Capital Southwest Corporation · NASDAQ:CSWC
Capital Southwest — Q4 FY2016 Earnings Presentation
15 slides from Capital Southwest's earnings presentation, Jun 7, 2016
Slide 1: Capital Southwest Corporation Q4 2016 Earnings Presentation
Capital Southwest CorporationQ4 2016 Earnings Presentation 5400 Lyndon B. Johnson Freeway, Suite 1300 | Dallas, Texas 75240 | 214.238.5700 | capitalsouthwest.com June 8, 2016
Slide 2: Forward-Looking Statements
This presentation contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995 relating to, among other things the business, financial condition and results of operations of Capital Southwest, the anticipated investment strategies and investments of
Slide 3: Conference Call Participants
Bowen S. DiehlPresident and Chief Executive OfficerMichael S. SarnerChief Financial OfficerChris RehbergerVP Finance / Treasurer Conference Call Participants
Slide 4: CSWC Company Overview
CSWC has refocused its investment strategy to become a lender to middle-market companies across the capital structureCSWC was formed in 1961, and became a BDC in 1988Publicly-traded on Nasdaq under CSWC tickerInternally-managed BDC with RIC status for tax purposesManagement transition over the last
Slide 5: Portfolio Rotation Focused on Credit
Portfolio Rotation Focused on Credit 6/30/2014 (excl. CSWI Companies) 3/31/2016 Investable Assets Since June 2014, CSWC has made significant strides towards rotating its investment assets from equity to creditExited 21 legacy portfolio companies for $222 MM in proceedsInvested $91 MM in 17 middle-ma
Slide 6: Q4 2016 Portfolio Originations
Q4 2016 Portfolio Originations In Thousands
Slide 7: Portfolio Mix as of 3/31/16 at Fair Value
Portfolio Mix as of 3/31/16 at Fair Value Current Investment Portfolio (By Type) Current Investment Portfolio (By Industry) For the quarter ended 3/31/16, increased Investment Portfolio to $178 MM from $135 MM; On Balance Sheet Loan Portfolio increased to $93 MM from $61 MM
Slide 8: I-45 Senior Loan Fund Portfolio
I-45 Senior Loan Fund Portfolio Current I-45 Portfolio (By Type) Current I-45 Portfolio (By Industry) Invested $8 MM additional equity to fund I-45 loan portfolio growth to $100 MM
Slide 9: Q4 2016 Highlights
Financial HighlightsGrew investment portfolio to $178 MM from $135 MM Q4 2016 Pre-Tax Net Investment Income of $708 K or $0.04 per weighted average diluted sharePaid quarterly dividend of $0.04 per shareNo non-accruals or watch list companies within debt investment portfolio$96 MM in cash available
Slide 10: Key Highlights
Key Highlights 1 CSWC utilizes an internal 1 - 4 investment rating system in which 1 represents material outperformance and 4 represents material underperformance. All new investments are initially set to 2.2 Excludes CSWC equity investment in I-45 Senior Loan Fund Quarter Ended 9/30/2015 Quarter En
Slide 11: Balance Sheet Highlights
Balance Sheet Highlights (In Thousands, except per share amounts) Quarter Ended 9/30/2015 Quarter Ended 12/31/2015 Quarter Ended 3/31/2016 Assets Portfolio Investments $93,339 $134,935 $178,436 Cash & Cash Equivalents $184,111 $143,680 $95,969 Deferred Tax Asset $1,649 $1,544 $2,342 Other Assets $6,
Slide 12: Income Statement Highlights
Income Statement Highlights (In Thousands, except per share amounts) Quarter Ended 9/30/15 Quarter Ended 12/31/15 Quarter Ended 3/31/16 Investment Income Interest Income $945 $1,415 $2,110 Dividend Income $0 $1,612 $1,578 Fees and Other Income $133 $280 $123 Total Investment Income $1,078 $3,307 $3,
Slide 13: Investment Income Detail
Investment Income Detail Constructing a portfolio of investments with recurring cash yield (In Thousands) Quarter Ended 9/30/2015 Quarter Ended 12/31/2015 Quarter Ended 3/31/2016 Investment Income Breakdown Cash Interest $930 $1,392 $2,063 Cash Dividends $0 $1,612 $1,578 Management Fees $133 $275 $1
Slide 14: Interest Rate Sensitivity
Interest Rate Sensitivity Debt Portfolio Composition Impact of Base Rate Changes on Net Investment Income Note: Illustrative change in NII is based on a projection of our existing debt investments as of 3/31/16, adjusted only for changes in Base Rates. The results of this analysis include the I-45 S
Slide 15: Corporate Information
Corporate Information Board of Directors Senior Management Fiscal Year End Inside Directors March 31 Joseph B. Armes Bowen S. Diehl Bowen S. Diehl President & Chief Executive Officer Independent Auditor Grant Thornton Dallas, TX Independent Directors Michael S. Sarner John H. Wilson Chief Financial