{"success":true,"data":{"pressRelease":{"id":"106779","rtpr_id":"nGNX6RTQb","ticker":"CSWC","exchange":"NASDAQ","all_tickers":["CSWC"],"title":"Capital Southwest Announces Financial Results for First Fiscal Quarter Ended June 30, 2026","author":"Globe Newswire","published_at":"2026-08-03T20:01:00.410Z","article_body":"DALLAS, Aug. 03, 2026 (GLOBE NEWSWIRE) -- Capital Southwest Corporation\n(“Capital Southwest,” “CSWC” or the “Company”) (Nasdaq: CSWC), an\ninternally managed business development company focused on providing flexible\nfinancing solutions to support the acquisition and growth of middle market\nbusinesses, today announced its financial results for the first fiscal quarter\nended June 30, 2026.\n\nFirst Quarter Fiscal Year 2027 Financial Highlights\n* Total Investment Portfolio at Fair Value: $2.2 billion * Credit Portfolio\nat Fair Value of $2.0 billion * 99% 1st Lien Senior Secured Debt\n* $216.3 million in new committed credit investments during the quarter\n* Weighted Average Yield on Debt Investments: 10.9%\n* Current non-accruals with a fair value of $23.4 million, representing 1.1%\nof the total investment portfolio, and a cost basis of $65.7 million,\nrepresenting 2.9% of the total investment portfolio\n \n* Equity Portfolio at Fair Value of $181.6 million, excluding investment in\nCapTrin Partners, LLC (\"CapTrin\"), CSWC's unconsolidated joint venture * $5.9\nmillion in new equity co-investments during the quarter\n \n* CSWC Equity Investment in CapTrin at Fair Value of $20.8 million * CapTrin\nportfolio of $97.8 million * Portfolio consists of 14 portfolio companies:\n100% 1st Lien Debt\n \n* CapTrin entered into $150.0 million special purpose vehicle financing credit\nfacility in April 2026, with an accordion feature that allows for an increase\nof total commitments to up to $350.0 million * $59.0 million of debt\noutstanding at CapTrin\n* CapTrin fund leverage of 1.4x debt to equity at fair value\n \n* CapTrin paid a $0.3 million quarterly dividend to CSWC\n \n \n* Pre-Tax Net Investment Income: $35.0 million, or $0.57 per weighted average\ncommon share outstanding\n* Estimated Undistributed Taxable Income (\"UTI\"): $0.87 per share as of June\n30, 2026\n* LTM Operating Leverage: 1.4% as of June 30, 2026\n* Dividends: Paid Total Dividends for the quarter ended June 30, 2026 of $0.64\n * Paid $0.58 per share Regular Quarterly Dividend ($0.1934 per share in each\nof April, May and June 2026)\n* Paid $0.06 per share Supplemental Quarterly Dividend in June 2026\n \n* Net Realized and Unrealized Depreciation: $10.9 million, or 0.5% of total\ninvestments at fair value * $6.4 million of net depreciation related to the\ncredit portfolio\n* $3.2 million of net depreciation related to the equity portfolio\n* $0.2 million of net depreciation related to CapTrin\n* $1.1 million net realized and unrealized income tax provision\n \n* Balance Sheet: * Cash and Cash Equivalents: $58.5 million\n* Total Net Assets: $1,058.5 million\n* Net Asset Value (“NAV”) per Share: $16.61\nIn commenting on the Company’s results, Michael Sarner, President and Chief\nExecutive Officer, stated, “The June quarter was an extremely active quarter\nfor Capital Southwest, with approximately $222 million of originations in 11\nnew and 16 existing portfolio companies. Demonstrating our continued\ninvestment discipline, for new platform deals closed during the June quarter,\nweighted-average senior leverage was 2.8x Debt-to-EBITDA and weighted-average\nloan-to-value was 29%, providing a substantial equity cushion beneath our\ndebt. Additionally, during the quarter we funded $21 million of our capital\ncommitment to our joint venture, CapTrin, which, as of June 30, 2026, holds\ntotal investments at fair value of approximately $98 million. Our portfolio\ncontinued to generate significant income for our shareholders, producing $0.57\nof pre-tax net investment income per share. During the quarter, the Board of\nDirectors again declared a regular quarterly dividend of $0.58 per share, of\nwhich $0.1934 per share will be paid for each of July, August and September\n2026, and a supplemental quarterly dividend of $0.06 to be paid in September\n2026. On the capitalization front, CapTrin closed a $150 million special\npurpose vehicle financing credit facility in April 2026, with an accordion\nfeature that allows for an increase of total commitments to up to $350\nmillion. We also continued to efficiently raise equity capital during the\nquarter, raising approximately $64 million through our Equity ATM Program.”\n\nFirst Quarter Fiscal Year Investment Activities\n\nDuring the quarter ended June 30, 2026, the Company originated $222.3 million\nin new commitments, consisting of investments in 11 new portfolio companies\ntotaling $173.0 million and add-on commitments in 16 portfolio companies\ntotaling $49.3 million. New portfolio company originations were comprised of\n$167.4 million in first lien senior secured debt and $5.6 million in equity\ninvestments.\n\nDuring the quarter ended June 30, 2026, the Company received proceeds of $19.5\nmillion from two portfolio company prepayments and exits, generating a\nweighted average IRR of 16.7%. Total proceeds were comprised entirely of debt\ninvestments.\n\nFirst Fiscal Quarter 2027 Operating Results\n\nFor the quarter ended June 30, 2026, Capital Southwest reported total\ninvestment income of $61.0 million, compared to $57.8 million in the prior\nquarter. The increase in investment income was primarily attributable to an\nincrease in interest income due to an increase in the weighted average cost\nbasis of investments held and an increase in the weighted average yield on\ndebt investments, which was primarily due to an increase in the weighted\naverage spread on debt investments.\n\nFor the quarter ended June 30, 2026, total operating expenses (excluding\ninterest expense) were $7.6 million, compared to $5.3 million in the prior\nquarter. The increase was primarily attributable to an increase in accrued\nbonus compensation.\n\nFor the quarter ended June 30, 2026, interest expense was $18.5 million,\ncompared to $17.3 million in the prior quarter. The increase is primarily\nattributable to an increase in average borrowings outstanding.\n\nFor the quarter ended June 30, 2026, total pre-tax net investment income was\n$35.0 million, compared to $35.2 million in the prior quarter.\n\nFor the quarter ended June 30, 2026, there was a tax benefit of $0.7 million,\ncompared to a tax provision of $0.6 million in the prior quarter. The benefit\nin the current quarter included a $1.1 million deferred tax benefit, which was\nprimarily attributable to adjustments to the tax basis of investments held at\nCapital Southwest Equity Investments, Inc., our wholly owned subsidiary that\nhas elected to be treated as a corporation for U.S. federal income tax\npurposes.\n\nDuring the quarter ended June 30, 2026, Capital Southwest recorded total net\nrealized and unrealized losses on investments of $10.9 million, compared to\n$7.1 million of total net realized and unrealized losses in the prior quarter.\nFor the quarter ended June 30, 2026, the total net realized and unrealized\nlosses on investments reflected net realized and unrealized depreciation on\nequity investments of $3.2 million, net realized and unrealized depreciation\non debt investments of $6.4 million, net unrealized depreciation of $0.2\nmillion on the Company's investment in CapTrin and a net realized and\nunrealized income tax provision of $1.1 million. The net increase in net\nassets resulting from operations was $24.7 million for the quarter, compared\nto $27.5 million in the prior quarter.\n\nThe Company’s NAV at June 30, 2026 was $16.61 per share, compared to $16.69\nper share in the prior quarter. The decrease in NAV per share from the prior\nquarter is primarily due to the grant of restricted stock awards and net\nrealized and unrealized losses on investments, partially offset by the\nissuance of common stock at a premium to NAV per share through the Equity ATM\nProgram (as described below).\n\nLiquidity and Capital Resources\n\nAt June 30, 2026, Capital Southwest had approximately $58.5 million in\nunrestricted cash and money market balances and $316.2 million of unused\ncapacity under the Corporate Credit Facility (as defined below) and the SPV\nCredit Facility (as defined below). The regulatory debt to equity ratio at the\nend of the quarter was 0.91 to 1.\n\nAs of June 30, 2026, Capital Southwest had the following borrowings\noutstanding:\n* $280.0 million of total debt outstanding on the Corporate Credit Facility\n* $113.0 million of total debt outstanding on the SPV Credit Facility\n* $225.0 million, net of amortized debt issuance costs, of the 5.125%\nconvertible notes due November 2029\n* $344.3 million, net of amortized debt issuance costs, of the 5.950% Notes\ndue 2030\n* $258.9 million, net of unamortized debt issuance costs, of SBA Debentures\n(as defined below)\nIn August 2016, CSWC entered into a senior secured credit facility (the\n“Corporate Credit Facility”) to provide additional liquidity to support\nits investment and operational activities. Borrowings under the Corporate\nCredit Facility accrue interest on a per annum basis at a rate equal to the\napplicable SOFR rate plus 2.15%. On August 2, 2023, CSWC entered into the\nThird Amended and Restated Senior Secured Revolving Credit Agreement that (1)\nincreased commitments under the Corporate Credit Facility from $400 million to\n$435 million; (2) added an uncommitted accordion feature that could increase\nthe maximum commitments up to $750 million; (3) extended the end of the\nCorporate Credit Facility's revolving period from August 9, 2025 to August 2,\n2027 and extended the final maturity from August 9, 2026 to August 2, 2028;\nand (4) amended several financial covenants. As of June 30, 2026, the total\ncommitments under the Corporate Credit Facility were $510 million provided by\n11 lenders.\n\nCapital Southwest SPV LLC (\"SPV\") is a wholly owned special purpose vehicle\nthat was formed to hold investments for the SPV Credit Facility to support our\ninvestment and operating activities. On March 20, 2024, SPV entered into a\nspecial purpose vehicle financing credit facility (the \"SPV Credit Facility\").\nThe SPV Credit Facility included an initial commitment of $150 million.\nPursuant to the terms of the loan agreement, on June 20, 2024, total\ncommitments automatically increased from $150 million to $200 million. The\nSPV Credit Facility also includes an accordion feature that allows increases\nup to $400 million of total commitments from new and existing lenders on the\nsame terms and conditions as the existing commitments. Borrowings under the\nSPV Credit Facility bear interest at three-month Term SOFR plus 2.50% per\nannum during the revolving period ending on March 20, 2027 and three-month\nTerm SOFR plus an applicable margin of 2.85% thereafter. SPV (i) paid unused\ncommitment fees of 0.10% through April 20, 2024 and (ii) pays unused\ncommitment fees of 0.35% thereafter, on the unused lender commitments under\nthe SPV Credit Facility, in addition to other customary fees. Under the SPV\nCredit Facility, SPV also pays a utilization fee based on the amount of\nborrowings utilized. The SPV Credit Facility matures on March 20, 2029.\n\nThe Company has an \"at-the-market\" offering (the \"Equity ATM Program\"),\npursuant to which the Company may offer and sell, from time to time through\nsales agents, up to $2 billion of shares of its common stock. During the\nquarter ended June 30, 2026, the Company sold 2,708,438 shares of its common\nstock under the Equity ATM Program at a weighted-average price of $23.47 per\nshare, raising $63.6 million of gross proceeds. Net proceeds were\n$62.6 million after commissions to the sales agents on shares sold. As of\nJune 30, 2026, the Company has $1,066.3 million available under the Equity\nATM Program.\n\nOur wholly owned subsidiaries, Capital Southwest SBIC I, LP (“SBIC I”) and\nCapital Southwest SBIC II, LP (\"SBIC II\" and together with SBIC I, the \"SBIC\nSubsidiaries\"), each received a license from the Small Business Administration\n(the \"SBA\") to operate as a Small Business Investment Company (\"SBIC\") under\nSection 301(c) of the Small Business Investment Act of 1958, as amended, on\nApril 20, 2021 and April 17, 2025, respectively. The SBIC licenses allow the\nSBIC Subsidiaries to obtain leverage by issuing SBA-guaranteed debentures\n(\"SBA Debentures\"), subject to the issuance of a leverage commitment by the\nSBA. SBA Debentures are loans issued to an SBIC that have interest payable\nsemi-annually and a ten-year maturity. The interest rate is fixed shortly\nafter issuance at a market-driven spread over U.S. Treasury Notes with\nten-year maturities. For two or more SBICs under common control, the maximum\namount of outstanding SBA Debentures cannot exceed $475 million. As of June\n30, 2026, SBIC I had a total leverage commitment from the SBA in the amount of\n$175.0 million, all of which was drawn, and SBIC II had a total leverage\ncommitment from the SBA in the amount of $90.0 million, all of which was\ndrawn.\n\nShare Repurchase Program\n\nOn July 28, 2021, the Company's Board of Directors (the \"Board\") approved a\nshare repurchase program authorizing the Company to repurchase up to $20\nmillion of its outstanding shares of common stock in the open market at\ncertain thresholds below its NAV per share, in accordance with guidelines\nspecified in Rules 10b5-1(c)(1)(i)(B) and 10b-18 under the Securities Exchange\nAct of 1934, as amended. On August 31, 2021, the Company entered into a share\nrepurchase agreement, which became effective immediately, and the Company will\ncease purchasing its common stock under the share repurchase program upon the\nearlier of, among other things: (1) the date on which the aggregate purchase\nprice for all shares equals $20 million including, without limitation, all\napplicable fees, costs and expenses; or (2) upon written notice by the Company\nto the broker that the share repurchase agreement is terminated. During the\nquarter ended June 30, 2026, the Company did not repurchase any shares of the\nCompany’s common stock under the share repurchase program.\n\nRegular Quarterly Dividend of $0.58 Per Share and Supplemental Quarterly\nDividend of $0.06 Per Share for Quarter Ended September 30, 2026\n\nOn May 27, 2026, the Board declared a regular quarterly dividend of $0.58, of\nwhich $0.1934 per share will be paid in each of July, August and September\n2026 and a supplemental quarterly dividend of $0.06 per share payable in\nSeptember 2026, each of which is detailed in the table below.\n\nThe Company’s regular quarterly dividend for the quarter ending September\n30, 2026 will be payable as follows:\n\n Declared Ex-Dividend Date Record Date Payment Date Amount Per Share \n 5/27/2026 7/15/2026 7/15/2026 7/31/2026 $ 0.1934 \n 5/27/2026 8/14/2026 8/14/2026 8/31/2026 $ 0.1934 \n 5/27/2026 9/15/2026 9/15/2026 9/30/2026 $ 0.1934 \n \n\nThe Company’s supplemental quarterly dividend for the quarter ending\nSeptember 30, 2026 will be payable as follows:\n\n Declared Ex-Dividend Date Record Date Payment Date Amount Per Share \n 5/27/2026 9/15/2026 9/15/2026 9/30/2026 $ 0.06 \n\n\n\n Total Regular Dividends per Share for Quarter Ending September 30, 2026: $ 0.58 \n Total Supplemental Dividend per Share for Quarter Ending September 30, 2026: $ 0.06 \n Total Dividends per Share for Quarter Ending September 30, 2026: $ 0.64 \n \n\nWhen declaring dividends, the Board of Directors reviews estimates of taxable\nincome available for distribution, which may differ from net investment income\nunder generally accepted accounting principles. The final determination of\ntaxable income for each year, as well as the tax attributes for dividends in\nsuch year, will be made after the close of the tax year.\n\nCapital Southwest maintains a dividend reinvestment plan (\"DRIP\") that\nprovides for the reinvestment of dividends on behalf of its registered\nstockholders who hold their shares with Capital Southwest’s transfer agent\nand registrar, Equiniti Trust Company.  Under the DRIP, if the Company\ndeclares a dividend, registered stockholders who have opted into the DRIP by\nthe dividend record date will have their dividend automatically reinvested\ninto additional shares of Capital Southwest's common stock. \n\nFirst Quarter 2027 Earnings Results Conference Call and Webcast\nCapital Southwest has scheduled a conference call on Tuesday, August 4, 2026,\nat 11:00 a.m. Eastern Time to discuss the first quarter 2027 financial\nresults. You may access the call by using the Investor Relations section of\nCapital Southwest's website at www.capitalsouthwest.com, or by using\nhttp://edge.media-server.com/mmc/p/cdtiv4v7.\n\nAn audio archive of the conference call will also be available on the Investor\nRelations section of Capital Southwest’s website.\n\nFor a more detailed discussion of the financial and other information included\nin this press release, please refer to the Capital Southwest's Quarterly\nReport on Form 10-Q for the fiscal year ended June 30, 2026 to be filed with\nthe Securities and Exchange Commission (the \"SEC\") and Capital Southwest’s\nFirst Fiscal Quarter 2027 Earnings Presentation to be posted on the Investor\nRelations section of Capital Southwest’s website at\nwww.capitalsouthwest.com.\n\nAbout Capital Southwest\n\nCapital Southwest Corporation (Nasdaq: CSWC) is a Dallas, Texas-based,\ninternally managed business development company with approximately\n$2.2 billion in investments at fair value as of June 30, 2026. Capital\nSouthwest is a middle market lending firm focused on supporting the\nacquisition and growth of middle market businesses with $5 million to $50\nmillion investments across the capital structure, including first lien,\nsecond lien and non-control equity co-investments. As a public company with a\npermanent capital base, Capital Southwest has the flexibility to be creative\nin its financing solutions and to invest to support the growth of its\nportfolio companies over long periods of time.\n\nForward-Looking Statements\nThis press release contains historical information and forward-looking\nstatements with respect to the business and investments of Capital Southwest,\nincluding, but not limited to, the statements about Capital Southwest's future\nperformance and financial performance and financial condition, and the timing,\nform and amount of any distributions or supplemental dividends in the future.\nForward-looking statements are statements that are not historical statements\nand can often be identified by words such as \"will,\" \"believe,\" \"expect\" and\nsimilar expressions and variations or negatives of these words. These\nstatements are based on management's current expectations, assumptions and\nbeliefs. They are not guarantees of future results and are subject to numerous\nrisks, uncertainties and assumptions that could cause actual results to differ\nmaterially from those expressed in any forward-looking statement. These risks\ninclude risks related to: changes in the markets in which Capital Southwest\ninvests; changes in the financial, capital, and lending markets; changes in\nthe interest rate environment and its impact on our business and our portfolio\ncompanies; regulatory changes; tax treatment; our ability to operate the SBIC\nSubsidiaries as small business investment companies; the uncertainty\nassociated with the imposition of tariffs and trade barriers and changes in\ntrade policy and its impact on our portfolio companies and our financial\ncondition; the impact of geopolitical conditions on our portfolio companies\nand opportunities available to us; an economic downturn or recession and its\nimpact on the ability of our portfolio companies to operate and the investment\nopportunities available to us; the impact of supply chain constraints on our\nportfolio companies; and the elevated levels of inflation and its impact on\nour portfolio companies and the industries in which we invests.\n\nReaders should not place undue reliance on any forward-looking statements and\nare encouraged to review Capital Southwest's Annual Report on Form 10-K for\nthe year ended March 31, 2026 and any subsequent filings with the SEC,\nincluding the \"Risk Factors\" sections therein, for a more complete discussion\nof the risks and other factors that could affect any forward-looking\nstatements. Except as required by the federal securities laws, Capital\nSouthwest does not undertake any obligation to publicly update or revise any\nforward-looking statements, whether as a result of new information, future\nevents, changing circumstances or any other reason after the date of this\npress release.\n\nInvestor Relations Contact:\n\nMichael S. Sarner, President and Chief Executive Officer\n214-884-3829\n\n CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES \n CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES \n (In thousands, except shares and per share data) \n \n June 30, March 31, \n 2026 2026 \n (Unaudited) \n Assets \n Investments at fair value: \n Non-control/Non-affiliate investments (Cost: $1,765,264 and $1,689,152, respectively) $ 1,762,554 $ 1,682,425 \n Affiliate investments (Cost: $357,928 and $338,124, respectively) 349,118 340,760 \n Control investments (Cost: $111,388 and $92,208, respectively) 90,610 74,261 \n Total investments (Cost: $2,234,580 and $2,119,485, respectively) 2,202,282 2,097,446 \n Cash and cash equivalents 58,457 29,045 \n Restricted cash 400 400 \n Receivables: \n Dividends and interest 37,214 31,678 \n Escrow 575 612 \n Other 1,929 2,190 \n Income tax receivable 48 717 \n Debt issuance costs (net of accumulated amortization of $13,875 and $13,172, respectively) 6,166 6,870 \n Other assets 8,448 8,560 \n Total assets $ 2,315,519 $ 2,177,518 \n Liabilities \n SBA Debentures (net of $6,092 and $5,333, respectively, of unamortized debt issuance costs) $ 258,908 $ 217,667 \n 2029 Convertible Notes (net of $5,044 and $5,413, respectively, of unamortized debt issuance costs) 224,956 224,587 \n September 2030 Notes (net of $5,692 and $6,029, respectively, of unamortized debt issuance costs) 344,308 343,971 \n Credit Facilities 393,000 345,000 \n Other liabilities 22,444 21,629 \n Accrued restoration plan liability 524 529 \n Income tax payable 1,334 636 \n Deferred tax liability 11,589 12,507 \n Total liabilities 1,257,063 1,166,526 \n \n Commitments and contingencies (Note 11) \n \n Net Assets \n Common stock, $0.25 par value: authorized, 75,000,000 shares at June 30, 2026 and March 31, 2026; issued, 63,733,867 shares at June 30, 2026 and 60,577,181 shares at March 31, 2026 15,933 15,144 \n Additional paid-in capital 1,136,438 1,074,854 \n Total distributable (loss) earnings (93,915 ) (79,006 ) \n Total net assets 1,058,456 1,010,992 \n Total liabilities and net assets $ 2,315,519 $ 2,177,518 \n Net asset value per share (63,733,867 shares outstanding at June 30, 2026 and 60,577,181 shares outstanding at March 31, 2026) $ 16.61 $ 16.69 \n \n\n\n\n CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES \n CONSOLIDATED STATEMENTS OF OPERATIONS \n (Unaudited) \n (In thousands, except shares and per share data) \n \n Three Months Ended \n June 30, \n 2026 2025 \n \n Investment income: \n Interest income: \n Non-control/Non-affiliate investments $ 42,397 $ 41,238 \n Affiliate investments 7,195 5,256 \n Control investments 874 621 \n Payment-in-kind interest income: \n Non-control/Non-affiliate investments 3,957 2,076 \n Affiliate investments 872 953 \n Control investments 83 231 \n Dividend income: \n Non-control/Non-affiliate investments 167 1,608 \n Affiliate investments 1,211 2,045 \n Control investments 258 24 \n Fee income: \n Non-control/Non-affiliate investments 3,307 1,396 \n Affiliate investments 397 189 \n Control investments 28 23 \n Other income 302 287 \n Total investment income 61,048 55,947 \n Operating expenses: \n Compensation 2,699 3,956 \n Share-based compensation 1,448 1,143 \n Interest 18,499 15,264 \n Professional fees 1,463 1,210 \n General and administrative 1,970 1,657 \n Total operating expenses 26,079 23,230 \n Income before taxes 34,969 32,717 \n Federal income, excise and other taxes 443 1,099 \n Deferred taxes (1,154 ) (271 ) \n Total income tax (benefit) provision (711 ) 828 \n Net investment income $ 35,680 $ 31,889 \n Realized (loss) gain \n Non-control/Non-affiliate investments $ 334 $ 17,846 \n Affiliate investments 67 4,087 \n Income tax provision (959 ) (6,229 ) \n Total net realized (loss) gain on investments, net of tax (558 ) 15,704 \n Net unrealized (depreciation) appreciation on investments \n Non-control/Non-affiliate investments 4,019 (22,062 ) \n Affiliate investments (11,447 ) 1,058 \n Control investments (2,831 ) (3,176 ) \n Income tax (provision) benefit (131 ) 3,588 \n Total net unrealized (depreciation) appreciation on investments, net of tax (10,390 ) (20,592 ) \n Net realized and unrealized (losses) gains on investments (10,948 ) (4,888 ) \n Net increase in net assets from operations $ 24,732 $ 27,001 \n \n Pre-tax net investment income per share - basic $ 0.57 $ 0.61 \n Net investment income per share – basic $ 0.58 $ 0.59 \n Net increase in net assets from operations – basic $ 0.40 $ 0.50 \n Net increase in net assets from operations - diluted $ 0.39 $ 0.48 \n Weighted average common shares outstanding – basic 61,141,741 53,516,995 \n Weighted average common shares outstanding – diluted 70,505,458 62,777,430 \n \n\n(https://www.globenewswire.com/NewsRoom/AttachmentNg/5a82239b-c87d-42f8-b03f-c9e4f9d7fc46)\n\n\n\nGlobeNewswire, Inc. 2026","article_body_html":"","raw_payload":{"data":{"id":"nGNX6RTQb","title":"Capital Southwest Announces Financial Results for First Fiscal Quarter Ended June 30, 2026","author":"Globe Newswire","ticker":"CSWC","created":"2026-08-03T20:01:00.410Z","tickers":["CSWC"],"exchange":"NASDAQ","article_body":"DALLAS, Aug. 03, 2026 (GLOBE NEWSWIRE) -- Capital Southwest Corporation\n(“Capital Southwest,” “CSWC” or the “Company”) (Nasdaq: CSWC), an\ninternally managed business development company focused on providing flexible\nfinancing solutions to support the acquisition and growth of middle market\nbusinesses, today announced its financial results for the first fiscal quarter\nended June 30, 2026.\n\nFirst Quarter Fiscal Year 2027 Financial Highlights\n* Total Investment Portfolio at Fair Value: $2.2 billion * Credit Portfolio\nat Fair Value of $2.0 billion * 99% 1st Lien Senior Secured Debt\n* $216.3 million in new committed credit investments during the quarter\n* Weighted Average Yield on Debt Investments: 10.9%\n* Current non-accruals with a fair value of $23.4 million, representing 1.1%\nof the total investment portfolio, and a cost basis of $65.7 million,\nrepresenting 2.9% of the total investment portfolio\n \n* Equity Portfolio at Fair Value of $181.6 million, excluding investment in\nCapTrin Partners, LLC (\"CapTrin\"), CSWC's unconsolidated joint venture * $5.9\nmillion in new equity co-investments during the quarter\n \n* CSWC Equity Investment in CapTrin at Fair Value of $20.8 million * CapTrin\nportfolio of $97.8 million * Portfolio consists of 14 portfolio companies:\n100% 1st Lien Debt\n \n* CapTrin entered into $150.0 million special purpose vehicle financing credit\nfacility in April 2026, with an accordion feature that allows for an increase\nof total commitments to up to $350.0 million * $59.0 million of debt\noutstanding at CapTrin\n* CapTrin fund leverage of 1.4x debt to equity at fair value\n \n* CapTrin paid a $0.3 million quarterly dividend to CSWC\n \n \n* Pre-Tax Net Investment Income: $35.0 million, or $0.57 per weighted average\ncommon share outstanding\n* Estimated Undistributed Taxable Income (\"UTI\"): $0.87 per share as of June\n30, 2026\n* LTM Operating Leverage: 1.4% as of June 30, 2026\n* Dividends: Paid Total Dividends for the quarter ended June 30, 2026 of $0.64\n * Paid $0.58 per share Regular Quarterly Dividend ($0.1934 per share in each\nof April, May and June 2026)\n* Paid $0.06 per share Supplemental Quarterly Dividend in June 2026\n \n* Net Realized and Unrealized Depreciation: $10.9 million, or 0.5% of total\ninvestments at fair value * $6.4 million of net depreciation related to the\ncredit portfolio\n* $3.2 million of net depreciation related to the equity portfolio\n* $0.2 million of net depreciation related to CapTrin\n* $1.1 million net realized and unrealized income tax provision\n \n* Balance Sheet: * Cash and Cash Equivalents: $58.5 million\n* Total Net Assets: $1,058.5 million\n* Net Asset Value (“NAV”) per Share: $16.61\nIn commenting on the Company’s results, Michael Sarner, President and Chief\nExecutive Officer, stated, “The June quarter was an extremely active quarter\nfor Capital Southwest, with approximately $222 million of originations in 11\nnew and 16 existing portfolio companies. Demonstrating our continued\ninvestment discipline, for new platform deals closed during the June quarter,\nweighted-average senior leverage was 2.8x Debt-to-EBITDA and weighted-average\nloan-to-value was 29%, providing a substantial equity cushion beneath our\ndebt. Additionally, during the quarter we funded $21 million of our capital\ncommitment to our joint venture, CapTrin, which, as of June 30, 2026, holds\ntotal investments at fair value of approximately $98 million. Our portfolio\ncontinued to generate significant income for our shareholders, producing $0.57\nof pre-tax net investment income per share. During the quarter, the Board of\nDirectors again declared a regular quarterly dividend of $0.58 per share, of\nwhich $0.1934 per share will be paid for each of July, August and September\n2026, and a supplemental quarterly dividend of $0.06 to be paid in September\n2026. On the capitalization front, CapTrin closed a $150 million special\npurpose vehicle financing credit facility in April 2026, with an accordion\nfeature that allows for an increase of total commitments to up to $350\nmillion. We also continued to efficiently raise equity capital during the\nquarter, raising approximately $64 million through our Equity ATM Program.”\n\nFirst Quarter Fiscal Year Investment Activities\n\nDuring the quarter ended June 30, 2026, the Company originated $222.3 million\nin new commitments, consisting of investments in 11 new portfolio companies\ntotaling $173.0 million and add-on commitments in 16 portfolio companies\ntotaling $49.3 million. New portfolio company originations were comprised of\n$167.4 million in first lien senior secured debt and $5.6 million in equity\ninvestments.\n\nDuring the quarter ended June 30, 2026, the Company received proceeds of $19.5\nmillion from two portfolio company prepayments and exits, generating a\nweighted average IRR of 16.7%. Total proceeds were comprised entirely of debt\ninvestments.\n\nFirst Fiscal Quarter 2027 Operating Results\n\nFor the quarter ended June 30, 2026, Capital Southwest reported total\ninvestment income of $61.0 million, compared to $57.8 million in the prior\nquarter. The increase in investment income was primarily attributable to an\nincrease in interest income due to an increase in the weighted average cost\nbasis of investments held and an increase in the weighted average yield on\ndebt investments, which was primarily due to an increase in the weighted\naverage spread on debt investments.\n\nFor the quarter ended June 30, 2026, total operating expenses (excluding\ninterest expense) were $7.6 million, compared to $5.3 million in the prior\nquarter. The increase was primarily attributable to an increase in accrued\nbonus compensation.\n\nFor the quarter ended June 30, 2026, interest expense was $18.5 million,\ncompared to $17.3 million in the prior quarter. The increase is primarily\nattributable to an increase in average borrowings outstanding.\n\nFor the quarter ended June 30, 2026, total pre-tax net investment income was\n$35.0 million, compared to $35.2 million in the prior quarter.\n\nFor the quarter ended June 30, 2026, there was a tax benefit of $0.7 million,\ncompared to a tax provision of $0.6 million in the prior quarter. The benefit\nin the current quarter included a $1.1 million deferred tax benefit, which was\nprimarily attributable to adjustments to the tax basis of investments held at\nCapital Southwest Equity Investments, Inc., our wholly owned subsidiary that\nhas elected to be treated as a corporation for U.S. federal income tax\npurposes.\n\nDuring the quarter ended June 30, 2026, Capital Southwest recorded total net\nrealized and unrealized losses on investments of $10.9 million, compared to\n$7.1 million of total net realized and unrealized losses in the prior quarter.\nFor the quarter ended June 30, 2026, the total net realized and unrealized\nlosses on investments reflected net realized and unrealized depreciation on\nequity investments of $3.2 million, net realized and unrealized depreciation\non debt investments of $6.4 million, net unrealized depreciation of $0.2\nmillion on the Company's investment in CapTrin and a net realized and\nunrealized income tax provision of $1.1 million. The net increase in net\nassets resulting from operations was $24.7 million for the quarter, compared\nto $27.5 million in the prior quarter.\n\nThe Company’s NAV at June 30, 2026 was $16.61 per share, compared to $16.69\nper share in the prior quarter. The decrease in NAV per share from the prior\nquarter is primarily due to the grant of restricted stock awards and net\nrealized and unrealized losses on investments, partially offset by the\nissuance of common stock at a premium to NAV per share through the Equity ATM\nProgram (as described below).\n\nLiquidity and Capital Resources\n\nAt June 30, 2026, Capital Southwest had approximately $58.5 million in\nunrestricted cash and money market balances and $316.2 million of unused\ncapacity under the Corporate Credit Facility (as defined below) and the SPV\nCredit Facility (as defined below). The regulatory debt to equity ratio at the\nend of the quarter was 0.91 to 1.\n\nAs of June 30, 2026, Capital Southwest had the following borrowings\noutstanding:\n* $280.0 million of total debt outstanding on the Corporate Credit Facility\n* $113.0 million of total debt outstanding on the SPV Credit Facility\n* $225.0 million, net of amortized debt issuance costs, of the 5.125%\nconvertible notes due November 2029\n* $344.3 million, net of amortized debt issuance costs, of the 5.950% Notes\ndue 2030\n* $258.9 million, net of unamortized debt issuance costs, of SBA Debentures\n(as defined below)\nIn August 2016, CSWC entered into a senior secured credit facility (the\n“Corporate Credit Facility”) to provide additional liquidity to support\nits investment and operational activities. Borrowings under the Corporate\nCredit Facility accrue interest on a per annum basis at a rate equal to the\napplicable SOFR rate plus 2.15%. On August 2, 2023, CSWC entered into the\nThird Amended and Restated Senior Secured Revolving Credit Agreement that (1)\nincreased commitments under the Corporate Credit Facility from $400 million to\n$435 million; (2) added an uncommitted accordion feature that could increase\nthe maximum commitments up to $750 million; (3) extended the end of the\nCorporate Credit Facility's revolving period from August 9, 2025 to August 2,\n2027 and extended the final maturity from August 9, 2026 to August 2, 2028;\nand (4) amended several financial covenants. As of June 30, 2026, the total\ncommitments under the Corporate Credit Facility were $510 million provided by\n11 lenders.\n\nCapital Southwest SPV LLC (\"SPV\") is a wholly owned special purpose vehicle\nthat was formed to hold investments for the SPV Credit Facility to support our\ninvestment and operating activities. On March 20, 2024, SPV entered into a\nspecial purpose vehicle financing credit facility (the \"SPV Credit Facility\").\nThe SPV Credit Facility included an initial commitment of $150 million.\nPursuant to the terms of the loan agreement, on June 20, 2024, total\ncommitments automatically increased from $150 million to $200 million. The\nSPV Credit Facility also includes an accordion feature that allows increases\nup to $400 million of total commitments from new and existing lenders on the\nsame terms and conditions as the existing commitments. Borrowings under the\nSPV Credit Facility bear interest at three-month Term SOFR plus 2.50% per\nannum during the revolving period ending on March 20, 2027 and three-month\nTerm SOFR plus an applicable margin of 2.85% thereafter. SPV (i) paid unused\ncommitment fees of 0.10% through April 20, 2024 and (ii) pays unused\ncommitment fees of 0.35% thereafter, on the unused lender commitments under\nthe SPV Credit Facility, in addition to other customary fees. Under the SPV\nCredit Facility, SPV also pays a utilization fee based on the amount of\nborrowings utilized. The SPV Credit Facility matures on March 20, 2029.\n\nThe Company has an \"at-the-market\" offering (the \"Equity ATM Program\"),\npursuant to which the Company may offer and sell, from time to time through\nsales agents, up to $2 billion of shares of its common stock. During the\nquarter ended June 30, 2026, the Company sold 2,708,438 shares of its common\nstock under the Equity ATM Program at a weighted-average price of $23.47 per\nshare, raising $63.6 million of gross proceeds. Net proceeds were\n$62.6 million after commissions to the sales agents on shares sold. As of\nJune 30, 2026, the Company has $1,066.3 million available under the Equity\nATM Program.\n\nOur wholly owned subsidiaries, Capital Southwest SBIC I, LP (“SBIC I”) and\nCapital Southwest SBIC II, LP (\"SBIC II\" and together with SBIC I, the \"SBIC\nSubsidiaries\"), each received a license from the Small Business Administration\n(the \"SBA\") to operate as a Small Business Investment Company (\"SBIC\") under\nSection 301(c) of the Small Business Investment Act of 1958, as amended, on\nApril 20, 2021 and April 17, 2025, respectively. The SBIC licenses allow the\nSBIC Subsidiaries to obtain leverage by issuing SBA-guaranteed debentures\n(\"SBA Debentures\"), subject to the issuance of a leverage commitment by the\nSBA. SBA Debentures are loans issued to an SBIC that have interest payable\nsemi-annually and a ten-year maturity. The interest rate is fixed shortly\nafter issuance at a market-driven spread over U.S. Treasury Notes with\nten-year maturities. For two or more SBICs under common control, the maximum\namount of outstanding SBA Debentures cannot exceed $475 million. As of June\n30, 2026, SBIC I had a total leverage commitment from the SBA in the amount of\n$175.0 million, all of which was drawn, and SBIC II had a total leverage\ncommitment from the SBA in the amount of $90.0 million, all of which was\ndrawn.\n\nShare Repurchase Program\n\nOn July 28, 2021, the Company's Board of Directors (the \"Board\") approved a\nshare repurchase program authorizing the Company to repurchase up to $20\nmillion of its outstanding shares of common stock in the open market at\ncertain thresholds below its NAV per share, in accordance with guidelines\nspecified in Rules 10b5-1(c)(1)(i)(B) and 10b-18 under the Securities Exchange\nAct of 1934, as amended. On August 31, 2021, the Company entered into a share\nrepurchase agreement, which became effective immediately, and the Company will\ncease purchasing its common stock under the share repurchase program upon the\nearlier of, among other things: (1) the date on which the aggregate purchase\nprice for all shares equals $20 million including, without limitation, all\napplicable fees, costs and expenses; or (2) upon written notice by the Company\nto the broker that the share repurchase agreement is terminated. During the\nquarter ended June 30, 2026, the Company did not repurchase any shares of the\nCompany’s common stock under the share repurchase program.\n\nRegular Quarterly Dividend of $0.58 Per Share and Supplemental Quarterly\nDividend of $0.06 Per Share for Quarter Ended September 30, 2026\n\nOn May 27, 2026, the Board declared a regular quarterly dividend of $0.58, of\nwhich $0.1934 per share will be paid in each of July, August and September\n2026 and a supplemental quarterly dividend of $0.06 per share payable in\nSeptember 2026, each of which is detailed in the table below.\n\nThe Company’s regular quarterly dividend for the quarter ending September\n30, 2026 will be payable as follows:\n\n Declared Ex-Dividend Date Record Date Payment Date Amount Per Share \n 5/27/2026 7/15/2026 7/15/2026 7/31/2026 $ 0.1934 \n 5/27/2026 8/14/2026 8/14/2026 8/31/2026 $ 0.1934 \n 5/27/2026 9/15/2026 9/15/2026 9/30/2026 $ 0.1934 \n \n\nThe Company’s supplemental quarterly dividend for the quarter ending\nSeptember 30, 2026 will be payable as follows:\n\n Declared Ex-Dividend Date Record Date Payment Date Amount Per Share \n 5/27/2026 9/15/2026 9/15/2026 9/30/2026 $ 0.06 \n\n\n\n Total Regular Dividends per Share for Quarter Ending September 30, 2026: $ 0.58 \n Total Supplemental Dividend per Share for Quarter Ending September 30, 2026: $ 0.06 \n Total Dividends per Share for Quarter Ending September 30, 2026: $ 0.64 \n \n\nWhen declaring dividends, the Board of Directors reviews estimates of taxable\nincome available for distribution, which may differ from net investment income\nunder generally accepted accounting principles. The final determination of\ntaxable income for each year, as well as the tax attributes for dividends in\nsuch year, will be made after the close of the tax year.\n\nCapital Southwest maintains a dividend reinvestment plan (\"DRIP\") that\nprovides for the reinvestment of dividends on behalf of its registered\nstockholders who hold their shares with Capital Southwest’s transfer agent\nand registrar, Equiniti Trust Company.  Under the DRIP, if the Company\ndeclares a dividend, registered stockholders who have opted into the DRIP by\nthe dividend record date will have their dividend automatically reinvested\ninto additional shares of Capital Southwest's common stock. \n\nFirst Quarter 2027 Earnings Results Conference Call and Webcast\nCapital Southwest has scheduled a conference call on Tuesday, August 4, 2026,\nat 11:00 a.m. Eastern Time to discuss the first quarter 2027 financial\nresults. You may access the call by using the Investor Relations section of\nCapital Southwest's website at www.capitalsouthwest.com, or by using\nhttp://edge.media-server.com/mmc/p/cdtiv4v7.\n\nAn audio archive of the conference call will also be available on the Investor\nRelations section of Capital Southwest’s website.\n\nFor a more detailed discussion of the financial and other information included\nin this press release, please refer to the Capital Southwest's Quarterly\nReport on Form 10-Q for the fiscal year ended June 30, 2026 to be filed with\nthe Securities and Exchange Commission (the \"SEC\") and Capital Southwest’s\nFirst Fiscal Quarter 2027 Earnings Presentation to be posted on the Investor\nRelations section of Capital Southwest’s website at\nwww.capitalsouthwest.com.\n\nAbout Capital Southwest\n\nCapital Southwest Corporation (Nasdaq: CSWC) is a Dallas, Texas-based,\ninternally managed business development company with approximately\n$2.2 billion in investments at fair value as of June 30, 2026. Capital\nSouthwest is a middle market lending firm focused on supporting the\nacquisition and growth of middle market businesses with $5 million to $50\nmillion investments across the capital structure, including first lien,\nsecond lien and non-control equity co-investments. As a public company with a\npermanent capital base, Capital Southwest has the flexibility to be creative\nin its financing solutions and to invest to support the growth of its\nportfolio companies over long periods of time.\n\nForward-Looking Statements\nThis press release contains historical information and forward-looking\nstatements with respect to the business and investments of Capital Southwest,\nincluding, but not limited to, the statements about Capital Southwest's future\nperformance and financial performance and financial condition, and the timing,\nform and amount of any distributions or supplemental dividends in the future.\nForward-looking statements are statements that are not historical statements\nand can often be identified by words such as \"will,\" \"believe,\" \"expect\" and\nsimilar expressions and variations or negatives of these words. These\nstatements are based on management's current expectations, assumptions and\nbeliefs. They are not guarantees of future results and are subject to numerous\nrisks, uncertainties and assumptions that could cause actual results to differ\nmaterially from those expressed in any forward-looking statement. These risks\ninclude risks related to: changes in the markets in which Capital Southwest\ninvests; changes in the financial, capital, and lending markets; changes in\nthe interest rate environment and its impact on our business and our portfolio\ncompanies; regulatory changes; tax treatment; our ability to operate the SBIC\nSubsidiaries as small business investment companies; the uncertainty\nassociated with the imposition of tariffs and trade barriers and changes in\ntrade policy and its impact on our portfolio companies and our financial\ncondition; the impact of geopolitical conditions on our portfolio companies\nand opportunities available to us; an economic downturn or recession and its\nimpact on the ability of our portfolio companies to operate and the investment\nopportunities available to us; the impact of supply chain constraints on our\nportfolio companies; and the elevated levels of inflation and its impact on\nour portfolio companies and the industries in which we invests.\n\nReaders should not place undue reliance on any forward-looking statements and\nare encouraged to review Capital Southwest's Annual Report on Form 10-K for\nthe year ended March 31, 2026 and any subsequent filings with the SEC,\nincluding the \"Risk Factors\" sections therein, for a more complete discussion\nof the risks and other factors that could affect any forward-looking\nstatements. Except as required by the federal securities laws, Capital\nSouthwest does not undertake any obligation to publicly update or revise any\nforward-looking statements, whether as a result of new information, future\nevents, changing circumstances or any other reason after the date of this\npress release.\n\nInvestor Relations Contact:\n\nMichael S. Sarner, President and Chief Executive Officer\n214-884-3829\n\n CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES \n CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES \n (In thousands, except shares and per share data) \n \n June 30, March 31, \n 2026 2026 \n (Unaudited) \n Assets \n Investments at fair value: \n Non-control/Non-affiliate investments (Cost: $1,765,264 and $1,689,152, respectively) $ 1,762,554 $ 1,682,425 \n Affiliate investments (Cost: $357,928 and $338,124, respectively) 349,118 340,760 \n Control investments (Cost: $111,388 and $92,208, respectively) 90,610 74,261 \n Total investments (Cost: $2,234,580 and $2,119,485, respectively) 2,202,282 2,097,446 \n Cash and cash equivalents 58,457 29,045 \n Restricted cash 400 400 \n Receivables: \n Dividends and interest 37,214 31,678 \n Escrow 575 612 \n Other 1,929 2,190 \n Income tax receivable 48 717 \n Debt issuance costs (net of accumulated amortization of $13,875 and $13,172, respectively) 6,166 6,870 \n Other assets 8,448 8,560 \n Total assets $ 2,315,519 $ 2,177,518 \n Liabilities \n SBA Debentures (net of $6,092 and $5,333, respectively, of unamortized debt issuance costs) $ 258,908 $ 217,667 \n 2029 Convertible Notes (net of $5,044 and $5,413, respectively, of unamortized debt issuance costs) 224,956 224,587 \n September 2030 Notes (net of $5,692 and $6,029, respectively, of unamortized debt issuance costs) 344,308 343,971 \n Credit Facilities 393,000 345,000 \n Other liabilities 22,444 21,629 \n Accrued restoration plan liability 524 529 \n Income tax payable 1,334 636 \n Deferred tax liability 11,589 12,507 \n Total liabilities 1,257,063 1,166,526 \n \n Commitments and contingencies (Note 11) \n \n Net Assets \n Common stock, $0.25 par value: authorized, 75,000,000 shares at June 30, 2026 and March 31, 2026; issued, 63,733,867 shares at June 30, 2026 and 60,577,181 shares at March 31, 2026 15,933 15,144 \n Additional paid-in capital 1,136,438 1,074,854 \n Total distributable (loss) earnings (93,915 ) (79,006 ) \n Total net assets 1,058,456 1,010,992 \n Total liabilities and net assets $ 2,315,519 $ 2,177,518 \n Net asset value per share (63,733,867 shares outstanding at June 30, 2026 and 60,577,181 shares outstanding at March 31, 2026) $ 16.61 $ 16.69 \n \n\n\n\n CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES \n CONSOLIDATED STATEMENTS OF OPERATIONS \n (Unaudited) \n (In thousands, except shares and per share data) \n \n Three Months Ended \n June 30, \n 2026 2025 \n \n Investment income: \n Interest income: \n Non-control/Non-affiliate investments $ 42,397 $ 41,238 \n Affiliate investments 7,195 5,256 \n Control investments 874 621 \n Payment-in-kind interest income: \n Non-control/Non-affiliate investments 3,957 2,076 \n Affiliate investments 872 953 \n Control investments 83 231 \n Dividend income: \n Non-control/Non-affiliate investments 167 1,608 \n Affiliate investments 1,211 2,045 \n Control investments 258 24 \n Fee income: \n Non-control/Non-affiliate investments 3,307 1,396 \n Affiliate investments 397 189 \n Control investments 28 23 \n Other income 302 287 \n Total investment income 61,048 55,947 \n Operating expenses: \n Compensation 2,699 3,956 \n Share-based compensation 1,448 1,143 \n Interest 18,499 15,264 \n Professional fees 1,463 1,210 \n General and administrative 1,970 1,657 \n Total operating expenses 26,079 23,230 \n Income before taxes 34,969 32,717 \n Federal income, excise and other taxes 443 1,099 \n Deferred taxes (1,154 ) (271 ) \n Total income tax (benefit) provision (711 ) 828 \n Net investment income $ 35,680 $ 31,889 \n Realized (loss) gain \n Non-control/Non-affiliate investments $ 334 $ 17,846 \n Affiliate investments 67 4,087 \n Income tax provision (959 ) (6,229 ) \n Total net realized (loss) gain on investments, net of tax (558 ) 15,704 \n Net unrealized (depreciation) appreciation on investments \n Non-control/Non-affiliate investments 4,019 (22,062 ) \n Affiliate investments (11,447 ) 1,058 \n Control investments (2,831 ) (3,176 ) \n Income tax (provision) benefit (131 ) 3,588 \n Total net unrealized (depreciation) appreciation on investments, net of tax (10,390 ) (20,592 ) \n Net realized and unrealized (losses) gains on investments (10,948 ) (4,888 ) \n Net increase in net assets from operations $ 24,732 $ 27,001 \n \n Pre-tax net investment income per share - basic $ 0.57 $ 0.61 \n Net investment income per share – basic $ 0.58 $ 0.59 \n Net increase in net assets from operations – basic $ 0.40 $ 0.50 \n Net increase in net assets from operations - diluted $ 0.39 $ 0.48 \n Weighted average common shares outstanding – basic 61,141,741 53,516,995 \n Weighted average common shares outstanding – diluted 70,505,458 62,777,430 \n \n\n(https://www.globenewswire.com/NewsRoom/AttachmentNg/5a82239b-c87d-42f8-b03f-c9e4f9d7fc46)\n\n\n\nGlobeNewswire, Inc. 2026"},"type":"article","timestamp":"2026-08-03T20:01:00.527847408Z","server_sent_at_ms":1785787260527},"received_at":"2026-08-03T20:01:00.595Z","source_url":"https://www.globenewswire.com/news-release/2026/08/03/3337850/8276/en/capital-southwest-announces-financial-results-for-first-fiscal-quarter-ended-june-30-2026.html"},"analysis":{"id":"95790","press_release_id":"106779","analysis_json":{"industry":{"label":"Capital Markets","sector":"Financials"},"redFlags":["NAV per share decreased quarter-over-quarter ($16.69 to $16.61)","Net realized and unrealized losses of $10.9 million","Dilutive ATM activity raised $63.6 million during the quarter"],"eventType":"earnings","narrative":"Capital Southwest reported total investment income of $61.0 million for the first fiscal quarter, up from $57.8 million in the prior quarter, with net investment income of $0.58 per share covering the regular dividend.\n\nThe Board declared a total dividend of $0.64 per share, consisting of a regular $0.58 and a supplemental $0.06, while the company raised $63.6 million in gross proceeds through its Equity ATM Program.\n\nNet asset value per share decreased slightly to $16.61 from $16.69, driven by net realized and unrealized losses and stock-based compensation, partially offset by the ATM issuance at a premium to NAV.","sentiment":"mixed","agentHooks":{"shouldPost":false,"suggestedAngle":"Active originations support dividend coverage despite modest NAV erosion."},"keyFigures":{"eps":0.58,"revenue":61000000,"customDimensions":{"pre_tax_nii":35000000,"atm_proceeds":"$63.6 million","nav_per_share":16.61,"dividend_total":0.64,"weighted_avg_yield":"10.9%","new_credit_investments":216300000}},"quotedText":"The June quarter was an extremely active quarter for Capital Southwest, with approximately $222 million of originations in 11 new and 16 existing portfolio companies.","namedEntities":{"people":[{"name":"Michael Sarner","role":"President and Chief Executive Officer"}],"products":["Equity ATM Program","Corporate Credit Facility","SPV Credit Facility","SBA Debentures"],"companies":[{"name":"Capital Southwest Corporation","ticker":"CSWC"},{"name":"CapTrin Partners, LLC","relationship":"joint venture"},{"name":"Equiniti Trust Company","relationship":"transfer agent"}],"dollarAmounts":[{"amount":"$2.2 billion","context":"Total Investment Portfolio at Fair Value"},{"amount":"$61.0 million","context":"total investment income for the quarter ended June 30, 2026"},{"amount":"$35.0 million","context":"Pre-Tax Net Investment Income"},{"amount":"$0.58 per share","context":"Regular Quarterly Dividend"},{"amount":"$0.06 per share","context":"Supplemental Quarterly Dividend"},{"amount":"$16.61","context":"Net Asset Value per Share"},{"amount":"$63.6 million","context":"gross proceeds from Equity ATM Program"}]},"materialImpact":{"score":3,"reasoning":"Solid QoQ growth in total investment income and net investment income covered the regular dividend. However, NAV per share declined, the company reported net realized/unrealized losses, and it raised capital via a dilutive ATM program."},"tickerRelevance":{"others":[],"primary":"CSWC"},"globalImportance":25,"audienceRelevance":25,"eventTypeSecondary":["dividend","offering"],"importanceComponents":{"tickerTier":"small-cap","eventGravity":"routine_earnings","sectorWeight":"financials"}},"event_type":"earnings","event_type_secondary":["dividend","offering"],"sentiment":"mixed","material_impact_score":3,"narrative":"Capital Southwest reported total investment income of $61.0 million for the first fiscal quarter, up from $57.8 million in the prior quarter, with net investment income of $0.58 per share covering the regular dividend.\n\nThe Board declared a total dividend of $0.64 per share, consisting of a regular $0.58 and a supplemental $0.06, while the company raised $63.6 million in gross proceeds through its Equity ATM Program.\n\nNet asset value per share decreased slightly to $16.61 from $16.69, driven by net realized and unrealized losses and stock-based compensation, partially offset by the ATM issuance at a premium to NAV.","key_figures":{"eps":0.58,"revenue":61000000,"customDimensions":{"pre_tax_nii":35000000,"atm_proceeds":"$63.6 million","nav_per_share":16.61,"dividend_total":0.64,"weighted_avg_yield":"10.9%","new_credit_investments":216300000}},"named_entities":{"people":[{"name":"Michael Sarner","role":"President and Chief Executive Officer"}],"products":["Equity ATM Program","Corporate Credit Facility","SPV Credit Facility","SBA Debentures"],"companies":[{"name":"Capital Southwest Corporation","ticker":"CSWC"},{"name":"CapTrin Partners, LLC","relationship":"joint venture"},{"name":"Equiniti Trust Company","relationship":"transfer agent"}],"dollarAmounts":[{"amount":"$2.2 billion","context":"Total Investment Portfolio at Fair Value"},{"amount":"$61.0 million","context":"total investment income for the quarter ended June 30, 2026"},{"amount":"$35.0 million","context":"Pre-Tax Net Investment Income"},{"amount":"$0.58 per share","context":"Regular Quarterly Dividend"},{"amount":"$0.06 per share","context":"Supplemental Quarterly Dividend"},{"amount":"$16.61","context":"Net Asset Value per Share"},{"amount":"$63.6 million","context":"gross proceeds from Equity ATM Program"}]},"model_name":"glm-4.7","prompt_hash":"sha256:727b4b9429a443af","schema_hash":"sha256:05005c02d9cffac9","created_at":"2026-08-03T20:11:54.002Z","global_importance":25,"audience_relevance":25,"importance_components":{"tickerTier":"small-cap","eventGravity":"routine_earnings","sectorWeight":"financials"}},"durationMs":153441,"modelName":"glm-4.7"}}