NASDAQ$CSWC

Capital Southwest Corporation · Q2 2021 earnings

Q2 2021 earnings · · Investor relations

Briefing

Announced financial results for second fiscal quarter ended September 30, 2020 and total dividends of $0.51 per share for the quarter ended December 31, 2020.

Capital Southwest reported strong performance in both the Upper and Lower Middle Market portfolios, with a portfolio appreciation of $8.4 million, increasing NAV per share from $14.95 to $15.36. The company announced Pre-Tax Net Investment Income of $0.44 per share and total dividends of $0.51 per share for the quarter.

  • Total Investment Portfolio: $631.2 million.
  • Pre-Tax Net Investment Income: $8.1 million, or $0.44 per weighted average diluted share.
  • Dividends: Paid $0.41 per share Regular Dividend, $0.10 per share Supplemental Dividend, totaling $0.51 per share.
  • Net Realized and Unrealized Portfolio Appreciation: $8.4 million.

Headline financials

Total Revenue

$16.7M

Previous: $15.2M+9.6%
EPS (adj)

$0.45

Previous: $0.38+18.4%
NAV per share

$15.36

No prior period
Net Income

$16.4M

No prior period
Operating Income

$8.1M

No prior period
Cash & Equivalents

$16M

No prior period
Total Assets

$664M

No prior period

Revenue & EPS history

Capital Southwest · Revenue · Quarterly

$16.7M

Q2 2021+9.6%vs Q2 2020
Beat estimate in 9 of 14 quarters(64%)
ActualEstimate

Revenue by segment

Capital Southwest · $18.3M total across 2 segments · Q1 2023

  • Non-control/Non-affiliate Investments
    $15.7M
  • Affiliate Investments
    $2.51M

Forward guidance

Capital Southwest is hopeful to receive formal license approval from the U.S. Small Business Administration by the end of this calendar year, which will allow access to $175 million in long term, cost effective debt capital to deploy in the lower middle market strategy.

Tailwinds

  • Potential access to $175 million in long-term, cost-effective debt capital.
  • Deployment of capital in the lower middle market strategy.
  • Significant earnings power for shareholders upon SBIC license approval.
  • Continued focus on supporting the acquisition and growth of middle market businesses.
  • Flexibility to be creative in financing solutions and support portfolio companies over long periods.

Headwinds

  • Uncertainty regarding the timing and ultimate issuance of the SBIC license.
  • Risks related to changes in the markets in which Capital Southwest invests.
  • Changes in financial, capital, and lending markets could impact performance.
  • Regulatory changes and tax treatment may affect financial results.
  • Economic and business conditions, including the impact of the COVID-19 pandemic, pose risks.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 19 quarterly earnings reports · overlaid with Q2 2021

Historical avgQ2 2021

+0.7%

Avg return

Earnings day

+2.4%

Avg return

5 days after

+1.6%

Avg return

30 days after

62%

26 / 42 earnings

Positive

+9.7%

Q2 2021

Best reaction

-13.0%

Q1 2012

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q4 2026+2.4%-1.5%+0.3%
Q3 2026+0.5%+0.2%-3.0%
Q2 2026-2.3%+1.7%+7.0%
Q4 2025-0.2%+2.5%-1.4%
Q3 2025+2.2%+3.1%+0.8%
Q2 2025-4.5%-6.4%-8.9%
Q1 2025-0.7%-2.5%+2.5%
Q4 2024-1.3%-2.0%-2.3%
Q3 2024+2.7%-2.0%-4.8%
Q2 2024+4.0%+3.8%+7.2%
Q1 2024+4.3%+2.0%+1.3%
Q4 2023+1.1%+1.6%+6.1%
Q3 2023+3.6%+2.6%-2.4%
Q2 2023+3.5%+3.5%-2.7%
Q1 2023+0.6%+1.4%-2.4%
Q4 2022+3.2%+5.5%-15.0%
Q3 2022+7.6%+6.3%+0.5%
Q2 2022-8.1%-2.6%-6.0%
Q1 2022+6.9%+5.9%+8.9%
Q4 2021+3.0%+5.2%-2.5%
Q3 2021+3.5%+8.5%+22.0%
Q2 2021+9.7%+17.9%+33.8%
Q1 2021+5.7%+9.5%+10.3%
Q4 2020+3.6%+9.2%-3.1%
Q3 2020-1.1%-2.0%-9.8%
Q2 2020-4.2%-5.0%-0.3%
Q1 2020+0.5%+4.0%+1.7%
Q4 2019-0.2%+0.4%-3.1%
Q3 2019+1.6%+0.5%+0.9%
Q1 2019+0.3%+1.8%+5.4%
Q4 2018+0.0%+10.9%+8.1%
Q3 2018+0.1%+0.7%+7.5%
Q1 2017+0.9%-0.3%+0.2%
Q4 2017+1.7%+2.3%+1.4%
Q3 2016-0.7%-2.5%-1.1%
Q3 2013
Q2 2013+2.9%
Q1 2013
Q4 2012+0.6%
Q3 2012-0.2%
Q2 2012-3.0%
Q1 2012-13.0%
Q4 2011-1.0%
Q4 2010-5.5%

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