Canada markets open in 2 hours 57 minutes
  • S&P/TSX

    20,244.29
    +89.75 (+0.45%)
     
  • S&P 500

    4,354.19
    -3.54 (-0.08%)
     
  • DOW

    33,919.84
    -50.63 (-0.15%)
     
  • CAD/USD

    0.7824
    +0.0019 (+0.25%)
     
  • CRUDE OIL

    71.60
    +1.11 (+1.57%)
     
  • BTC-CAD

    53,960.45
    -1,582.82 (-2.85%)
     
  • CMC Crypto 200

    1,052.62
    -11.22 (-1.05%)
     
  • GOLD FUTURES

    1,776.40
    -1.80 (-0.10%)
     
  • RUSSELL 2000

    2,186.18
    +3.98 (+0.18%)
     
  • 10-Yr Bond

    1.3240
    0.0000 (0.00%)
     
  • NASDAQ futures

    15,083.00
    +59.00 (+0.39%)
     
  • VOLATILITY

    22.77
    -2.94 (-11.44%)
     
  • FTSE

    7,068.15
    +87.17 (+1.25%)
     
  • NIKKEI 225

    29,639.40
    -200.31 (-0.67%)
     
  • CAD/EUR

    0.6666
    +0.0015 (+0.23%)
     

Kingsway Reports Second Quarter 2021 Results

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·16 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

ITASCA, Ill., Aug. 5, 2021 /CNW/ - (NYSE: KFS) Kingsway Financial Services Inc. ("Kingsway" or the "Company") today announced its operating results for the three and six months ended June 30, 2021, which includes the following highlights:

  • Net loss improved to ($0.3) million for the three months ended June 30, 2021, from a net loss of ($1.4) million for the same period in 2020

  • Non-GAAP adjusted income grew to $1 million for the three months ended June 30, 2021, compared to a non-GAAP adjusted loss of ($0.5) million for the same period in 2020

  • Extended Warranty segment operating income increased to $2.6 million for the three months ended June 30, 2021 compared to $1.3 million for the same period in 2020,

  • Extended Warranty segment non-GAAP adjusted EBITDA improved to $2.7 million for the three months ended June 30, 2021, from $1.4 million for the same period in 2020

Refer to "Second Quarter Cash Flows" below for an explanation regarding a one-time, $11.7 million current quarter cash outflow to operating cash flows. Refer to "Leased Real Estate" below for further explanation regarding a $2.9 million non-cash, non-recurring increase in other (expense) income and tax benefit.

Non-GAAP Adjusted Income Loss

For the three months ended June 30, 2021, non-GAAP adjusted income (loss) improved to income of $1 million in 2021, from a loss of ($0.5) million in 2020. Included in 2021 are three months of PWI results following its acquisition effective December 1, 2020.

Reconciliations of net (loss) income to non-GAAP adjusted income (loss) are presented in the attached schedules.

Second Quarter Cash Flows

The Company reported year-to-date net cash used in operating activities of ($11.5) million, compared to net cash used in operating activities of ($1) million for the prior period. A majority of the increase in net cash used in operating activities is related to the monetization of future rental proceeds from the Company's Leased Real Estate segment.

During the second quarter of 2021, the Company borrowed $15.0 million, at an interest rate of 3.2%, against future rental proceeds that were not being used to service the existing mortgage. As a result of this borrowing, the Company paid $11.7 million in management and guarantee fees as per the settlement of CMC litigation, of which $10.6 million is shown as an operating cash outflow in the statement of cash flows. Had the Company not executed the borrowing, this amount would not have been due or paid. See Note 27, "Commitments and Contingent Liabilities", to our 2020 Annual Report on Form 10-K, for further information on the settlement.

As a result of this monetization, the Company retained $2.7 million, which it believes it can deploy and earn a return in excess of the stated interest rate on the borrowed funds.

Extended Warranty

The Extended Warranty service fee and commission revenue increased 80.8% (or $8.4 million) to $18.8 million for the three months ended June 30, 2021 compared with $10.4 million for the three months ended June 30, 2020. The increase is primarily due to the inclusion of PWI for the three months ended June 30, 2021 following its acquisition effective December 1, 2020. PWI service fee and commission revenue was $7.4 million for the three ended June 30, 2021.

The Extended Warranty operating income improved to $2.6 million for the three months ended June 30, 2021 compared with $1.3 million for the three months ended June 30, 2020. The increase in operating income is primarily due to the following:

  • $0.8 million due to the inclusion of PWI in 2021 following its acquisition effective December 1, 2020;

  • A $0.2 million increase at IWS to $0.6 million for the three months ended June 30, 2021, due to a decrease in claims authorized on vehicle service agreements and lower general and administrative expenses that was partially offset by a slight decrease in revenue;

  • A $0.2 million increase at Trinity to $0.3 million for the three months ended June 30, 2021, driven by increased revenues in its equipment breakdown and maintenance support services, as well as an increase in revenue and gross profit on the extended warranty services product, partially offset by a related increase in cost of services sold compared to the same period in 2020;

  • A $0.3 million increase at PWSC to $0.5 million for the three months ended June 30, 2021, due to an increase in revenue and lower general and administrative expenses; and

  • A $0.2 million decrease at Geminus to $0.4 million for the three months ended June 30, 2021 due to a decrease in revenue that was partially offset by lower general and administrative expenses compared with the three months ended June 30, 2020.

Extended Warranty Non-GAAP adjusted EBITDA improved to $2.7 million for the three months ended June 30, 2021, compared with $1.5 million for the same period in 2020, primarily due to the increase in Extended Warranty operating income as explained above.

Reconciliations of Extended Warranty operating income to Extended Warranty non-GAAP adjusted EBITDA are presented in the attached schedules.

Leased Real Estate

The Leased Real Estate contractually-fixed rental income was $3.3 million for the three months ended June 30, 2021 and 2020.

Leased Real Estate operating loss was ($2.3) million for the three months ended June 30, 2021 compared with operating income of $0.8 million for the three months ended June 30, 2020. The operating loss is primarily the result of a non-recurring $2.9 million non-cash expense recorded during the second quarter of 2021 to reverse an indemnification receivable that is recorded in other (expense) income in the consolidated statements of operations. This expense is offset by a tax benefit of $2.9 million that is recorded in the consolidated statements of operations. The decrease is also attributable to management fee expense of $0.2 million as a result of the settlement of CMC litigation.

As a result of the monetization explained above, future management fees have been prepaid and will be a non-cash expense going forward. See Note 27, "Commitments and Contingent Liabilities", to our 2020 Annual Report on Form 10-K, for further information on the settlement.

About the Company

Kingsway is a holding company that owns or controls subsidiaries primarily in the extended warranty, asset management and real estate industries. The common shares of Kingsway are listed on the New York Stock Exchange under the trading symbol "KFS."

Non U.S. GAAP Financial Measure

The Company believes that non-GAAP adjusted net income (loss) and non-GAAP adjusted EBITDA, when presented in conjunction with comparable GAAP measures, provide useful information about the Company's operating results and enhances the overall ability to assess the Company's financial performance. The Company uses non-GAAP adjusted net income (loss) and non-GAAP adjusted EBITDA, together with other measures of performance under GAAP, to compare the relative performance of operations in planning, budgeting and reviewing the performance of its business. Non-GAAP adjusted net income (loss) and non-GAAP adjusted EBITDA allow investors to make a more meaningful comparison between the Company's core business operating results over different periods of time. The Company believes that non-GAAP adjusted net income (loss) and non-GAAP adjusted EBITDA, when viewed with the Company's results under GAAP and the accompanying reconciliations, provide useful information about the Company's business without regard to potential distortions. By eliminating potential differences in results of operations between periods caused by the factors listed in the attached schedules, the Company believes that non-GAAP adjusted net income (loss) and non-GAAP adjusted EBITDA can provide useful additional basis for comparing the current performance of the underlying operations being evaluated. Investors should consider these non GAAP measures in addition to, not as a substitute for or as superior to, financial reporting measures prepared in accordance with GAAP. Investors are encouraged to review the Company's financial results prepared in accordance with GAAP to understand the Company's performance taking into account all relevant factors.

Forward-Looking Statements

This press release 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," "intends," "estimates," "seeks" and variations and similar words and expressions are intended to identify such forward-looking statements; however, the absence of any such words does not mean that a statement is a not a forward-looking statement. Such forward-looking statements relate to future events or future performance, but reflect Kingsway management's current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements, including as a result of the COVID 19 pandemic. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the section entitled "Risk Factors" in the Company's 2020 Annual Report on Form 10-K and subsequent Form 10-Qs and Form 8-Ks filed with the Securities and Exchange Commission. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Additional Information

Additional information about Kingsway, including a copy of its Annual Reports can be accessed on the EDGAR section of the U.S. Securities and Exchange Commission's website at www.sec.gov, on the Canadian Securities Administrators' website at www.sedar.com, or through the Company's website at www.kingsway-financial.com.

Kingsway Financial Services Inc.
Consolidated Balance Sheets
(in thousands, except share data)


June 30, 2021

December 31,
2020


(unaudited)



Assets





Investments:





Fixed maturities, at fair value (amortized cost of $21,470 and $20,488, respectively)

$

21,602

$

20,716

Equity investments, at fair value (cost of $1,147 and $1,157, respectively)


225


444

Limited liability investments


3,568


3,692

Limited liability investments, at fair value


20,362


32,811

Investments in private companies, at adjusted cost


790


790

Real estate investments, at fair value (cost of $10,225 and $10,225, respectively)


10,662


10,662

Other investments, at cost which approximates fair value


288


294

Short-term investments, at cost which approximates fair value


157


157

Total investments


57,654


69,566

Cash and cash equivalents


17,093


14,374

Restricted cash


27,540


30,571

Accrued investment income


900


757

Service fee receivable, net of allowance for doubtful accounts of $258 and $478, respectively


5,021


3,928

Other receivables, net of allowance for doubtful accounts of $201 and $201, respectively


14,144


16,323

Deferred acquisition costs, net


9,106


8,835

Property and equipment, net of accumulated depreciation of $26,557 and $24,441, respectively


93,376


95,015

Right-of-use asset


2,560


2,960

Goodwill


121,289


121,130

Intangible assets, net of accumulated amortization of $16,426 and $15,433, respectively


83,140


84,133

Other assets


15,668


4,882

Total Assets

$

447,491

$

452,474

Liabilities and Shareholders' Equity





Liabilities:





Accrued expenses and other liabilities

$

40,671

$

42,502

Income taxes payable


188


2,859

Deferred service fees


88,446


87,945

Unpaid loss and loss adjustment expenses


1,407


1,449

Bank loan


23,182


25,303

Notes payable


191,143


192,057

Subordinated debt, at fair value


58,218


50,928

Lease liability


2,814


3,213

Net deferred income tax liabilities


26,503


27,555

Total Liabilities


432,572


433,811

Redeemable Class A preferred stock, no par value; 1,000,000 and 1,000,000 authorized at June 30, 2021
and December 31, 2020, respectively; 182,876 and 182,876 issued and outstanding at June 30, 2021 and
December 31, 2020, respectively; redemption amount of $6,828 and $6,658 at June 30, 2021 and
December 31, 2020, respectively


6,828


6,504

Shareholders' Equity:





Common stock, no par value; 50,000,000 and 50,000,000 authorized at June 30, 2021 and December 31,
2020, respectively; 22,365,631 and 22,211,069 issued and outstanding at June 30, 2021 and December
31, 2020, respectively



Additional paid-in capital


356,331


355,242

Treasury stock, at cost; 247,450 and 247,450 outstanding at June 30, 2021 and December 31, 2020, respectively


(492


(492)

Accumulated deficit


(394,851


(394,807)

Accumulated other comprehensive income


32,434


38,059

Shareholders' equity attributable to common shareholders


(6,578


(1,998)

Noncontrolling interests in consolidated subsidiaries


14,669


14,157

Total Shareholders' Equity


8,091


12,159

Total Liabilities, Class A preferred stock and Shareholders' Equity

$

447,491

$

452,474

Kingsway Financial Services Inc.
Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)



Three months ended June 30,



Six months ended June 30,




2021



2020



2021



2020


Revenues:


































Service fee and commission revenue


$

18,755



$

10,438



$

37,329



$

21,624


Rental revenue



3,341




3,341




6,682




6,682


Total revenues



22,096




13,779




44,011




28,306


Operating expenses:

















Claims authorized on vehicle service agreements



5,251




2,347




9,918




4,727


Loss and loss adjustment expenses



(4)




2




4




15


Commissions



1,576




1,279




3,080




2,582


Cost of services sold



952




347




1,932




750


General and administrative expenses



12,043




8,388




24,509




19,081


Leased real estate segment interest expense



1,500




1,491




2,968




2,990


Total operating expenses



21,318




13,854




42,411




30,145


Operating income (loss)



778




(75)




1,600




(1,839)


Other revenues (expenses), net:

















Net investment income



403




681




824




1,400


Net realized gains



187




8




238




216


(Loss) gain on change in fair value of equity investments



(45)




489




(196)




(108)


Gain (loss) on change in fair value of limited liability investments, at fair value



731




(123)




529




1,776


Net change in unrealized loss on private company investments












(670)


Other-than-temporary impairment loss












(117)


Other (expenses) income



(2,741)




65




(2,634)




246


Interest expense not allocated to segments



(1,593)




(1,997)




(3,145)




(4,150)


Amortization of intangible assets



(496)




(573)




(993)




(1,147)


(Loss) gain on change in fair value of debt



(738)




(202)




(1,757)




2,443


Gain on extinguishment of debt









2,494





Total other expenses, net



(4,292)




(1,652)




(4,640)




(111)


Loss from continuing operations before income tax benefit



(3,514)




(1,727)




(3,040)




(1,950)


Income tax benefit



(3,258)




(300)




(3,683)




(130)


(Loss) income from continuing operations



(256)




(1,427)




643




(1,820)


Gain on disposal of discontinued operations, net of taxes






6







6


Net (loss) income



(256)




(1,421)




643




(1,814)


Less: net income attributable to noncontrolling interests in consolidated subsidiaries



428




108




687




829


Less: dividends on preferred stock



85




224




323




601


Net loss attributable to common shareholders


$

(769)



$

(1,753)



$

(367)



$

(3,244)


Loss per share – continuing operations:

















Basic:


$

(0.03)



$

(0.08)



$

(0.02)



$

(0.15)


Diluted:


$

(0.03)



$

(0.08)



$

(0.02)



$

(0.15)


Earnings per share – discontinued operations:

















Basic:


$



$



$



$


Diluted:


$



$



$



$


Loss per share – net loss attributable to common shareholders:

















Basic:


$

(0.03)



$

(0.08)



$

(0.02)



$

(0.15)


Diluted:


$

(0.03)



$

(0.08)



$

(0.02)



$

(0.15)


Weighted-average shares outstanding (in '000s):

















Basic:



22,366




22,211




22,292




22,140


Diluted:



22,366




22,211




22,292




22,140


Kingsway Financial Services Inc.
Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)



Six months ended June 30,




2021



2020


Cash provided by (used in):









Operating activities:









Net income (loss)


$

643



$

(1,814)


Adjustments to reconcile net income (loss) to net cash used in operating activities:









Gain on disposal of discontinued operations, net of taxes






(6)


Equity in net income of limited liability investments



(45)




(12)


Depreciation and amortization expense



3,138




3,335


Stock-based compensation expense, net of forfeitures



2,407




82


Net realized gains



(238)




(216)


Loss on change in fair value of equity investments



196




108


Gain on change in fair value of limited liability investments, at fair value



(529)




(1,776)


Net change in unrealized loss on private company investments






670


Loss (gain) on change in fair value of debt



1,757




(2,443)


Loss on change in fair value of derivatives



73





Deferred income taxes



(1,052)




(272)


Other-than-temporary impairment loss






117


Amortization of fixed maturities premiums and discounts



88




58


Amortization of notes payable premium, discounts and debt issue costs



(430)




(447)


Gain on extinguishment of debt



(2,494)





Changes in operating assets and liabilities:









Service fee receivable, net



(1,093)




118


Other receivables, net



2,179




1,776


Deferred acquisition costs, net



(271)




(146)


Other assets



(10,786)




62


Unpaid loss and loss adjustment expenses



(42)




(277)


Deferred service fees



501




(887)


Other, net



(5,510)




954


Net cash used in operating activities



(11,508)




(1,016)


Investing activities:









Proceeds from sales and maturities of fixed maturities



2,894




10,269


Proceeds from sales of equity investments



23





Purchases of fixed maturities



(3,952)




(7,405)


Net proceeds from limited liability investments



168




134


Net proceeds from limited liability investments, at fair value



13,188




77


Net proceeds from investments in private companies



89




60


Net proceeds from other investments



6




103


Net purchases of short-term investments






(2)


Acquisition of business, net of cash acquired



(50)





Net purchases of property and equipment



(506)




(105)


Net cash provided by investing activities



11,860




3,131


Financing activities:









Distributions to noncontrolling interest holders



(170)




(43)


Taxes paid related to net share settlements of restricted stock awards



(323)




(83)


Principal payments on bank loans



(2,161)




(687)


Principal proceeds from notes payable, net of debt issuance costs of $1,685 in 2021



13,270




2,858


Principal payments on notes payable



(11,280)




(2,012)


Net cash (used in) provided by financing activities



(664)




33


Net (decrease) increase in cash and cash equivalents and restricted cash



(312)




2,148


Cash and cash equivalents and restricted cash at beginning of period



44,945




25,661


Cash and cash equivalents and restricted cash at end of period


$

44,633



$

27,809


Kingsway Financial Services Inc.
Reconciliation of GAAP Net (Loss) Income to Non-GAAP Adjusted Income (Loss)
(in thousands)
(UNAUDITED)



Twelve
Months
Ended



For the Three Months Ended




6/30/2021



6/30/2021



3/31/2021



12/31/2020



9/30/2020


GAAP Net (Loss) Income


$

(2,957)



$

(256)



$

899



$

(2,478)



$

(1,124)























Non-GAAP Adjustments:





















(Gain) Loss on sale of non-core investments (1)



(21)




(71)




-




(51)




101


Change in fair value of investments (2)



...(3,903)




(686)




353




(2,193)




(1,377)


Change in fair value of debt (3)



3,027




738




1,019




767




503


Litigation expenses (5)



1,876




-




344




997




535


Acquisition and disposition related expenses (6)



377




-




-




238




139


Employee termination and recruiting expenses (7)



171




-




160




-




11


Stock-based compensation expense (8)



3,667




735




1,699




1,106




127


Extraordinary audit and audit-related expenses (10)



76




-




-




-




76


Loss on extinguishment of debt (11)



851




-




-




851




-


CMC Settlement (12)



958




-




(645)




1,603




-


Amortization expense



2,137




496




497




572




572


Total Non-GAAP Adjustments



9,216




1,212




3,427




3,890




687























Non-GAAP Adjusted Income (Loss) (13)


$

6,259



$

956



$

4,326



$

1,414



$

(437)




Twelve
Months
Ended



For the Three Months Ended




6/30/2020



6/30/2020



3/31/2020



12/31/2019



9/30/2019


GAAP Net Loss


$

(8,919)



$

(1,421)



$

(393)



$

(3,098)



$

(4,006)























Non-GAAP Adjustments:





















(Gain) Loss on sale of non-core investments (1)



(353)




-




(60)




-




(293)


Change in fair value of investments (2)



934




(366)




(632)




(1,803)




3,736


Change in fair value of debt (3)



(2,001)




202




(2,645)




1,052




(610)


Equity in net (gain) loss of investee (4)



(1)




-




-




(127)




126


Litigation expenses (5)



1,349




19




1,141




124




65


Acquisition and disposition related expenses (6)



58




-




35




-




23


Employee termination and recruiting expenses (7)



1,119




46




295




715




63


Stock-based compensation expense (8)



592




131




171




145




145


Net loss from discontinued operations, net of taxes (9)



1,538




(6)




-




1,544




-


Extraordinary audit and audit-related expenses (10)



1,203




305




390




149




359


Impairment of assets



117




-




117




-




-


Amortization expense



2,498




573




573




676




675


Total Non-GAAP Adjustments



7,053




904




(615)




2,475




4,289























Non-GAAP Adjusted (Loss) Income


$

(1,866)



$

(518)



$

(1,009)



$

(623)



$

283


(1)

Represents realized gains and losses on the Company's non-core investments. The Company has determined that realized gains and losses relating to its Argo investment fund are core to its strategic operations; therefore, Argo realized gains and losses have been removed from this line item, resulting in immaterial increases to prior period amounts.

(2)

The Company has investments in several entities that are not essential to the ongoing operations and strategy of the Company. The investments are recorded at fair value and changes to fair value are recorded as unrealized gains or losses.



Twelve
Months Ended



For the Three Months Ended




6/30/2021



6/30/2021



3/31/2021



12/31/2020



9/30/2020


(Gain) loss on change in fair value of limited liability investments, at fair value


$

(2,798)



$

(731)



$

202



$

(1,995)



$

(274)


Net change in unrealized (gain) loss on private company investments



74




-




-




-




74


(Gain) loss on change in fair value of equity securities



(1,179)




45




151




(198)




(1,177)


Total


$

(3,903)



$

(686)



$

353



$

(2,193)



$

(1,377)




Twelve
Months Ended



For the Three Months Ended




6/30/2020



6/30/2020



3/31/2020



12/31/2019



9/30/2019


(Gain) loss on change in fair value of limited liability investments, at fair value


$

361



$

123



$

(1,899)



$

(1,219)



$

3,356


Net change in unrealized (gain) loss on private company investments



1,013




-




670




-




343


(Gain) loss on change in fair value of equity securities



(439)




(489)




597




(584)




37


Total


$

935



$

(366)



$

(632)



$

(1,803)



$

3,736


(3)

The Company records its subordinated debt at fair value and changes to fair value (net of the portion of the change attributable to instrument-specific credit risk) are recorded as unrealized gains or losses.

(4)

Represents the Company's investment in the common stock of Itasca Capital Ltd. ("ICL"). The Company fully disposed of its investment in ICL during Q4 2019.

(5)

Legal expenses associated with the Company's defense against significant litigation matters.

(6)

Expenses related to legal, accounting and other expenses associated with completed and contemplated acquisitions and disposals.

(7)

Includes charges relating to severance and consulting agreements pertaining to former key employees. 2019 also includes key employee recruiting expenses.

(8)

Non-cash expense arising from the grant and modification of stock-based awards to employees. Q1 2021 includes new grants to certain officers of the Company, a portion of which vested upon grant. In Q4 2020, the Company modified an award previously granted to the President of one of its subsidiaries, resulting in additional non-cash compensation expense associated with the change in fair value of the award.

(9)

Includes losses relating to the October 2018 completed sale of the Mendota group of companies. Refer to Note 5, Disposal and Discontinued Operations, to the Company's 2020 Annual Report on Form 10-K for further information.

(10)

Extraordinary audit and audit-related expenses incurred as a result of the delayed filing of the 2018 and 2019 Kingsway audited financial statements and related quarterly filings.

(11)

Early termination fees and write-off of unamortized debt issuance costs and discount associated with the early extinguishment of the 2019 KWH loan as part of the Company's purchase of PWI.

(12)

In March 2021, DGI, TRT LeaseCo, LLC and various other entities affiliated with each of them entered into a settlement agreement with respect to such litigation and certain other matters ("CMC Settlement Agreement"). As part of the settlement, the Company made a one-time fee payment to DGI of which $1.6 million relates to rental income collected in periods prior to 2020. In 2021, the Company recorded a benefit related to the finalization of management fees and legal expenses associated with the settlement of CMC litigation.

(13)

Includes a benefit of $2.5 million and $0.4 million from PPP loan forgiveness for the three months ended March 31, 2021 and December 31, 2020, respectively.

Kingsway Financial Services Inc.
Reconciliation of Extended Warranty Segment Operating Income to Non-GAAP Adjusted EBITDA
and Pro Forma Non-GAAP Adjusted EBITDA
(in thousands)
(UNAUDITED)



Twelve
Months
Ended



For the Three Months Ended




6/30/2021



6/30/2021



3/31/2021



12/31/2020



9/30/2020


GAAP Operating Income for Extended Warranty
segment (1)


$

12,378



$

2,600



$

5,309



$

3,264



$

1,205























Non-GAAP Adjustments:





















Investment income (2)



236




42




43




51




100


Gain (loss) on sale of core investments (3)



39




1




12




(3)




29


Depreciation



234




53




12




112




58


Total Non-GAAP Adjustments



509




95




67




160




187























Non-GAAP adjusted EBITDA for Extended Warranty
segment


$

12,887



$

2,695



$

5,376



$

3,424



$

1,392


PWI operating income (4)



2,010




-




-




914




1,096


PWI depreciation (4)



43




-




-




30




13


Pro forma Non-GAAP adjusted EBITDA for Extended
Warranty segment


$

14,940



$

2,695



$

5,376



$

4,368



$

2,501




Twelve
Months
Ended



For the Three Months Ended




6/30/2020



6/30/2020



3/31/2020



12/31/2019



9/30/2019


GAAP Operating Income for Extended Warranty
segment (1)


$

5,144



$

1,285



$

850



$

1,431



$

1,579























Non-GAAP Adjustments:





















Investment income (2)



584




100




144




177




163


Gain (loss) on sale of core investments (3)



70




8




61




4




(3)


Impairment of assets



117




-




117




-




-


Depreciation



222




55




55




55




57


Total Non-GAAP Adjustments



993




163




377




236




217























Non-GAAP adjusted EBITDA for Extended Warranty
segment


$

6,137



$

1,448



$

1,227



$

1,667



$

1,796


PWI operating income (4)



4,997




2,214




1,250




1,086




447


PWI depreciation (4)



51




13




13




13




12


Pro forma Non-GAAP adjusted EBITDA for Extended
Warranty segment


$

11,186



$

3,675



$

2,490



$

2,765



$

2,255


(1)

Includes one month of PWI operating income for the three months ended December 31, 2020 and excludes PWI for prior periods. Excludes the impact of final purchase accounting adjustments for PWI, which will be completed in 2021. Also includes a benefit of $2.2 million and $0.4 million from PPP loan forgiveness for the three months ended March 31, 2021 and December 31, 2020, respectively.

(2)

Investment income arising as part of Extended Warranty segment's minimum holding requirements

(3)

Realized Gains (losses) resulting from investments held in trust as part of Extended Warranty segment's minimum holding requirements

(4)

Includes amounts related to PWI prior to acquisition (April 2019 through November 2020).

Cision
Cision

View original content:https://www.prnewswire.com/news-releases/kingsway-reports-second-quarter-2021-results-301348983.html

SOURCE Kingsway Financial Services Inc.

Cision
Cision

View original content: http://www.newswire.ca/en/releases/archive/August2021/05/c6139.html

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting