Workflow
Kingsway(KFS) - 2024 Q3 - Quarterly Report
KFSKingsway(KFS)2024-11-06 21:34
Transcript

Financial Performance - The Company's revenue for the year ended December 31, 2023, was more than 100million[281].−InQ32024,KingswayFinancialServicesreportedsegmentoperatingincomeof100 million[281]. - In Q3 2024, Kingsway Financial Services reported segment operating income of 2.8 million, an increase of 0.1millionfromQ32023,withyear−to−dateincomeat0.1 million from Q3 2023, with year-to-date income at 8.0 million, down 0.8millioncomparedtotheprioryear[300].−Thecompanyreportedalossfromcontinuingoperationsof0.8 million compared to the prior year[300]. - The company reported a loss from continuing operations of 2.2 million in Q3 2024, compared to a loss of 0.8millioninQ32023,withayear−to−datelossof0.8 million in Q3 2023, with a year-to-date loss of 6.6 million compared to income of 25.2millioninthesameperiodlastyear[301].−KingswayFinancialServicesexperiencedanetlossof25.2 million in the same period last year[301]. - Kingsway Financial Services experienced a net loss of 2.3 million in Q3 2024, compared to a net loss of 0.7millioninQ32023,withayear−to−datenetlossof0.7 million in Q3 2023, with a year-to-date net loss of 6.8 million compared to net income of 25.5millionintheprioryear[302].−ExtendedWarrantyservicefeeandcommissionrevenuewas25.5 million in the prior year[302]. - Extended Warranty service fee and commission revenue was 17.8 million for Q3 2024, up from 17.3millioninQ32023,withyear−to−daterevenueat17.3 million in Q3 2023, with year-to-date revenue at 51.6 million, compared to 51.0millionintheprioryear[303].−KingswaySearchXceleratorrevenueincreasedto51.0 million in the prior year[303]. - Kingsway Search Xcelerator revenue increased to 9.3 million in Q3 2024 from 7.5millioninQ32023,withyear−to−daterevenueat7.5 million in Q3 2023, with year-to-date revenue at 28.1 million compared to 26.4millionintheprioryear[306].SegmentInformation−Kingswayoperatesthroughtworeportablesegments:ExtendedWarrantyandKingswaySearchXcelerator[282].−ExtendedWarrantyincludessubsidiariessuchasIWS,Geminus,PWI,andTrinity,providingvariousvehicleserviceagreementsandwarrantyproducts[283][284][285][286][287].−KingswaySearchXceleratorcomprisessubsidiarieslikeCSuite,Ravix,andDDI,offeringprofessionalservicesandoutsourcedfinancialservices[288][289][290][291].−TheoperatingincomeforKingswaySearchXceleratorwas26.4 million in the prior year[306]. Segment Information - Kingsway operates through two reportable segments: Extended Warranty and Kingsway Search Xcelerator[282]. - Extended Warranty includes subsidiaries such as IWS, Geminus, PWI, and Trinity, providing various vehicle service agreements and warranty products[283][284][285][286][287]. - Kingsway Search Xcelerator comprises subsidiaries like CSuite, Ravix, and DDI, offering professional services and outsourced financial services[288][289][290][291]. - The operating income for Kingsway Search Xcelerator was 1.1 million in Q3 2024, compared to 1.0millioninQ32023,withyear−to−dateoperatingincomeat1.0 million in Q3 2023, with year-to-date operating income at 3.9 million, down from 4.2million[306].−OperatingincomefortheExtendedWarrantysegmentwas4.2 million[306]. - Operating income for the Extended Warranty segment was 1.7 million in Q3 2024, down from 1.8millioninQ32023,withyear−to−dateoperatingincomeat1.8 million in Q3 2023, with year-to-date operating income at 4.0 million compared to 4.6millionintheprioryear[304].InvestmentandCashFlow−AsofSeptember30,2024,thecompanyheldcashandcashequivalents,restrictedcash,andinvestmentswithacarryingvalueof4.6 million in the prior year[304]. Investment and Cash Flow - As of September 30, 2024, the company held cash and cash equivalents, restricted cash, and investments with a carrying value of 56.2 million[334]. - The total carrying value of investments is 56.2million,adecreasefrom56.2 million, a decrease from 59.4 million on December 31, 2023[335]. - The company reported 0.7millionofnetcashprovidedbyoperatingactivitiesfromcontinuingoperationsfortheninemonthsendedSeptember30,2024,asignificantimprovementfrom0.7 million of net cash provided by operating activities from continuing operations for the nine months ended September 30, 2024, a significant improvement from 25.7 million of net cash used in the same period in 2023[355]. - During the nine months ended September 30, 2024, net cash used in investing activities was 16.4million,primarilyduetotheacquisitionofImageSolutionsandpurchasesoffixedmaturities[356].−NetcashprovidedbyfinancingactivitiesfortheninemonthsendedSeptember30,2024,was16.4 million, primarily due to the acquisition of Image Solutions and purchases of fixed maturities[356]. - Net cash provided by financing activities for the nine months ended September 30, 2024, was 13.3 million, driven by bank loan proceeds of 33.7millionandClassBpreferredstockissuanceof33.7 million and Class B preferred stock issuance of 8.3 million[357]. Debt and Liabilities - The total bank loans increased to 60.3millionatSeptember30,2024,from60.3 million at September 30, 2024, from 46.3 million at December 31, 2023[340]. - The company borrowed 5.5millionunderthe2024KWHDDTLand5.5 million under the 2024 KWH DDTL and 1.0 million under the KWH Revolver during the third quarter of 2024[344]. - The carrying value of subordinated debt is 13.7millionasofSeptember30,2024,withaprincipalvalueof13.7 million as of September 30, 2024, with a principal value of 15.0 million[349]. - The company recorded a loss on extinguishment of debt of 0.2millionfortheninemonthsendedSeptember30,2024,relatedtothe2020KWHLoanmodification[328].MarketandCompliance−TheaggregatemarketvalueoftheCompany′ssharesheldbynon−affiliatestockholderswasbetween0.2 million for the nine months ended September 30, 2024, related to the 2020 KWH Loan modification[328]. Market and Compliance - The aggregate market value of the Company's shares held by non-affiliate stockholders was between 75 million and $250 million as of the last business day of Q2 2023[281]. - The Company is now deemed an accelerated filer, which requires compliance with auditor attestation requirements under Section 404(b) of the Sarbanes-Oxley Act[281]. - The Company disclaims any intention to update or revise forward-looking statements unless required by applicable securities law[280]. - The company is classified as a smaller reporting company and is not required to make certain market risk disclosures[364].