Q1 2025 Capital Southwest Corp Earnings Call Transcript
Key Points
- Capital Southwest Corp (CSWC) generated pretax net investment income of $0.69 per share, covering both the regular and supplemental dividends.
- The Board of Directors declared a $0.01 per share increase to the regular dividend, bringing it to $0.58 per share for the September quarter.
- Portfolio activity included $108.1 million in new commitments, demonstrating strong deal sourcing and origination capabilities.
- The company raised over $38 million in gross equity proceeds during the quarter, enhancing balance sheet liquidity.
- Capital Southwest Corp (CSWC) maintained a conservative leverage ratio of 0.75 to 1, ensuring strong balance sheet liquidity and flexibility.
- Increased competition from both bank and non-bank lenders has led to tighter spreads and slightly higher leverage levels.
- The company experienced $77.2 million in debt prepayments, which could impact future income generation.
- Net Asset Value (NAV) per share decreased by $0.17 to $16.60, primarily due to net unrealized depreciation and dilution from restricted stock issuance.
- Operating expenses were higher than usual due to one-time costs, affecting overall profitability.
- The company faces potential earnings pressure from anticipated interest rate cuts over the next 18 months.
Thank you for joining today's Capital Southwest first quarter fiscal year 2025 earnings call. Participating on the call today are Bowen Diehl, Chief Executive Officer; Michael Sarner, Chief Finance Officer; Josh Weinstein, Chief Investment Officer, and Chris Rehberger, Executive Vice President, Finance.
I will now turn the call over to Chris Rehberger.
Thank you. I would like to remind everyone that in the course of this call, we will be making certain forward-looking statements. These statements are based on current conditions, currently available information and management's 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 such statements.
For information concerning these risks and uncertainties see Capital Southwest's publicly available filings with the SEC. The company does not undertake any obligation to
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