NASDAQ$CSWC

Capital Southwest Corporation · Q2 2024 earnings

Q2 2024 earnings · · Investor relations

Briefing

Announced financial results for the second fiscal quarter ended September 30, 2023 and an increase in total dividends.

Capital Southwest reported a strong quarter with $110 million of originations. Pre-tax net investment income was $0.67 per share, covering both the regular and supplemental dividends. The board declared an increased regular quarterly dividend of $0.57 per share and a supplemental dividend of $0.06 per share for the December 31, 2023 quarter.

  • Total Investment Portfolio was $1.4 billion, including a $1.2 billion credit portfolio and a $121.1 million equity portfolio.
  • Pre-Tax Net Investment Income was $26.4 million, or $0.67 per weighted average share outstanding.
  • Total dividends for the quarter ended September 30, 2023, were $0.62 per share.
  • Net Asset Value (NAV) per Share was $16.46.

Headline financials

Total Revenue

$14.3M

Previous: $8.66M+64.6%
EPS (adj)

$0.69

Previous: $0.52+32.7%
Weighted avg yield on debt

13.5%

Previous: 10.6%+27.4%
NAV per share

$16.46

Previous: $16.53-0.4%
Capital Expenditures

-$2K

Previous: -$156K+98.7%
Free Cash Flow

$22.6M

Previous: $9.3M+143.2%
Net Income

$22.6M

Previous: $9.46M+139.2%
Operating Income

$12.8M

Previous: $7.4M+73.5%
Gross Profit

$14.2M

Previous: $8.46M+67.3%
Cash & Equivalents

$23M

Previous: $30.2M-23.9%
Total Assets

$1.42B

Previous: $1.11B+27.3%
Stock-Based Comp

$1.24M

Previous: $1.06M+16.6%

Revenue & EPS history

Capital Southwest · Revenue · Quarterly

$14.3M

Q2 2024+64.6%vs Q2 2023
Beat estimate in 4 of 14 quarters(29%)
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

The Board of Directors intends to continue distributing quarterly supplemental dividends while base rates remain materially above long-term historical averages and the company has a meaningful UTI balance. Future dividend declarations are at the discretion of the Board of Directors.

Tailwinds

  • Board of Directors declared an increase in our regular quarterly dividend to $0.57 per share for the December 31, 2023 quarter.
  • Board of Directors declared a supplemental dividend of $0.06 per share for the December 31, 2023 quarter, resulting in total dividends for the December 31, 2023 quarter of $0.63 per share.
  • Shareholder approval to increase the number of authorized shares from 40,000,000 to 75,000,000.
  • Incremental shares provide Capital Southwest with the flexibility to continue our track record of raising accretive equity to maintain conservative balance sheet leverage while growing our asset base.
  • Company intends to continue to distribute quarterly supplemental dividends for the foreseeable future while base rates remain materially above long-term historical averages and we have a meaningful UTI balance.

Headwinds

  • Future dividend declarations are at the discretion of the Board of Directors.
  • Changes in the markets in which Capital Southwest invests.
  • Changes in the financial, capital, and lending markets.
  • Changes in the interest rate environment and its impact on our business and our portfolio companies.
  • An economic downturn and its impact on the ability of our portfolio companies to operate and the investment opportunities available to us.

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 2024

Historical avgQ2 2024

+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%

Discussion

Share your read of this quarter. Sign-in carries your eToro identity.

Join the conversation

Sign in with eToro to post your read of this quarter and vote on others'.

Sign in with eToro