Kingsway-KFS Stock Falls Following Q3 Earnings Decline, Revenues Up Y/Y

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].