Capital Southwest Reports 49.3% Increase in Investment Income

By Bobby Samwell • Wednesday, May 22 11:09 • Permanent Link

Capital Southwest Corporation has recently released its 10-K report, providing a comprehensive overview of the company's financial condition and results of operations for the year ended March 31, 2024. The company, based in Dallas, Texas, specializes in credit and private equity and venture capital investments in middle market companies, focusing on various sectors including industrial manufacturing, healthcare, technology, energy services, and specialty chemicals.

In the year ended March 31, 2024, Capital Southwest reported total investment income of approximately $178.1 million, representing a significant increase of $58.8 million, or 49.3%, compared to the previous year. This increase was primarily driven by a 29.0% rise in the average monthly cost basis of debt investments and an increase in weighted average yield on debt investments from 12.8% to 13.3% year-over-year.

The company's net investment income for the same period saw a substantial increase of $41.3 million, or 60.1%, reaching $110.0 million. However, the net realized loss on investments, net of tax, amounted to $39.9 million, a significant increase from the previous year. Additionally, the net unrealized appreciation on investments was reported at $13.6 million, compared to a net unrealized depreciation of $18.6 million in the prior year.

In terms of financial liquidity and capital resources, Capital Southwest Corporation had $32.3 million in cash and cash equivalents as of March 31, 2024, and $344.2 million of unused capacity under the Corporate Credit Facility and the SPV Credit Facility. The company also provided details of its cash flows, showing a net increase in cash and cash equivalents of $10.7 million for the year ended March 31, 2024.

Furthermore, the report highlighted the issuance of unsecured notes, including the January 2026 Notes and the October 2026 Notes, as well as the SBA Debentures, which totaled $153.0 million as of March 31, 2024.

Following these announcements, the company's shares moved -1.9%, and are now trading at a price of $25.91. For the full picture, make sure to review Capital Southwest's 10-K report.

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