XML 38 R28.htm IDEA: XBRL DOCUMENT v3.23.2
Note 20 - Segmented Information
 6 Months Ended
Jun. 30, 2023
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

NOTE 20 SEGMENTED INFORMATION

 

The Company reports segment information based on the "management" approach. The management approach designates the internal reporting used by management for making decisions and assessing performance as a source of the Company’s reportable operating segments. The Company conducts its business through the following two reportable segments: Extended Warranty and Kingsway Search Xcelerator.

 

Prior to the fourth quarter of 2022, the Company conducted its business through a third reportable segment, Leased Real Estate. Leased Real Estate included the following subsidiaries of the Company: CMC and VA Lafayette.  As further discussed in Note 5, "Acquisitions, Disposal and Discontinued Operations," both CMC and VA Lafayette have been classified as discontinued operations and the results of their operations are reported separately for all periods presented.  As such, the Leased Real Estate segment no longer exists and all segmented information has been restated to exclude the Leased Real Estate segment for all periods presented. 

 

Extended Warranty Segment

 

Extended Warranty includes the following subsidiaries of the Company: IWS, Geminus, PW I, PWSC and Trinity (collectively, "Extended Warranty").  As discussed in Note 5 , "Acquisitions, Disposal and Discontinued Operations ," the Company disposed of PWSC on July 29, 2022.  The earnings of PWSC are included in the unaudited interim consolidated statements of operations and the segment disclosures through the disposal date.   

 

IWS is a licensed motor vehicle service agreement company and is a provider of after-market vehicle protection services distributed by credit unions in 25 states and the District of Columbia to their members, with customers in all fifty states.

 

Geminus primarily sells vehicle service agreements to used car buyers across the United States, through its subsidiaries, Penn and Prime. Penn and Prime distribute these products in 42 and 40 states, respectively, via independent used car dealerships and franchised car dealerships.

 

PWI markets, sells and administers vehicle service agreements to used car buyers in all fifty states via independent used car and franchise network of approved automobile and motorcycle dealer partners. PWI’s business model is supported by an internal sales and operations team and partners with American Auto Shield in three states with a "white label" agreement.  PWI also has a "white label" agreement with a third-party that sells and administers a GAP product in certain states.

 

PWSC sold new home warranty products and provided administration services to home builders and homeowners across the United States. PWSC distributed its products and services through an in-house sales team and through insurance brokers and insurance carriers throughout all states except Alaska and Louisiana.

 

Trinity sells HVAC, standby generator, commercial LED lighting and commercial refrigeration warranty products and provides equipment breakdown and maintenance support services to companies across the United States. As a seller of warranty products, Trinity markets and administers product warranty contracts for certain new and used products in the HVAC, standby generator, commercial LED lighting and commercial refrigeration industries throughout the United States. Trinity acts as an agent on behalf of the third-party insurance companies that underwrite and guaranty these warranty contracts. Trinity does not guaranty the performance underlying the warranty contracts it sells. As a provider of equipment breakdown and maintenance support services, Trinity acts as a single point of contact to its clients for both certain equipment breakdowns and scheduled maintenance of equipment. Trinity will provide such repair and breakdown services by contracting with certain HVAC providers.

 

Kingsway Search Xcelerator Segment

 

Kingsway Search Xcelerator includes the Company's subsidiaries CSuite, Ravix and SNS.  

 

CSuite provides financial executive services, for project and interim-staffing engagements, and search services for full-time placements for customers throughout the United States.

 

Ravix provides outsourced financial services and human resources consulting for short or long duration engagements for customers in several states.

 

SNS provides healthcare staffing services to acute healthcare facilities on a contract or per diem basis in the United States, primarily in California. 

 

Revenues and Operating Income by Reportable Segment

 

Results for the Company's reportable segments are based on the Company's internal financial reporting systems and are consistent with those followed in the preparation of the unaudited consolidated interim financial statements. The following tables provide financial data used by management. Segment assets are not allocated for management use and, therefore, are not included in the segment disclosures below.

 

Revenues by reportable segment reconciled to consolidated revenues for the three and six months ended June 30, 2023 and June 30, 2022 were:

 

(in thousands)

 

Three months ended June 30,

  

Six months ended June 30,

 
  

2023

  

2022

  

2023

  

2022

 

Revenues:

                

Service fee and commission revenue - Extended Warranty

 $17,043  $19,444  $33,714  $37,730 

Service fee and commission revenue - Kingsway Search Xcelerator

  9,154   4,146   18,872   8,316 

Total revenues

 $26,197  $23,590  $52,586  $46,046 

 

The operating income by reportable segment in the following table is before income taxes and includes revenues and direct segment costs. Total segment operating income reconciled to the consolidated (loss) income from continuing operations for the three and six months ended June 30, 2023 and June 30, 2022 were:

 

(in thousands)

 

Three months ended June 30,

  

Six months ended June 30,

 
  

2023

  

2022

  

2023

  

2022

 

Segment operating income:

                

Extended Warranty

 $1,392  $2,936  $2,824  $4,659 

Kingsway Search Xcelerator

  1,616   893   3,193   1,699 

Total segment operating income

  3,008   3,829   6,017   6,358 

Net investment income

  330   465   1,068   1,084 

Net realized gains

  123   184   333   238 

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

  1,707   (38)  2,782   (48)

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

  4   46   (126)  173 

Impairment losses

  (95)  —   (95)  — 

Loss on change in fair value of derivative asset option contracts

  —   —   (1,366)  — 

Interest expense

  (1,086)  (1,704)  (4,058)  (3,068)

Other revenue and expenses not allocated to segments, net

  (3,806)  (3,180)  (6,446)  (6,246)

Amortization of intangible assets

  (1,410)  (1,442)  (2,828)  (2,884)

Loss on change in fair value of debt

  (339)  (1,330)  (30)  (3,198)

Gain on extinguishment of debt

  —   —   31,616   — 

(Loss) income from continuing operations before income tax expense (benefit)

  (1,564)  (3,170)  26,867   (7,591)

Income tax expense (benefit)

  213   (19)  912   (441)

(Loss) income from continuing operations

 $(1,777) $(3,151) $25,955  $(7,150)