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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of report (Date of earliest event reported):  February 3, 2025

CAPITAL SOUTHWEST CORPORATION
(Exact Name Of Registrant As Specified In Charter)
Texas814-0006175-1072796
(State or Other Jurisdiction of Incorporation)(Commission File Number)(IRS Employer Identification No.)

8333 Douglas Avenue, Suite 1100
Dallas, Texas 75225
(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (214) 238-5700
 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbol(s)Name of Each Exchange on Which Registered
Common Stock, $0.25 par value per shareCSWCThe Nasdaq Global Select Market
7.75% Notes due 2028CSWCZThe Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 2.02  Results of Operations and Financial Condition.

On February 3, 2025, Capital Southwest Corporation (the “Company”) issued a press release, a copy of which has been furnished as Exhibit 99.1 hereto.

The information furnished in this Current Report on Form 8-K under Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the "Securities Act"), except as shall be expressly set forth by reference in a future filing.

Item 7.01  Regulation FD Disclosure.

The Company expects to hold a conference call with analysts and investors on February 4, 2025.  A copy of the investor presentation slides to be used by the Company on such conference call is furnished as Exhibit 99.2 to this Form 8-K and incorporated herein by reference.

The information set forth under this Item 7.01, including Exhibit 99.2, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, nor shall it be deemed incorporated by reference into any filing under the Securities Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01  Financial Statements and Exhibits

(d)          Exhibits
Exhibit No.Description
104Cover Page Interactive Data File (embedded within the Inline XBRL document)



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: February 3, 2025
By:/s/ Michael S. Sarner
Name: Michael S. Sarner
Title:   Chief Financial Officer





Exhibit 99.1

currentcswca27.jpg
8333 Douglas Avenue, Suite 1100
Dallas, Texas 75225
T 214.238.5700
F 214.238.5701


Capital Southwest Announces Financial Results for Third Fiscal Quarter Ended December 31, 2024 and Announces Increase in Total Dividends to $0.64 per share for the Quarter Ending March 31, 2025
CSWC Reports Pre-Tax Net Investment Income of $0.64 Per Share for Quarter Ended December 31, 2024
Dallas, Texas – February 3, 2025 – Capital Southwest Corporation (“Capital Southwest,” “CSWC” or the “Company”) (Nasdaq: CSWC), an internally managed business development company focused on providing flexible financing solutions to support the acquisition and growth of middle market businesses, today announced its financial results for the third fiscal quarter ended December 31, 2024.
Third Quarter Fiscal Year 2025 Financial Highlights
•Total Investment Portfolio: $1.7 billion
◦Credit Portfolio of $1.5 billion:
▪98% 1st Lien Senior Secured Debt
▪$313.4 million in new committed credit investments during the quarter
▪Weighted Average Yield on Debt Investments: 12.1%
▪Current non-accruals with a fair value of $45.8 million, representing 2.7% of the total investment portfolio
◦Equity Portfolio of $158.8 million
▪$4.1 million in new equity co-investments during the quarter
•Pre-Tax Net Investment Income: $30.7 million, or $0.64 per weighted average share outstanding
•Estimated Undistributed Taxable Income ("UTI"): $0.68 per share as of December 31, 2024
•LTM Operating Leverage: 1.6% for the quarter ended December 31, 2024
•Dividends: Paid $0.58 per share Regular Dividend and $0.05 per share Supplemental Dividend
◦115% LTM Pre-Tax NII Regular Dividend Coverage
◦Total Dividends for the quarter ended December 31, 2024 of $0.63 per share
•Net Realized and Unrealized Depreciation: $13.7 million, or 0.8% of total investments at fair value
◦$12.3 million of net appreciation related to the equity portfolio
◦$26.0 million of net depreciation related to the credit portfolio
•Balance Sheet:
◦Cash and Cash Equivalents: $36.0 million
◦Total Net Assets: $830.4 million
◦Net Asset Value (“NAV”) per Share: $16.59






In commenting on the Company’s results, Bowen Diehl, President and Chief Executive Officer, stated, “The December quarter was an active quarter for Capital Southwest, with approximately $318 million of new committed originations. Our portfolio continued to generate significant income for our shareholders, producing $0.64 of pre-tax net investment income per share for the quarter, which outearned both our $0.58 per share regular dividend and our $0.05 per share supplemental dividend paid for the quarter. In consideration of the continued performance of our portfolio, the Board of Directors has again declared a regular dividend of $0.58 per share for the quarter ending March 31, 2025. Our Board of Directors also has declared an increase in our supplemental dividend to $0.06 per share for the quarter ending March 31, 2025, resulting in total dividends for the quarter of $0.64 per share. While future dividend declarations are at the discretion of our Board of Directors, it is our intent to continue to distribute quarterly supplemental dividends for the foreseeable future. We continued to efficiently raise equity capital during the quarter, raising over $53 million on our Equity ATM Program. In addition, during the quarter, we successfully raised $230 million of 5.125% unsecured convertible notes due 2029, which further diversified our balance sheet liability structure. Finally, we received a 'green light' letter from the U.S. Small Business Administration to file an application to obtain a license to operate a second SBIC subsidiary. If approved, a second SBIC license will provide Capital Southwest with access to up to an additional $175 million in cost effective debt capital.”

Third Quarter Fiscal Year Investment Activities
Originations
During the quarter ended December 31, 2024, the Company originated $317.5 million in new commitments, consisting of investments in nine new portfolio companies totaling $175.2 million and add-on commitments in 20 portfolio companies totaling $142.3 million. New portfolio company investment transactions that closed during the quarter ended December 31, 2024 are summarized as follows:
Undisclosed Portfolio Company, $32.0 million 1st Lien Senior Secured Debt, $5.0 million Revolving Loan, $0.5 million Equity
Musiker Discovery Programs, Inc., $23.0 million 1st Lien Senior Secured Debt, $7.5 million Delayed Draw Term Loan, $5.0 million Revolving Loan: The company provides pre-college, enrichment, and gifted summer programs to students in grades 1-12.
Superior Health Parent LLC, $17.5 million 1st Lien Senior Secured Debt, $10.0 million Delayed Draw Term Loan, $3.0 million Revolving Loan: The company is a provider of home health and hospice services across eight agencies in Louisiana.
Mid-Florida Endodontics Management Company, LLC, $16.1 million 1st Lien Senior Secured Debt, $10.0 million Delayed Draw Term Loan, $3.0 million Revolving Loan: The company provides endodontic services, primarily focused on root canals and related examinations and retreatments.
Undisclosed Portfolio Company, $8.0 million 1st Lien Senior Secured Debt, $2.0 million Revolving Loan, $1.0 million Equity
Red Dog Operations Holding Company LLC, $7.5 million 1st Lien Senior Secured Debt, $2.0 million Revolving Loan, $1.0 million Preferred Equity: The company is a family-owned provider of boarding, daycare, grooming, and other ancillary pet services across six facilities in the Cincinnati and Boston areas.
Cumbria Capital MSO, LLC, $5.4 million 1st Lien Senior Secured Debt, $2.0 million Delayed Draw Term Loan, $1.5 million Revolving Loan: The company is a medical practice offering treatment for a variety of gastrointestinal and liver disorders.
Undisclosed Portfolio Company, $6.7 million 1st Lien Senior Secured Debt
Undisclosed Portfolio Company, $4.0 million 1st Lien Senior Secured Debt, $1.0 million Revolving Loan, $0.5 million Equity
Prepayments and Exits
During the quarter ended December 31, 2024, the Company received full prepayments on two debt investments totaling $26.7 million.


Versicare Management LLC: Proceeds of $23.7 million, generating an IRR of 17.1%.
Research Now Group, LLC: Proceeds of $2.9 million, generating an IRR of (9.6)%.

Third Fiscal Quarter 2025 Operating Results
For the quarter ended December 31, 2024, Capital Southwest reported total investment income of $52.0 million, compared to $48.7 million in the prior quarter. The increase in investment income was primarily attributable to an increase in prepayment and other fees received during the quarter.
For the quarter ended December 31, 2024, total operating expenses (excluding interest expense) were $6.6 million, compared to $6.1 million in the prior quarter. The increase was primarily attributable to an increase in accrued bonus compensation in the current quarter and an increase in general and administrative expenses primarily due to the write off of deferred offering costs related to our previous shelf registration statement during the current quarter.
For the quarter ended December 31, 2024, interest expense was $14.7 million, compared to $12.6 million in the prior quarter. The increase was primarily attributable to an increase in average debt outstanding.
For the quarter ended December 31, 2024, total pre-tax net investment income was $30.7 million, compared to $30.0 million in the prior quarter.
For the quarter ended December 31, 2024, there was a tax provision of $0.4 million, compared to a tax benefit of $1.2 million in the prior quarter. The benefit in the prior quarter included a $1.5 million deferred tax benefit, which is primarily attributable to an increase in the tax basis of investments held by our wholly owned subsidiary, Capital Southwest Equity Investments, Inc., due to pass-through income, resulting in a decrease in tax appreciation.
During the quarter ended December 31, 2024, Capital Southwest recorded total net realized and unrealized losses on investments of $13.7 million, compared to $8.5 million of total net realized and unrealized losses in the prior quarter. For the quarter ended December 31, 2024, the total net realized and unrealized losses on investments reflected net realized and unrealized gains on equity investments of $12.3 million and net realized and unrealized losses on debt investments of $26.0 million. The net increase in net assets resulting from operations was $16.3 million for the quarter, compared to $22.7 million in the prior quarter.
The Company’s NAV at both December 31, 2024 and September 30, 2024 was $16.59 per share. Increases in NAV per share are attributable to the issuance of common stock at a premium to NAV per share through the Equity ATM Program (as described below), offset by net realized and unrealized losses on investments.

Liquidity and Capital Resources
At December 31, 2024, Capital Southwest had approximately $36.0 million in unrestricted cash and money market balances and $376.2 million of unused capacity under the Corporate Credit Facility (as defined below) and the SPV Credit Facility (as defined below). The regulatory debt to equity ratio at the end of the quarter was 0.90 to 1.

As of December 31, 2024, Capital Southwest had the following borrowings outstanding:
•$190.0 million of total debt outstanding on the Corporate Credit Facility
•$118.0 million of total debt outstanding on the SPV Credit Facility
•$148.7 million, net of unamortized debt issuance costs, of the 3.375% Notes due October 2026
•$70.1 million, net of unamortized debt issuance costs, of the 7.75% Notes due August 2028
•$222.7 million, net of amortized debt issuance costs, of the 5.125% convertible notes due November 2029
•$170.7 million, net of unamortized debt issuance costs, of SBA Debentures (as defined below)

In August 2016, CSWC entered into a senior secured credit facility (the “Corporate Credit Facility”) to provide additional liquidity to support its investment and operational activities. Borrowings under the Corporate Credit Facility accrue interest on a per annum basis at a rate equal to the applicable SOFR rate plus 2.15%. On August 2, 2023, CSWC entered into the Third Amended and Restated Senior Secured Revolving Credit Agreement (the "Credit Agreement") that (1) increased commitments under the Corporate Credit Facility from $400 million to $435 million; (2) added an uncommitted accordion feature that could increase the maximum commitments up to $750 million; (3) extended the end of the Corporate Credit Facility's revolving period from August 9, 2025 to August 2, 2027 and extended the final maturity from August 9, 2026 to August 2, 2028; and (4) amended several financial covenants. On December 7, 2023,


the Company entered into an Incremental Commitment and Assumption Agreement that increased the total commitments under the accordion feature of the Credit Agreement by $25 million, which increased total commitments from $435 million to $460 million. The $25 million increase was provided by one new lender, bringing the total bank syndicate to ten participants. On September 12, 2024, the Company entered into an Incremental Commitment and Assumption Agreement that increased the total commitments under the accordion feature of the Credit Agreement by $25 million, which increased total commitments from $460 million to $485 million. The $25 million increase was provided by one new lender, bringing the total bank syndicate to 11 participants.
Capital Southwest SPV LLC ("SPV") is a wholly owned special purpose vehicle that was formed to hold investments for the SPV Credit Facility (as defined below) to support our investment and operating activities. On March 20, 2024, SPV entered into a special purpose vehicle financing credit facility (the "SPV Credit Facility"). The SPV Credit Facility included an initial commitment of $150 million. Pursuant to the terms of the loan agreement, on June 20, 2024, total commitments automatically increased from $150 million to $200 million. The SPV Credit Facility also includes an accordion feature that allows increases up to $400 million of total commitments from new and existing lenders on the same terms and conditions as the existing commitments. Borrowings under the SPV Credit Facility bear interest at three-month Term SOFR plus 2.50% per annum during the revolving period ending on March 20, 2027 and three-month Term SOFR plus an applicable margin of 2.85% thereafter. SPV (i) paid unused commitment fees of 0.10% through April 20, 2024 and (ii) pays unused commitment fees of 0.35% thereafter, on the unused lender commitments under the SPV Credit Facility, in addition to other customary fees. Under the SPV Credit Facility, SPV also pays a utilization fee based on the amount of borrowings utilized. The SPV Credit Facility matures on March 20, 2029.
On November 4, 2024, the Company issued $230.0 million in aggregate principal amount of 5.125% convertible notes due 2029 (the "2029 Convertible Notes"), including the underwriters' full exercise of their option to purchase an additional $30.0 million in aggregate principal amount to cover over-allotments. The 2029 Convertible Notes bear interest at a rate of 5.125% per year, payable quarterly on February 15, May 15, August 15 and November 15 of each year, beginning on February 15, 2025. The 2029 Convertible Notes will mature on November 15, 2029, unless earlier converted, redeemed or repurchased. The conversion rate was initially 40.0000 shares of common stock per $1,000 principal amount of 2029 Convertible Notes (equivalent to an initial conversion price of $25.00 per share of common stock), subject to adjustment in some events.
On December 9, 2024, the Company redeemed $140.0 million in aggregate principal amount of the issued and outstanding 4.50% notes due 2026 (the "January 2026 Notes") in full. The January 2026 Notes were redeemed at 100% of their principal amount, plus the accrued and unpaid interest thereon, through, but excluding the redemption date. Accordingly, the Company recognized a realized loss on extinguishment of debt, equal to the write-off of the related unamortized debt issuance costs, of $0.4 million during the quarter ended December 31, 2024. There was no "make-whole" premium required to be paid in connection with the redemption.
The Company has an "at-the-market" offering (the "Equity ATM Program"), pursuant to which the Company may offer and sell, from time to time through sales agents, shares of its common stock. On May 21, 2024, the Company increased the maximum amount of shares of its common stock to be sold through the Equity ATM Program from $650 million to $1 billion. During the quarter ended December 31, 2024, the Company sold 2,364,147 shares of its common stock under the Equity ATM Program at a weighted-average price of $22.68 per share, raising $53.6 million of gross proceeds. Net proceeds were $52.9 million after commissions to the sales agents on shares sold. As of December 31, 2024, the Company has $358.6 million available under the Equity ATM Program.
On April 20, 2021, our wholly owned subsidiary, Capital Southwest SBIC I, LP (“SBIC I”), received a license from the Small Business Administration (the "SBA") to operate as a Small Business Investment Company ("SBIC") under Section 301(c) of the Small Business Investment Act of 1958, as amended. The SBIC license allows SBIC I to obtain leverage by issuing SBA-guaranteed debentures ("SBA Debentures"), subject to the issuance of a leverage commitment by the SBA. SBA debentures are loans issued to an SBIC that have interest payable semi-annually and a ten-year maturity. The interest rate is fixed shortly after issuance at a market-driven spread over U.S. Treasury Notes with ten-year maturities. As of December 31, 2024, SBIC I had a total leverage commitment from the SBA in the amount of $175.0 million, all of which was drawn.
Share Repurchase Program
On July 28, 2021, the Company's board of directors (the "Board") approved a share repurchase program authorizing the Company to repurchase up to $20 million of its outstanding shares of common stock in the open market at certain thresholds below its NAV per share, in accordance with guidelines specified in Rules 10b5-1(c)(1)(i)(B) and 10b-18 under the Securities Exchange Act of 1934, as amended. On August 31, 2021, the Company entered into a share repurchase agreement, which became effective immediately, and the Company will cease purchasing its common stock


under the share repurchase program upon the earlier of, among other things: (1) the date on which the aggregate purchase price for all shares equals $20 million including, without limitation, all applicable fees, costs and expenses; or (2) upon written notice by the Company to the broker that the share repurchase agreement is terminated. During the quarter ended December 31, 2024, the Company did not repurchase any shares of the Company’s common stock under the share repurchase program.

Regular Dividend of $0.58 Per Share and Supplemental Dividend of $0.06 Per Share for Quarter Ended March 31, 2025

On January 29, 2025, the Board declared a total dividend of $0.64 per share for the quarter ending March 31, 2025, comprised of a Regular Dividend of $0.58 per share and a Supplemental Dividend of $0.06 per share.
The Company's dividend will be payable as follows:

Regular Dividend

Amount Per Share: $0.58
Ex-Dividend Date: March 14, 2025
Record Date: March 14, 2025
Payment Date: March 31, 2025

Supplemental Dividend

Amount Per Share: $0.06
Ex-Dividend Date: March 14, 2025
Record Date: March 14, 2025
Payment Date: March 31, 2025

When declaring dividends, the Board reviews estimates of taxable income available for distribution, which may differ from net investment income under generally accepted accounting principles. The final determination of taxable income for each year, as well as the tax attributes for dividends in such year, will be made after the close of the tax year.
 
Capital Southwest maintains a dividend reinvestment plan ("DRIP") that provides for the reinvestment of dividends on behalf of its registered stockholders who hold their shares with Capital Southwest’s transfer agent and registrar, American Stock Transfer and Trust Company.  Under the DRIP, if the Company declares a dividend, registered stockholders who have opted into the DRIP by the dividend record date will have their dividend automatically reinvested into additional shares of Capital Southwest common stock. 

Third Quarter 2025 Earnings Results Conference Call and Webcast
Capital Southwest has scheduled a conference call on Tuesday, February 4, 2025, at 11:00 a.m. Eastern Time to discuss the third quarter 2025 financial results. You may access the call by using the Investor Relations section of Capital Southwest's website at www.capitalsouthwest.com, or by using http://edge.media-server.com/mmc/p/viedrjap.
An audio archive of the conference call will also be available on the Investor Relations section of Capital Southwest’s website.
For a more detailed discussion of the financial and other information included in this press release, please refer to the Capital Southwest's Form 10-Q for the period ended December 31, 2024 to be filed with the Securities and Exchange Commission (the "SEC") and Capital Southwest’s Third Fiscal Quarter 2025 Earnings Presentation to be posted on the Investor Relations section of Capital Southwest’s website at www.capitalsouthwest.com.

About Capital Southwest
Capital Southwest Corporation (Nasdaq: CSWC) is a Dallas, Texas-based, internally managed business development company with approximately $1.7 billion in investments at fair value as of December 31, 2024. Capital Southwest is a middle market lending firm focused on supporting the acquisition and growth of middle market businesses with $5 million to $50 million investments across the capital structure, including first lien, second lien and non-control equity co-


investments. As a public company with a permanent capital base, Capital Southwest has the flexibility to be creative in its financing solutions and to invest to support the growth of its portfolio companies over long periods of time.

Forward-Looking Statements
This press release contains historical information and forward-looking statements with respect to the business and investments of Capital Southwest, including, but not limited to, the statements about Capital Southwest's future performance and financial performance and financial condition, Capital Southwest's ability to continue to grow its balance sheet, the timing, form and amount of any distributions or supplemental dividends in the future, and Capital Southwest's receipt of a second SBIC license. Receipt of a green light letter provides no assurance that the SBA will ultimately issue an SBIC license, and Capital Southwest has received no assurance or indication from the SBA as such, or of a timeframe in which it would receive its second SBIC license, should one be granted. Forward-looking statements are statements that are not historical statements and can often be identified by words such as "will," "believe," "expect" and similar expressions and variations or negatives of these words. These statements are based on management's current 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 those expressed in any forward-looking statement. These risks include risks related to: 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; regulatory changes; tax treatment; our ability to operate SBIC I as a small business investment company; an economic downturn and its impact on the ability of our portfolio companies to operate and the investment opportunities available to us; the impact of supply chain constraints and labor shortages on our portfolio companies; and the elevated levels of inflation and its impact on our portfolio companies and the industries in which we invests.
Readers should not place undue reliance on any forward-looking statements and are encouraged to review Capital Southwest's Annual Report on Form 10-K for the year ended March 31, 2024 and any subsequent filings with the SEC, including the "Risk Factors" sections therein, for a more complete discussion of the risks and other factors that could affect any forward-looking statements. Except as required by the federal securities laws, Capital Southwest does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changing circumstances or any other reason after the date of this press release.

Investor Relations Contact:
Michael S. Sarner, Chief Financial Officer
214-884-3829


CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(In thousands, except shares and per share data)
December 31,March 31,
20242024
(Unaudited)
Assets
Investments at fair value:
Non-control/Non-affiliate investments (Cost: $1,481,051 and $1,276,690, respectively)
$1,471,215 $1,286,355 
Affiliate investments (Cost: $223,612 and $200,013, respectively)
221,044 190,206 
Control investments (Cost: $8,619 and $0, respectively)
9,027 — 
Total investments (Cost: $1,713,282 and $1,476,703, respectively)
1,701,286 1,476,561 
Cash and cash equivalents36,013 32,273 
Receivables:
Dividends and interest28,237 22,928 
Escrow— 16 
Other4,056 7,276 
Income tax receivable668 336 
Debt issuance costs (net of accumulated amortization of $9,685 and $7,741, respectively)
9,938 10,928 
Other assets8,867 6,440 
Total assets$1,789,065 $1,556,758 
Liabilities
SBA Debentures (net of $4,279 and $4,305, respectively, of unamortized debt issuance costs)$170,721 $148,695 
January 2026 Notes (net of $0 and $612, respectively, of unamortized debt issuance costs)— 139,388 
October 2026 Notes (net of $1,346 and $1,923, respectively, of unamortized debt issuance costs)148,654 148,077 
August 2028 Notes (net of $1,800 and $2,182, respectively, of unamortized debt issuance costs)70,075 69,693 
2029 Convertible Notes (net of $7,256 and $0, respectively, of unamortized debt issuance costs)222,744 — 
Credit Facilities308,000 265,000 
Other liabilities20,993 17,381 
Accrued restoration plan liability556 570 
Income tax payable1,251 281 
Deferred tax liability15,629 11,997 
Total liabilities958,623 801,082 
Commitments and contingencies (Note 11)
Net Assets
Common stock, $0.25 par value: authorized, 75,000,000 shares at December 31, 2024 and March 31, 2024; issued, 50,051,332 shares at December 31, 2024 and 45,050,759 shares at March 31, 2024
12,513 11,263 
Additional paid-in capital903,513 796,945 
Total distributable (loss) earnings(85,584)(52,532)
Total net assets830,442 755,676 
Total liabilities and net assets$1,789,065 $1,556,758 
Net asset value per share (50,051,332 shares outstanding at December 31, 2024 and 45,050,759 shares outstanding at March 31, 2024)
$16.59 $16.77 



CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except shares and per share data)
Three Months EndedNine Months Ended
December 31,December 31,
2024202320242023
Investment income:
Interest income:
Non-control/Non-affiliate investments$37,789 $33,627 $114,346 $97,924 
Affiliate investments4,767 4,214 14,253 12,691 
Control investments333 — 975 — 
Payment-in-kind interest income:
Non-control/Non-affiliate investments2,717 3,452 7,025 5,329 
Affiliate investments529 621 1,670 1,926 
Dividend income:
Non-control/Non-affiliate investments586 2,447 3,525 3,233 
Affiliate investments— 96 51 187 
Control investments— 2,129 — 6,439 
Fee income:
Non-control/Non-affiliate investments3,671 1,655 6,589 2,949 
Affiliate investments525 115 1,443 632 
Control investments8 17 75 62 
Other income1,048 193 2,081 332 
Total investment income51,973 48,566 152,033 131,704 
Operating expenses:
Compensation2,388 3,919 7,844 8,762 
Share-based compensation1,544 1,188 4,306 3,387 
Interest14,717 11,473 39,751 31,635 
Professional fees998 919 3,450 2,863 
General and administrative1,643 1,301 4,699 3,877 
Total operating expenses21,290 18,800 60,050 50,524 
Income before taxes30,683 29,766 91,983 81,180 
Federal income, excise and other taxes474 392 1,016 841 
Deferred taxes(107)515 627 (270)
Total income tax provision367 907 1,643 571 
Net investment income$30,316 $28,859 $90,340 $80,609 
Realized (loss) gain
Non-control/Non-affiliate investments$(12,889)$(7,849)$(22,374)$(13,445)
Affiliate investments84 — 251 (6,503)
Control investments— — (260)— 
Income tax benefit (provision)— 7 — (286)
Total net realized (loss) gain on investments, net of tax(12,805)(7,842)(22,383)(20,234)
Net unrealized (depreciation) appreciation on investments
Non-control/Non-affiliate investments(5,229)8,569 (19,455)4,648 
Affiliate investments7,745 (6,829)7,193 1,302 
Control investments(354)778 408 2,944 
Income tax (provision) benefit (3,009)(51)(2,720)1,012 
Total net unrealized (depreciation) appreciation on investments, net of tax(847)2,467 (14,574)9,906 
Net realized and unrealized (losses) gains on investments(13,652)(5,375)(36,957)(10,328)
Realized loss on extinguishment of debt(387)— (387)(361)
Realized loss on disposal of fixed assets(9)— (9)— 
Net increase in net assets from operations$16,268 $23,484 $52,987 $69,920 
Pre-tax net investment income per share - basic$0.64 $0.72 $1.95 $2.05 
Net investment income per share – basic$0.63 $0.70 $1.92 $2.04 
Net increase in net assets from operations - diluted$0.34 $0.57 $1.12 $1.77 
Net increase in net assets from operations – basic$0.34 $0.57 $1.13 $1.77 
Weighted average shares outstanding – basic48,315,228 41,513,773 47,079,617 39,610,643 
Weighted average shares outstanding – diluted54,121,844 41,513,773 49,022,194 39,610,643 

Q3 2025 Earnings Presentation 8333 Douglas Avenue, Suite 1100 | Dallas, Texas 75225 | 214.238.5700 | capitalsouthwest.com February 4, 2025 Capital Southwest Corporation

 
Page 2 Important Notices • These materials and any presentation of which they form a part are neither an offer to sell, nor a solicitation of an offer to purchase, any securities of Capital Southwest. • These materials and the presentations of which they are a part, and the summaries contained herein, do not purport to be complete and no obligation to update or otherwise revise such information is being assumed. Nothing shall be relied upon as a promise or representation as to the future performance of Capital Southwest. Such information is qualified in its entirety by reference to the more detailed discussions contained elsewhere in Capital Southwest’s public filings with the Securities and Exchange Commission (the "SEC"). • There is no guarantee that any of the estimates, targets or projections illustrated in these materials and any presentation of which they form a part will be achieved. Any references herein to any of the Capital Southwest’s past or present investments or its past or present performance, have been provided for illustrative purposes only. It should not be assumed that these investments were or will be profitable or that any future investments by Capital Southwest will be profitable or will equal the performance of these investments. • The information contained herein has been derived from financial statements and other documents provided by the portfolio companies unless otherwise stated. • Past performance is not indicative of future results. In addition, there can be no assurance that unrealized investments will be realized at the expected multiples shown as actual realized returns will depend on, among other factors, future operating results of each of Capital Southwest’s current portfolio companies, the value of the assets and economic conditions at the time of disposition, any related transaction costs, and the timing and manner of sale, all of which may differ from the assumptions on which Capital Southwest’s expected returns are based. In many instances, Capital Southwest will not determine the timing or manner of sale of its portfolio companies. • Capital Southwest has filed a registration statement (which contains the prospectus) with the SEC for any offering to which this communication may relate and may file one or more prospectus supplements to the prospectus in the future. Before you invest in any of Capital Southwest's securities, you should read the registration statement and the applicable prospectus and prospectus supplement(s), including the information incorporated by reference therein, in order to fully understand all of the implications and risks of an offering of Capital Southwest's securities. You should also read other documents Capital Southwest has filed with the SEC for more complete information about Capital Southwest and any offering of its securities. You may get these documents for free by visiting EDGAR on the SEC's website at www.sec.gov. Alternatively, Capital Southwest will arrange to send you any applicable prospectus and prospectus supplement(s) if you request such materials by calling us at (214) 238-5700. These materials are also made available, free of charge, on our website at www.capitalsouthwest.com. Information contained on our website is not incorporated by reference into this communication.

 
Page 3 • This presentation contains forward-looking statements relating to, among other things, the business, market conditions, financial condition and results of operations of Capital Southwest, the anticipated investment strategies and investments of Capital Southwest, future market demand, and statements about Capital Southwest's receipt of a second SBIC license. Receipt of a green light letter provides no assurances that the SBA will ultimately issue an additional SBIC license to Capital Southwest, and Capital Southwest has received no assurance or indication from the SBA as such, or of a timeframe in which it would receive its second SBIC license, should one be granted. Any statements that are not statements of historical fact are forward-looking statements. Forward-looking statements are often, but not always, preceded by, followed by, or include words such as "believe," "expect," "intend," "plan," "should" or similar words, phrases or expressions or the negative thereof. These statements are made on the basis of the current beliefs, expectations and assumptions of the management of Capital Southwest and speak only as of the date of this presentation. There are a number of risks and uncertainties that could cause Capital Southwest’s actual results to differ materially from the forward-looking statements included in this presentation. • These risks include risks related to: changes in the markets in which Capital Southwest invests; changes in the financial, capital, and lending markets; the impact of interest rate volatility; the impact of supply chain constraints and labor difficulties on our portfolio companies; elevated levels of inflation and its impact on Capital Southwest's portfolio companies and the industries in which it invests; regulatory changes; tax treatment and general economic and business conditions; our ability to operate our wholly owned subsidiary, Capital Southwest SBIC I, LP, as a small business investment company ("SBIC"); and an economic downturn and its impact on the ability of our portfolio companies to operate and the investment opportunities available to us. • For a further discussion of some of the risks and uncertainties applicable to Capital Southwest and its business, see Capital Southwest’s Annual Report on Form 10-K for the fiscal year ended March 31, 2024 and its subsequent filings with the SEC. Other unknown or unpredictable factors could also have a material adverse effect on Capital Southwest’s actual future results, performance, or financial condition. As a result of the foregoing, readers are cautioned not to place undue reliance on these forward-looking statements. Capital Southwest does not assume any obligation to revise or to update these forward-looking statements, whether as a result of new information, subsequent events or circumstances, or otherwise, except as may be required by law. Forward-Looking Statements

 
Page 4 Bowen S. Diehl President and Chief Executive Officer Michael S. Sarner Chief Financial Officer Josh S. Weinstein Senior Managing Director and Chief Investment Officer Chris Rehberger Executive Vice President and Treasurer Conference Call Participants

 
Page 5 • CSWC was formed in 1961, and elected to be regulated as a BDC in 1988 • Publicly-traded on Nasdaq: Common Stock (“CSWC”) and 7.75% Notes due 2028 ("CSWCZ") • Internally Managed BDC with RIC tax treatment for U.S. federal income tax purposes • 33 employees based in Dallas, Texas • Total Balance Sheet Assets of $1.8 B as of December 31, 2024 • Operate Capital Southwest SBIC I, LP, a wholly-owned subsidiary • Maintain investment grade issuer ratings of Baa3 from Moody's and BBB- from Fitch CSWC Company Overview CSWC is a middle-market lending firm focused on supporting the acquisition and growth of middle-market companies across the capital structure

 
Page 6 • Q3 2025 Pre-Tax Net Investment Income (“NII”) of $30.7 MM or $0.64 per share • Declared Regular Dividend of $0.58 per share for the quarter ending March 31, 2025 ◦ In addition, increased Supplemental Dividend to $0.06 per share for the quarter ending March 31, 2025, compared to the $0.05 per share Supplemental Dividend paid for the quarter ended December 31, 2024 • Investment Portfolio at Fair Value of approximately $1.7 B ◦ $317.5 MM in total new committed investments to nine new portfolio companies and twenty existing portfolio companies • Net Asset Value per share of $16.59 as of December 31, 2024 • Issued $230.0 MM in aggregate principal of 5.125% Convertible Notes due 2029 ◦ Initial conversion price of $25.00 per share of common stock • Redeemed in full $140.0 MM January 2026 Notes ◦ No "make-whole" premium required on the redemption • Received "Green Light Letter" from SBA in December 2024, allowing CSWC to submit Final Application for SBIC II • Raised $53.6 MM in gross proceeds through Equity ATM Program during the quarter ◦ Sold shares at weighted-average price of $22.68 per share, or 137% of the prevailing NAV per share • Regulatory Debt to Equity ended at 0.90x for the quarter • $376 MM of total availability under credit facilities and $36 MM in cash and cash equivalents as of quarter end Q3 2025 Highlights Financial Highlights

 
Page 7 • In the last twelve months ended 12/31/2024, CSWC generated $2.65 per share in Pre-Tax NII and paid out $2.30 per share in Regular Dividends ◦ LTM Pre-Tax NII Regular Dividend Coverage of 115% • Cumulative Pre-Tax NII Regular Dividend Coverage of 111% since launch of credit strategy in 2015 • Total of $4.12 per share Special and Supplemental Dividends declared since launch of credit strategy in 2015 • Estimated Undistributed Taxable Income ("UTI") of $0.68 per share as of December 31, 2024 Track Record of Consistent Dividends Continues Dividend Yield – Quarterly Annualized Total Dividend / CSWC Share Price at Qtr. End D iv id en d Pe r Sh ar e $0.54 $0.97 $0.48 $0.63 $0.50 $0.57 $0.58 $0.59 $0.62 $0.63 $0.63 $0.63 $0.64 $0.63 $0.64 $0.44 $0.47 $0.48 $0.48 $0.50 $0.52 $0.53 $0.54 $0.56 $0.57 $0.57 $0.57 $0.58 $0.58 $0.58 $0.10 $0.50 $0.05 $0.05 $0.05 $0.06 $0.06 $0.06 $0.06 $0.06 $0.05 $0.06 $0.15 Regular Dividend Per Share Supplemental Dividend Per Share Special Dividend Per Share 9/30/2021 12/31/2021 3/31/2022 6/30/2022 9/30/2022 12/31/2022 3/31/2023 6/30/2023 9/30/2023 12/31/2023 3/31/2024 6/30/2024 9/30/2024 12/31/2024 3/31/2025 $0.00 $0.25 $0.50 $0.75 $1.00 $1.25 8.6% 15.3% 8.1% 13.7% 13.3% 13.0% 11.8% 12.0% 10.8% 10.6% 10.1% 9.7% 10.1% 11.5%

 
Page 8 History of Value Creation $17.68 $17.38 $18.63 $20.90 $22.71 $21.97 $24.90 $28.27 $30.06 $32.93 $33.39 $34.02 $34.65 $17.68 $17.34 $17.80 $19.08 $18.62 $15.13 $16.01 $16.86 $16.37 $16.77 $16.60 $16.59 $16.59 $0.26 $0.26 $1.16 $2.31 $2.71 $3.41 $3.66 $3.89 $3.95 $4.01 $4.06 $0.04 $0.57 $1.56 $2.93 $4.53 $6.18 $8.00 $10.03 $12.27 $12.84 $13.42 $14.00 Net Asset Value Per Share Cumulative Special/Supplemental Dividends Paid Per Share Cumulative Regular Dividends Paid Per Share 9/30/2015 3/31/2016 3/31/2017 3/31/2018 3/31/2019 3/31/2020 3/31/2021 3/31/2022 3/31/2023 3/31/2024 6/30/2024 9/30/2024 12/31/2024 $0.00 $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 $35.00 $40.00 Total Value (Net Asset Value + Cumulative Dividends Paid) Increase from Credit Strategy of $16.97 per share through 12/31/2024

 
Page 9 CSWC leads financing transactions, primarily backing private equity firms that generally fit the following parameters • Flexible financing solutions to fund growth, changes of control, or other corporate events • Investments are diverse among industries, geographic regions, and end markets • Companies with EBITDA between $3 MM and $25 MM • Typical leverage of 2.5x – 4.5x Debt to EBITDA through CSWC debt position and Loan-to-Value of 25% - 50% • Investments generally range in size from $5 MM to $50 MM • Both sponsored and non-sponsored deals • Floating rate first lien debt securities • Frequently make equity co-investments alongside CSWC debt Lower Middle Market Credit Strategy

 
Page 10 Granular Credit Portfolio Heavily Weighted Towards First Lien Investments 98% of credit portfolio in first lien senior secured loans with an average investment hold size of 0.9% as of 12/31/2024 Credit Portfolio Heavily Weighted to First Lien $ (M illi on s) Average H old S ize % $93 $167 $239 $368 $474 $573 $794 $1,038 $1,345 $1,335 $1,374 $1,543 5.6% 3.6% 3.8% 2.8% 2.3% 1.9% 1.5% 1.3% 0.9% 1.0% 1.0% 0.9% Sub-Debt Second Lien First Lien Average Hold Size % 3/31/2016 3/31/2017 3/31/2018 3/31/2019 3/31/2020 3/31/2021 3/31/2022 3/31/2023 3/31/2024 6/30/2024 9/30/2024 12/31/2024 $0 $250 $500 $750 $1,000 $1,250 $1,500 $1,750 —% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 64% 28% 8% 82% 10% 8% 4% 10% 86% 90% 8% 2% 6% 92% 2% 93% 7% 96% 4% 43% 41% 16% 97% 3% 98% 2% 98% 2% 98% 2%

 
Page 11 $317.5 MM in total new committed investments to nine new portfolio companies and twenty existing portfolio companies Q3 2025 Originations Portfolio Originations Q3 2025 Name Industry Type Total Debt Funded at Close ($000s) Total Equity Funded at Close ($000s) Unfunded Commitments at Close ($000s) Debt Yield to Maturity Undisclosed Portfolio Company N/A First Lien / Equity $32,000 $500 $5,000 10.5% Musiker Discovery Programs, Inc. (d.b.a Summer Discovery) Education First Lien $23,000 $— $12,500 12.0% Superior Health Parent LLC Healthcare Services First Lien $18,500 $— $12,000 10.5% Edge Autonomy Holdings, LLC Aerospace & Defense First Lien $30,000 $— $— 12.1% Mid-Florida Endodontics Management Company, LLC Healthcare Services First Lien $16,100 $— $13,000 11.0% SureKap, LLC Industrial Machinery First Lien $13,500 $— $6,900 10.5% C&M Conveyor, Inc. Industrial Machinery First Lien $15,619 $— $— 11.5% Exact Borrower, LLC Media & Marketing First Lien $11,500 $— $4,000 11.0% FS Vector LLC Research & Consulting Services First Lien / Equity $12,000 $333 $2,000 10.4% LKC Technologies, Inc. Healthcare Equipment & Supplies First Lien $12,650 $— $— 11.3% Undisclosed Portfolio Company N/A First Lien / Equity $8,000 $1,000 $2,000 12.5% Red Dog Operations Holding Company LLC Consumer Services First Lien / Equity $7,500 $1,000 $2,000 11.0% Pool Service Partners, Inc. Consumer Services First Lien $— $— $10,400 11.7% Cumbria Capital MSO, LLC Healthcare Services First Lien $5,400 $— $3,500 11.0% • $234.7 MM funded at close

 
Page 12 Portfolio Originations Q3 2025 Name Industry Type Total Debt Funded at Close ($000s) Total Equity Funded at Close ($000s) Unfunded Commitments at Close ($000s) Debt Yield to Maturity Undisclosed Portfolio Company N/A First Lien $6,750 $— $— 12.5% LEHR Upfitters, LLC Commerical Services & Supplies First Lien $612 $— $6,121 10.5% Undisclosed Portfolio Company N/A First Lien / Equity $4,000 $500 $1,000 11.3% Microbe Formulas LLC Healthcare Products First Lien $5,043 $— $— 10.3% Crafty Apes LLC Movies & Entertainment First Lien $3,623 $— $924 11.8% KMS, LLC Distribution First Lien $1,829 $— $— 14.1% 360 Quote TopCo, LLC Media & Marketing First Lien $— $— $1,500 10.8% Guardian Fleet Services, Inc. Transportation & Logistics First Lien / Equity $1,000 $500 $— 13.6% Systec Corporation Industrial Machinery First Lien $1,000 $— $— 12.3% Heat Trak, LLC Consumer Products First Lien $500 $— $— 14.3% Spectrum of Hope, LLC (d.b.a Kids SPOT) Healthcare Services First Lien $411 $— $— 12.8% Other Equity Co-Investments Various Equity $— $303 $— N/A Total / Wtd. Avg $230,537 $4,136 $82,845 11.27% Q3 2025 Originations (Continued) $317.5 MM in total new committed investments to nine new portfolio companies and twenty existing portfolio companies • $234.7 MM funded at close

 
Page 13 Portfolio Exits Q3 2025 Name Industry Type Total Proceeds ($000s) Realized Gain / (Loss) ($000s) IRR Versicare Management LLC Healthcare Services First Lien $23,721 $362 17.1% Research Now Group, LLC Data Processing & Outsourced Services First / Second Lien $2,935 $(237) (9.6)% Total / Wtd. Avg $26,656 $125 6.8% Track Record of CSWC Exits Continues • During the quarter, CSWC exited two debt investments generating proceeds of $26.7 MM and a weighted average IRR of 6.8% • Cumulative weighted average IRR of 13.7% on 88 portfolio company exits, generating $1.1 B in proceeds since launch of credit strategy in January 2015

 
Page 14 CSWC Investment Portfolio Composition (1) At December 31, 2024 and September 30, 2024, we had equity ownership in approximately 62% and 61%, respectively, of our investments (2) The weighted-average annual effective yields were computed using the effective interest rates during the quarter for all debt investments at cost as of December 31, 2024, including accretion of original issue discount but excluding fees payable upon repayment of the debt instruments (3) The weighted average annual effective yields on total investments were calculated by dividing total investment income, exclusive of non-recurring fees, by average total investments at fair value (4) Includes CSWC debt investments only. Weighted average EBITDA metric is calculated using investment cost basis weighting. For the quarters ended December 31, 2024 and September 30, 2024, fourteen portfolio companies and twelve portfolio companies, respectively, are excluded from this calculation due to a reported debt to adjusted EBITDA ratio that was not meaningful. (5) Includes CSWC debt investments only. Calculated as the amount of each portfolio company’s debt (including CSWC’s position and debt senior or pari passu to CSWC’s position, but excluding debt subordinated to CSWC’s position) in the capital structure divided by each portfolio company’s adjusted EBITDA. Weighted average leverage is calculated using investment cost basis weighting. For the quarters ended December 31, 2024 and September 30, 2024, fourteen portfolio companies and twelve portfolio companies, respectively, are excluded from this calculation due to a reported debt to adjusted EBITDA ratio that was not meaningful. Maintaining appropriate portfolio leverage while receiving attractive risk- adjusted returns Investment Portfolio - Statistics (in $000's) 9/30/2024 12/31/2024 Total CSWC Portfolio Total CSWC Portfolio Number of Portfolio Companies 118 125 Total Cost $1,522,664 $1,713,282 Total Fair Value $1,508,507 $1,701,286 Average Hold Size Debt Investments (at Fair Value) $13,086 $13,897 Average Hold Size Equity Investments (at Fair Value) $1,868 $2,062 % First Lien Investments (at Fair Value) 89.2% 89.1% % Second Lien Investments (at Fair Value) 1.8% 1.5% % Subordinated Debt Investments (at Fair Value) 0.1% 0.1% % Equity (at Fair Value) (1) 8.9% 9.3% Wtd. Avg. Yield on Debt Investments (2) 12.9% 12.1% Wtd. Avg. Yield on Total Investments (3) 12.7% 12.1% Wtd. Avg. EBITDA of Issuer ($MM's) (4) $19.8 $20.0 Wtd. Avg. Leverage through CSWC Security (5) 3.8x 3.6x

 
Page 15 Approximately 95% of all debt investments are currently rated a "1" or "2" as credit portfolio continues to demonstrate solid performance Investment Rating 9/30/2024 Investment Rating Upgrades Investment Rating Downgrades 12/31/2024 # of Loans Fair Value ($MM) % of Portfolio (FV) # of Loans Fair Value ($MM) % of Portfolio (FV) # of Loans Fair Value ($MM) % of Portfolio (FV) # of Loans Fair Value ($MM) % of Portfolio (FV) 1 23 $247.5 18.0% 9 $99.0 6.4% — $— —% 36 $414.0 26.8% 2 114 $1,037.5 75.5% — $— —% — $— —% 113 $1,047.9 67.9% 3 10 $87.8 6.4% — $— —% 2 $15.4 1.0% 10 $78.7 5.1% 4 1 $1.1 0.1% — $— —% 1 $2.0 0.1% 2 $2.0 0.1% Quarter-over-Quarter Investment Rating Migration Note: We utilize an internally developed investment rating system to rate the performance and monitor the expected level of returns for each debt investment in our portfolio. The investment rating system takes into account both quantitative and qualitative factors of the portfolio company and the investments held therein. Investment Ratings range from a rating of 1, which represents the least amount of risk in our portfolio, to 4, which indicates that the investment is performing materially below underwriting expectations.

 
Page 16 CSWC Portfolio Mix as of December 31, 2024 at Fair Value Current Investment Portfolio (By Type) Current Investment Portfolio (By Industry) Current Investment Portfolio of approximately $1.7 B continues to be heavily weighted towards first lien investments and diverse across industries First Lien 89.1% Second Lien 1.5% Senior Subordinated Debt 0.1% Equity 9.3% Healthcare Services 13% Media & Marketing 8% Food, Agriculture & Beverage 7% Consumer Services 7% Consumer Products 7% Financial Services 6% Industrial Machinery 5% Transportation & Logistics 5% Business Services 5% Industrial Products 4% Healthcare Equipment & Supplies 4% Software & IT Services 3% Aerospace & Defense 3% Environmental Services 3% Note: Equity represents equity co-investments across 77 portfolio companies.

 
Page 17 Income Statement (In Thousands, except per share amounts) Quarter Ended 3/31/2024 Quarter Ended 6/30/2024 Quarter Ended 9/30/2024 Quarter Ended 12/31/2024 Investment Income Interest Income $39,923 $42,987 $43,698 $42,889 PIK Interest Income 2,953 3,051 2,398 3,246 Dividend Income 1,887 2,418 572 586 Fees and Other Income 1,668 2,898 2,038 5,252 Total Investment Income $46,431 $51,354 $48,706 $51,973 Expenses Cash Compensation $1,869 $3,466 $1,990 $2,388 Share Based Compensation 1,131 1,224 1,538 1,544 General & Administrative 2,209 2,931 2,577 2,641 Total Expenses (excluding Interest) $5,209 $7,621 $6,105 $6,573 Interest Expense $11,453 $12,447 $12,587 $14,717 Pre-Tax Net Investment Income $29,769 $31,286 $30,014 $30,683 Gains / Losses and Taxes Net Realized and Unrealized Losses $(15,927) $(14,824) $(8,481) $(13,661) Realized Loss on Extinguishment of Debt — — — (387) Income Tax (Expense) / Benefit (373) (2,427) 1,151 (367) Net increase in Net Assets Resulting from Operations $13,469 $14,035 $22,684 $16,268 Weighted Average Basic Shares Outstanding 44,101 45,665 47,243 48,315 Pre-Tax NII Per Basic Weighted Average Share $0.68 $0.69 $0.64 $0.64 Net Increase in Net Assets Per Basic Wtd. Average Share $0.31 $0.31 $0.48 $0.34

 
Page 18 Operating Leverage Trend Driving exceptional Operating Leverage through benefits of internally-managed structure Period Ending To ta l A ss et s ( $M M ) O perating Expenses as % of A vg A ssets $284 $326 $417 $552 $585 $736 $974 $1,258 $1,557 $1,544 $1,604 $1,789 4.9% 4.2% 3.7% 3.0% 2.8% 2.4% 2.2% 1.9% 1.7% 1.8% 1.7% 1.6% FY 16 FY 17 FY 18 FY 19 FY 20 FY 21 FY 22 FY 23 FY 24 Q1 FY 25 Q2 FY 25 Q3 FY 25 $0 $500 $1,000 $1,500 $2,000 1% 2% 3% 4% 5% 6% Total Assets Operating Expenses as % of Average Total Assets Note: Operating Leverage calculated as last twelve months operating expenses (excluding interest expense) divided by average annual assets

 
Page 19 $16.59 $0.64 $(0.58) $(0.05) $(0.54) $0.26 $0.27 $0.03 $(0.03) $16.59 9/3 0/2 02 4 N AV/Shar e Pre- Tax Net I nv est ment In com e Regu lar Divi den d Sup ple ment al D ivi den d Net C han ge in Valu ati on of Debt Port fol io Net C han ge in Valu ati on of Equ ity Port fol io Accr eti on fro m Equ ity Iss uan ce Shar e B ase d C om pen sat ion Exp ens e Othe r C orp ora te 12 /31 /20 24 NAV/Shar e $14.00 $14.50 $15.00 $15.50 $16.00 $16.50 $17.00 $17.50 $18.00 NAV per Share Bridge for Quarter Ended 12/31/24 Earnings / Dividends $0.01 per Share Investment Portfolio Valuation Change $(0.28) per Share Other Corporate $0.27 per Share

 
Page 20 Significant Unused Debt Capacity with Long-Term Duration Earliest debt maturity occurs in October 2026 Facility Total Commitments Interest Rate Maturity Principal Drawn Undrawn Commitment October 2026 Notes (1) $150.0 MM 3.375% October 2026 $150.0 MM N/A Corporate Credit Facility $485.0 MM Term SOFR + 2.15% August 2028 $190.0 MM $294.1 MM (2) August 2028 Notes (3) $71.9 MM 7.75% August 2028 $71.9 MM N/A SPV Credit Facility $200.0 MM Term SOFR + 2.50% March 2029 $118.0 MM $82.0 MM 2029 Convertible Notes (4) $230.0 MM 5.125% November 2029 $230.0 MM N/A SBA Debentures $175.0 MM 4.42% (5) September 2031 (6) $175.0 MM $0.0 MM P rin ci pa l P ay m en ts ($ M M ) Long-Term Debt Obligations (Calendar Year) $150.0 $261.9 $348.0 $175.0 $118.0$190.0$150.0 $71.9 $230.0 $175.0 SPV Facility Corporate Credit Facility October 2026 Notes August 2028 Notes 2029 Convertible Notes SBA Debentures CY 2025 CY 2026 CY 2027 CY 2028 CY 2029 CY 2030 - Thereafter $0 $150 $300 $450 $600 (1) Redeemable in whole or in part at any time prior to July 1, 2026, at par plus a "make whole" premium, and thereafter at par (2) Net of $0.9 MM in letters of credit outstanding (3) Redeemable in whole or in part at Capital Southwest's option on or after August 1, 2025 (4) Redeemable in whole or in part at Capital Southwest's option on or after November 20, 2027 or before the 45th scheduled trading day immediately prior to the maturity date if the price of CSWC common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (5) Weighted average interest rate of all SBA Debentures for the three months ended December 31, 2024 (6) First SBA Debentures mature on September 1, 2031

 
Page 21 Balance Sheet (In Thousands, except per share amounts) Quarter Ended 3/31/2024 Quarter Ended 6/30/2024 Quarter Ended 9/30/2024 Quarter Ended 12/31/2024 Assets Portfolio Investments $1,476,561 $1,468,126 $1,508,507 $1,701,286 Cash & Cash Equivalents 32,273 33,299 47,237 36,013 Other Assets 47,924 42,607 48,754 51,766 Total Assets $1,556,758 $1,544,032 $1,604,498 $1,789,065 Liabilities SBA Debentures $148,695 $148,880 $149,064 $170,721 January 2026 Notes 139,388 139,472 139,557 — October 2026 Notes 148,077 148,269 148,462 148,654 August 2028 Notes 69,693 69,820 69,948 70,075 2029 Convertible Notes — — — 222,744 Credit Facilities 265,000 229,000 278,000 308,000 Other Liabilities 30,229 31,260 28,209 38,429 Total Liabilities $801,082 $766,701 $813,240 $958,623 Shareholders Equity Net Asset Value $755,676 $777,331 $791,258 $830,442 Net Asset Value per Share $16.77 $16.60 $16.59 $16.59 Regulatory Debt to Equity 0.82x 0.75x 0.80x 0.90x

 
Page 22 Portfolio Statistics Continuing to build a well performing credit portfolio (In Thousands) Quarter Ended 3/31/2024 Quarter Ended 6/30/2024 Quarter Ended 9/30/2024 Quarter Ended 12/31/2024 Portfolio Statistics Fair Value of Debt Investments $1,344,559 $1,335,279 $1,374,041 $1,542,524 Average Debt Investment Hold Size $12,566 $12,717 $13,086 $13,897 Fair Value of Debt Investments as a % of Par 96% 95% 95% 95% % of Investment Portfolio on Non-Accrual at Fair Value 2.3% 1.9% 3.5% 2.7% Weighted Average Yield on Debt Investments 13.29% 13.26% 12.87% 12.08% Fair Value of All Portfolio Investments $1,476,561 $1,468,126 $1,508,507 $1,701,286 Weighted Average Yield on all Portfolio Investments 12.67% 13.49% 12.73% 12.06% Investment Mix (Debt vs. Equity) at Fair Value 91% / 9% 91% / 9% 91% / 9% 91% / 9%

 
Page 23 Investment Income Detail Constructing a portfolio of investments with recurring cash yield (In Thousands) Quarter Ended 3/31/2024 Quarter Ended 6/30/2024 Quarter Ended 9/30/2024 Quarter Ended 12/31/2024 Investment Income Breakdown Cash Interest $38,881 $41,998 $42,629 $42,294 Cash Dividends 1,887 2,418 572 586 PIK Income 2,953 3,051 2,398 3,246 Amortization of Purchase Discounts and Fees 1,254 1,531 1,560 1,641 Management/Admin Fees 469 465 480 491 Fees & Other Income 987 1,891 1,067 3,715 Total Investment Income $46,431 $51,354 $48,706 $51,973 Key Metrics Cash Income as a % of Investment Income (1) 94% 94% 95% 94% % of Total Investment Income that is Recurring 98% 94% 98% 92% (1) Includes Purchase Discounts and Fees previously received in cash

 
Page 24 Key Financial Metrics Strong Pre-Tax Net Investment Income and Dividend Yield driven by net portfolio growth and investment performance (1) Return on Equity is calculated as the quarterly annualized Pre-Tax NII, Realized Earnings, or Total Earnings, respectively, divided by equity at the end of the prior quarter Quarter Ended 3/31/2024 Quarter Ended 6/30/2024 Quarter Ended 9/30/2024 Quarter Ended 12/31/2024 Key Financial Metrics Pre-Tax Net Investment Income Per Wtd Avg Basic Share $0.68 $0.69 $0.64 $0.64 Pre-Tax Net Investment Income Return on Equity (ROE)(1) 16.10% 16.34% 15.31% 15.31% Realized Earnings Per Wtd Avg Basic Share $0.22 $0.65 $0.44 $0.35 Realized Earnings Return on Equity (ROE)(1) 5.27% 15.45% 10.65% 8.55% Earnings Per Wtd Avg Basic Share $0.31 $0.31 $0.48 $0.34 Earnings Return on Equity (ROE)(1) 7.28% 7.33% 11.57% 8.12% Regular Dividends per Share $0.57 $0.57 $0.58 $0.58 Supplemental / Special Dividends per Share $0.06 $0.06 $0.06 $0.05 Total Dividends per Share $0.63 $0.63 $0.64 $0.63

 
Page 25 Note: Illustrative change in annual NII does not adjust for potential changes in the credit market, credit quality, size and composition of the assets in the portfolio. It also does not adjust for other business developments, including future originations and repayments. Accordingly, no assurances can be given that actual results would not differ materially from the table above. Interest Rate Sensitivity Fixed vs. Floating Credit Portfolio Exposure Change in Base Interest Rates Illustrative Annual NII Change ($'s) Illustrative Annual NII Change ($ Per Share) (200 bps) (24,004,811) (0.48) (150 bps) (18,033,867) (0.36) (100 bps) (12,022,578) (0.24) (50 bps) (6,011,289) (0.12) 50 bps 6,011,289 0.12 2.2% 97.8% Fixed Floating

 
Page 26 Corporate Information Board of Directors Senior Management Fiscal Year End Inside Director Bowen S. Diehl March 31 Bowen S. Diehl President & Chief Executive Officer Independent Directors Independent Auditor David R. Brooks Michael S. Sarner RSM US LLP Chicago, ILChristine S. Battist Chief Financial Officer, Secretary & Treasurer Jack D. Furst William R. Thomas Josh S. Weinstein Ramona Rogers-Windsor Senior Managing Director & Chief Investment Officer Corporate Counsel Eversheds Sutherland (US) LLP Corporate Offices & Website Investor Relations 8333 Douglas Avenue Michael S. Sarner Suite 1100 Capital Southwest Dallas, TX 75225 214-884-3829 http://www.capitalsouthwest.com msarner@capitalsouthwest.com Transfer Agent Equiniti Trust Company, LLC Securities Listing www.equiniti.com Nasdaq: "CSWC" (Common Stock) Nasdaq: "CSWCZ" (7.75% Notes due 2028) Industry Analyst Coverage Firm Analyst Contact Information Ladenburg Thalmann & Co., Inc. Mickey Schleien Direct: 305-572-4131 Citizens JMP Brian McKenna Direct: 585-217-7407 Jefferies, LLC Matthew Hurwit Direct: 415-419-9644 Raymond James & Associates Robert Dodd Direct: 901-579-4560 Oppenheimer & Co., Inc. Mitchel Penn Direct: 212-667-7136 UBS Securities, LLC Douglas Harter Direct: 212-882-0080 B. Riley Securities Bryce Rowe Direct: 703-312-1820

 
v3.25.0.1
Cover
Feb. 03, 2025
Document Information [Line Items]  
Document Type 8-K
Document Period End Date Feb. 03, 2025
Entity Registrant Name CAPITAL SOUTHWEST CORPORATION
Entity Incorporation, State or Country Code TX
Entity File Number 814-00061
Entity Tax Identification Number 75-1072796
Entity Address, Address Line One 8333 Douglas Avenue
Entity Address, Address Line Two Suite 1100
Entity Address, City or Town Dallas
Entity Address, State or Province TX
Entity Address, Postal Zip Code 75225
City Area Code 214
Local Phone Number 238-5700
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Entity Central Index Key 0000017313
Amendment Flag false
Medium-term Notes  
Document Information [Line Items]  
Title of 12(b) Security 7.75% Notes due 2028
Trading Symbol CSWCZ
Security Exchange Name NASDAQ
Common Stock  
Document Information [Line Items]  
Title of 12(b) Security Common Stock, $0.25 par value per share
Trading Symbol CSWC
Security Exchange Name NASDAQ
Capital Southwest (NASDAQ:CSWCZ)
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