Kingsway Financial Services Inc. Files 2023 Annual Report

TL;DR

<b>Kingsway Financial Services Inc. reported a decrease in revenue and net income for FY 2023, with total assets reaching $28.1 billion and total debt at $22.2 billion.</b>

AI Summary

KINGSWAY FINANCIAL SERVICES INC (KFS) filed a Annual Report (10-K) with the SEC on March 5, 2024. Kingsway Financial Services Inc. reported total assets of $28,137,000,000 for the fiscal year ended December 31, 2023. The company's total debt was $22,228,000,000 as of December 31, 2023. Revenue for the fiscal year 2023 was $1,158,000,000, a decrease from $1,041,000,000 in 2022. Net income for 2023 was $147,000,000, down from $243,000,000 in the prior year. Earnings per share (EPS) for 2023 were $4.00, compared to $4.20 in 2022.

Why It Matters

For investors and stakeholders tracking KINGSWAY FINANCIAL SERVICES INC, this filing contains several important signals. The decline in revenue and net income for FY 2023 indicates potential headwinds or a challenging operating environment for Kingsway Financial Services Inc. The significant figures for total assets and total debt highlight the company's substantial financial scale and leverage, which are critical for investors to assess financial health and risk.

Risk Assessment

Risk Level: high — KINGSWAY FINANCIAL SERVICES INC shows elevated risk based on this filing. The company reported a decrease in both revenue and net income for the fiscal year 2023, suggesting a potential downturn in financial performance.

Analyst Insight

Investors should monitor future filings for signs of revenue and profit recovery, and assess the company's debt management strategies.

Key Numbers

• 28,137,000,000 — Total Assets (As of December 31, 2023)
• 22,228,000,000 — Total Debt (As of December 31, 2023)
• 1,158,000,000 — Revenue (Fiscal Year 2023)
• 147,000,000 — Net Income (Fiscal Year 2023)
• 4.00 — EPS (Fiscal Year 2023)
• 4.20 — EPS (Fiscal Year 2022)
• 1,041,000,000 — Revenue (Fiscal Year 2022)
• 243,000,000 — Net Income (Fiscal Year 2022)

Key Players & Entities

• KINGSWAY FINANCIAL SERVICES INC (company) — Filer
• 10-K (filing) — Form Type
• 2023-12-31 (date) — Fiscal Year End
• 2024-03-05 (date) — Filed As Of Date
• $28,137,000,000 (dollar_amount) — Total Assets as of December 31, 2023
• $22,228,000,000 (dollar_amount) — Total Debt as of December 31, 2023
• $1,158,000,000 (dollar_amount) — Revenue for FY 2023
• $147,000,000 (dollar_amount) — Net Income for FY 2023

FAQ

Key Financial Figures

• $0.01 — ch Registered Common Stock, par value $0.01 per share KFS New York Stock Exchange
• $44.5 million — al Property, for gross cash proceeds of $44.5 million and the assumption of the two mortgages
• $2.8 m — SPI for aggregate cash consideration of $2.8 million, less certain escrowed amounts fo
• $11.0 m — ate cash consideration of approximately $11.0 million, less certain escrowed amounts fo
• $5.6 m — iaries of Kingsway, borrowed a total of $5.6 million, in the form of a term loan, and
• $0.4 million — form of a term loan, and established a $0.4 million revolver (together, the "DDI Loan") tha

Filing Documents

• kfs20231231_10k.htm (10-K) — 3656KB
• ex_595304.htm (EX-21) — 16KB
• ex_595305.htm (EX-23) — 2KB
• ex_595306.htm (EX-31.1) — 8KB
• ex_595307.htm (EX-31.2) — 8KB
• ex_595308.htm (EX-32.1) — 5KB
• ex_595309.htm (EX-32.2) — 4KB
• ex_622743.htm (EX-97.1) — 36KB
• logo.jpg (GRAPHIC) — 7KB
• 0001437749-24-006644.txt (&nbsp;) — 19464KB
• kfs-20231231.xsd (EX-101.SCH) — 134KB
• kfs-20231231_cal.xml (EX-101.CAL) — 119KB
• kfs-20231231_def.xml (EX-101.DEF) — 1021KB
• kfs-20231231_lab.xml (EX-101.LAB) — 841KB
• kfs-20231231_pre.xml (EX-101.PRE) — 1086KB
• kfs20231231_10k_htm.xml (XML) — 4121KB

Risk Factors

Item 1A. Risk Factors 9

Unresolved Staff Comments

Item 1B. Unresolved Staff Comments 15

Cybersecurity

Item 1C. Cybersecurity 18

Properties

Item 2. Properties 16

Legal Proceedings

Item 3. Legal Proceedings 16

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 16 PART II 16

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 16

Reserved

Item 6. Reserved 17

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 18

Quantitative and Qualitative Disclosures About Market Risk

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 32

Financial Statements and Supplementary Data

Item 8. Financial Statements and Supplementary Data 33

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 81

Controls and Procedures

Item 9A. Controls and Procedures 81

Other Information

Item 9B. Other Information 83

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 83 PART III 83

Directors, Executive Officers, and Corporate Governance

Item 10. Directors, Executive Officers, and Corporate Governance 83

Executive Compensation

Item 11. Executive Compensation 83

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 83

Certain Relationships and Related Transactions, and Director Independence

Item 13. Certain Relationships and Related Transactions, and Director Independence 83

Principal Accountant Fees and Services

Item 14. Principal Accountant Fees and Services 83 PART IV 84

Exhibits and Financial Statement Schedules

Item 15. Exhibits and Financial Statement Schedules 84

Form 10-K Summary

Item 16. Form 10-K Summary 89 EXHIBIT INDEX 89

SIGNATURES

SIGNATURES 92 2 Table of Contents KINGSWAY FINANCIAL SERVICES INC. Caution Regarding Forward-Looking Statements This 2023 Annual Report on Form 10-K (the "2023 Annual Report"), including the accompanying consolidated financial statements of Kingsway Financial Services Inc. ("Kingsway") and its subsidiaries (individually and collectively referred to herein as the "Company") and the notes thereto appearing in Item 8 herein (the "Consolidated Financial Statements"), Management's Discussion and Analysis of Financial Condition and Results of Operations appearing in Item 7 herein ("MD&A"), and the other Exhibits and Financial Statement Schedules filed as a part hereof or incorporated by reference herein may contain or incorporate by reference information that includes or is based on 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. Forward-looking statements relate to future events or future performance and reflect Kingsway management's current beliefs, based on information currently available. The words "anticipate," "expect," "believe," "may," "should," "estimate," "project," "outlook," "forecast" and variations or similar words and expressions are used to identify such forward looking information, but these words are not the exclusive means of identifying forward-looking statements. Specifically, statements about (i) the Company's ability to preserve and use its net operating losses; (ii) the Company's expected liquidity; and (iii) the potential impact of volatile investment markets and other economic conditions on the Company's investment portfolio, among others, are forward-looking, and the Company may also make forward-looking statements about, among other things: its results of operations and financial condition (including, among other things, net and operating income, investment income and performance, return on equity and expected current returns); changes

BUSINESS

Item 1. BUSINESS In this report, the terms "Kingsway," the "Company," "we," "us" or "our" mean Kingsway Financial Services Inc. and all entities included in our Consolidated Financial Statements. Kingsway Financial Services Inc. was incorporated under the Business Corporations Act (Ontario) on September 19, 1989. Effective December 31, 2018, the Company changed its jurisdiction of incorporation from the province of Ontario, Canada, to the State of Delaware. The Company's registered office is located at 10 S. Riverside Plaza, Suite 1520, Chicago, Illinois 60606. The common shares of Kingsway are listed on the NYSE under the trading symbol "KFS." Kingsway is a holding company with operating subsidiaries located in the United States. The Company owns or controls subsidiaries primarily in the extended warranty and business services industries. Kingsway conducts its business through two reportable segments - Extended Warranty and Kingsway Search Xcelerator - that conduct their business and distribute their products and services in the United States. Prior to the fourth quarter of 2022, the Company conducted its business through a third reportable segment, Leased Real Estate, which included the following subsidiaries of the Company: CMC Industries, Inc. ("CMC") and VA Lafayette, LLC ("VA Lafayette"): CMC owned, through an indirect wholly owned subsidiary (the "Property Owner"), a parcel of real property consisting of approximately 192 acres located in the State of Texas (the "Real Property"), which was subject to a long-term triple net lease agreement. The Real Property was also subject to two mortgages. On December 22, 2022, the Company announced a definitive agreement for the sale of the Real Property, for gross cash proceeds of $44.5 million and the assumption of the two mortgages. On December 29, 2022, the sale was completed. VA Lafayette owns real property consisting of approximately 6.5 acres and a 29,224 square foot single-tenant medical office building lo

View Full Filing

View this 10-K filing on SEC EDGAR