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Note 22 - Segmented Information
 12 Months Ended
Dec. 31, 2023
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

NOTE 22 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, "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, PWI, PWSC and Trinity (collectively, "Extended Warranty").  As discussed in Note 5, "Disposal and Discontinued Operations," the Company disposed of PWSC on July 29, 2022.  The earnings of PWSC are included in the 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 24 states and the District of Columbia to their members, with customers in all 50 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 47 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 sells and administers a guaranteed asset protection product ("GAP"), under the Penn name, in states where Penn is approved.

 

PWSC sold home warranty products and provided administration services to homebuilders 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, SNS, SPI and DDI.  

 

CSuite is a professional services firm that provides experienced chief financial officer and other finance professionals to its clients through a variety of flexible offerings. These offerings include project and interim staffing engagements, and contingent search services for permanent placements for its clients throughout the United States.

 

Ravix provides outsourced financial services and human resources consulting for short or long duration engagements for customers throughout the United States.  

 

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

 

SPI provides software products created exclusively to serve the management needs of all types of shared-ownership properties throughout the United States, Europe, Asia, Mexico and the Caribbean.

 

DDI provides outsourced 24 hours a day and 7 days per week ("24/7") cardiac telemetry services for long-term acute care ("LTAC") and inpatient rehabilitation hospitals. Outsourcing cardiac monitoring is intended to allow hospitals to eliminate personnel callouts and human resources issues, remove distractions from onsite operations, and free up facility staff to assist directly with patient care. DDI has been operating for over 10 years and currently has a presence in 42 states. 

 

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 consolidated 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 years ended December 31, 2023 and December 31, 2022 were:

 

(in thousands)

 

Years ended December 31,

 
  

2023

  

2022

 

Revenues:

        

Service fee and commission revenue - Extended Warranty

 $68,231  $74,042 

Service fee and commission revenue - Kingsway Search Xcelerator

  35,013   19,238 

Total revenues

 $103,244  $93,280 

 

 

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 income from continuing operations for the years ended December 31, 2023 and December 31, 2022 were:

 

(in thousands)

 

Years ended December 31,

 
  

2023

  

2022

 

Segment operating income

        

Extended Warranty

 $6,983  $9,879 

Kingsway Search Xcelerator

  5,252   3,548 

Total segment operating income

  12,235   13,427 

Net investment income

  1,804   2,305 

Net realized gains

  761   1,209 

Net gain (loss) on equity investments

  3,397   (26)

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

  78   (1,754)

Net change in unrealized gain on private company investments

  63   — 

Gain on change in fair value of real estate investments

  —   1,488 

Impairment losses

  (229)  — 

(Loss) gain on change in fair value of derivative asset option contracts

  (1,366)  16,730 

Interest expense

  (6,250)  (8,092)

Other revenue and expenses not allocated to segments, net

  (12,823)  (17,206)

Amortization of intangible assets

  (5,909)  (6,133)

Loss on change in fair value of debt

  (68)  (4,908)

Gain on disposal of subsidiary

  342   37,917 

Gain on extinguishment of debt

  31,616   — 

Income from continuing operations before income tax (benefit) expense

  23,651   34,957 

Income tax (benefit) expense

  (1,899)  4,825 

Income from continuing operations

 $25,550  $30,132