Capital Southwest Corporation (CSWC) 2026 Q4 法說會逐字稿

Thank you for joining today's Capital Southwest fourth quarter fiscal year 2026 earnings call. Participating on today's call are Michael Sarner, Chief Executive Officer; Chris Rehberger, Chief Financial Officer; Josh Weinstein, Chief Investment Officer; and Amy L. Baker, Executive Vice President, Accounting.

感謝您參加今日 Capital Southwest 2026 會計年度第四季財報電話會議。今日與會者包括：執行長 Michael Sarner；財務長 Chris Rehberger；投資長 Josh Weinstein；以及會計執行副總裁 Amy L. Baker。

I will now turn the call over to Amy Baker.

我現在把電話交給 Amy Baker。

Thank you. I would like to remind everyone that in the course of this call, we will be making certain forward-looking statements. These statements are based on current conditions, currently available information, and management's 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 such statements. For information concerning these risks and uncertainties, see Capital Southwest's publicly available filings with the SEC. The company does not undertake any obligation to 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, except as required by law.

謝謝。我想提醒各位，在本次電話會議過程中，我們將作出若干前瞻性陳述。這些陳述係基於目前狀況、目前可得資訊，以及管理層的預期、假設與信念。其不構成對未來結果的保證，且受多項風險、不確定性與假設影響，可能導致實際結果與該等陳述存在重大差異。有關這些風險與不確定性的資訊，請參閱 Capital Southwest 向美國證券交易委員會（SEC）提交並公開可得的申報文件。除法律要求外，公司在本新聞稿日期之後，不因新資訊、未來事件、情勢變化或任何其他原因而承擔更新或修訂任何前瞻性陳述之義務。

I will now hand the call over to our President and Chief Executive Officer, Michael Sarner.

我現在把電話交給我們的總裁兼執行長 Michael Sarner。

Thanks, Amy, and thank you, everyone, for joining us for our fourth quarter fiscal year 2026 earnings call. We're pleased to be with you today to discuss our fourth fiscal quarter and the 2026 fiscal year.

謝謝，Amy，也感謝各位參加我們 2026 會計年度第四季財報電話會議。我們很高興今天與各位一同回顧第四個會計季度以及 2026 會計年度的表現。

Overall, 2026 was an outstanding year for Capital Southwest by any measure. During the year, we grew our investment portfolio by approximately $300 million, or 17%, from $1.8 billion to $2.1 billion. Deal activity was robust, with $762 million in new committed investment originations. Additionally, we grew investment income by $28 million, or 14%, from $204 million to $232 million. And despite a backdrop of pronounced volatility, we preserved the value of our portfolio.

整體而言，2026 年對 Capital Southwest 來說，無論以任何指標衡量都是非常出色的一年。在這一年中，我們的投資組合規模增加約 3 億美元（約 17%），由 18 億美元成長至 21 億美元。交易活動相當活躍，新承諾投資起始金額達 7.62 億美元。此外，我們的投資收益增加 2,800 萬美元（約 14%），由 2.04 億美元提升至 2.32 億美元。即便在波動顯著的背景下，我們仍維持了投資組合的價值。

NAV per share closed the year at $16.69, essentially unchanged from $16.70 in the prior year, underscoring the resilience of our platform and the durability of our underwriting. As a result of our consistent investment strategy and strong operating performance, we've delivered an industry-leading 40% return on equity for our shareholders during the fiscal year 2026. Despite relentless market disruptions this year, from Liberation Day to the private credit contagion to the conflict in Iran. We continue to execute with consistency. The market has recognized that stability, and our stock performance reflects the value of our approach.

每股淨資產價值（NAV）年末為 16.69 美元，與前一年度的 16.70 美元基本持平，凸顯我們平台的韌性與承作（underwriting）的耐久性。憑藉一致的投資策略與強勁的營運表現，我們在 2026 會計年度為股東帶來業界領先的 40% 股東權益報酬率。儘管今年市場干擾不斷，從「解放日」到私募信貸蔓延效應，再到伊朗衝突。我們仍持續以一致性執行。市場已認可這份穩定性，而我們的股價表現也反映了我們方法的價值。

The quality of our debt portfolio remains strong, reflected in a weighted average leverage of 3.6 times, weighted average interest coverage of 3.5 times, and non-accruals of 1.1% at fair value, down from 1.7% in the prior year. During the quarter, we saw improved performance across our watch list, with seven companies demonstrating meaningful progress and two removed from the watch list following a return to plan. We attribute much of this improvement to our Portfolio Operations group, which works closely with our deal teams on credits that require additional support. This team is driving tangible value at the portfolio level, which in turn contributes to stronger overall performance and enhanced long-term shareholder value.

我們的債務投資組合品質仍然強勁，體現在加權平均槓桿倍數 3.6 倍、加權平均利息保障倍數 3.5 倍，以及以公允價值計算的不計息（non-accrual）比率為 1.1%，較前一年度的 1.7% 下降。本季度，我們的觀察名單整體表現改善，其中 7 家公司展現顯著進展，另有 2 家在回到既定計畫後自觀察名單移除。我們將此改善很大一部分歸功於投資組合營運（Portfolio Operations）團隊；該團隊與交易團隊密切合作，協助需要額外支持的授信案。該團隊正在投資組合層面創造可衡量的價值，進而帶動更強的整體表現並提升股東長期價值。

Additionally, our equity portfolio continues to perform well with net unrealized appreciation of $37.8 million, or $0.62 per share as of the end of fiscal year 2026. We anticipate that a portion of this appreciation will be harvested as realized gains in fiscal year 2027, and thus will be available in our UTI bucket to support future dividend distributions. With $1.07 per share of undistributed taxable income, we're entering the year from a position of strength. Over the last 12 months, we have harvested $36.9 million in realized gains from equity exits, driving UTI growth from $0.79 per share in March 2025 to today's level. Our UTI balance highlights both the reliability of our realization engine and our conservative approach to dividend distributions when base rates were elevated, resulting in a meaningful balance of taxable income, which we intend to distribute to our shareholders over time.

此外，我們的股權投資組合持續表現良好，截至 2026 會計年度末，未實現淨增值為 3,780 萬美元，或每股 0.62 美元。我們預期其中一部分增值將在 2027 會計年度以已實現收益的形式落袋，並因此可納入我們的 UTI（未分配應稅所得）池，以支持未來股利分配。在每股 1.07 美元的未分配應稅所得下，我們以強勁的態勢進入新年度。過去 12 個月，我們透過股權退出已實現收益 3,690 萬美元，使 UTI 自 2025 年 3 月的每股 0.79 美元成長至目前水準。我們的 UTI 餘額凸顯了我們實現收益引擎的可靠性，以及在基準利率偏高時對股利分配採取保守作法；因此累積了可觀的應稅所得餘額，我們計畫隨時間推移分配給股東。

Looking ahead, we are confident in our ability to continue generating realized gains that will support and expand our UTI balance. That confidence is grounded in the strength of our investment strategy in the lower middle market. At origination, we typically see three distinct avenues for equity value creation. First, new investments often present low-hanging fruit opportunities, operational or strategic adjustments, the sponsor can implement immediately to drive meaningful EBITDA uplift.

展望未來，我們有信心持續創造已實現收益，以支持並擴大我們的 UTI 餘額。這份信心建立在我們於低中型市場（lower middle market）投資策略的優勢之上。在投資起始階段，我們通常看到三條清晰的股權價值創造途徑。第一，新投資往往存在「低垂果實」的機會，也就是贊助方可立即推動的營運或策略調整，以帶來顯著的 EBITDA 提升。

Second, following a change of control, the sponsor and management team activate a set of targeted growth initiatives designed to accelerate both revenue expansion and margin improvement. Third, in many cases, the team has already identified actionable M&A opportunities that can further scale the platform, broaden capabilities, and diversify the business. As EBITDA grows and the business becomes more resilient and diversified, we expect these initiatives to enhance enterprise value and ultimately result in realized gains on our equity investments.

第二，在控制權變更後，贊助方與管理團隊會啟動一系列聚焦的成長計畫，旨在加速營收擴張並改善利潤率。第三，在許多情況下，團隊已識別出可執行的併購（M&A）機會，可進一步擴大平台規模、拓展能力並分散業務結構。隨著 EBITDA 成長、企業更具韌性且更加多元化，我們預期這些舉措將提升企業價值，並最終在我們的股權投資上帶來已實現收益。

We were also extremely active during the year in diversifying our sources of capital. We raised over $465 million in new debt capital commitments in the form of $350 million, 5.9% bond issuance, $90 million in approved leverage commitments for our second SBIC fund, and an additional $25 million in new secured debt commitments on our corporate credit facility. Additionally, we raised over $160 million in gross equity proceeds on our ATM program during the year at a weighted average price of 1.3 times the prevailing NAV per share. Having continual access to the public equity market through the ATM program is a tremendous tool, which we can use in all market environments.

今年我們在資金來源多元化方面也非常積極。我們以 3.5 億美元、票面利率 5.9% 的債券發行、第二支 SBIC 基金 9,000 萬美元核准槓桿承諾，以及公司信用融資額度新增 2,500 萬美元擔保債務承諾的形式，合計募集超過 4.65 億美元的新債務資本承諾。此外，我們今年透過 ATM 計畫募集超過 1.6 億美元的股權總募資款，按加權平均價格計算約為當時每股 NAV 的 1.3 倍。透過 ATM 計畫持續進入公開股權市場是一項極佳工具，使我們能在各種市場環境中靈活運用。

We have also made meaningful progress on CapTrin Partners, our joint venture with Trinity Capital. The JV now holds approximately $85 million in assets, and we expect to continue originating low leverage, high-quality investments within this structure. Subsequent to quarter end, we closed a $150 million revolving credit facility, further expanding the JV's capacity and competitiveness. This facility provides the liquidity to meaningfully increase the scale of our joint venture over time and advance rates that should produce a 13% to 14% return once fully ramped.

我們在 CapTrin Partners（與 Trinity Capital 的合資企業）方面也取得了實質進展。該合資企業目前持有約 8,500 萬美元資產，我們預期將持續在此架構下承作低槓桿、高品質的投資。在季度結束後，我們完成了一筆 1.5 億美元的循環信用融資，進一步擴大合資企業的承作能力與競爭力。該融資提供流動性，使我們能隨時間顯著提升合資企業規模，並以預期可在完全爬坡後帶來 13% 至 14% 報酬率的預支率（advance rates）運作。

From a relationship standpoint, I could not be more impressed with Kyle and the entire Trinity team, and we look forward to exploring additional avenues where we can create value for both organizations. Finally, this year we continued our long track record of producing steady dividend distributions, consistent dividend coverage, and solid value creation. Despite a year in which SOFR shrunk by approximately 60 basis points. We increased our total dividends paid from $2.54 per share in fiscal year 2025 to $2.56 per share in fiscal year 2026.

就合作關係而言，我對 Kyle 以及 Trinity 全體團隊的表現印象深刻，我們也期待探索更多能為兩家機構創造價值的合作途徑。最後，今年我們延續長期以來穩健的股利分配紀錄、穩定的股利覆蓋率，以及扎實的價值創造。儘管今年 SOFR 約下降 60 個基點。我們仍將每股股利總額由 2025 會計年度的 2.54 美元提高至 2026 會計年度的 2.56 美元。

Dividend sustainability, strong credit performance, and continued access to capital from multiple capital sources are all core to our overall business strategy. Our track record in all these areas demonstrates consistent performance, as well as the absolute alignment of all our decisions with the interests of our fellow shareholders. Although broader middle market M&A headlines have highlighted a slowdown tied to technology uncertainty, AI-related risks, and inflation concerns stemming from the conflict in Iran. Our vantage point in the lower middle market tells a very different story.

股利的可持續性、強勁的信用表現，以及持續從多元資金來源取得資本，都是我們整體商業策略的核心。我們在上述各方面的紀錄展現了一貫的表現，也顯示我們所有決策與股東利益完全一致。儘管更廣泛的中型市場併購（M&A）新聞標題凸顯了因科技不確定性、AI 相關風險，以及伊朗衝突引發的通膨疑慮而導致的放緩。但我們在低中型市場的觀察角度呈現出截然不同的景象。

Activity in this segment has historically been and continues to be remarkably steady. Founder-driven catalysts such as retirement, succession planning, estate considerations, and the desire to de-risk after years of value creation do not fluctuate with macro sentiment or quarterly volatility. As a result, the lower middle market consistently offers a more resilient and predictable transaction environment. A characteristic that remains significantly underappreciated.

此分部的活動歷來一直、且至今仍然異常穩定。由創辦人驅動的催化因素，例如退休、接班規劃、遺產考量，以及在多年創造價值後希望降低風險，並不會隨著總體情緒或季度波動而起伏。因此，低中型市場一貫提供更具韌性且更可預測的交易環境。而這一特性仍被嚴重低估。

From a Capital Southwest perspective, we've seen a meaningful increase in new deals reviewed, advanced, and ultimately closed. However, our close rate, which historically averaged roughly 2%, has moderated to 1.5%. This decline reflects our continued discipline in pricing and structuring transactions based on the risk we underwrite, not simply the terms required to win a deal. We attribute the increase in deal flow to the continued development of our deal leads, the addition of two Managing Directors, and the joint venture, which has enhanced our competitiveness on higher quality opportunities. Despite this increase in deal flow, we've also seen tightening in leverage levels and loan-to-value ratios, underscoring the importance of maintaining our disciplined approach as the market continues to reprice risk.

從 Capital Southwest 的角度來看，我們看到新交易在審閱、推進並最終完成方面均有顯著增加。然而，我們的成交率（歷史平均約為 2%）已放緩至 1.5%。這一下降反映出我們在定價與交易結構上持續保持紀律，係基於我們所承擔的風險進行承作，而非僅為了贏得交易而迎合所需條款。我們將交易量增加歸因於交易線索的持續培育、兩位董事總經理的加入，以及合資企業的成立，這些因素提升了我們在更高品質機會上的競爭力。儘管交易量增加，我們也看到槓桿水準與貸款價值比（LTV）趨於收緊，凸顯在市場持續重新定價風險之際，維持我們紀律性作法的重要性。

In summary, we are extremely proud of our performance throughout fiscal year 2026, and we remain confident in the long-term prospects for our company and the opportunities ahead.

總結而言，我們對 2026 財政年度全年的表現感到非常自豪，並對公司長期前景及未來機會仍充滿信心。

I'll now hand the call over to Josh to review some more specifics of our investment activity.

接下來我將把電話會議交給 Josh，請他說明我們投資活動的更多細節。

Thanks, Michael. This quarter, we deployed a total of $158 million of new committed capital consisting of $112 million in first lien senior secured debt and $2 million of equity across five new portfolio companies. We also completed add-on financings for 12 existing portfolio companies, totaling $43 million in first lien senior secured debt, and $650,000 in equity. Add-on financing continued to be an important source of originations for us. Over the last 12 months, add-ons as a percent of total new commitments have been 31%.

謝謝，Michael。本季我們共部署了 1.58 億美元的新承諾資本，其中包括對五家新投資組合公司的 1.12 億美元第一順位擔保優先債務，以及 200 萬美元股權。我們也為 12 家既有投資組合公司完成加碼融資，合計 4,300 萬美元第一順位擔保優先債務，以及 65 萬美元股權。加碼融資仍是我們重要的案源來源。過去 12 個月，加碼案占新承諾總額的比例為 31%。

These opportunities allow us to deploy capital into businesses we know well with proven management teams and sponsors. The weighted average spread on our new commitments this quarter was approximately 6.6%, which we view as extremely attractive given today's competitive spread environment. Our on-balance sheet credit portfolio ended the quarter at $1.9 billion, representing 19% year-over-year growth from $1.6 billion as of March 2025. Importantly, 100% of our new portfolio company debt originations were first lien senior secured. And as of quarter end, 99% of the credit portfolio remained first lien senior secured with a weighted average exposure per company of only 0.9%.

這些機會使我們能將資本投入我們非常熟悉、且擁有經驗證的管理團隊與贊助方的企業。本季新承諾的加權平均利差約為 6.6%，在當前競爭激烈的利差環境下，我們認為極具吸引力。我們資產負債表內的信貸投資組合於季末達 19 億美元，較 2025 年 3 月的 16 億美元年增 19%。重要的是，我們本季所有新投資組合公司債務承作皆為第一順位擔保優先。且截至季末，信貸投資組合中 99% 仍為第一順位擔保優先，每家公司加權平均曝險僅 0.9%。

This level of portfolio granularity reflects our disciplined approach to risk management as we continue to scale the balance sheet. The vast majority of our deal activity continues to be in first lien senior secured loans to private equity-backed companies. Approximately 93% of our credit portfolio is sponsor-backed, which provides strong governance, operational support, and, when needed, the potential for junior capital. In the lower middle market, we frequently have the opportunity to invest on a minority basis in the equity of our portfolio companies pari passu with the private equity firm when we believe the equity thesis is compelling.

如此細緻的投資組合分散度，反映我們在持續擴大資產負債表規模時，對風險管理所採取的紀律性作法。我們絕大多數的交易活動仍集中於對私募股權支持公司的第一順位擔保優先貸款。約 93% 的信貸投資組合為贊助方支持，這帶來強而有力的治理、營運支援，並在需要時提供次順位資本的可能性。在低中型市場中，當我們認為股權投資論點具吸引力時，常有機會以少數股權方式，與私募股權公司同順位（pari passu）共同投資於投資組合公司的股權。

As of quarter end, our equity co-investment portfolio consisted of 87 investments with a total fair value of $181 million, representing 9% of our total portfolio at fair value. This portfolio was marked at 126% of our cost, representing $37.8 million of embedded unrealized appreciation, or $0.62 per share. These equity positions continue to give our shareholders meaningful upside participation in growing lower middle market businesses driven by both operational improvements and strategic add-on acquisitions.

截至季末，我們的股權共同投資組合包含 87 項投資，總公允價值為 1.81 億美元，占我們按公允價值計算之總投資組合的 9%。該投資組合以成本的 126% 入帳評價，代表內含未實現增值 3,780 萬美元，或每股 0.62 美元。這些股權部位持續讓股東能在成長中的低中型市場企業中獲得可觀的上行參與，成長動能來自營運改善與策略性加碼併購。

The lower middle market remains competitive, as this segment of the market continues to attract both bank and non-bank lenders. Although this environment has produced tighter loan pricing for higher quality opportunities, the depth and durability of our sponsor relationships our team has built, combined with the enhanced deal flow generated by our expanded and more seasoned investment staff, continue to position us to source and win transactions with compelling risk-return profiles.

低中型市場仍具競爭性，因為該市場區隔持續吸引銀行與非銀行放款人。儘管此環境使高品質機會的貸款定價更為緊縮，但我們團隊所建立之贊助方關係的深度與持久性，加上擴編且更資深的投資團隊所帶來的更強案源，仍使我們能夠發掘並贏得具吸引力風險報酬特性的交易。

Today, our portfolio includes investments from 88 unique private equity firms, and over the past 12 months, we closed 13 new platform investments with sponsors with which we had not previously partnered. Since launching our credit strategy, we have completed transactions with over 130 private equity firms nationwide, including more than 20% with whom we have completed multiple deals. Our portfolio now consists of 131 portfolio companies, allocated 90.1% to first lien senior secured debt, 1.2% to second lien senior secured debt, and 8.6% to equity co-investments. The credit portfolio generated a weighted average yield of 10.8% with weighted average leverage through our security of 3.6 times EBITDA. We remain pleased with the overall performance of the portfolio.

目前，我們的投資組合涵蓋來自 88 家不同私募股權公司的投資；在過去 12 個月中，我們與先前未合作過的贊助方完成了 13 筆新的平台型投資。自我們啟動信貸策略以來，已在全國與超過 130 家私募股權公司完成交易，其中超過 20% 的對象我們已完成多筆交易。我們的投資組合目前由 131 家投資組合公司構成，配置為：90.1% 第一順位擔保優先債務、1.2% 第二順位擔保優先債務，以及 8.6% 股權共同投資。信貸投資組合產生的加權平均收益率為 10.8%，以我們擔保順位計算之加權平均槓桿為 EBITDA 的 3.6 倍。我們對投資組合的整體表現仍感到滿意。

At origination, all loans are initially assigned an investment rating of 2 on a 5-point scale, with 1 being the highest rating, and 5 being the lowest rating. As of quarter end, 88% of the portfolio at fair value was rated in the top two categories. Cash flow coverage remains strong at 3.5 times, reflecting an improvement from the 2.9 times low observed during the peak of this rate cycle. This strength is further supported by the fact that our loans represent, on average, only 43% of portfolio company enterprise value. Our portfolio remains broadly diversified across industries, and our average exposure per company of less than 1% continues to provide meaningful protection against idiosyncratic risk.

在承作時，所有貸款最初均被賦予 5 點量表中的投資評等 2（1 為最高評等，5 為最低評等）。截至季末，按公允價值計算之投資組合中有 88% 評為前兩個等級。現金流覆蓋倍數仍維持強勁於 3.5 倍，較本輪利率循環高峰期觀察到的 2.9 倍低點有所改善。此強勁表現亦受到以下事實支持：我們的貸款平均僅占投資組合公司企業價值的 43%。我們的投資組合在產業間仍維持廣泛分散，而每家公司平均曝險低於 1% 亦持續提供對特定個別風險的實質保護。

For new platform deals closed during the March quarter, weighted average senior leverage was 2.7 times debt to EBITDA, and weighted average loan to value was 33%, providing a substantial equity cushion beneath our debt. Over the past 12 months, new platform originations have averaged 3.1 times senior leverage and 35% loan to value, underscoring our consistent commitment to conservative underwriting.

就 3 月季度完成的新平台型交易而言，加權平均優先槓桿為債務對 EBITDA 的 2.7 倍，加權平均貸款價值比（LTV）為 33%，在我們的債務之下提供了可觀的股權緩衝。過去 12 個月，新平台型承作平均為 3.1 倍優先槓桿與 35% LTV，凸顯我們對保守承作標準一貫且持續的承諾。

I will now hand the call over to Chris to review specifics of our financial performance for the quarter.

我現在將把電話會議交給 Chris，請他說明本季財務表現的細節。

Thanks, Josh. Specific to our performance for the quarter, pre-tax net investment income was $35.2 million, or $0.59 per share. For the quarter, total investment income decreased to $57.8 million from $61.4 million in the prior quarter. The decrease was primarily driven by a 2.2% increase in interest and dividend income and a decrease of $0.8 million in PIK income. The decrease in interest income was predominantly driven by a 35-basis-point decrease in SOFR compared to the prior quarter. As of the end of the quarter, our loans on non-accrual represented 1.1% of our investment portfolio at fair value, a decrease from 1.5% as of the end of the prior quarter.

謝謝，Josh。就本季表現而言，稅前淨投資收益為 3,520 萬美元，或每股 0.59 美元。本季總投資收益由前一季的 6,140 萬美元下降至 5,780 萬美元。下降主要由利息與股利收入增加 2.2% 以及 PIK 收入減少 80 萬美元所致。利息收入的下降主要是因 SOFR 較前一季下滑 35 個基點所驅動。截至季末，我們不計息（non-accrual）貸款按公允價值計算占投資組合的 1.1%，較前一季季末的 1.5% 下降。

During the quarter, we paid a $0.58 per share regular dividend, paid monthly, and a $0.06 per share supplemental quarterly dividend. For the June 2026 quarter, our Board has again declared a total of $0.58 per share in regular quarterly dividends, payable monthly in each of April, May, and June 2026. And maintained the $0.06 supplemental quarterly dividend, also payable in June, bringing total dividends declared to $0.64 per share. We continued to demonstrate strong dividend coverage with 109% cumulative coverage since launching our credit strategy.

本季我們支付每股 0.58 美元的例行股利（按月支付），並支付每股 0.06 美元的補充季度股利。就 2026 年 6 月季度而言，本公司董事會再次宣告每股合計 0.58 美元的例行季度股利，將於 2026 年 4 月、5 月與 6 月各月按月支付。並維持每股 0.06 美元的補充季度股利，同樣於 6 月支付，使宣告股利總額達每股 0.64 美元。自我們啟動信貸策略以來，累計股利覆蓋率達 109%，我們持續展現強勁的股利覆蓋能力。

With a UTI balance of $1.07 per share and a sizable unrealized appreciation balance in our equity portfolio, we remain confident in our ability to continue distributing quarterly supplemental dividends over time. LTM operating leverage ended the quarter at 1.4%, a meaningful improvement from 1.7% in the prior quarter. Notably, this reduction occurred despite the addition of six new employees. Going forward, we expect to continue to add resources to our team while maintaining operating leverage in the 1.4% to 1.5% range. Our operating leverage remains significantly better than the BDC industry median of approximately 2.7%, underscoring the inherent efficiency of the internally managed BDC model.

以每股 1.07 美元的 UTI 餘額，以及我們股票投資組合中可觀的未實現增值餘額，我們仍然有信心能夠隨時間持續發放季度補充股利。過去十二個月（LTM）營運槓桿在本季末為 1.4%，較前一季的 1.7% 有顯著改善。值得注意的是，這項下降發生在新增六名員工的情況下。展望未來，我們預期在持續增補團隊資源的同時，將營運槓桿維持在 1.4% 至 1.5% 的區間。我們的營運槓桿仍明顯優於 BDC 產業約 2.7% 的中位數，凸顯內部管理型 BDC 模式的固有效率。

This structure has consistently delivered meaningful fixed cost leverage to shareholders, while still enabling us to invest in talent and infrastructure as we continue to scale a best-in-class BDC platform. NAV per share decreased to $16.69 per share, down from $16.75 per share in the prior quarter. The primary drivers of the NAV per share decline for the quarter were net realized and unrealized depreciation on our investment portfolio, offset by accretion from our equity ATM program. We raised approximately $25 million in gross equity proceeds during the quarter through our equity ATM program at a weighted average share price of $23.13 per share, or 138% of the prevailing NAV per share, reinforcing our ability to raise capital efficiently and accretively.

此一架構持續為股東帶來具意義的固定成本槓桿，同時也讓我們能在持續擴大一流 BDC 平台規模的過程中，投資於人才與基礎設施。每股淨資產價值（NAV）降至每股 16.69 美元，低於前一季的每股 16.75 美元。本季每股 NAV 下滑的主要因素為投資組合的已實現與未實現減值，部分被我們股票 ATM 計畫帶來的增厚（accretion）所抵銷。本季我們透過股票 ATM 計畫募集約 2,500 萬美元的股權總募資金額，加權平均股價為每股 23.13 美元，相當於當期每股 NAV 的 138%，再次印證我們能以高效率且具增厚效果的方式籌資。

Our liquidity position remains robust, with approximately $394 million in cash and undrawn leverage commitments across our revolving credit facilities, plus $42 million available on SBA debentures. In total, this represents more than 1.3 times coverage of the $329 million in unfunded commitments across the portfolio. Regulatory leverage entered the quarter at 0.9 to 1 debt-to-equity. While our target leverage remains in the 0.85 to 0.95 times range.

我們的流動性部位仍然強勁，約有 3.94 億美元的現金與循環信用額度項下未動用的槓桿承諾，另有 SBA 債券可用額度 4,200 萬美元。合計而言，這相當於對投資組合中 3.29 億美元未撥款承諾的覆蓋倍數超過 1.3 倍。監管槓桿於本季初為負債對股權比 0.9 倍。而我們的目標槓桿仍維持在 0.85 倍至 0.95 倍的區間。

We continue to factor in the current macroeconomic backdrop and intend to maintain a prudent leverage cushion to help mitigate capital markets volatility. We will continue to raise secured and unsecured debt capital, as well as equity through our ATM program in a methodical and opportunistic manner to ensure we maintain significant liquidity and a conservatively constructed balance sheet with adequate covenant cushions.

我們持續將當前的總體經濟背景納入考量，並打算維持審慎的槓桿緩衝，以協助降低資本市場波動的影響。我們將持續以有計畫且把握機會的方式，募集有擔保與無擔保的債務資本，以及透過 ATM 計畫募集股權，以確保維持充足流動性，並打造保守的資產負債表結構與足夠的契約（covenant）緩衝。

I will now hand the call back to Michael for some final comments.

我現在把電話交回給 Michael，請他做一些最後的補充。

Thank you, Chris, Josh, and Amy, and all the employees who help us tell this story on a quarterly basis. Thank you, everyone, for joining us today. This concludes our prepared remarks.

謝謝 Chris、Josh 和 Amy，以及所有協助我們每季講述這段故事的員工。也謝謝各位今天加入我們。以上為我們事先準備的發言。

Operator, we are ready to open the lines for Q&A.

接線員，我們準備好開放問答。

(Operator Instruction) Erik Zwick, Lucid Capital Markets.

(接線員指示) Erik Zwick，Lucid Capital Markets。

Good morning. If I could start, I'm just curious with regard to the unrealized depreciation in the credit portfolio in the quarter. Was that primarily related to changing kind of market multiples or anything kind of more credit specific. Wondering if you could just expand on that a little bit.

早安。如果我可以先問，關於本季信貸投資組合的未實現減值，我有點好奇。那主要是因為市場倍數變動之類的因素，還是更偏向特定信用面因素？想請你們再多說明一下。

Yeah, I think we had one portfolio company that was added to our watch list that had a write-down, which we have confidence in the company, but it did have a fairly large write-down. And then the rest I do think multiples were down quite a bit this quarter, which is sort of an overhang when we went through our portfolio review. But we pretty much identified about 95% of the portfolio was doing exceptionally well. And yet some of those didn't have write-ups because of those multiples, but by and large it was just one company and then the overall market multiple.

是的，我想我們有一家投資組合公司被加入觀察名單並進行了減記；我們對該公司仍有信心，但確實出現了相當大的減記。其餘部分，我確實認為本季倍數下滑幅度不小，這在我們進行投資組合檢視時形成某種壓力。但我們基本上判定約 95% 的投資組合表現非常出色。然而其中一些因為倍數因素並未上調估值；總體而言，主要就是那一家公司以及整體市場倍數的影響。

I appreciate that. Just looking at the trajectory of the dividend income that you received in the most recent year, it was up markedly from the prior year from $4.5 million to $12.7 million, so curious how much of that increase is sustainable or how much that might have been kind of one-time dividends. Just any outlook, any thoughts on outlook you might have there would be helpful.

了解，謝謝。再看你們最近一年的股利收入走勢，較前一年從 450 萬美元大幅增加到 1,270 萬美元，因此我想了解這樣的增幅有多少是可持續的，或有多少可能屬於一次性的股利。若能提供一些展望或看法會很有幫助。

Sure. Yeah, we've had a few companies that have done exceptionally well and have been making large distributions. I think that in the first half of this fiscal year, we will continue to see strong distributions from these companies. One or both could be in the market for sale at some point, and so maybe that doesn't bleed into fiscal year 2028, but for the next few quarters, we should expect to continue to see those dividends. Thanks.

當然。是的，我們有幾家公司表現特別好，並且一直在進行較大額的分配。我認為在本財政年度上半年，我們將持續看到這些公司帶來強勁的分配。其中一家或兩家可能在某個時間點進入出售市場，因此也許不會延續到 2028 財年，但在接下來幾個季度，我們應該仍會持續看到這些股利。謝謝。

And last one for me, I look at the space of publicly traded BDCs, Capital Southwest has low exposure to software in the portfolio, which I guess puts you in a more favorable position relative to many peers, given the current market sentiment. Just curious why over time you have decided not to have that much exposure to software. And then in the instances where you have made some investments, what attracted you to those particular companies?

我最後一個問題：我看公開交易的 BDC 同業中，Capital Southwest 在投資組合中對軟體的曝險較低；在目前市場情緒下，這似乎讓你們相較許多同業處於更有利的位置。想請教為何長期以來你們選擇不對軟體有那麼多曝險。另外，在你們確實進行某些投資的情況下，是什麼吸引你們投資那些特定公司？

I think a lot of the software companies honestly are generally larger and more venture, so those two together generally wouldn't fit our lens. It could be said that a lot of these companies also have ARR, which we generally are cash flow lenders, and we believe that lending off a multiple of EBITDA is a more conservative and prudent way to underwrite. So I think that's generally been the reason why. It's not that we haven't seen the opportunities, we just never gotten truly comfortable with them.

我認為很多軟體公司坦白說通常規模更大、也更偏創投屬性，因此這兩點加在一起一般不符合我們的投資視角。也可以說，許多這類公司有 ARR（年度經常性收入），而我們通常是以現金流為基礎的放款人；我們認為以 EBITDA 倍數作為放款與承作依據，是更保守且更審慎的授信方式。所以我想這通常就是原因。並不是我們沒有看到機會，只是我們始終無法真正對這些機會感到安心。

I don't know, Josh, if you have --

Josh，我不知道你是否有--

Yes, Michael, we have seen them over the years and we've reviewed them. It's just not something any of us really have had a lot of experience with, and so we just couldn't really get comfortable or as comfortable with doing a lot of ARR deals and stuck to our knitting of cash flow lending for the most part.

是的，Michael，這些年來我們確實看過並審視過這類案子。只是我們幾位在這方面都沒有太多經驗，因此對於做大量 ARR 類型的交易，我們很難真正感到安心或同樣程度的安心；所以大多數情況下仍專注於我們熟悉的現金流放款。

I appreciate that and just looking back across your historical results, you've certainly done very well without it, so it's not like you've needed it. So thanks, I appreciate the insight there.

了解，謝謝。回頭看你們的歷史表現，即使沒有它你們也做得非常好，所以也不是說你們需要它。謝謝，我很感謝你們提供的見解。

(Operator Instructions) Robert Dodd, Raymond James.

(接線員指示) Robert Dodd，Raymond James。

Hi guys. On the operating efficiencies, your point, the 1.4% to 1.5% and the advantage of being internally managed, in this quarter, obviously some expenses seemed pretty low. Another advantage where that gets adjusted by the Board as you go. But can you give us any color about what was the driver there? Was it not hitting targets on deployment. Was it the fact that NAV was down, which may be temporary, but can you give us any ideas of what got factored into why that was low in the fourth quarter, just trying to get a feel for what didn't meet your expectations exactly?

嗨，各位。關於營運效率，你們提到 1.4% 到 1.5% 以及內部管理的優勢；在本季，顯然有些費用看起來相當低。另一個優勢是董事會會隨著情況進行調整。但你們能否提供一些背景，說明主要驅動因素是什麼？是因為投放（deployment）未達目標嗎？還是因為 NAV 下滑（可能是暫時的）？能否分享一些你們認為第四季之所以偏低的因素，讓我們了解有哪些地方沒有完全符合你們的預期？

Sure, and I wouldn't frame it that way at all. I think the Board and management felt that this was one of our strongest years for a variety of reasons. But we had accruals, essentially we had some large fees that came in over the year. We had some over-accruals into the bonus pool, and then at the end of the year, the Board gets together to basically determine what they think the final number should look like. And so from where we had accrued through three quarters to where the payout was in the fourth quarter, we had some that was backed out, but we paid over 100% in all cases for our employees, and again would frame this year as a very successful one.

當然，但我完全不會用那樣的方式來描述。我認為董事會與管理團隊覺得，基於多種原因，這是我們最強勁的年度之一。不過我們有一些應計項目；基本上，我們在年度內收到了一些較大的費用。我們在獎金池方面也有一些超額應計，而在年底時，董事會會聚在一起，基本上決定他們認為最終數字應該呈現的樣貌。因此，從我們前三季的應計水準到第四季的實際發放水準之間，有一部分被回沖；但在所有情況下我們對員工的發放都超過 100%，而且再次強調，我們會把今年視為非常成功的一年。

Yeah, Robert, I'll just jump in and sort of going forward, because it was kind of low in the last quarter. Total compensation expenses sort of in the $5.5 million per quarter range, that's a good number. That will vacillate a little bit based on the discussion we just had, but that's sort of what you can expect going forward.

好的，Robert，我先插一句，並談談接下來的情況，因為上一季確實偏低。總薪酬費用大致落在每季約550萬美元的區間，這是個不錯的數字。這個數字會依我們剛才討論的內容而略有波動，但大致上你往後可以這樣預期。

Got it. Then on the other one, I mean, to your point, you've got a lot of unrealized appreciation in the equity portfolio. Obviously, I don't have the March portfolio case, it is not out yet, but if I look at the fourth quarter, I mean, the net number is there is a lot of net unrealized appreciation, but as well, if you look just at the successes, you've got $100 million in appreciation on assets. And then that's offset by some that are down. Just listening to the comments, it sounds like you're very confident some of that is going to monetize this year.

了解。那另一個問題，我的意思是，正如你所說，你們的股票投資組合裡有不少未實現增值。顯然我還沒有3月的投資組合資料，因為還沒出，但如果我看第四季，整體淨額顯示有大量淨未實現增值；同時，如果只看表現好的部分，你們在資產上有1億美元的增值。然後也有一些是下跌的來抵銷。聽你們的評論，感覺你們非常有信心其中一部分會在今年變現。

Now it might result in lower dividend income, but what are those processes, are significant processes already underway by the sponsor, obviously, to sell assets this year that gives you that level of confidence. I mean, there are some like IT group, that is, there is a lot of appreciation in that asset, for example, right. So could you give us any incremental -- and I know it's a touchy kind of topic, but any incremental info on where the level of confidence comes from, and is it going to be some of your biggest appreciated assets that are likely to crystallize this year?

這可能會導致股利收入降低，但這些流程是什麼？贊助方是否已經在推動一些重要流程，顯然是為了在今年出售資產，讓你們有這樣的信心？我的意思是，有些像IT group，那個資產例如就有很大的增值，對吧。所以你們能否提供任何額外的——我知道這是個比較敏感的話題——任何額外資訊，說明這種信心的來源？以及今年可能會實現的，會不會是你們增值幅度最大的幾項資產？

Yeah, I think that there's two primary sales, I won't get into details, but one is actually been announced publicly that there is an IPO process which would result in us, we have shares in a company. We sold into a company that went public. We would have the ability to sell those shares, and we have actually floors on what the equity value would look like. So that is something that we would expect to see happen in the next three months, four months. And then we have another company that is in the market now, it is still in the nascent stages.

是的，我想主要有兩筆出售，我不會談細節，但其中一筆其實已經公開宣布，有一個IPO流程，這會使我們——我們持有一家公司的股份。我們投資的一家公司已經上市。我們將有能力出售那些股份，而且我們對股權價值的水準其實有設定底線。所以我們預期這件事會在接下來三到四個月內發生。另外我們還有另一家公司目前也在市場上，但仍處於相對初期的階段。

It is a fairly large position, but we feel pretty confident based on where we are that there should be a sale there. If you look at the cost base, it's relative to the fair value. Obviously, there are going to be large gains associated that will go into our UTI bucket. It will also allow us to reduce our cost of capital because obviously this is -- appreciation, if realized, now becomes the ability to pay down our credit facility and/or raise less shares. So all of that gives us confidence both in these exits and the ability to grow UTI and the ability to continue to support our dividend going forward.

那是一個相當大的部位，但基於我們目前的進展，我們相當有信心那裡會有一筆出售。如果你看成本基礎相對於公允價值。顯然，會有相當可觀的收益，將會進入我們的UTI（未分配應稅所得）池。這也會讓我們降低資金成本，因為顯然這是——增值一旦實現，就能用來償還我們的循環信貸額度，和/或減少發行股份。因此，這些都讓我們對這些退出、對UTI的成長，以及對未來持續支持股利發放的能力更有信心。

Understood, understood. If I got one more quick one. On the JV, I think you said, expected or by a target kind of return on capital to you from that vehicle 13% to 14% when fully ramped, obviously. I mean, is that like -- is the full ramp 18 months, or, I mean, I'm just kind of asking what is the timeframe to get to that in that vehicle with the partner you have?

了解，了解。我再問一個很快的問題。關於JV，我想你說，當那個載體完全爬坡後，預期或目標給你們的資本報酬率是13%到14%，當然是在完全到位的情況下。我的意思是——完全爬坡是18個月嗎？或者——我只是想問，和你們的合作夥伴一起，這個載體要多久才能達到那個水準？

Sure. So I think the notion would be it's going to take at least, I'm looking at Chris, 18 to 24 months before we see the full ramp. I think we're targeting 2 times leverage plus, and so I think it's going to take a little bit of time. I would say that we have the capital in-house, $150 million credit facility, in order to achieve that leverage and achieve those returns, but I do think we're looking at originating $30 million to $40 million a quarter in the fund. And so I think it's going to take at least 1.5 to 2 years.

當然。所以我想概念上，至少要——我看一下Chris——18到24個月，我們才會看到完全爬坡。我想我們的目標是2倍以上的槓桿，所以我認為需要一些時間。我會說，我們內部有資金，150百萬美元的信貸額度，用來達到那個槓桿並實現那些報酬；但我確實認為，我們在基金裡每季大概會承作3,000萬到4,000萬美元的新增案源。因此我認為至少需要1.5到2年。

Yeah, so Robert, we're going to be sort of efficient with the leverage there and try to be mindful of asset diversity and borrowing base. We'll probably try to ramp the leverage fairly in the short term here. So as we look ahead, I agree with Michael's comments, it's going to take kind of 18 months to full ramp. But in the next 6 months, it should start producing double-digit returns for Capital Southwest, so call it 6 months, we're kind of in the 11% range and then we go from there.

是的，所以Robert，我們會在那裡有效率地運用槓桿，並注意資產多元性與借款基礎。我們可能會在短期內嘗試把槓桿拉升得相當快。所以往前看，我同意Michael的評論，大概需要18個月才能完全爬坡。但在接下來6個月內，它應該就會開始為Capital Southwest帶來兩位數報酬，所以大概6個月時，我們在11%左右，然後再從那裡往上。

And Robert, I'd also like to add that the JV itself, so certainly there's going to be an uplift of a penny or two from this fund by itself. But having this joint venture has been really important to the business in the way of us being able to be more competitive on deals that are priced somewhere in the SOFR plus 5% to 5.75% range, which historically we weren't bidding or winning on. And so today, we have the ability to both bid and win on these deals, maintain tight structures, and as well as earn the same type of spreads, the 6% to 7% spread that we're used to through the last-out positions on these credits.

Robert，我也想補充，JV本身當然會讓這支基金單獨帶來約1到2美分的提升。但擁有這個合資企業，對我們的業務非常重要，因為它讓我們在一些定價落在SOFR加5%到5.75%區間的交易上更具競爭力，而過去我們通常不會出價或贏得這類交易。因此現在，我們既有能力出價並贏得這些交易，維持嚴謹的結構，同時也能透過這些信貸的最後順位（last-out）部位，賺取我們過去習慣的那種利差，也就是6%到7%的利差。

(Operator Instructions) Sean-Paul Adams, B. Riley Securities.

(接線員指示) Sean-Paul Adams，B. Riley Securities。

It looks like you guys have kind of ramped up in terms of employee count and perhaps a deal team. Any color on how just these changes and the amount of employees and perhaps the amount of deals passing your desk are going to look forward for next fiscal year's origination activity?

看起來你們在人員數量、也許還有交易團隊方面都有所擴編。能否談談這些變化、員工數量，以及可能送到你們桌上的交易量，對下一個會計年度的承作（origination）活動展望會是什麼樣子？

Sure. Look, when we look back around 18 months ago, we had 27 employees. Today, as of the quarter end, we had 36, and we actually have another 7 coming on, so we're going to be up to 43 employees. We built out our operations team over the last 18 months. We've added a new MD, a new Vice President, a new Principal, and certainly added more support staff on the back office.

當然。你看，大約18個月前回頭看，我們有27名員工。今天，截至本季季末，我們有36名，而且我們其實還會再加入7名，所以將增加到43名員工。過去18個月我們擴建了營運團隊。我們新增了一位新的董事總經理（MD）、一位新的副總裁（VP）、一位新的Principal，並且在後台也增加了更多支援人員。

And the notion here that with the new MD we have, with with the -- some maturation of the deal leads in place, and the ability to continue to win new share and new sponsor relationships. We're just seeing enhanced deal flow. Two years ago, I think we saw 800 deals that we looked at in one year. The run rate now is around 1,400 deals a year.

而這裡的想法是，隨著我們新加入的MD、以及現有交易線索的逐步成熟，再加上我們持續贏得新的市占與新的贊助方關係的能力。我們看到交易流量正在增加。兩年前，我想我們一年大概看了800筆交易。目前的年化速度大約是1,400筆交易。

So we are adding staff to support the growth that we're seeing and strengthen the organization to continue to make great decisions based on having the right people in the right place, having time and experience to review these opportunities.

因此，我們正在增聘人員，以支援我們看到的成長，並強化組織，確保把對的人放在對的位置上，並有足夠的時間與經驗來審視這些機會，從而持續做出很好的決策。

This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Michael Sarner for any further remarks.

今天節目的問答環節到此結束。我想把節目交回給Michael Sarner，請他做進一步的結語。

Thank you, operator, and thank you, everyone, for joining us today. Please feel free to call us anytime with questions or to get an update on the business. We look forward to catching up with you next quarter. Goodbye.

謝謝你，接線員，也謝謝各位今天加入我們。如有問題或想了解業務最新進展，歡迎隨時致電給我們。我們期待在下個季度再與各位交流。再見。

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.

謝謝各位女士先生參與今天的電話會議。本節目到此結束。您現在可以掛線。祝各位有美好的一天。