facility, and $184.4 million in available borrowings under the Credit Facility. The regulatory debt to equity ratio at the end of the quarter was 0.92 to 1.
Regular Dividend and Supplemental Dividend for Q4 2023
On October 25, 2023, the Board declared a total dividend of $0.63 per share for the quarter ended December 31, 2023, comprised of a Regular Dividend of $0.57 per share and a Supplemental Dividend of $0.06 per share.
Explore the complete 8-K earnings release (here) from Capital Southwest Corp for further details.
This article first appeared on GuruFocus.
