Kingsway(KFS) - 2024 Q3 - Quarterly Results

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]