CSWC Capital Southwest

Capital Southwest Corp. is an internally managed closed end non-diversified management investment company. It engages in the provision of customized financing to middle market companies in the industry segment located in the United States. The company investment portfolio includes companies in the following industries: media, marketing and entertainment, distribution, retail, industrial, consumer, paper and forest products, business, upstream energy, environmental, healthcare, financial, industrial, consumer, and software and information technology services, transportation and logistics, telecommunications, and restaurants. Capital Southwest was founded on April 19, 1961 and is headquartered in Dallas, TX.

Company profile

Bowen Diehl
Fiscal year end
IRS number

CSWC stock data



2 Feb 21
17 Apr 21
31 Mar 22
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Dec 20 Sep 20 Jun 20 Mar 20
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Annual (USD)
Mar 20 Mar 19 Mar 18 Mar 17
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Financial data from company earnings reports.

Date Owner Security Transaction Code Indirect 10b5-1 $Price #Shares $Value #Remaining
19 Mar 21 Christine Battist Common Stock Buy Aquire P No No 21.45 1,000 21.45K 6,191
11 Feb 21 Brooks David R Common Stock Buy Aquire P No No 20.5673 1,500 30.85K 30,000
10 Jun 20 Michael Scott Sarner Common Stock Grant Aquire A No No 0 55,527 0 248,563
10 Jun 20 Diehl Bowen S Common Stock Grant Aquire A No No 0 66,631 0 161,577

Data for the last complete 13F reporting period. To see the most recent changes to ownership, click the ownership history button above.

29.7% owned by funds/institutions
13F holders
Current Prev Q Change
Total holders 71 58 +22.4%
Opened positions 18 4 +350.0%
Closed positions 5 12 -58.3%
Increased positions 24 16 +50.0%
Reduced positions 18 25 -28.0%
13F shares
Current Prev Q Change
Total value 104.65M 80.76M +29.6%
Total shares 5.9M 5.75M +2.6%
Total puts 11.9K 0 NEW
Total calls 12.4K 24.1K -48.5%
Total put/call ratio 1.0
Largest owners
Shares Value Change
Punch & Associates Investment Management 884.62K $15.7M -20.6%
Sanders Morris Harris 865.72K $15.37M +2.9%
Zuckerman Investment 846.39K $15.02M -1.8%
First Manhattan 472.79K $8.39M -3.5%
Van Eck Associates 278.38K $4.94M +20.8%
ARES Ares Management 257.71K $4.57M +3.3%
Arrowstreet Capital, Limited Partnership 156.52K $2.78M +28.8%
Advisors Asset Management 141.75K $2.52M -1.8%
Grace & White 134.8K $2.39M -6.7%
Confluence Investment Management 132.6K $2.35M +102.4%
Largest transactions
Shares Bought/sold Change
Punch & Associates Investment Management 884.62K -229.9K -20.6%
Millennium Management 115.73K +71.37K +160.9%
Confluence Investment Management 132.6K +67.08K +102.4%
Two Sigma Investments 81K +65.9K +436.3%
Centric Wealth Management 61.9K +61.9K NEW
Quadrature Capital 60.63K +60.63K NEW
Ariel Investments 96.6K -59.56K -38.1%
Radcliffe Capital Management 0 -57.96K EXIT
Legacy Capital Wealth Partners 54.04K +54.04K NEW
Van Eck Associates 278.38K +47.96K +20.8%

Financial report summary

  • Item 1A. Risk Factors
  • Our financial condition and results of operations will depend on our ability to effectively allocate and manage capital.
  • Any unrealized losses we experience may be an indication of future realized losses, which could reduce our income available to make distributions.
  • Our business model depends to a significant extent upon strong referral relationships. Our inability to maintain or develop these relationships, as well as the failure of these relationships to generate investment opportunities, could adversely affect our business.
  • All of our assets are subject to security interests under our secured Credit Facility and if we default on our obligations under the Credit Facility, we may suffer adverse consequences, including foreclosure on our assets.
  • In addition to regulatory limitations on our ability to raise capital, our current debt obligations contain various covenants, which, if not complied with, could accelerate our repayment obligations under the Credit Facility thereby materially and adversely affecting our liquidity, financial condition, results of operations and ability to pay distributions.
  • Because we borrow money to make investments, the potential for gain or loss on amounts invested in us is magnified and may increase the risk of investing in us.
  • If we do not invest a sufficient portion of our assets in qualifying assets, we could fail to qualify as a BDC or be precluded from investing according to our current business strategy.
  • A failure on our part to maintain our status as a BDC would significantly reduce our operating flexibility.
  • Even if the Company qualifies as a regulated investment company, it may face tax liabilities that reduce its cash flow.
  • A substantial portion of our portfolio investments are not publicly traded. As a result, the fair value of these investments may not be readily determinable and will be recorded at fair value as determined in good faith and under the direction of our Board of Directors. As a result, there may be uncertainty as to the value of our portfolio investments.
  • We are currently operating in a period of capital markets disruptions and economic uncertainty. Such market conditions may materially and adversely affect debt and equity capital markets, which may have a negative impact on our business, financial condition and operations.
  • Events outside of our control, including public health crises, could negatively affect our portfolio companies and our results of our operations.
  • Global economic, political, regulatory and financial conditions, including uncertainty about the financial stability of the United States, may adversely affect our business, results of operations and financial condition, including our revenue growth and profitability.
  • Significant developments stemming from the United Kingdom’s referendum on membership in the European Union could have a material adverse effect on us.
  • Changes in the laws or regulations governing our business or the operations of our portfolio companies, changes in the interpretations thereof of newly enacted laws or regulations, and any failure by us to comply with these laws or regulations, could require changes to certain business practices of us or our portfolio companies, negatively affect the profitability of the operations, cash flows or financial condition of us or our portfolio companies, impose additional costs on us or our portfolio companies or otherwise adversely affect our business or the business of our portfolio companies.
  • Adverse market and economic conditions could cause harm to our operating results.
  • Our success depends on attracting and retaining qualified personnel in a competitive environment.
  • Effective April 25, 2019, our asset coverage requirement was reduced from 200% to 150%, which could increase the risk of investing in the Company.
  • Efforts to comply with the Sarbanes-Oxley Act involve significant expenditures, and non-compliance with the Sarbanes-Oxley Act may adversely affect us.
  • Our ability to enter into transactions with our affiliates is restricted.
  • Regulations governing our operation as a BDC will affect our ability to, and the way in which we, raise additional capital.
  • Shareholders may incur dilution if we sell shares of our common stock in one or more offerings at prices below the then current NAV per share of our common stock or issue securities to convert to shares of our common stock.
  • We cannot predict how tax reform legislation will affect us, our investments, or our shareholders, and any such legislation could adversely affect our business.
  • We are highly dependent on information systems and systems failures could significantly disrupt our business, which may, in turn, have a material adverse effect on our operating results and negatively affect the market price of our common stock and our ability to pay dividends to our shareholders.
  • Terrorist attacks, acts of war or natural disasters may affect any market for our common stock, impact the businesses in which we invest and harm our business, operating results and financial condition.
  • Our business and operations may be negatively affected if we become subject to securities litigation or shareholder activism, which could cause us to incur significant expense, hinder execution of our investment strategy and impact our stock price.
  • Our investments in portfolio companies involve a number of significant risks.
  • The lack of liquidity in our investments may adversely affect our business.
  • Defaults by our portfolio companies could harm our operating results.
  • Prepayments of our debt investments by our portfolio companies could adversely impact our results of operations and reduce our return on equity.
  • Changes in interest rates may affect our cost of capital, the value of investments and net investment income.
  • There may be circumstances in which our debt investments could be subordinated to claims of other creditors or we could be subject to lender liability claims.
  • As a RIC, we may have certain regulatory restrictions that could preclude us from making additional investments in our portfolio companies.
  • Changes relating to the LIBOR calculation process may adversely affect the value of the LIBOR-indexed, floating-rate debt securities in our portfolio.
  • We generally will not control our portfolio companies.
  • Second priority liens on collateral securing loans that we make to our portfolio companies may be subject to control by senior creditors with first priority liens. Further, in cases where we invest in unsecured subordinated debt, we would not have any lien on the collateral. In each of these cases, if there is a default, the value of the collateral may not be sufficient to repay in full both the first priority creditors and us.
  • Our portfolio companies may incur debt that ranks equally with, or senior to, our investments in those companies.
  • Investing in shares of our common stock may involve an above average degree of risk.
  • Shares of closed-end investment companies, including BDCs, may trade at a discount to their net asset value.
  • The December 2022 Notes and the October 2024 Notes will be unsecured and therefore will be effectively subordinated to any existing and future secured indebtedness, including indebtedness under our Credit Facility.
  • The indenture under which the December 2022 Notes and the October 2024 Notes were issued contain limited protection for holders of the December 2022 Notes and the October 2024 Notes.
  • We may not be able to repurchase the October 2024 Notes upon a Change of Control Repurchase Event.
  • If we default on our obligations to pay our other indebtedness, we may not be able to make payments on the Notes.
  • We currently intend to pay quarterly dividends. However, in the future we may not pay any dividends depending on a variety of factors.
  • We currently pay dividends in cash. However, in the future we may choose to pay dividends in our own stock, in which case you may be required to pay tax in excess of the cash you receive.
  • We may not be able to invest a significant portion of the net proceeds from future capital raises on acceptable terms, which could harm our financial condition and operating results.
  • Terms relating to redemption may materially adversely affect the return on our debt securities.
  • Provisions of the Texas law and our charter could deter takeover attempts and have an adverse impact on the price of our common stock.
Management Discussion
  • Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations
  • The information contained herein may contain “forward-looking statements” based on our current expectations, assumptions and estimates about us and our industry. These forward-looking statements involve risks and uncertainties. Words such as “may,” “predict,” “will,” “continue,” “likely,” “would,” “could,” “should,” “expect,” “anticipate,” “potential,” “estimate,” “indicate,” “seek,” “believe,” “target,” “intend,” “plan,” or “project” and other similar expressions identify forward-looking statements. These risks include risks related to changes in the markets in which the Company invests; changes in the financial and lending markets; regulatory changes; tax treatment and general economic and business conditions; and uncertainties associated with the impact from the COVID-19 pandemic, including its impact on the global and U.S. capital markets and the global and U.S. economy, the length and duration of the COVID-19 outbreak in the United States as well as worldwide and the magnitude of the economic impact of that outbreak; the effect of the COVID-19 pandemic on our business prospects and the operational and financial performance of our portfolio companies, including our ability and their ability to achieve their respective objectives, and the effects of the disruptions caused by the COVID-19 pandemic on our ability to continue to effectively manage our business. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements that are subject to risks, uncertainties and assumptions. Our actual results could differ materially from those we express in the forward-looking statements as a result of several factors more fully described in “Risk Factors” and elsewhere in our Form 10-K for the fiscal year ended March 31, 2020 and in this Form 10-Q. The forward-looking statements made in this Form 10-Q relate only to events as of the date on which the statements are made. You should read the following discussion in conjunction with the consolidated financial statements and related footnotes and other financial information included in our Form 10-K for the fiscal year ended March 31, 2020. We undertake no obligation to update publicly any forward-looking statements for any reason, whether as a result of new information, future events or otherwise, except as required by law.
  • We are an internally managed closed-end, non-diversified management investment company that has elected to be regulated as a BDC under the 1940 Act. We specialize in providing customized debt and equity financing to LMM companies and debt capital to UMM companies in a broad range of investment segments located primarily in the United States. Our investment objective is to produce attractive risk-adjusted returns by generating current income from our debt investments and capital appreciation from our equity and equity related investments. Our investment strategy is to partner with business owners, management teams and financial sponsors to provide flexible financing solutions to fund growth, changes of control, or other corporate events. We invest primarily in senior debt securities, secured by security interests in portfolio company assets, and in secured and unsecured subordinated debt securities. We also invest in equity interests in our portfolio companies alongside our debt securities.
Content analysis
H.S. senior Avg
New words: calendar, expanded, merged, merger, Sky, Supplementary, surviving
Removed: consulting, insider, met, terminate, writing