Shares of Kingsway Financial Services Inc. (KFS) have lost 4.8% since the company reported its earnings for the quarter ended June 30, 2025, underperforming the S&P 500 Index, which gained 1.6% during the same period. Over the past month, the stock has been down 3.9% versus the S&P 500’s 3.2% increase.KFS’ Earnings SnapshotKingsway Financial’s second-quarter 2025 consolidated revenue rose 16.9% year over year to $30.9 million from $26.4 million, driven primarily by the Kingsway Search Xcelerator (KSX) segme ...

Financial Data and Key Metrics Changes - Consolidated revenue for Q2 2025 was $30.9 million, an increase of 16.9% compared to $26.4 million in Q2 2024 [20] - Consolidated adjusted EBITDA for Q2 2025 was $1.7 million, down from $2.5 million in the prior year quarter [20] - Trailing twelve month adjusted run rate EBITDA for the businesses owned was approximately $22 million to $23 million [16] Business Line Data and Key Metrics Changes - In the KSX segment, revenue increased by 42.1% to $13.3 million in Q2 2025, up from $9.3 million in the same quarter a year ago [20] - Adjusted EBITDA for the KSX segment increased by 31% to $2.4 million compared to $1.8 million in the year-ago quarter [20] - Revenue for the Extended Warranty segment increased by 3.1% to $17.6 million in Q2 2025, up from $17.1 million in the prior year period [23] Market Data and Key Metrics Changes - The four largest midstream natural gas pipeline operators expect to increase their capacity by approximately 17% by 2026, indicating strong demand for additional pipeline capacity in the Permian Basin [9] - The shift from combustible engine motors to electric motors in the Permian Basin has increased from an estimated 10% in 2020 to over 20% today, suggesting a significant industry trend [10] Company Strategy and Development Direction - The company aims to accelerate growth through its public search fund strategy, increasing its target for KSX acquisitions from 2-3 per year to 3-5 per year [7] - The company is focused on building a diversified collection of high-quality services companies that are asset-light and generate recurring revenue [5] - The company is positioning itself to efficiently source, acquire, and scale additional businesses that fit its model [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth potential, stating that the second quarter marked significant progress with three acquisitions and increased capital for growth ambitions [19] - The company believes that the earnings power of its KSX segment is at a record high and is optimistic about future performance [19] - Management noted that the extended warranty segment remains cash generative and is well-positioned for continued success despite recent challenges [24] Other Important Information - The company completed a private placement of common shares, raising $15.7 million to support its growth strategy [6] - As of June 30, 2025, the company held $12.1 million in cash and cash equivalents, up from $5.5 million at year-end [24] - The company recorded a $600,000 expense related to a settlement agreement, which will not recur going forward [27] Q&A Session Summary Question: Clarification on run rate EBITDA - Management clarified that the run rate EBITDA of $22 million to $23 million includes both existing businesses and recent acquisitions [32] Question: Future acquisition expectations - Management indicated that they do not plan to stop acquisitions after reaching their target range and will continue to seek opportunities [38][40] Question: Active OIRs and talent pipeline - Management confirmed there are currently two active OIRs and expressed intentions to increase this number, highlighting a strong pipeline of talent [41][42] Question: Learning from acquisitions - Management acknowledged learning from past acquisitions and emphasized a tighter focus on revenue quality and recurring revenue in future deals [44] Question: Attributes of future OIRs - Management stated that while future OIRs may vary, they will continue to seek candidates with specific attributes indicative of success in small company leadership [47]

KINGSWAY REPORTS Second QUARTER 2025 FINANCIAL RESULTS Management to Host Conference Call Today, August 7, 2025, at 5 p.m. ET Chicago - August 7, 2025 - (NYSE: KFS) Kingsway Financial Services Inc. ("Kingsway" or the "Company"), the only publicly-traded US company employing the Search Fund model to acquire and build great businesses, today announced its operating results for the three and six months ended June 30, 2025. Second Quarter 2025 Consolidated Financial Highlights Recent Business Highlights ● Conso ...

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarterly Period Ended June 30, 2025 or UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☐ 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 ...

NYSE: KFS Investor Presentation December 2022 Efficient Operations, Thoughtful Capital Allocation Forward-Looking Statements | 2 This presentation includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. Words such as "expects," "believes," "anticipates," " ...

Summary of Kingsway Financial Services Inc (KFS) 2025 Investor Day Company Overview - **Company**: Kingsway Financial Services Inc (KFS) - **Event**: 2025 Investor Day held on May 19, 2025 - **Location**: New York Stock Exchange Core Industry and Business Model - Kingsway operates as a publicly traded U.S. firm leveraging the search fund model to acquire and build businesses, focusing on quality services companies that generate recurring revenue and have strong margins [6][7][45] - The search fund model, also known as entrepreneurship through acquisition (ETA), has historically delivered annual returns in the mid-30% range, with a reported 35% internal rate of return (IRR) [8][9] - The company targets small businesses with EBITDA between $1 million to $3 million, acquiring them at 4.5 to 6.5 times EBITDA [13] Strategic Focus and Growth Opportunities - Kingsway is positioned to capitalize on the "silver tsunami" of retiring business owners, with nearly $4.8 trillion of wealth expected to change hands over the next two decades [14][16] - The company aims to fill the gap left by lower middle market private equity firms that often avoid deals where the owner wants to step away, creating favorable dynamics for search fund entrepreneurs [16] - Kingsway's strategy includes a self-funding growth flywheel: acquiring businesses, investing in growth, and reinvesting cash flow to fund further acquisitions [33][35] Recent Acquisitions and Performance - Recent acquisitions include Image Solutions, Bud's Plumbing, and SPI, with a focus on enhancing operational performance and expanding market reach [50][52][54] - Revenue for KSX was up 23% in Q1 2025 compared to Q1 2024, primarily due to the acquisition of Image Solutions [53] - Adjusted EBITDA also increased by 23%, indicating strong performance across acquired businesses [54] Financial Metrics and Valuation - Kingsway's current run rate adjusted EBITDA is approximately $18 million to $19 million [40] - The company maintains a disciplined approach to acquisitions, typically targeting mid-single-digit EBITDA multiples, ensuring a margin of safety through business quality rather than price paid [42] Kingsway Business System (KBS) - KBS is a framework designed to support newly acquired companies in achieving operational excellence and sustainable growth [63][66] - The system focuses on four pillars: talent acquisition, strategic planning, enterprise excellence, and growth [66][70] - KBS provides tools and resources for CEOs to improve performance, including talent mapping, KPI management, and structured problem-solving methodologies [71][73] Advisory Board and Leadership - Kingsway boasts a world-class advisory board, including seasoned experts like Tom Joyce, former CEO of Danaher Corporation, who provides strategic guidance and mentorship [28][22] - The company emphasizes the importance of attracting top-quality entrepreneurial talent and providing robust support to ensure successful leadership transitions [21][24] Tax Advantages and Financial Structure - Kingsway has accumulated approximately $622 million in net operating loss carryforwards, providing significant tax advantages that enhance cash flow and returns [31][32] - As a public company, Kingsway benefits from permanent equity capital, allowing for long-term investments without the pressure of a fund timetable [23][47] Conclusion - Kingsway Financial Services Inc is uniquely positioned to leverage the search fund model for growth, with a strong track record, disciplined investment criteria, and a comprehensive support system for its operators [46][48] - The company is well-prepared to capitalize on the upcoming wave of business transitions and continues to seek new acquisition opportunities to drive long-term shareholder value [45][39]

Kingsway's Business Model and Strategy - Kingsway Financial Services Inc is the only publicly-traded US company employing the Search Fund model to acquire and build businesses[9, 59] - Kingsway seeks to compound long-term shareholder value through its decentralized management model and tax-advantaged structure[10] - Kingsway employs the traditional Search Fund model to acquire small businesses with EBITDA of $1-3 million for roughly 4-6x EBITDA using a 50/50 split of equity and debt[20] - Kingsway targets 2-3 acquisitions per year with an acquisition IRR hurdle of >30%[50] - Kingsway has $622 million of valuable NOL tax assets[41] Financial Performance and Acquisitions - Kingsway's 12-month run-rate adjusted EBITDA for its operating companies is $18.0-$19.0 million[51] - KSX revenue grew +23.3% year-over-year in Q1 2025[68] - KSX adjusted EBITDA grew +23.2% year-over-year in Q1 2025[68] - Bud's Plumbing was acquired for $5.0 million at a 6.0x EBITDA multiple based on $0.8 million TTM Adj EBITDA[55, 102] Search Fund Model and Market Opportunity - Historical return across all Search Funds tracked by the Stanford Graduate School of Business since 1984 is +35.1%[14] - Nearly $4.8 trillion of net worth will be transferred over the next 20 years due to Baby Boomer business owner retirements[22]

Core Insights - Kingsway Financial Services Inc. (KFS) reported an 8.4% year-over-year increase in consolidated revenues to $28.3 million for Q1 2025, but experienced a net loss of $3.1 million, widening from a loss of $2.3 million in the previous year [2][4] Revenue Growth and Segment Performance - The Kingsway Search Xcelerator (KSX) segment saw revenues rise 23.3% to $11.7 million, driven by acquisitions, while the Extended Warranty segment's revenues remained flat at $16.7 million [3][4] - Adjusted consolidated EBITDA declined to $1.4 million from $2.1 million, reflecting a 35.7% decrease [2] Key Business Metrics - The trailing 12-month run-rate adjusted EBITDA for operating companies is estimated between $18 million and $19 million, indicating potential for future growth [4][11] - Several subsidiaries under KSX, including Ravix and CSuite, showed underlying strength with modest EBITDA gains despite flat revenue [5] Management Commentary - CEO JT Fitzgerald emphasized strategic and financial progress, highlighting recent acquisitions that expanded Kingsway's platforms [7] - CFO Kent Hansen noted that the first quarter is typically the weakest for KFS, but forward-looking indicators suggest strengthening in core segments [7] Factors Influencing Financial Performance - The revenue increase was primarily driven by KSX acquisitions, with Bud's Plumbing contributing approximately $800,000 in annual run-rate adjusted EBITDA [8] - The decline in consolidated adjusted EBITDA was attributed to lower profitability in the Extended Warranty segment and increased corporate overhead costs [8] Recent Developments - Kingsway Financial executed two acquisitions in early 2025, acquiring Bud's Plumbing for $5 million and ViewPoint to enhance its SaaS capabilities [12] - Rob Humble was appointed president and CEO of PWI and Penn Warranty, aligning executive incentives with Kingsway's KSX model [13]

Financial Data and Key Metrics Changes - Consolidated revenue for Q1 2025 was $28.3 million, an increase of 8.4% compared to $26.2 million in Q1 2024 [16] - Consolidated adjusted EBITDA declined by $800,000 year-over-year, reflecting lower profitability in the extended warranty segment and higher holdcoat costs [16] - Trailing twelve month adjusted run rate EBITDA for the businesses, including recent acquisitions, stands at approximately $18 million to $19 million [15] Business Line Data and Key Metrics Changes - In the Kingsway Search Accelerator (KSX) segment, revenue was $11.7 million, up 23.3% year-over-year, with adjusted EBITDA also increasing by 23.3% [18] - Extended warranty segment revenue was flat at $16.7 million compared to Q1 2024, but cash sales increased by 3.7% year-over-year [21] - Adjusted EBITDA for the extended warranty segment was $800,000, down from $1.4 million in the prior year [22] Market Data and Key Metrics Changes - Cash sales in the extended warranty segment showed a sequential increase of 9.3% from year-end [21] - Trailing twelve month modified cash EBITDA for the extended warranty segment was up 11.7% year-over-year [22] Company Strategy and Development Direction - The company aims to compound long-term shareholder value through a decentralized management model and acquisitions of high-quality service companies [5] - Recent acquisitions, including Bud's Plumbing and Viewpoint, are expected to enhance the KSX platform and provide additional growth levers [10][9] - The company is focused on expanding its deal pipeline, which is currently the most active it has ever been [29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth trajectory of the KSX segment, indicating that many businesses are nearing an inflection point for accelerated growth [13] - The extended warranty segment is entering a more favorable phase of recovery, with positive signs of cash sales growth [14] - Management highlighted the importance of patience in realizing value creation from investments in growth [40] Other Important Information - The company appointed two new independent directors to strengthen corporate governance [11] - A $6 million private placement was completed to fund the Bud's Plumbing acquisition, increasing total debt to $59.5 million [28] Q&A Session Summary Question: Can you provide any color on the Viewpoint acquisition and its strategic fit? - The acquisition was sourced by Drew at SPI and strategically fits by providing a cloud-native software solution for smaller resort operators in North America while expanding geographic reach [33] Question: Can you explain the J curve with search acquisitions? - The J curve represents the initial negative impact on profitability due to investments in talent and technology, followed by a period of growth as these investments pay off [37] Question: Can you share more about the robust deal pipeline? - The company has experienced operators building their M&A pipelines and is excited about potential acquisitions in fragmented markets [41] Question: Why is the owner of Bud's staying on for a one-year transition? - This is typical and desirable in search acquisitions to ensure a smooth transition of customer relationships and institutional knowledge [43] Question: Are there other industries targeted for platforms? - The company evaluates industries based on growth potential and operator fit, considering sectors like insurance brokerage and wealth management for future platforms [46]

Kingsway Financial Services Inc (KFS) Q1 2025 Earnings Call May 08, 2025 05:00 PM ET Speaker0 Good day, and welcome to the Kingsway First Quarter twenty twenty five Earnings Call. At this time, participants are in a listen only mode. A question and answer session will follow the formal presentation. Please note this conference is being recorded. With me on the call are J. T. Fitzgerald, Chief Executive Officer and Kent Hansen, Chief Financial Officer. Before we begin, I want to remind everybody that today's ...