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 8, 2016
CAPITAL SOUTHWEST CORPORATION
(Exact Name Of Registrant As Specified In Charter)
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Texas
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814-00061
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75-1072796
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(State or Other Jurisdiction of Incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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5400 Lyndon B. Johnson Freeway, Suite 1300
Dallas, Texas 75240
(Address of Principal Executive Offices) (Zip Code)
Registrant’s telephone number, including area code: (972) 233-8242
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) |
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☐
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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| ☐ | 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)) |
| Item 2.02 | Results of Operations and Financial Condition. |
On February 8, 2016, 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, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1934, 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 9, 2016. 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 Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
| Item 9.01 | Financial Statements and Exhibits |
| (d) | Exhibits |
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Exhibit No.
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Description
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99.1
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Press release issued by Capital Southwest Corporation on February 8, 2016
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99.2
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Investor presentation slides
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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.
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Dated: February 8, 2016
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By:
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/s/ Bowen S. Diehl
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Name:
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Bowen S. Diehl
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Title:
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Chief Executive Officer and President
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EXHIBIT INDEX
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Exhibit No.
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Description
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Press release issued by Capital Southwest Corporation on February 8, 2016
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Investor presentation slides
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Exhibit 99.1
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Lincoln Centre Tower I
5400 Lyndon B. Johnson Freeway, Suite 1300
Dallas, Texas 75240
T 214.238.5700
F 214.238.5701
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Capital Southwest Announces Financial Results for Third Fiscal Quarter Ended December 31, 2015
CSWC Grows Portfolio to $135 million in Invested Assets
Dallas, Texas – February 8, 2016 – Capital Southwest Corporation (“Capital Southwest” or the “Company”; Nasdaq: CSWC) today announced its financial results for the third fiscal quarter ended December 31, 2015.
Financial Highlights
| • | Total Investment Portfolio: $134.9 million |
| ◦ | Total Credit Portfolio: $60.9 million |
| ◦ | Total Legacy Equity Portfolio: $45.6 million |
| ◦ | Total Investment in I-45 Senior Loan Fund (“I-45 SLF”): $28.4 million |
| ✓ | I-45 SLF portfolio consists of $84 million invested in 19 credits, predominantly 1st Lien |
| • | During the quarter, we completed the final stage of the planned divestitures of legacy Capital Southwest equity investments, which consisted of $3.2 million in sale proceeds and a realization of $8.2 million in capital losses. |
| ◦ | Total divestitures of legacy Capital Southwest equity investments since June 2014 have generated sales proceeds of $222 million and net capital gains of $169 million |
| • | Total Cash: $143.7 million |
| • | Total Net Assets: $270.8 million |
| • | Net Asset Value per Share: $17.22 |
| • | Weighted Average Yield on Debt Investments: 10.3% |
| • | No investment assets currently on non-accrual |
| • | Net Investment Loss of ($20) thousand |
| ◦ | Net Investment Loss includes $0.7 million of expenses associated with the spin-off |
| ◦ | Adjusted for specific spin-off related expenses, Net Investment Income would have been $0.7 million, or $0.04 / share |
In commenting on the Company’s results, Bowen Diehl, President and Chief Executive Officer, stated, “This quarter marks the end of our transformation to a credit focused BDC. We have largely completed the immediately planned divestitures of our legacy Capital Southwest equity investments and have made significant progress towards building and managing a diverse portfolio of credit investments. We saw strong deal flow during 2015, allowing us to make some very interesting investments in high quality companies. We have also been pleased with the ramp of I-45 SLF, which allowed for positive earnings at the fund and a dividend to the I-45 SLF equity holders during its first quarter of operations. Finally, our sizeable liquidity position, between Capital Southwest and I-45 SLF, allowed us to benefit from the recent dislocation in the markets.
Portfolio and Investment Activities
During the quarter ended December 31, 2015, the Company originated four credit investments totaling $18.6 million. The Company received proceeds related to the sales of certain equity securities in legacy investments totaling $3.2 million and recognized net realized losses on such sales totaling $8.2 million. New investment transactions which occurred during the quarter ended December 31, 2015 are summarized as follows:
360 Holdings III Corp., $7.0 million 1st Lien Senior Secured Debt: Three Sixty Group is a provider of branded merchandising programs to retailers, offering high-velocity, value-priced, proprietary consumer products and accessories.
Argon Medical Devices, $5.0 million 2nd Lien Senior Secured Debt: Argon is a global manufacturer of single-use specialty medical devices for interventional radiology and cardiology, vascular surgery, and critical care procedures.
Water Pik, Inc., $4.8 million 2nd Lien Senior Secured Debt: Water Pik is the largest designer, marketer, and supplier of branded consumer and professional oral health products and replacement showerheads.
Prepaid Legal Services, Inc., $1.8 million 2nd Lien Senior Secured Debt: Prepaid Legal is the largest provider of subscription-based legal and identity theft plans to the North American market.
Subsequent to quarter end, the Company originated three investments totaling $15.6 million. New investment transactions subsequent to quarter end are summarized as follows:
Chandler Signs, L.P., $6.0 million Senior Secured Subordinated Debt and Equity: Chandler Signs is a national, vertically integrated provider of exterior on premise signs for multi-site companies in a wide variety of end markets.
TaxAct, Inc., $5.0 million 1st Lien Senior Secured Debt: TaxAct, Inc. is a US provider of internet-enabled tax solutions for consumers, tax professionals, and small business owners.
Digital River Inc., $4.6 million 1st Lien Senior Secured Debt: Digital River is a leading provider of mission-critical, end-to-end outsourced e-commerce solutions to tier 1 and tier 2 enterprises across many industry verticals.
Third Fiscal Quarter 2016 Operating Results
For the quarter ended December 31, 2015, Capital Southwest reported total investment income of $3.3 million, compared to $1.1 million in the prior quarter. The increase in investment income was attributable to both an increase in debt investments outstanding and dividends paid from certain portfolio companies.
For the quarter ended December 31, 2015, total expenses (excluding tax expense) were $3.9 million, compared to $10.3 million in the prior quarter. The decrease in expenses was primarily due to one-time expenses related to the spin-off of CSW Industrials, Inc. (Nasdaq: CSWI) in the prior quarter, as well as the departure of certain employees that joined CSW Industrials. In the current quarter, there were $0.7 million of spin-off expenses recorded.
For the quarter ended December 31, 2015, there was a tax benefit of $0.6 million recorded compared to an expense of $0.1 million in the prior quarter. The increase was due to tax losses at Capital Southwest Management Company, a wholly-owned management company subsidiary.
For the quarter ended December 31, 2015, total net investment loss was ($20) thousand compared to a loss of $(9.3) million in the prior quarter. Excluding specific spin-off related expenses, net investment income was $0.7 million.
During the quarter ended December 31, 2015, Capital Southwest recorded net realized and unrealized losses on investments of $(1.1) million. The net decrease in net assets resulting from operations was $(1.1) million, compared to $(9.0) million in the prior quarter. The prior quarter included $7.9 million in one-time expenses related to the spin-off.
The company’s net asset value, or NAV, at December 31, 2015 was $17.22 per share, as compared to $17.68 at September 30, 2015. The reduction in NAV was primarily due to the $2.9 million tax paid on behalf of shareholders for net capital gains earned in 2015.
Liquidity and Capital Resources
At December 31, 2015 Capital Southwest had unrestricted cash and money market balances of approximately $143.7 million, total assets of approximately $286.6 million, and net assets of approximately $270.8 million. As of December 31, 2015, Capital Southwest had no borrowings outstanding.
Remarking on the Company’s liquidity position, Michael S. Sarner, Chief Financial Officer of the Company, stated, “This quarter we have continued to execute on our strategy of deploying capital into granular credit investments. We are thoughtfully constructing a portfolio which will allow us to effectively leverage our balance sheet as we deploy our available capital. Additionally, we are pleased that we were able to produce positive Net Investment Income before spin-off related expenses in the first quarter post separation.”
Share Repurchase Program
On January 25th, 2016, Capital Southwest announced that its board of directors authorized the repurchase of up to $10 million of its common stock at prices below the Company’s net asset value per share as reported in its most recent financial statements. The Board authorized the plan because it believes that the Company’s common stock may be undervalued from time to time due to market volatility.
Third Fiscal Quarter 2016 Financial Results Conference Call and Webcast
Capital Southwest has scheduled a conference call on Tuesday, February 9, 2016, at 11:00 a.m. Eastern Time to discuss the third fiscal quarter 2016 financial results. You may access the call by dialing 1-855-835-4076 and using the passcode 32876449 at least 10 minutes before the call. The call can also be accessed using the Investor Relations section of Capital Southwest’s website at www.capitalsouthwest.com, or by using http://edge.media-server.com/m/p/crw7xbye.
A telephonic replay will be available through February 16, 2016 by dialing 1-800-585-8367 and using the passcode 32876449. 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 Form 10-Q for the period ended December 31, 2015 to be filed with the Securities and Exchange Commission and Capital Southwest’s Third Fiscal Quarter 2016 Investor 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 publicly traded business development company, with approximately $271 million in net assets as of December 31, 2015. On September 30, 2015, Capital Southwest completed the spin-off to shareholders of its industrial businesses, CSW Industrials, Inc. Capital Southwest is a credit investment firm focused on supporting the acquisition and growth of middle market businesses with $5 to $20 million investments across the capital structure, including first lien, unitranche, second lien and subordinated debt, as well as non-control equity co-investments. Since Capital Southwest’s formation in 1961, it has always sought to invest in companies with strong management teams and sound financial performance. As a public company with a permanent capital base, Capital Southwest is fortunate to have 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 within the meaning of The Private Securities Litigation Reform Act of 1995 with respect to the business and investments of Capital Southwest. 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 and lending markets and general economic and business conditions.
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, 2015 and subsequent fillings with the Securities and Exchange Commission 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 Contacts:
Michael S. Sarner, Chief Financial Officer
214-884-3829
Exhibit 99.2
Capital Southwest CorporationQ3 2016 Earnings Presentation 5400 Lyndon B. Johnson Freeway, Suite 1300 | Dallas, Texas 75240 | 972.233.8242 | capitalsouthwest.com February 8, 2016
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 Capital Southwest, and future market demand. Any statements preceded or followed by or that include the words "believe," "expect," "intend," "plan," "should" or similar words, phrases or expressions or the negative thereof, or any other statements that are not historical statements are forward-looking statements. These statements are made on the basis of the current beliefs, expectations and assumptions of the management of Capital Southwest. 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. In light of these risks, uncertainties, assumptions, and other factors inherent in forward-looking statements, actual results may differ materially from those discussed in this presentation. Other unknown or unpredictable factors could also have a material adverse effect on Capital Southwest’s actual future results, performance, or achievements. For a further discussion of these and other 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, 2015 and its subsequent filings with the Securities and Exchange Commission. As a result of the foregoing, readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this presentation. Capital Southwest does not assume any obligation revise or to update these forward-looking statements to reflect any new information, subsequent events or circumstances, or otherwise, except as may be required by law. Forward-Looking Statements
Bowen S. DiehlChief Executive Officer and PresidentMichael S. SarnerChief Financial OfficerDouglas M. KelleyManaging DirectorChris RehbergerVP Finance Conference Call Participants
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 two years has resulted in a new Chairman, CEO, CFO, and credit teamIn December 2014, announced split into two separate companies with spin-off of industrial growth company (“CSW Industrials”; Nasdaq: CSWI) which was completed September 30th, 2015Over the past 18 months, CSWC has made significant strides towards rotating its investment portfolio from equity to credit CSWC Company Overview
Investment strategy designed with the end game in mind….Build a BDC portfolio that pays shareholders attractive sustainable dividends, funded from investment incomeAchieve granularity and diversity across asset classesEstablish balance between liquid and illiquid asset classesMaintain capital preservation as first priorityDemonstrate consistent NAV per share growth Match of fixed/floating rates with financing sources Asset Allocation & Investment Strategy
Support the acquisition and growth of companies in the Lower Middle Market Companies range from $3 to $20 million in EBITDATarget leverage of 2x – 4x Debt to EBITDA Commitment size up to $20 million with hold sizes of $5 MM to $15 MMOriginate both Sponsored and Non-sponsored debt investments across the capital structure, including first lien, unitranche, second lien and subordinated debtNon-control equity co-investments alongside debt investments Participate in First and Second Lien debt investments in the Upper Middle MarketCompanies typically have in excess of $50 MM in EBITDATarget leverage of 3x – 5.5x Debt to EBITDA Hold sizes of $5 MM to $7 MMFloating Rate debt securitiesMore liquid assets relative to Lower Middle Market investmentsCreates ability to invest/divest opportunistically based on market conditions and liquidity position Investment Focus
Maintaining Strict Investment Criteria Experienced Management Team with Meaningful Equity Ownership Relevant experience and track record of successSignificant economic interest in the future success of the company Strong Competitive Position Sustainable Business Model Diversification of Customers and Suppliers Ability of Capital Structure to Sustain Economic Cycles Significant Equity Value Supporting Debt Market leader in its business segmentsQuantifiable competitive advantage versus their competitors with barriers to entry Differentiated product and/or service that gives company a sustainable reason to existConsistent cash flow with ability to maintain margins Inability for any one customer to significantly affect the company’s financial performance and ability to service debtSustainability of supply and cost of inputs Capital structure appropriate for business model and industryDownside scenario modeling proves ability to sustain economic cycles while servicing debt with leverage inside enterprise value Underlying equity value sufficient to support debt in case of idiosyncratic business risks or economic cycles
Portfolio Rotation Focused on Credit 6/30/2014 (excl. CSWI Companies) 12/31/2015 Investable Assets Since June 2014, CSWC has made significant strides towards rotating its investment assets from equity to creditExited 21 portfolio companies for $222 MM in proceedsInvested $61 MM in 12 middle-market credit investmentsInvested $84 MM in 19 credits within I-45 Senior Loan Fund (“I-45”), a joint venture with Main Street CapitalBelow is a depiction of the asset rotation of the CSWC portfolio, excluding the businesses that were spun-off as CSW Industrials
Q3 2016 and Post-Quarter End Originations In Thousands Q3 2016 Portfolio Originations Name Industry Type Market Segment Par Value Yield Three Sixty Group Consumer Products & Retail 1st Lien Upper Middle Market $7,000 L + 9.0% (1% Floor) Argon Medical Devices Healthcare Products 2nd Lien Upper Middle Market $5,000 L + 9.5% (1% Floor) Water PIK Consumer Products & Retail 2nd Lien Upper Middle Market $4,781 L + 8.75% (1% Floor) Prepaid Legal Services Consumer Services 2nd Lien Upper Middle Market $1,750 L + 9.0% (1.25% Floor) Total $18,531 Portfolio Originations - Since Quarter End Name Industry Type Market Segment Principal Amount Yield Chandler Signs Services: Business Secured Subordinated Debt Lower Middle Market $4,500 12% Fixed Chandler Signs Services: Business Equity Lower Middle Market $1,500 N/A Tax Act / HD Vest Financial Services 1st Lien Upper Middle Market $5,000 L + 6.0% (1% Floor) Digital River Software & IT Services 1st Lien Upper Middle Market $4,632 L + 6.0% (1% Floor) Total $15,632
Portfolio Mix as of 12/31/15 at Fair Value By Investment Type By Industry Continuing to build a diverse investment portfolio
I-45 Senior Loan Fund Portfolio Detail By Investment Type By Industry I-45 Portfolio Statistics Total Principal Outstanding $83,689 Number of Issuers 19 Avg. Investment Size as a % of Portfolio 5.26% Wtd. Avg. Leverage of Investments 3.3x Wtd. Avg. Yield to Maturity 7.59% Wtd. Avg. Duration (Years) 4.5 Invested $28.8 MM of our $68 MM commitment in I-45 SLF
Financial HighlightsQ3 2016 Net Investment Loss of ($20 K) or ($0.00) per weighted average shareNet Investment Income of $0.7 MM or $.04 per weighted average share excluding spin-off related expensesGrew investment portfolio to $135 MM from $93 MM Positive cash flow from operations excluding spin-off expensesNo non-accruals or watch list companies within debt investment portfolio$144 MM in cash available for investment activityKey UpdatesImplemented $10 MM Share Repurchase PlanRamp of I-45 Senior Loan Fund ahead of plan due to opportunistic secondary purchases during the quarter $88 MM total assets, predominantly in first lien investments Raised $75 MM on Deutsche Bank Credit Facility (accordion up to 2x debt to equity) I-45 produced a dividend to CSWC of $265 K in first quarter of operations Q3 2016 Highlights
Key Highlights 1 NAV reduction attributed to $2.9 MM tax payment on behalf of shareholders and $1.1 MM of net portfolio depreciation.2 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 2.3 Excludes CSWC equity investment in I-45 Senior Loan Fund Quarter Ended 9/30/2015 Quarter Ended 12/31/2015 Financial Highlights Net Investment Loss Per Share ($0.60) ($0.00) NAV Per Share1 $17.68 $17.22 Cash & Cash Equivalents $184,111 $143,680 Debt to Equity 0.0x 0.0x Shares Outstanding 15,583 15,725 Weighted Average Shares Outstanding (Diluted) 15,680 15,751 Portfolio Statistics Fair Value of Debt Investments $45,115 $60,929 Average Debt Investment Hold Size $5,013 $5,077 Fair Value of Debt Investments as a % of Cost 100% 100% % of Debt Portfolio on Non-Accrual (at Fair Value) 0.3% 0.0% Weighted Average Investment Rating2 N/A 2.0 Weighted Average Yield on Debt Investments 10.11% 10.31% Total Fair Value of Investments $93,339 $134,935 Weighted Average Yield on all Investments 4.83% 11.28% Investment Mix (Debt vs. Equity)3 47% / 53% 57% / 43% Investment Mix (Yielding vs. Non-Yielding) 80% / 20% 89% / 11%
Balance Sheet Highlights (In Thousands, except per share amounts) Quarter Ended 9/30/2015 Quarter Ended 12/31/2015 Assets Portfolio Investments $93,339 $134,935 Cash & Cash Equivalents $184,111 $143,680 Other Assets $8,200 $7,965 Total Assets $285,650 $286,580 Liabilities Payable for Unsettled Transaction $0 $4,850 Income Tax Payable $0 $2,948 Other Liabilities $10,059 $7,997 Total Liabilities $10,059 $15,795 Shareholders Equity Net Asset Value $275,591 $270,785 Shares Outstanding at Period End 15,583 15,725 NAV per Share $17.68 $17.22 Debt to Equity 0.0x 0.0x
Income Statement Highlights (In Thousands, except per share amounts) Quarter Ended 9/30/2015 Quarter Ended 12/31/2015 Investment Income Interest Income $945 $1,415 Dividend Income $0 $1,612 Fees and Other Income $133 $280 Total Investment Income $1,078 $3,307 Expenses Cash Compensation $3,411 $1,675 Share Based Compensation $370 $195 General & Administrative $1,070 $1,354 Spin-off Related Expenses $5,474 $710 Total Expenses $10,325 $3,934 Income Tax Benefit (Loss) ($88) $607 Net Investment Loss ($9,335) ($20) Gain / (Loss) Net realized gain (losses) on investments ($3,396) ($8,170) Net increase (decrease) in unrealized appreciation of investments $3,783 $7,060 Net increase (decrease) in net assets resulting from operations ($8,948) ($1,130) Weighted Average Shares Outstanding 15,680 15,751 Net Investment Income Per Weighted Average Share ($0.60) ($0.00)
Investment Income Detail Constructing a portfolio of investments with recurring cash yield (In Thousands) Quarter Ended 9/30/2015 Quarter Ended 12/31/2015 Investment Income Breakdown Cash Interest $930 $1,392 Amortization of purchase discounts and fees $15 $23 Cash Dividends $0 $1,612 Management Fees $133 $275 Other Income (non-recurring) $0 $5 Total Investment Income $1,078 $3,307 Key Metrics Cash Income as a % of Investment Income 98.6% 99.3% % of Total Investment Income that is Recurring 100.0% 99.8%
Interest Rate Sensitivity Debt Portfolio Composition Impact of Base Rate Changes on Net Investment Income Note: Illustrative change in NII is based on a projection of our existing debt investments as of 12/31/15, adjusted only for changes in Base Rates. The I-45 Senior Loan Fund is comprised of 100% floating rate assets and liabilities. Change in Base Interest Rates Illustrative NII Change ($'s) Illustrative NII Change (Per Share) 50 bps ($34,814) ($0.00) 100bps $333,308 $0.02 150bps $732,988 $0.05 200bps $1,132,667 $0.07
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 Officer, Secretary & Treasurer William R. Thomas T. Duane Morgan Corporate Counsel David R. Brooks Investor Relations Thompson & Knight / Jones Day Dallas, TX Jack D. Furst Michael S. Sarner Capital Southwest Corporate Offices & Website 214-884-3829 5400 LBJ Freeway msarner@capitalsouthwest.com Transfer Agent 13th Floor American Stock Transfer & Trust Company, LLC Dallas, TX 75240 Securities Listing 800-937-5449 http://www.capitalsouthwest.com NASDAQ: CSWC www.amstock.com