Kingsway Financial Services Inc. reported a challenging financial performance for the third quarter and the nine months ended September 30, 2024, compared to the same periods in 2023. Total revenues for Q3 2024 reached $27.1 million, up from $24.8 million in Q3 2023, while year-to-date revenues increased to $79.7 million from $77.4 million. The growth in revenue was primarily driven by higher service fee and commission income, particularly from the Extended Warranty segment, which saw an increase in vehicle service agreement fees and GAP commissions.
Despite the revenue growth, Kingsway experienced significant losses. The company reported an operating loss of $672,000 for Q3 2024, compared to a loss of $208,000 in Q3 2023. For the nine months ended September 30, 2024, the loss from continuing operations was $(6.6 million), a stark contrast to a profit of $25.2 million in the same period of the previous year. The net loss attributable to common shareholders for Q3 2024 was $(2.8 million), compared to $(1.0 million) in Q3 2023, and for the nine months, the loss was $(7.7 million) versus a profit of $25.3 million in 2023.
The company's total assets decreased to $191.1 million as of September 30, 2024, from $197.7 million at the end of 2023. Total liabilities also saw a slight decline to $171.4 million from $173.1 million. However, total shareholders' equity significantly dropped to $11.4 million from $24.6 million, reflecting the ongoing losses.
Strategically, Kingsway completed the acquisition of Image Solutions, LLC, on September 26, 2024, for approximately $20.4 million, which is expected to enhance its service offerings in the IT managed services sector. The company also dissolved its noncontrolling interest, resulting in a loss of $7.5 million for Q3 2024.
Kingsway's cash and cash equivalents decreased to $6.5 million from $9.1 million at the end of 2023, while restricted cash slightly increased to $8.6 million. The company reported net cash provided by operating activities of $1.2 million for the nine months ended September 30, 2024, a significant improvement from a net cash used of $25.7 million in the same period of 2023.
Overall, Kingsway Financial Services Inc. is navigating a period of financial difficulty, marked by increased revenues but substantial losses, alongside strategic acquisitions aimed at bolstering its market position.
About KINGSWAY FINANCIAL SERVICES INC
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