This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

KINGSWAY ANNOUNCES PRELIMINARY FOURTH QUARTER 2010 RESULTS

Stocks in this article: KFS

TORONTO, March 23 /PRNewswire-FirstCall/ - (TSX:KFS) (NYSE:KFS) Kingsway Financial Services Inc. ("Kingsway" or the "Company") today announced that it expects to report a fourth quarter decline in shareholders' equity of approximately $55 million, or approximately $1.06 per share, primarily due to loss reserve strengthening; non-cash impairments and adjustments; the operations and disposition of American Country Insurance Company and American Service Insurance Company, Inc.; and other results of operations.  These results are unaudited and are subject to further management review.  Additional details will be provided when the Company releases its 2010 results, currently scheduled for March 30, 2011.  All amounts contained within this press release are in U.S. dollars.

The Company projects:

  • approximately $21 million of loss reserve strengthening in its insurance companies, primarily in Universal Casualty Company, related to periods prior to fourth quarter 2010;
  • approximately $10 million of non-cash impairments and adjustments to certain operating assets and liabilities;
  • approximately $9 million relating to the disposition and fourth quarter operating results of American Country Insurance Company and American Service Insurance Company, Inc.; and
  • the remainder of the expected decline will result from fourth quarter results of operations and expenses of the holding company including interest expense.

"These results are disappointing but reflect the continued restructuring that is required to move forward," said Larry G. Swets, Jr., Kingsway's President and Chief Executive Officer.  "Immediate action was taken in the fourth quarter to address the operating results, and we feel confident our business units are now focused solely on profitability.  We still remain challenged by operational profitability, corporate overhead expense and interest expense.  We will continue to address these challenges with further strategic actions."

Effective with the release of its first quarter 2011 financial results, Kingsway will be required to report under the principles of International Financial Reporting Standards, or IFRS.  Under IFRS, the Company will record its outstanding debt at fair market value rather than cost.  Based upon market data available at the time of today's release, the Company estimates the difference between debt at cost and debt at fair market value to be approximately $50 million. The Company's anticipated December 31, 2010 book value per share will be approximately $1.82, but, after reporting under IFRS, book value per share is expected to increase by approximately $0.97 before taking into account the effect of income taxes on the fair value adjustment.  This would result in pro forma book value per share of approximately $2.79 before any potential income tax effects.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,810.06 +91.06 0.51%
S&P 500 2,063.50 +10.75 0.52%
NASDAQ 4,712.97 +11.1030 0.24%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs