FG Financial (FGF) - 2025 Q1 - Quarterly Results

Fundamental Global Inc. Fourth Quarter and Full Year 2024 Financial Results This report provides a comprehensive overview of Fundamental Global Inc.'s financial performance and strategic initiatives for the fourth quarter and full year ended 2024 CEO Commentary & Strategic Overview The CEO highlighted a year of strategic consolidation through three mergers, monetization of real estate, and improved operating profit in the managed services business, maintaining a strong balance sheet with $109 million in assets and minimal debt, and planning to continue streamlining operations and allocating capital to cash-flow-producing assets - In 2024, the company focused on consolidating public companies and simplifying its operating structure, successfully completing three merger transactions[2] - The company monetized a real estate holding and announced an agreement to sell a portion of its reinsurance business for $5.6 million, expected to close in H1 2025[2] Balance Sheet Strength as of Dec 31, 2024 | Metric | Value | | :--- | :--- | | Total Assets | $109 million | | Stockholders' Equity | $74 million | | Long-term Debt | Nominal | Key Operational Highlights Throughout 2024 and into early 2025, the company executed several key strategic actions including mergers with FG Group Holdings and Strong Global Entertainment to reduce costs, the sale of its Digital Ignition facility and Strong/MDI subsidiary, and supporting IPOs for two SPAC clients, alongside a signed sale agreement for part of its reinsurance business - Completed a merger with FG Group Holdings Inc. in February 2024 to consolidate and streamline operations[5] - Sold its Digital Ignition facility in April 2024, significantly reducing G&A expenses and long-term debt[5] - Sold its Strong/MDI Screen Systems, Inc. operating subsidiary for approximately $30 million in September 2024[5] - Executed an agreement in March 2025 to sell a portion of its reinsurance business for $5.6 million[5] Financial Performance Analysis For the full year 2024, total revenue remained stable at $17.3 million, supported by a 20.7% increase in managed services revenue, offset by non-cash equity method losses, while net loss attributable to common shareholders significantly improved to $2.6 million from $14.1 million in the prior year, primarily due to a $21.8 million gain on the sale of Strong/MDI, though net loss from continuing operations widened to $22.9 million due to merger-related expenses and increased equity method losses Full Year 2024 vs 2023 Key Metrics | Metric | FY 2024 | FY 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $17.3M | $17.1M | +1.5% | | Managed Services Revenue | $32.0M | $26.5M | +20.7% | | Net Loss (to common shareholders) | ($2.6M) | ($14.1M) | Improvement | | Net Loss from Continuing Ops | ($22.9M) | ($12.3M) | Worsened | | Net Loss per Share | ($2.43) | ($35.22) | Improvement | - The significant improvement in net loss was primarily driven by a $21.8 million gain from the sale of the Strong/MDI subsidiary, which is classified under discontinued operations[8][9] - Financial results are impacted by a reverse merger completed on February 29, 2024, where prior period results reflect only FG Group Holdings, while subsequent results are for the combined company, and Strong/MDI and reinsurance operations are reclassified as discontinued operations[4] Financial Statements The consolidated financial statements detail the company's financial position as of December 31, 2024, and its performance for the year, with the balance sheet showing increased assets and equity alongside reduced debt due to merger activities, the statement of operations highlighting the material impact of discontinued operations, and the cash flow statement outlining cash sources and uses across operating, investing, and financing activities Consolidated Balance Sheets As of December 31, 2024, total assets increased to $109.5 million from $62.1 million in 2023, driven by merger activities, with total stockholders' equity more than doubling to $74.2 million from $37.0 million, and total debt significantly reduced to $2.4 million from $7.8 million in the prior year Consolidated Balance Sheet Highlights ($ in thousands) | Account | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Assets | $109,469 | $62,143 | | Cash and cash equivalents | $7,794 | $5,995 | | Equity holdings and other holdings | $60,073 | $28,021 | | Assets of discontinued operations | $31,626 | $9,886 | | Total Liabilities | $35,272 | $25,136 | | Short-term & Long-term debt | $2,369 | $7,755 | | Liabilities of discontinued operations | $22,436 | $6,799 | | Total Stockholders' Equity | $74,197 | $37,007 | Consolidated Statements of Operations For the year ended December 31, 2024, the company reported a net loss from continuing operations of $22.9 million, wider than the $12.3 million loss in 2023, but due to a significant net income from discontinued operations of $21.5 million, the total net loss attributable to common shareholders improved dramatically to $2.6 million, or ($2.43) per share, compared to a loss of $14.1 million, or ($35.22) per share, in the prior year Consolidated Statement of Operations Highlights - Year Ended Dec 31 ($ in thousands) | Account | 2024 | 2023 | | :--- | :--- | :--- | | Total Revenue | $17,348 | $17,093 | | Loss from operations | ($24,876) | ($16,286) | | Net (loss) income from continuing operations | ($22,859) | ($12,307) | | Net (loss) income from discontinued operations | $21,544 | ($2,334) | | Net loss attributable to common shareholders | ($2,565) | ($14,077) | | Net loss per common share | ($2.43) | ($35.22) | Consolidated Statements of Cash Flows For the year ended December 31, 2024, net cash used in operating activities was $4.7 million, a reversal from $0.2 million provided in 2023, while investing activities provided $13.1 million primarily from asset sales, and financing activities used $6.9 million largely for debt repayments and preferred dividend payments, resulting in an overall cash increase of $1.5 million Consolidated Statement of Cash Flows Highlights - Year Ended Dec 31 ($ in thousands) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | ($4,714) | $156 | | Net cash provided by (used in) investing activities | $13,148 | ($695) | | Net cash (used in) provided by financing activities | ($6,858) | $3,383 | | Net increase in cash and cash equivalents | $1,529 | $2,960 | - Key cash inflows from investing activities included $6.2 million from sales of property and equipment and $5.0 million from sales of equity securities[20] - Key cash outflows from financing activities included $5.8 million in principal payments on short-term and long-term debt and $1.4 million in preferred dividend payments[20]