Core Viewpoint - Kingsway Financial Services Inc. reported a wider loss per share in Q3 fiscal 2024 compared to the previous year, despite an increase in revenues driven by both business segments [1][5]. Revenue Analysis - Kingsway Financial registered revenues of $27.1 million in Q3 fiscal 2024, reflecting a 9.5% year-over-year increase [2]. - The Extended Warranty segment generated $17.8 million in service fee and commission revenues, up 3.4% year over year [3]. - The Kingsway Search Xcelerator segment saw revenues of $9.3 million, marking a 23.3% year-over-year increase [3]. Operating Expenses - General and administrative expenses rose by 15% year over year to $11.9 million [4]. - The cost of services sold increased by 9.5% year over year to $6.8 million [4]. - Claims authorized on vehicle service agreements increased by 7.5% year over year to $6.3 million, while commissions rose by 8.9% to $2.8 million [4]. Profitability Metrics - The operating loss for Q3 fiscal 2024 was $0.7 million, compared to a loss of $0.2 million in the same quarter last year [5]. - The net loss for the quarter was $2.3 million, wider than the $0.7 million loss reported in the prior year [5]. - Adjusted EBITDA increased by 27.8% year over year to $2.9 million [5]. Liquidity and Cash Flow - Kingsway Financial ended Q3 fiscal 2024 with cash and cash equivalents of $6.7 million, down from $9.8 million at the end of Q2 [6]. - Cumulative net cash provided by operating activities was $1.2 million, a significant improvement from the $25.3 million used in operating activities a year ago [6]. Strategic Developments - During the reported quarter, Kingsway Financial acquired Image Solutions LLC, an IT managed services provider, and completed the sale of the VA Layfette subsidiary, which raises optimism about the company's future prospects [7].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, par value $0.01 per share KFS New York Stock Exchange FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarterly Period Ended September 30, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from _____ to _ ...

Revenue Performance - Consolidated revenue increased by 9.5% to $27.1 million for Q3 2024, compared to $24.8 million in Q3 2023[1] - Extended Warranty revenue rose by 3.4% to $17.8 million in Q3 2024, while Kingsway Search Xcelerator (KSX) revenue surged by 23.3% to $9.3 million[1] Profitability and Loss - Consolidated net loss for Q3 2024 was $2.3 million, compared to a net loss of $0.7 million in the prior year period[1] - Adjusted consolidated EBITDA increased by 27.8% to $2.9 million for Q3 2024, compared to $2.3 million in Q3 2023[2] - The twelve-month run-rate adjusted EBITDA for operating companies is projected between $18.5 million and $19.5 million[2] Debt and Equity - Total net debt increased to $52.0 million as of September 30, 2024, up from $35.3 million as of December 31, 2023[6] - The company repurchased 312,850 shares of common stock at a cost of $2.5 million year-to-date through November 1, 2024[5] - The company issued 330,000 shares of convertible preferred stock for proceeds of $8.25 million, which were utilized for the Image Solutions acquisition[6] Segment Performance - GAAP Operating Income for the Extended Warranty segment for the twelve months ended September 30, 2024, was $6,405,000, compared to $7,361,000 for the same period in 2023, representing a decrease of approximately 13%[17] - Non-GAAP adjusted EBITDA for the Extended Warranty segment for the three months ended September 30, 2024, was $2,072,000, an increase from $2,122,000 in the same period of 2023, indicating a slight decline of about 2%[17][18] - GAAP Operating Income for the KSX segment for the twelve months ended September 30, 2024, was $4,984,000, down from $5,322,000 in 2023, reflecting a decrease of approximately 6%[20][21] - Non-GAAP adjusted EBITDA for the KSX segment for the three months ended September 30, 2024, was $1,313,000, compared to $1,105,000 in the same period of 2023, showing an increase of about 19%[20][21] - The Extended Warranty segment's total Non-GAAP adjusted EBITDA for the twelve months ended September 30, 2024, was $7,898,000, compared to $8,659,000 for the same period in 2023, representing a decrease of approximately 9%[17][18] - The KSX segment's total Non-GAAP adjusted EBITDA for the twelve months ended September 30, 2024, was $5,916,000, compared to $5,687,000 for the same period in 2023, indicating an increase of about 4%[20][21] Investments and Acquisitions - The company completed the acquisition of Image Solutions LLC for $19.5 million in cash, enhancing its IT services portfolio[4] - Kingsway appointed Rob Casper as the newest Operator-in-Residence in the KSX platform, indicating ongoing expansion efforts[4] Other Financial Metrics - Total Non-GAAP adjustments for the Extended Warranty segment for the twelve months ended September 30, 2024, amounted to $1,493,000, compared to $1,298,000 for the same period in 2023, representing an increase of approximately 15%[17][18] - Investment income for the Extended Warranty segment for the three months ended September 30, 2024, was $327,000, up from $273,000 in the same period of 2023, indicating an increase of about 20%[17][18] - Employee costs for the KSX segment for the three months ended September 30, 2024, were $120,000, compared to $87,000 in the same period of 2023, reflecting an increase of approximately 38%[20][21] - Depreciation for the KSX segment for the three months ended September 30, 2024, was $22,000, a decrease from $64,000 in the same period of 2023, indicating a decline of about 66%[20][21]

Core Points - Kingsway Financial Services Inc. is conducting a conference call to discuss its acquisition of Image Solutions LLC [1][3] - Key participants in the call include the CEO of Kingsway, the CFO, and the incoming CEO of Image Solutions [3] Company Overview - The conference call is hosted by James Carbonara from Hayden IR [2] - The call includes forward-looking statements regarding expected revenue, operating margins, expenses, and future business outlook [4] - The company may use non-GAAP metrics to analyze performance, with reconciliations available in periodic SEC filings [5]

Summary of Kingsway Financial Services Inc. Conference Call on Acquisition of Image Solutions LLC Company and Industry Overview - **Company**: Kingsway Financial Services Inc. (NYSE: KFS) - **Acquisition Target**: Image Solutions LLC - **Industry**: IT Managed Services and Hardware as a Service Key Points from the Conference Call Acquisition Details - Kingsway acquired Image Solutions LLC for **$19.5 million** in cash, plus transaction expenses and a small working capital adjustment [7] - The acquisition is funded through **$11.4 million** in cash and a **$7.7 million** debt facility [12] - Image Solutions is the **sixth acquisition** in Kingsway's growing Kingsway Search Xcelerator (KSX) portfolio [8] Financial Performance of Image Solutions - For the 12 months ending June 30, 2024, Image Solutions reported **$9.8 million** in unaudited revenue and **$3.1 million** in unaudited adjusted EBITDA [11] - The acquisition valuation represents approximately **2.3 times revenue** and **6.3 times adjusted EBITDA** [11] - Image Solutions has maintained EBITDA margins exceeding **30%** over the last two years [11] Business Model and Growth Potential - Image Solutions operates in a **highly fragmented** and growing industry, with both managed service provider (MSP) and hardware as a service sectors expected to grow at **11% to 12% CAGR** over the next decade [33] - Approximately **30%** of Image Solutions' revenue comes from MSP services, which have grown at an average rate of **25% year-over-year** for the past three years [18] - The company has a **2% revenue churn rate** and **80%** of its revenue is contractually recurring, indicating strong client retention [19][20] Strategic Focus and Future Plans - The company plans to leverage the Kingsway Business System Playbook to establish processes and dedicated business development capabilities [25] - Future growth opportunities include expanding service lines such as **cybersecurity** and **cloud storage**, as well as geographic expansion beyond current markets [26][40] - The management emphasizes the importance of customer retention and new customer acquisition as key components of their growth strategy [25] Impact of Hurricane Helene - Image Solutions was minimally affected by Hurricane Helene, maintaining operations and power throughout the storm [23] - The company anticipates a full recovery by year-end, with only temporary deferrals in installations expected [24] Management Insights - The transition of Davide Zanchi from Operator-in-Residence to CEO of Image Solutions is seen as a positive move, with expectations for strong leadership and growth under his guidance [27] - Kingsway is actively seeking additional Operator-in-Residence candidates to support future acquisitions and growth goals [28] Market Dynamics - The IT managed services market is characterized by increasing outsourcing of IT management, making MSPs essential for operational efficiency [18] - Image Solutions is well-positioned to capitalize on this trend, integrating equipment sales and support into long-term contracts [18] Additional Important Insights - The acquisition is viewed as a milestone in Kingsway's Xcelerator program, with expectations for significant shareholder value creation [27] - The management team is focused on maintaining high margins while investing in business growth [35] This summary encapsulates the key points discussed during the conference call regarding the acquisition of Image Solutions LLC by Kingsway Financial Services Inc., highlighting the financial performance, strategic focus, and market dynamics of the IT managed services industry.

An eternal debate among the investment community is whether it is preferable to bet on the horse or the jockey of a particular company. In this case, the horse is a metaphor for the industry and business model of the company in question. The jockey refers to the senior management team, and in particular the CEO, who steers and directs the company. Can a business model or industry be so compelling or strong that any jockey could essentially lead it to victory? While there is no doubt that some combination of ...

Zacks Investment Research has recently initiated coverage of Kingsway Financial Services Inc. (KFS) , assigning a "Neutral" recommendation to the company's shares. This assessment comes amid a mixed outlook for the company, which has been making notable strides in the extended warranty and business services space despite industry challenges. KFS, currently operating from Chicago, IL, operates as a holding company with subsidiaries focused primarily on the extended warranty and business services sectors. It ...

Kingsway Financial Services Inc. (NYSE:KFS) Q2 2024 Earnings Conference Call August 6, 2024 5:00 PM ET Company Participants James Carbonara - Investor Relations John T. Fitzgerald - Chief Executive Officer Kent A. Hansen - Executive Vice President and Chief Financial Officer Conference Call Participants Adam Patinkin - David Capital Operator Good day, and welcome to the Kingsway Second Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will fo ...

Exhibit 99.1 KINGSWAY REPORTS SECOND QUARTER 2024 FINANCIAL RESULTS Management to Host Conference Call Today at 5 p.m. ET Chicago - (August 6, 2024) - (NYSE: KFS) Kingsway Financial Services Inc. ("Kingsway" or the "Company") today announced its operating results for the three and six months ended June 30, 2024. Second Quarter 2024 Consolidated Financial Highlights ● Consolidated revenue increased 1.0% to $26.4 million for the three months ended June 30, 2024, compared to $26.2 million in the prior year per ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarterly Period Ended June 30, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from _____ to _____ Commission File Number: 001-15204 Kingsway Financial Services Inc. (Exact name of registrant as specified in its charter) Delaware (State or other j ...