Q4 2025 Capital Southwest Corp Earnings Call Transcript
Key Points
- Capital Southwest Corp (CSWC) grew its investment portfolio by approximately $300 million, or 21%, from $1.5 billion to $1.8 billion.
- The company reduced its nonaccruals at fair value from 2.3% to 1.7%, indicating improved portfolio quality.
- CSWC raised over $300 million in new debt capital commitments, including a $230 million convertible bond issuance.
- The company received approval for a second SBIC license, allowing access to an additional $175 million in debt capital.
- CSWC maintained a strong dividend growth, increasing its regular dividend from $2.24 per share in fiscal year 2024 to $2.31 per share in fiscal year 2025, with additional supplemental dividends.
- The geopolitical environment and trade policy changes have created uncertainty, impacting the lower middle market and potentially slowing M&A activity.
- Certain industries, such as manufacturing and consumer discretionary products, are experiencing increased costs due to tariffs.
- CSWC identified 7% of its debt portfolio at fair value as moderate risk due to tariff exposure.
- The company experienced net realized and unrealized losses due to restructurings of two portfolio companies.
- There is potential for spread compression in the lower middle market as lenders compete for deals outside directly impacted industries.
Thank you for joining today's Capital Southwest fourth quarter fiscal year 2025 earnings call. Participating on the call today are Michael Sarner, Chief Executive Officer; Chris Rehberger, Chief Financial Officer; Josh Weinstein, Chief Investment Officer; and AB Baker, Executive Vice President, Accounting.
I will now turn the call over to Amy Baker.
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
| Access to All Earning Calls and Stock Analysis | |
| 30-Year Financial on one screen | |
| All-in-one Stock Screener with unlimited filters | |
| Customizable Stock Dashboard | |
| Real Time Insider Trading Transactions | |
| 8,000+ Institutional investors’ 13F holdings | |
| Powerful Excel Add-in and Google sheets Add-on | |
| All data downloadable | |
| Quick customer support | |
| And much more... |
Trustpilot
We'd love to learn more about your experiences on GuruFocus.com and how we can improve!
Take Survey
