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    Adam Patinkin • David Capital Partners

    Adam Patinkin's questions to Kingsway Financial Services Inc (KFS) leadership

    Adam Patinkin's questions to Kingsway Financial Services Inc (KFS) leadership • Q3 2024

    Question

    Adam Patinkin from David Capital asked for more details on the newly hired Operator in Residence (OIR), Rob Casper. He also questioned why DDI's strong revenue growth hasn't translated to EBITDA yet and inquired about the current M&A pipeline, particularly in light of the recent election.

    Answer

    Executive John Fitzgerald highlighted that new OIR Rob Casper has extensive experience in private equity-backed roll-up strategies and is targeting service-related industries. Regarding DDI, Fitzgerald explained that the company made upfront investments in personnel and a new Salt Lake City operations center to handle a large backlog of new customers, which temporarily depressed EBITDA. He stated that operating leverage should begin to improve as early as Q4. Fitzgerald also confirmed the M&A pipeline is very active with strong top-of-funnel metrics.

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    Adam Patinkin's questions to Kingsway Financial Services Inc (KFS) leadership • Q2 2024

    Question

    Adam Patinkin of David Capital Partners inquired about the Extended Warranty segment, asking for more detail on the relationship between moderating cost inflation and recent pricing actions, and the expected trend for the remainder of the year.

    Answer

    Executive John Fitzgerald explained that the 2.9% year-over-year claims increase was driven by severity, not frequency. He noted that high-single-digit price increases implemented since late 2023 are yielding an effective rate increase of 4-5%. Fitzgerald anticipates lower year-over-year claims inflation in the second half of 2024 due to easier comparisons, while the benefits of pricing adjustments continue to materialize.

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