Crosswinds Holdings Inc. Reports Q2 2017 Financial Results


TORONTO, Aug. 11, 2017 (GLOBE NEWSWIRE) -- Crosswinds Holdings Inc. (“Crosswinds” or the “Company”) (TSX:CWI) today announced its financial results as at and for the three and six months ended June 30, 2017.

Business Highlights

  • During the quarter, the Company completed the monetization of its interests in Salbro Bottle Group (“Salbro”) resulting in cash proceeds of approximately $3.0 million.  Salbro was the last remaining legacy investment in Crosswinds’ portfolio.
  • The Company’s investment in Monarch Delaware Holdings LLC and its subsidiaries (“Monarch”) recorded a loss for the quarter as a result of low net premium production, increased claims activity and increased loss reserves.
  • Crosswinds had expected to see a reasonable profit from Monarch during the second quarter of 2017. Monarch has experienced what the Company views as unacceptable losses well in excess of trends and projections leading to a significant loss for Crosswinds in the quarter. Rising attritional losses have negatively impacted Monarch.  The Company is assessing options and strategies to improve this investment structure and its performance.
  • The Company further capitalized Crosswinds Re with $2,656,600 during Q2 2017 but has not yet written any business as the opportunities it has reviewed to date have not met its risk-reward criteria. 

Q2 2017 Financial Highlights

For the three months ended June 30, 2017, the Company reported:

  • Net loss of $(937,706) or $(0.10) per common share (“Share”) compared to net loss of $(265,442) or $(0.04) per Share for the three months ended June 30, 2016. Until such time as Monarch’s performance improves or Crosswinds Re becomes active and profitable, the Company expects its revenues to be constrained; 
  • Share of loss from Monarch of $(0.5) million compared to share of income of $0.1 million for the three months ended June 30, 2016;
  • Shareholders’ equity attributable to Crosswinds’ shareholders (or net book value1) of $23.2 million or $2.52 per Share1 compared to $20.2 million or $3.81 per Share1 at December 31, 2016
  • $0.07 of the decrease in net book value1 during the quarter represents unrealized foreign exchange loss on translating the USD denominated investment in Monarch into Canadian dollars for financial statement purposes in an environment where the Canadian dollar has strengthened.  The Monarch investment is subject to significant foreign currency fluctuations which are unrealized but can distort the investment performance.

1 Net book value per share is a non-IFRS financial measure and is calculated as total shareholders’ equity under International Financial Reporting Standards (IFRS) divided by the number of common shares outstanding as at the period end.  See the cautionary statement regarding use of Non-IFRS financial measures at the end of this release.

For the six months ended June 30, 2017, the Company reported:

  • Net loss of $(1,367,909) or $(0.17) per Share compared to net loss of $(712,272) or $(0.12) per Share for the six months ended June 30, 2016; and
  • Share of loss from Monarch of $(0.5) million compared to income of $0.2 million for the six months ended June 30, 2016.

The Company’s net loss for the three and six months ended June 30, 2017 was primarily attributable to the share of loss in Monarch which was due to a decrease in premium production, increased claims activity and an increase in loss reserves.

Statement of Operations Highlights

 Three months ended June 30Six months ended June 30
In CAD thousands, except per Share amounts   2017  2016  2017  2016 
Revenue$   131 $103 $   255 $209 
Net results of investments (612) 121  (600) 143 
Expenses (531) (472) (1,093) (1,031)
Net loss$(1,012)$(248) (1,438) (679)
Non-controlling interest’s (income) loss 74  (17) 70  (33)
Net loss attributable to the shareholders of Crosswinds$ (938)$(265) (1,368) (712)
Net loss per Share$ (0.10)$(0.04)$(0.17)$(0.12)

For the quarter ended June 30, 2017, the Company reported:

  • Cash of $8.4 million compared to $1.6 million at December 31, 2016 reflecting the completion of a rights offering in Q1 2017 and the monetization of Salbro in Q2 2017; and
  • Carrying value of $17.2 million for Monarch compared to $18.3 million at December 31, 2016.

Balance Sheet Highlights

In CAD thousands, except per Share amountsJune 30, 2017December 31, 2016
Cash$  8,427 $1,566 
Investments in an associate and private entity 17,250  21,322 
Other assets 225  202 
Total Assets $ 25,902 $23,090 
Total Liabilities (203) (277)
Total Shareholders’ Equity$ 25,699 $22,813 
Non-controlling interests (2,464) (2,610)
Shareholders’ Equity attributable to the shareholders of Crosswinds$23,235 $20,203 
Number of shares outstanding (millions) 9.2  5.3 
Net book value per Share attributable to the shareholders of Crosswinds$ 2.52 $3.81 

Financial Information

For a comprehensive review of the Company’s results, shareholders are encouraged to read the Company’s condensed interim consolidated financial statements and accompanying Interim Management’s Discussion and Analysis for the period ended June 30, 2017, copies of which will be available on the Company’s website at and on SEDAR at

Crosswinds Holdings Inc.

Crosswinds is a publicly traded private equity firm and asset manager targeting strategic and opportunistic investments in the financial services sector with a particular focus on the insurance industry.

Caution Regarding Forward-Looking Information
This release includes certain forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “should”, “plans” or “continue” or the negative thereof or variations thereon or similar terminology. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct.  These forward-looking statements are subject to a number of risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements. Reference should be made to the risk factors in the Company’s 2016 Annual Information Form, in the Management’s Discussion and Analysis for the year ended December 31, 2016 and in our other filings with Canadian securities regulators. Additional important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, competition, interest rates, tax related matters, loss of personnel, reliance on key personnel, ability of the Company to generate positive future returns for investors, ability of the Company to execute its strategies from time to time; the receipt of any regulatory approvals or consents required from time to time. This news release makes reference to the net book value per share which is a non-IFRS financial measure.  The Company calculates the net book value per share as it believes it to be an important metric that shareholders use and frequently request and refer to because shareholders often view the Company as an holding company of investments in private entities.  Net book value is a non-IFRS financial measure that does not have any standardized meaning prescribed by International Financial Reporting Standards and therefore it is unlikely to be comparable to similar measures presented by other issuers.  This classification is not an IFRS measure and should not be considered either in isolation of, or as a substitute for, measures prepared in accordance with IFRS.

Cautionary Statement Regarding the Valuation of Investments in Private Entities
In the absence of an active market for its investments in private entities, fair values are determined by management using the appropriate valuation methodologies after considering the history and nature of the business, operating results and financial conditions, the outlook and prospects, the general economic, industry and market conditions, capital market and transaction market conditions, contractual rights relating to the investment, public market comparables, private market transactions multiples and, where applicable, other pertinent considerations. The process of valuing investments for which no active market exists is inevitably based on inherent uncertainties and the resulting values may differ from values that would have been used had an active market existed. The amounts at which the Company's investments in private entities could be disposed of may differ from the fair value assigned and the differences could be material. Estimated costs of disposition are not included in the fair value determination. 

More information

Colin King
Tel:  1-800-439-5136

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Source: Crosswinds Holdings Inc.

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