ITASCA, IL, April 16, 2019 /CNW/ - (NYSE: KFS) Kingsway
Financial Services Inc. ("Kingsway" or the "Company") today
announced that additional time is needed for the Company to
complete its Annual Report on Form 10-K for the fiscal year ended
December 31, 2018. Kingsway
previously filed Form 12b-25 to extend the filing deadline for its
2018 Form 10-K by 15 calendar days. The Company's outside
independent auditors, RSM US LLP, have informed the Company they
will require additional time to complete their work. Kingsway
will continue to work with its auditors with the objective of
filing its 2018 Form 10-K as soon as practicable.
The Company issued a press release dated March 14, 2019 reporting certain unaudited 2018
fourth quarter and year-end financial results. As previously
stated in its Form 12b-25 filing, Kingsway has determined that
certain of its limited liability investments, previously accounted
for under the equity method of accounting, will now be accounted
for on a consolidated basis. Kingsway estimates that the
effect on the Company's consolidated balance sheet at December 31, 2018 as a result of consolidating
the identified limited liability investments will be an
approximately $4 million increase in
shareholders' equity, as a result of recording noncontrolling
interests in consolidated subsidiaries. The Company will also
now report the gross assets and related non-recourse liabilities
collateralized by real estate investments at fair value that are
carried on the balance sheets of these limited liability
investments. Kingsway estimates that the effect on the
Company's consolidated statement of operations for the year ended
December 31, 2018 as a result of
consolidating the identified limited liability investments will be
an approximately $0.4 million
improvement in the Company's net loss, as a result of recording net
income attributable to noncontrolling interests in consolidated
subsidiaries. The Company will restate its 2017 financial
statement information presented in its 2018 Form 10-K to conform to
this presentation.
The Company has identified two additional adjustments, which it
intends to reflect in its 2018 Form 10-K, compared to the unaudited
2018 fourth quarter and year-end financial results released on
March 14, 2019. The first item
consists of a $0.2 million increase
to Extended Warranty segment revenue and operating income in the
Company's consolidated statement of operations for the year ended
December 31, 2018, with an offsetting
decrease to Extended Warranty segment revenue and operating income
in the Company's consolidated statement of operations for the year
ended December 31, 2017. The
second item consists of a $0.6
million increase to the Company's net investment income for
the year ended December 31, 2018 to
reflect new information received by Kingsway from one of its
limited liability investments subsequent to the release of the
Company's earnings on March 14,
2019.
Kingsway's auditors have not completed their audit procedures,
so, until such time that the Company's auditors have completed
their audit procedures, there remains the possibility of additional
adjustments to the financial results released by Kingsway on
March 14, 2019. Kingsway will
continue to work with its auditors with the objective of filing its
Annual Report on Form 10-K for the fiscal year ended December 31, 2018 as soon as practicable.
About the Company
Kingsway is a holding company that
owns or controls subsidiaries primarily in the extended warranty,
asset management and real estate industries. The common
shares of Kingsway are listed on the New York Stock Exchange under
the trading symbol "KFS."
Forward-Looking Statements
This press release includes
"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 that are not historical facts, and involve
risks and uncertainties that could cause actual results to differ
materially from those expected and projected. Words such as
"expects," "believes," "anticipates," "intends," "estimates,"
"seeks" and variations and similar words and expressions are
intended to identify such forward-looking statements. Such
forward-looking statements relate to future events or future
performance, but reflect Kingsway management's current beliefs,
based on information currently available. These statements
include the Company's expectations as to the timing and outcome of
its audit and the filing of its 2018 Form 10-K. A number of
factors could cause actual events, performance or results to differ
materially from the events, performance and results discussed in
the forward-looking statements. For information identifying
important factors that could cause actual results to differ
materially from those anticipated in the forward-looking
statements, please refer to the section entitled "Risk Factors" in
the Company's Quarterly Report on Form 10-Q for the period ended
September 30, 2018. Except as
expressly required by applicable securities law, the Company
disclaims any intention or obligation to update or revise any
forward-looking statements whether as a result of new information,
future events or otherwise.
Additional Information
Additional information about
Kingsway, including a copy of its 2017 Annual Report and filings on
Forms 10-Q and 8-K, can be accessed on the Canadian Securities
Administrators' website at www.sedar.com, on the EDGAR section of
the U.S. Securities and Exchange Commission's website at
www.sec.gov or through the Company's website at
www.kingsway-financial.com.
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SOURCE Kingsway Financial Services Inc.