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FG

Fundamental Global Inc. (FGF)·Q1 2024 Earnings Summary

Executive Summary

  • Q1 2024 revenue rose 31.6% year over year to $8.64M, driven by stronger Strong Entertainment product and installation demand and one month of reinsurance/investment contribution post-merger; however, operating loss widened to $(5.93)M on higher SG&A and a $1.48M non-cash impairment tied to the Digital Ignition sale .
  • Net loss attributable to common shareholders was $(4.36)M (total EPS $(0.27); $(0.26) from continuing operations), versus $(3.99)M (EPS $(0.42)) in Q1 2023; “other income” included a $1.86M bargain purchase gain that partially offset the operating loss .
  • Management is executing a simplification plan: sold Digital Ignition in April to reduce debt/overhead and announced the planned Strong/MDI combination with FG Acquisition Corp., forming Saltire in Canada—management sees this as unlocking and growing value in Strong/MDI .
  • No formal revenue/EPS guidance; management noted Q2 2024 will be the first full quarter reflecting reinsurance and investment results from the acquired FG Financial business lines—an incremental revenue/earnings tailwind vs. Q1’s one-month inclusion .

What Went Well and What Went Wrong

  • What Went Well

    • Entertainment demand: “increased demand from cinema operators for screen products and installation services” lifted Strong Entertainment revenue; total company revenue +31.6% YoY to $8.64M .
    • Portfolio actions/support: Announced Digital Ignition sale (reduces debt, increases cash, lowers overhead) and Strong/MDI combination with FG Acquisition Corp. to form Saltire, intended to unlock/grow the value of Strong/MDI .
    • Management tone on cost: CEO: “simplify…reduce public company costs and focus…on accelerating growth in select scalable and high ROIC businesses,” highlighting a cost and focus agenda for shareholder returns .

  • What Went Wrong

    • Profitability: Operating loss widened to $(5.93)M, and net loss to common was $(4.36)M on higher costs and a non-cash $1.48M impairment related to Digital Ignition; SG&A rose with public company costs and post-merger FG Financial inclusion .
    • Margin compression: Net income margin was approximately −50% in Q1 as losses outpaced revenue growth; investment income remained negative in the quarter (−$3.40M) .
    • Limited visibility: No formal top/bottom-line guidance and only one month of reinsurance/investment included in Q1 (full run-rate starts Q2), limiting near-term model clarity .

Financial Results

Note: Comparability is affected by reverse merger accounting. Q1 2024 reflects three months of FG Group Holdings plus one month of FG Financial; Q1 2023 reflects FG Group Holdings only; Q3–Q4 2023 reflect legacy FG Financial (pre-merger) .

MetricQ1 2023Q3 2023Q4 2023Q1 2024
Revenue ($USD Millions)$6.57 $11.18 $6.95 $8.64
Operating Income (Loss) ($USD Millions)$(4.13) $5.63 $(0.21) $(5.93)
Net Income Attributable to Common ($USD Millions)$(3.99) $5.18 $(0.66) $(4.36)
EPS (Total) ($)$(0.42) $0.50 $(0.06) $(0.27)
EPS (Continuing Operations) ($)n/an/an/a$(0.26)
Operating Margin %−62.9% (calc from )50.3% (calc from )−3.0% (calc from )−68.6% (calc from )
Net Income Margin %−60.7% (calc from )46.4% (calc from )−9.5% (calc from )−50.4% (calc from )

Revenue composition (mix-driven insight)

Revenue Line ($USD Millions)Q1 2023Q1 2024
Net Product Sales$7.20 $8.02
Net Services Revenue$2.91 $3.25
Net Premiums Earned$0.00 $0.78
Net Investment Income$(3.54) $(3.40)
Total Revenue$6.57 $8.64

Selected KPIs and balance sheet

KPI ($USD Millions unless noted)Dec 31, 2023Mar 31, 2024
Total Assets$65.74 $110.28
Total Stockholders’ Equity (Total)$37.01 $66.60
Investment Holdings$30.9 $49.1
Cash & Cash Equivalents$2.40 $7.21
Preferred Dividend (Series A)$2.00/share FY23 $0.25/share Q1’24

Notable P&L items Q1 2024:

  • Non-cash impairment and disposal of assets: $1.48M, elevating total expenses .
  • “Bargain purchase on acquisition and other income, net”: $1.86M (offset to operating loss within other income) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue/EPSFY or Q2+None providedNone providedMaintained: no formal guidance
Reinsurance/Investment Run-rateQ2 2024n/aQ2 will be first full quarter reflecting acquired FG Financial linesNew disclosure (operational timing)
Series A Preferred DividendQ1 2024FY 2023: $2.00/share for the year $0.25/share for Q1 2024 Not comparable (quarter vs. full-year)

Earnings Call Themes & Trends

Note: We found no Q1 2024 earnings call transcript for FGF after targeted searches; no transcript appears in the filings catalog. As such, “Current Period” reflects management commentary and disclosures in Q1 materials.

TopicPrevious Mentions (Q-2 and Q-1)Current PeriodTrend
Portfolio simplification / cost reductionQ4’23: Focus to “consolidate and simplify…reduce public company costs” post-merger .Q1’24: Reiterated simplification; sold Digital Ignition to reduce debt, increase cash, lower overhead .Accelerating simplification actions.
Reinsurance contributionQ4’23: Reinsurance premiums up; profitable 2023 vs. 2022 .Q1’24: Only one month of reinsurance included; full-quarter impact begins Q2 .Positive mix shift starting Q2.
Entertainment (Strong/MDI)Q3’23: Strong progress in merchant banking/portfolio companies .Q1’24: Strong/MDI to combine with FG Acquisition Corp., forming Saltire to unlock value .Strategic monetization/scale path.
Merchant banking / SPACsQ3’23: iCoreConnect combination; ongoing pipeline .Q1’24: Continued investment holdings growth to $49.1M post-merger .Portfolio depth increasing.
Governance/leadershipN/APost-merger leadership and board set; CEO/CFO roles confirmed .Stable leadership post-merger.

Management Commentary

  • “We are pleased to report our first quarter as a combined company…our goal is to simplify all of our operations, reduce public company costs and focus our efforts on accelerating growth in select scalable and high ROIC businesses.” — Kyle Cerminara, Chairman & CEO .
  • “In April, we announced the sale of our Digital Ignition business…which reduces debt, increases cash and decreases overhead costs.” .
  • “Also in April we announced the planned combination of Strong/MDI Screen Systems with FG Acquisition Corp., which will form a Saltire Inc as new investment platform in Canada and potentially unlock and grow the value of our investment in Strong/MDI.” .
  • “We are continuing to focus on ways to reduce costs, streamline and focus our efforts on shareholder returns.” .

Q&A Highlights

  • No earnings call transcript was available in the filings catalog or through our transcript search; therefore, no Q&A takeaways for Q1 2024 could be captured (we verified 8-Ks, 10-Qs, press releases; no call transcript found) and targeted transcript search returned no FGF results.

Estimates Context

  • We attempted to retrieve S&P Global (Capital IQ) Wall Street consensus for Q1 2024 (revenue and EPS), but no mapping was available for FGF, so consensus estimates were unavailable via SPGI for this period (attempt failed due to missing CIQ mapping). As a result, we cannot present versus-consensus comparisons for Q1 2024 [GetEstimates error log].

Key Takeaways for Investors

  • Near-term revenue tailwind: Q2 2024 will be the first full quarter with reinsurance and investment results from the acquired FG Financial lines, improving comparability and potentially the run-rate vs. Q1’s one month .
  • Strategic simplification underway: Digital Ignition sale reduces debt/overhead, and Strong/MDI–FG Acquisition combination (Saltire) offers a path to unlock value in entertainment assets—key catalysts to watch for deal closure and proceeds/structure .
  • Profitability inflection depends on cost control and mix: Q1 losses were driven by higher SG&A/public company costs and a non-cash impairment; execution on cost reduction and full-quarter reinsurance inclusion are the levers to narrow losses .
  • Balance sheet scale-up post-merger: Assets increased to $110.3M and equity to $66.6M; investment holdings expanded to $49.1M, offering optionality but with portfolio mark-to-market sensitivity .
  • Watch the investment income line: Net investment income remained negative in Q1; sustained improvement here (along with reinsurance) is critical for margin trajectory .
  • No formal guidance and no Q1 call: Modeling still carries uncertainty; upcoming Q2 print (first full-quarter combined) should provide better visibility on normalized economics .

Appendix: Additional Detail

  • Dividend: Paid $0.4M ($0.25/share) on 8% Series A Preferred in Q1 2024; FY 2023 preferred dividend totaled $2.00/share .
  • Auditor change (procedural, post-merger alignment): Haskell & White appointed as independent auditor; BDO dismissed; no disagreements reported .
  • Merger mechanics and leadership: FG Financial and FG Group Holdings merger closed Feb 29, 2024; company renamed Fundamental Global Inc.; CEO Kyle Cerminara; CFO Mark D. Roberson .

Sources:

  • Q1 2024 8-K press release and financial statements
  • Q4 2023 8-K press release and financial statements
  • Q3 2023 8-K press release and financial statements
  • Merger completion 8-K (leadership/strategy)
  • Auditor change 8-K
  • Strong/MDI–FG Acquisition Corp. combination (via SGE 8-K)