Crosswinds Holdings Inc. Reports 2017 Financial Results

04/02/2018

TORONTO, April 02, 2018 (GLOBE NEWSWIRE) -- Crosswinds Holdings Inc. (“Crosswinds” or the “Company”) (TSX:CWI) today announced its financial results as at and for the three months and year ended December 31, 2017.

Business Highlights

  • During the fourth quarter of 2017, the Company announced that it had entered into a purchase and sale agreement to sell its interest in Monarch to its Joint Venture partner (the “Monarch Sale”). 
  • The Company classified its investment in Monarch as held for sale as of November 27, 2017 and presented Monarch as a discontinued operation in its financial results.

Subsequent Event

  • After year end, the Company completed the Monarch Sale with the Company receiving USD$10.5 million of the proceeds.
  • Following the Monarch Sale, the Company currently has approximately CAD $4.5 million in cash and USD$12.7 million in cash and cash equivalents, which at the current exchange rate (USD 1.00 = CAD 1.29) is equivalent to a total of CAD$20.9 million.  
  • As the majority of the Company’s assets are now in cash, the Company’s Board of Directors is exploring next steps which include assessing available investment opportunities against other strategic alternatives including, without limitation, a return of capital or other monetization event.  The Company will provide periodic updates on the status of this review.

Financial Highlights

For the three months ended December 31, 2017, the Company reported:

  • Net loss from continuing operations of $(500,544) or $(0.05) per common share (“Share”) compared to net income from continuing operations of $114,291 or $0.02 per Share for the three months ended December 31, 2016; and
  • Shareholders’ equity attributable to Crosswinds’ shareholders (or net book value1) of $19.4 million or $2.12 per Share1 compared to $20.2 million or $3.81 per Share1 at December 31, 2016.

For the year ended December 31, 2017, the Company reported:

  • Net loss from continuing operations of $(1,953,579) or $(0.22) per Share compared to net loss from continuing operations of $(1,167,553) or $(0.19) per Share for the year ended December 31, 2016.

The Company’s net loss from continuing operations for the year ended December 31, 2017 was primarily attributable to:

  • the unrealized gain on Salbro of $608,000 reported in 2016 with no such corresponding amount reported in 2017, following the monetization of the Salbro investment in Q2;
  • the increase in the unrealized foreign exchange loss on the revaluation of USD denominated assets as a result of the strengthening of the CAD over the USD; and
  • a marginal increase in expenses incurred at Crosswinds Re as a result of Crosswinds Re’s infrastructure being fully built out.

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.


Statement of Operations Highlights

  Three months ended Dec. 31 Year ended Dec. 31
In CAD thousands, except per Share amounts    2017     2016     2017     2016  
Revenue  $    134   $ 115   $    496   $  435  
Net results of investments   (40 )   634     (228 )   559  
Expenses   (595 )   (635 )   (2,222 )   (2,161 )
Net income (loss) from continuing operations $ (501 ) $ 114   $ (1,954 ) $ (1,167 )
(Loss) income from discontinued operations   (268 )   65     (3,194 )   400  
Net income (loss)   (769 )   179     (5,148 )   (767 )
Non-controlling interest (income) loss   38      (9 )   456     (57 )
Net income (loss) attributable to the shareholders of Crosswinds $ (731 ) $ 170   $ (4,692 ) $ (824 )
Net income (loss) per Share from continuing and discontinued operations $ (0.08 ) $ 0.03   $ (0.54 ) $ (0.14 )


Balance Sheet Highlights

In CAD thousands, except per Share amounts December 31, 2017 December 31, 2016
Cash and marketable securities $  7,507   $   1,566  
Investments in an associate and private entity   -     21,322  
Asset classified as held for sale   13,986     -  
Other assets   203     202  
Total Assets $ 21,696   $ 23,090  
Total Liabilities   (256 )   (277 )
Total Shareholders’ Equity $ 21,440   $ 22,813  
Non-controlling interests   (1,998 )   (2,610 )
Shareholders’ Equity attributable to the shareholders of Crosswinds $ 19,442   $ 20,203  
Number of Shares outstanding (millions)   9.2     5.3  
Net book value per Share attributable to the shareholders of Crosswinds $ 2.12   $   3.96  


Financial Information

For a comprehensive review of the Company’s results, shareholders are encouraged to read the Company’s audited consolidated financial statements and accompanying Management’s Discussion and Analysis for the year ended December 31, 2017, copies of which will be available on the Company’s website at www.crosswindsinc.com and on SEDAR at www.sedar.com.

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.

More information

Colin King
Tel:  1-800-439-5136  info@crosswindsinc.com   www.crosswindsinc.com

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 2017 Annual Information Form, in the Management’s Discussion and Analysis for the year ended December 31, 2017 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, sourcing and timing for completing any new investments, outcome of assessment of alternatives available to the Company, 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 Investment in Salbro
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. 

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Source: Crosswinds Holdings Inc.

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