Kingsway(US:KFS)2025-11-06 21:02Financial Performance - Net investment income for the three months ended September 30, 2025 was $431,000, an increase of 7% from $403,000 in the same period of 2024[93]. - For the three months ended September 30, 2025, service fee and commission revenue was $37.173 million, a 37.1% increase from $27.136 million in the same period of 2024[165]. - For the nine months ended September 30, 2025, service fee and commission revenue reached $96.441 million, up 20.9% from $79.742 million in 2024[165]. - The company reported a loss from continuing operations of $2.411 million for the three months ended September 30, 2025, compared to a loss of $2.176 million for the same period in 2024, representing an increase of 10.8%[189]. - Loss from continuing operations before income tax expense was $11,113,000 for the nine months ended September 30, 2025, compared to a loss of $6,435,000 in 2024, representing an increase in loss of 72.5%[236]. Assets and Investments - As of September 30, 2025, the carrying value of limited liability investments totaled $0.6 million, with no impairments recorded during the three and nine months ended September 30, 2025 and 2024[90]. - The carrying value of the company's investments in private companies was $0.6 million as of September 30, 2025, with no adjustments recorded for observable price changes[92]. - Total intangible assets increased to $54.918 million as of September 30, 2025, up from $40.049 million at December 31, 2024[99]. - The fair value of limited liability investments increased from $2,859,000 at December 31, 2024, to $3,148,000 at September 30, 2025[253]. - The company recorded no impairments related to investments in private companies for the three and nine months ended September 30, 2025[255]. Goodwill and Intangible Assets - The company recorded goodwill of $10.6 million related to acquisitions during the nine months ended September 30, 2025, with total goodwill increasing to $69.544 million[95]. - Amortization of intangible assets for the nine months ended September 30, 2025 was $5.8 million, compared to $4.3 million for the same period in 2024[101]. - No goodwill impairment charges were recorded during the three and nine months ended September 30, 2025 and 2024[98]. Debt and Financing - Total debt as of September 30, 2025 was $72.671 million, with bank loans comprising $56.483 million of this total[108]. - The 2021 Ravix Loan had a principal amount of $6.0 million and was due to mature on October 1, 2027[109]. - The 2022 Ravix Loan, part of the acquisition of CSuite, included an additional principal amount of $6.0 million and was due to mature on November 16, 2028[111]. - The Company recorded a principal prepayment of $1.5 million on the 2021 Ravix term loan on July 23, 2024[114]. - The 2025 Ravix Loan was established with a principal amount of $9.1 million, maturing on February 7, 2031, and the 2022 Ravix Revolver was extended to February 7, 2027[116]. Revenue and Service Fees - Revenue from contracts with customers includes various service fees and commissions, with total revenue recognized from sales-type leases of $0.4 million for the three months ended September 30, 2025[164]. - Vehicle service agreement fees for the three months ended September 30, 2025, were $15.504 million, compared to $15.215 million in 2024, reflecting a 1.9% increase[165]. - Maintenance support service fees decreased to $1.203 million in Q3 2025 from $1.300 million in Q3 2024, a decline of 7.5%[165]. - Business services consulting fees increased significantly to $5.474 million in Q3 2025 from $4.026 million in Q3 2024, representing a 36.1% growth[165]. Tax and Valuation - The company maintained a valuation allowance for its gross deferred tax assets, reflecting uncertainty about generating taxable income necessary to utilize prior operating losses[186]. - As of September 30, 2025, the company carried net deferred income tax liabilities of $4.6 million, up from $4.4 million at December 31, 2024[187]. - The company recorded an income tax benefit of $(2.050) million for the three months ended September 30, 2025, compared to a tax expense of $21,000 for the same period in 2024[13]. Stock and Dividends - The Company declared cash dividends for Preferred Stock totaling $327,000 for the three months ended September 30, 2025, compared to $13,000 for the same period in 2024, representing a significant increase[211]. - The total accrued dividends for Preferred Stock as of September 30, 2025, amounted to $327,000, up from $166,000 as of December 31, 2024[205]. - The Company has three series of redeemable preferred stock outstanding, with a total redemption value of $16.25 million as of September 30, 2025[200]. Acquisitions and Noncontrolling Interests - The Company acquired a 20% noncontrolling interest in Southside Plumbing for $925,000 on August 14, 2025, with a net loss attributable to this interest of $34,000 for the nine months ended September 30, 2025[206][207]. - The redeemable noncontrolling interest balance as of September 30, 2025, was $925,000, reflecting the acquisition of Southside Plumbing[207]. Segment Performance - The Company operates through two reportable segments: Kingsway Search Xcelerator and Extended Warranty[219]. - Service fee and commission revenue from the KSX segment reached $18,975,000 for the three months ended September 30, 2025, compared to $9,293,000 in 2024, reflecting a 104% growth[231]. - Total segment operating income for the Extended Warranty segment was $401,000 for the three months ended September 30, 2025, down from $1,704,000 in 2024[235]. Fair Value Measurements - The fair value of limited liability investments is categorized in Level 3 of the fair value hierarchy, reflecting the use of valuation multiples based on performance metrics[243]. - The company employs a fair value hierarchy to categorize inputs for valuation techniques, with Level 1 being the highest priority[244]. - The estimated fair value of the seller phantom equity awards is $3,328,000 as of September 30, 2025[253].