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Note 19 - Segmented Information
 6 Months Ended
Jun. 30, 2025
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

NOTE 19 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's chief operating decision maker is its President and Chief Executive Officer.  The Company conducts its business through the following two reportable segments: Extended Warranty and Kingsway Search Xcelerator.

 

Extended Warranty Segment

 

Extended Warranty includes the following subsidiaries of the Company: IWS, Geminus, PW I and Trinity (collectively, "Extended Warranty").  

 

IWS is a licensed motor vehicle service agreement company and is a provider of after-market vehicle protection services distributed by credit unions in 28 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 46 and 35 states, respectively, via independent used car dealerships and franchised car dealerships.  Penn also sells and administers a GAP product, in states where Penn is approved.

 

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.  

 

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 ("KSX")

 

KSX includes the Company's subsidiaries CSuite, Ravix, SNS, SPI, DDI, Image Solutions and Bud's Plumbing.  

 

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, Australia, Mexico and the Caribbean.

 

DDI provides outsourced 24 hours a day and 7 days per week cardiac telemetry services for long-term acute care 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 currently has a presence in 42 states and Puerto Rico. 

 

Image Solutions provides comprehensive information technology managed services, including equipment sales, service, and helpdesk support to customers primarily in North Carolina, Kansas, Georgia, Kentucky and Tennessee. 

 

Bud's Plumbing provides a comprehensive range of plumbing services, including emergency repairs, drain cleaning, water heater installations, and water treatment solutions to residential and commercial customers, primarily in Evansville, Indiana.

 

Revenues and Operating Income by Reportable Segment

 

Revenues by reportable segment reconciled to consolidated revenues for the three and six months ended June 30, 2025 and June 30, 2024 were:

 

(in thousands)

 

Three months ended June 30,

  

Six months ended June 30,

 
  

2025

  

2024

  

2025

  

2024

 

Revenues:

                

Service fee and commission revenue - Extended Warranty

 $17,642  $17,105  $34,312  $33,790 

Service fee and commission revenue - KSX

  13,277   9,341   24,956   18,816 

Total revenues

 $30,919  $26,446  $59,268  $52,606 

 

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 Company uses operating income as the measure of profit or loss for our segments. The Company's chief operating decision maker uses segment operating income to allocate resources in the annual budget and forecasting process and considers actual versus plan variances in assessing the performance of each segment. The chief operating decision maker also uses segment operating income as an input to the overall compensation measures for segment management under the Company's incentive compensation plans. From time to time we may report the impact of certain events, gains, losses or other charges related to our segments outside of segment operating income.  Segment assets are not regularly reviewed by the Company's chief operating decision maker and, therefore, are not included in the segment disclosures below.

 

Among other items, the degree and pace of inflation and interest rate changes may have impacts on our business and the recently announced tariffs or retaliatory responses to such tariffs may impact the Company’s operating income. The potential impact of current macroeconomic uncertainties on the Company’s financial condition, results of operations, and cash flows is subject to change and continues to depend on the extent and duration of these uncertainties.

 

The operating income (loss) by reportable segment in the following table is before income taxes and includes revenues and direct segment costs. The significant expense categories and amounts by segment align with the segment level information that is regularly provided to the chief operating decision maker.

 

Total segment operating income reconciled to the consolidated loss from continuing operations for the three months ended  June 30, 2025 and June 30, 2024 is as follows:

 

(in thousands) 

Three months ended June 30, 2025

  

Three months ended June 30, 2024

 

 

 

Extended Warranty

  

KSX

  

Total

  

Extended Warranty

  

KSX

  

Total

 

Service fee and commission revenue

 $17,642  $13,277  $30,919  $17,105  $9,341  $26,446 
                         

Less segment expenses:

                        

Claims authorized on vehicle service agreements

  6,805   —   6,805   6,349   —   6,349 

Commissions

  2,902   —   2,902   2,776   1   2,777 

Cost of services sold

  1,092   7,176   8,268   777   5,384   6,161 

Salaries and benefits

  4,246   2,160   6,406   3,644   1,505   5,149 

Insurance expense

  578   127   705   587   78   665 

Professional fees

  360   348   708   236   246   482 

IT expense

  335   420   755   280   113   393 

Other segment items (a)

  1,387   997   2,384   1,212   573   1,785 

Total segment operating (loss) income

 $(63) $2,049  $1,986  $1,244  $1,441  $2,685 

Net investment income

          410           308 

Net realized gains

          128           277 

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

          177           86 

Interest expense

          (1,265)          (1,162)

General and administrative expenses and other revenue not allocated to segments, net (b)

          (2,886)          (2,087)

Amortization of intangible assets

          (1,710)          (1,457)

Impairment of intangible assets

          (135)          (690)

Loss on change in fair value of debt

          (1)          (49)

Loss on extinguishment of debt

          —           (160)

Loss from continuing operations before income tax (benefit) expense

          (3,296)          (2,249)

Income tax (benefit) expense

          (131)          104 

Loss from continuing operations

         $(3,165)         $(2,353)

 

Total segment operating income reconciled to the consolidated loss from continuing operations for the for the six months ended  June 30, 2025 and June 30, 2024 is as follows:

 

(in thousands) 

Six months ended June 30, 2025

  

Six months ended June 30, 2024

 

 

 

Extended Warranty

  

KSX

  

Total

  

Extended Warranty

  

KSX

  

Total

 

Service fee and commission revenue

 $34,312  $24,956  $59,268  $33,790  $18,816  $52,606 
                         

Less segment expenses:

                        

Claims authorized on vehicle service agreements

  12,715   —   12,715   12,470   —   12,470 

Commissions

  5,654   (93)  5,561   5,384   1   5,385 

Cost of services sold

  1,918   14,044   15,962   1,507   10,963   12,470 

Salaries and benefits

  8,309   3,907   12,216   7,458   3,015   10,473 

Insurance expense

  1,139   234   1,373   1,156   171   1,327 

Professional fees

  706   684   1,390   486   510   996 

IT expense

  647   756   1,403   571   309   880 

Other segment items (a)

  2,772   1,632   4,404   2,438   1,063   3,501 

Total segment operating (loss) income

 $452  $3,792  $4,244  $2,320  $2,784  $5,104 

Net investment income

          790           634 

Net realized gains

          57           401 

Net loss on equity investments

          —           (3)

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

          178           78 

Interest expense

          (2,495)          (2,307)

General and administrative expenses and other revenue not allocated to segments, net (b)

          (5,719)          (3,826)

Amortization of intangible assets

          (3,392)          (2,871)

Impairment of intangible assets

          (219)          (1,201)

Gain (loss) on change in fair value of debt

          19           (129)

Loss on extinguishment of debt

          (115)          (160)

Loss from continuing operations before income tax (benefit) expense

          (6,652)          (4,280)

Income tax (benefit) expense

          (395)          188 

Loss from continuing operations

          (6,257)          (4,468)

 

 

(a)

Other segment items in the table above for each reportable segment include bank charges, bad debt expense, occupancy expenses, depreciation expense, licenses and taxes, general overhead expenses and miscellaneous income.

 

(b)

General and administrative expenses and other revenue not allocated to segments, net includes corporate and non-operating general and administrative expenses, contingent consideration expense (2024 year to date only) and non-operating other revenue.