Good day, welcome to Kingsway First Quarter 2023 Earnings Call. At this time, all participants have been placed in a listen-only mode, and the floor will be open for questions and comments after the presentation. If you would like to join the queue at any time to ask a question, you may press star one on your telephone keypad. Should you wish to remove yourself from queue, you may press star two. With me on the call are J.T. Fitzgerald, Chief Executive Officer, and Kent Hansen, Chief Financial Officer. Before we begin, I want to remind everyone that today's conference call may contain forward-looking statements. Forward-looking statements include statements regarding the future, including expected revenue, operating margins, expenses, and future business outlook. Actual results or trends could materially differ from those contemplated by those forward-looking statements. For discussion of such risks and uncertainties which could cause actual results to differ from those expressed or implied in the forward-looking statements, please see risk factors detailed in the Company's annual report on Form 10-K, as well as other reports that the company filed from time to time with the Securities and Exchange Commission. Please note, too, that today's call may include the use of non-GAAP metrics that management utilizes to analyze the company's performance. A reconciliation of such non-GAAP metrics to the most comparable GAAP metrics is available in our most recent press release as well as in our periodic filings with the SEC I'd like to turn the call over to J.T. Fitzgerald, CEO of Kingsway. J.T., please proceed. Thank you, Tom. Good afternoon, welcome to the Kingsway First Quarter 2023 Earnings Call. Thank you for joining us. Let me begin by saying we are very pleased with our start to 2023, with solid financial performance and operating results that generally met our expectations despite an environment of macro uncertainty regarding interest rates and inflation. Importantly, we further simplified and strengthened our balance sheet with the repurchase of nearly all our trust preferred debt and recorded a nice gain. With a cleaned up balance sheet and the liquidity and capital resources we have available, we are poised to execute on our strategy for future growth. As of March 31, 2023, our trailing twelve-month consolidated adjusted EBITDA was $11 and a half million, an increase of nearly 80% over the comparable year-ago period. Our trailing 12-month adjusted EBITDA run rate of our operating businesses continues to be in the $18 million-$19 million range. Turning first to our Extended Warranty segment. On a pro forma basis, first quarter warranty revenues increased 3% over last year, and pro forma adjusted EBITDA increased by 17%. Please note that our pro forma results exclude PWSC, which was sold in Q3 of 2022. At our auto-focused warranty businesses, higher used car prices and increasing financing costs continue to have a modest impact on industry-wide demand. Despite these macro conditions, our warranty businesses continue to execute and find opportunities for growth. As used car prices begin to normalize, particularly at the older end of the spectrum where our products are most relevant, we continue to expect that declining used car prices will offset some of the impact of higher borrowing costs. At our mechanical and HVAC focused warranty business, ongoing supply chain backlogs for new equipment continue to pose challenges. As the supply chain frees up and those machines are shipped and installed, we expect that the associated warranty revenues will revert to historical growth trends. In our Search Xcelerator or KSX segment, revenues grew by 131% compared to the first quarter of last year, and adjusted EBITDA of $1.7 million was up 93%. This segment of our business is currently comprised of three operating entities, Ravix, C-Suite, and Secure Nursing Services or SNS. As you may recall, in November 2023, we acquired CSuite, a national financial executive services firm that provides financial management leadership in the U.S., and SNS, a staffing agency for the nursing and healthcare vertical. Q1 2023 is the first quarter that includes a full period of results for these two entities. Kent will provide more details later in the call, but we are encouraged by the early performance of these acquired businesses. Turning to the balance sheet. During the quarter, we repurchased nearly all of our trust preferred debt or TRUPS debt, as we call it, that was under option using available funds from working capital. We paid $56.5 million for five of the six remaining TRUPS tranches. With this transaction, we recognized a gain on extinguishment of debt of $31.6 million. As of the end of the first quarter, we had a carrying value of $11.8 million related to the remaining TRUPS debt instrument. In March, the board approved a one-year share repurchase program and authorized the repurchase of up to $10 million of our stock through March 21st, 2024. We believe it is a good corporate practice to have a plan in place and the flexibility to allocate capital towards repurchasing shares. We are acutely focused on maximizing intrinsic value per share. If market conditions provide opportunities, we will allocate capital to accretive repurchases of our stock. Our priorities for 2023 and beyond remain the same. Strategically allocating capital to build a business that delivers sustainable long-term growth, generates positive cash from operations and provides an attractive return for our shareholders. We are targeting 2-3 new acquisitions per year that fit our clearly defined acquisition criteria and will generate annualized adjusted EBITDA in the range of $1.5 million-$3 million each. We aim to do this by in part attracting, developing and retaining world-class tele-talent within our KSX platform. We have a great team of talented professionals who are actively searching for acquisition targets that fit our defined set of criteria, and our acquisition pipeline is strong. Subsequent to the end of the first quarter, we added a new operator in residence or OIR, Mr. Peter Hearne to the KSX platform. Peter joins us from Centerview Partners, where he advised companies across a broad range of industries on key strategic and financial matters, including mergers and acquisitions. We welcome Peter to the team and look forward to supporting him in his search for a great company to acquire and run. Subsequent to quarter end, we announced that we welcome Charles Joyce to Kingsway as Vice President of Business Development for our KSX platform. This is a new position at the company. Charlie joins us from 4 Circle LLC, a search investment firm where he was responsible for sourcing and evaluating investment opportunities. We are delighted to welcome Charlie to the team as we build out our deal sourcing engine for future acquisitions. Finally, before I turn the call over to Kent for a more in-depth discussion of the numbers, I'd like to remind everyone that we are hosting our annual general meeting of shareholders along with an Investor Day at the New York Stock Exchange next Tuesday, May 16th. The AGM will begin at 9:00 A.M. Eastern Time. The Investor Day pre-presentation will follow immediately thereafter. I'll now turn the call over to Kent for a review of our financial results. Kent. Thank you, J.T. Before I get started, as a reminder, during the fourth quarter of 2022, we began executing a plan to sell one of our subsidiaries, VA Lafayette, as part of our strategic shift away from the leased real estate assets and to simplify our capital structure. VA Lafayette is included in discontinued operations, and its assets and liabilities are reported as held for sale. The results of its operations are reported separately and not included in the results I'm about to discuss. Income from continuing operations was $27.7 million for the first quarter of 2023, compared to a loss from continuing operations of $4 million in the first quarter of 2022. The current period includes a $31.6 million gain on the extinguishment of debt related to the repurchase of our tranches, as well as interest expense on all 6 tranches through the date of repurchase. Consolidated adjusted EBITDA was $2.4 million for the first quarter of 2023, a $1.4 million or 135% increase compared to consolidated adjusted EBITDA of $1 million in the first quarter of last year. Combined operating income for Extended Warranty in KSX was $3 million for the first quarter of 2023 compared to $2.5 million in the prior year. Combined pro forma adjusted EBITDA, which excludes the results of PWSC that we sold in July of 2022, was $3.5 million in the first quarter of 2023 and $2.4 million in the first quarter of last year, or an increase of 44%. Breaking this down by reportable segment. In Extended Warranty, first quarter 2023 pro forma adjusted EBITDA was $1.8 million or 10.9% of pro forma Extended Warranty revenue, compared to $1.6 million or 9.6% of pro forma revenue in the first quarter of last year. The first quarter of 2023 was impacted by the following items. First, at Trinity, lower revenue was due to an unseasonably mild winter and parts availability issues due to the overall supply chain that J.T. mentioned, which was partially offset by lower cost of goods sold due to the variable cost nature of those expenses. Trinity leadership is focused on expanding its offering of warranties in the HVAC and refrigeration sectors, and we believe there's a lot of room for growth in this area. Slightly higher revenue at PWI and lower general and administrative expenses that were partially offset by higher commission expenses. As mentioned on prior calls, Brian Cosgrove took over the leadership of PWI in the second half of 2022 and continues to implement strict cost discipline while bringing in new leadership to the sales organization. Finally, higher revenue at IWS was partially offset by an increase in commission expense and claims expense. The latter attributed to a decrease in the number of claims that was more than offset by an increase in the average cost of a claim. For Extended Warranty on a trailing twelve-month basis, pro forma adjusted EBITDA was $10 million or 14.3% of pro forma revenue, compared to $7.7 million or 11.5% of pro forma revenue in the previous trailing twelve-month period. Turning to KSX, adjusted EBITDA was $1.7 million or 17.1% of segment revenue in the first quarter of 2023, compared to $861,000 or 20.7% of segment revenue in the first quarter of last year. The first quarter of 2023 was impacted by the following items. First, at Ravix, lower revenue due to a decline in billable hours that was partially offset by an increase in billing rates. A shift in mix to higher level positions and lower general administrative expenses. The decline in billable hours is mainly attributable to the decline in general M&A activity and venture capital funding. However, gross margin improved to 33% in the first quarter of 2023, compared to 29% a year ago. For the quarter, Ravix had adjusted EBITDA of $900,000. As Timi Okah will cover more at our Investor Day next week, since Kingsway acquired Ravix in October of 2021, TTM revenue has increased 21%, TTM adjusted EBITDA has increased 40%, and the number of clients have increased 18%, all without increasing headcount. KSX also benefited from a full quarter of financial results from C-Suite and SNS. Timi, who also leads Ravix, took over the leadership at CSuite upon its acquisition. CSuite's revenue is being impacted by similar factors as Ravix, as well as a higher mix of revenue from search, which is generally lower margin. Gross margin was 30% for the first quarter of 2023. For the quarter, CSuite had adjusted EBITDA of $135,000. At SNS, we have seen a shift in mix from travel staffing to per diem staffing, resulting in a nearly 50/50 split for Q1 of 2023. While the total number of shifts is down slightly from prior year, the average billing rates are holding at a higher level than anticipated. Charles is doing a nice job transitioning the business from the former owner and is already looking to expand into other geographic markets. Gross margin was 26% in the first quarter of 2023, and SNS had adjusted EBITDA of about $650,000. Turning now to our balance sheet. At the end of the first quarter of 2023, we had cash and cash equivalents of $8.3 million, compared to $64.2 million at the end of 2022. This decrease was largely driven by the TRUPS repurchase of approximately $56.5 million. We also received $6.2 million in cash proceeds from holders of our warrants exercising during the quarter. As of March 31, 2023, $3.2 million of our $5 strike warrants remained outstanding. Our total outstanding debt is comprised of bank loans and the remaining TRUPS. Debt associated with VA Lafayette is reported in as a separate line item on our balance sheet as liabilities held for sale. We had total outstanding debt of $42.8 million at the end of the first quarter of 2023, compared with $102.1 million at the end of 2022, and an originally reported amount of $292.7 million at the end of 2021. Since the end of 2021, we have reduced our total debt by 85%. As of March 31, 2023, our deferred interest was $0. I would also like to note that all but 30,000 of our Class A preferred shares elected to convert during the first quarter, and the remaining 30,000 are expected to convert during the second quarter. As a reminder, conversion requires zero cash outlay by the company. On a quick side note, our VA clinic is listed for sale and is actively being marketed by a national broker. We have received a lot of serious interest and hope to have the VA clinic sold during 2023. As J.T. mentioned, the board approved a 1-year share repurchase program and authorized the repurchase of our stock. No shares were repurchased during the 3 months ended March 31, 2023. In summary, our business performed well in the first quarter. We have substantially de-levered and simplified our financials, and we have the financial flexibility to be selective and opportunistic as we deploy capital. With that, I look forward to seeing you at our upcoming Investor Day and now turn the call back over to the operator to open the line for questions. Certainly, and thank you. Ladies and gentlemen, the floor is now open for questions. If you would like to join the queue to ask a question at this time, you may press star one on your telephone keypad. Should you wish to remove yourself from queue, you may press star, then two. We do ask, if listening on speaker phone this afternoon, that you please pick up your handset to provide optimal sound quality. Once again, ladies and gentlemen, that'll be star one on your telephone keypad at this time, if you would like to join the queue to ask a question. Please hold a moment while we poll for questions. We do have a question from Adam Patinkin. Adam, your line is live. Please proceed. Hey, guys. Congratulations on a nice start to the year. Thanks, Adam. Nice to hear from you. Yeah, likewise. I guess I have just a few quick questions. My first one is, I was interested in the hiring of Charlie Joyce. Can you expand on his role and what you expect him to bring to the team and what that might mean for your ability to, you know, maybe attract additional OIRs and to conclude purchases of businesses in the KSX segment? Yeah. Charlie, great background, was doing a self-funded search, understands the ETA community very broadly. The thought process here is to really lean into our sourcing process here at KSX to allow our OIRs to focus on more direct sourcing in specific industries of interest. Charlie will be... ...predominantly focused on building out our database of intermediaries, brokers, and investment bankers, and enhancing our outreach process to describe the Search Xcelerator, our acquisition criteria, and the solution that we provide to lots of business owners who are looking to transition into retirement. The hope is that we will be able to see a lot more opportunities that are coming through traditional broker and intermediary channel with someone, you know, single point of contact at the Search Xcelerator that can focus on that will also provide continuity in that sourcing engine as new OIRs come onto the platform and other OIRs leave when they get an acquisition done. He'll also spend some time focused on our recruiting efforts. He's very plugged in in the ETA community, as I said. He will be a point of presence for the Search Xcelerator at ETA conferences on business school campuses, et cetera. I think that it really enhances our product offering for OIRs to come on board, you know, if they can step into a very vibrant and powerful pipeline of ongoing deal flow through that channel. I think it'll also help that he's out getting the word out in the community. That's great. That's a really exciting person to bring on board, and it sounds like a really nice fit. Maybe to kind of transition to something you touched on there, you know, now you have 4 OIRs, and I know you reiterated during your prepared remarks that you're still targeting 2-3 acquisitions per year. Can you maybe talk about, you know, what you're seeing out there in the market, how your pipeline looks maybe compared to, you know, last quarter or a few months ago? Just would love any update on, you know, the progress around the OIRs and making business acquisitions. Look, you know, I think broadly, the general M&A environment was a little slow in the first quarter. We certainly saw that at CSuite and Ravix, and I think you probably read about it. At the lower end of the lower middle market, I think that it remained pretty solid. You know, credit conditions tightened up a bit. Valuation expectations probably are a little mismatched between sort of buyers' cost of capital and sellers' expectations. I fully expected that to kind of revert and the broader sort of M&A environment to unthaw here as we head into the summer. Our pipeline looks pretty strong. You know, Peter and Drew are up to sort of full speed and cranking along. We have Peter Hearne just joined us, so expect to get him up and going. obviously, the things that Charlie is doing, will only enhance that. We did part ways with 1 OIR subsequent to quarter end, so, we're still at a total of 3 OIRs with the addition of Peter. Got it. Okay. That's helpful to know. Maybe just one final question on a slightly different topic, which is, I was just scanning through the Form 10-Q after you guys released it and noticed that you had a $1.1 million gain or an unrealized gain, and it looks like it's related to Limbach shares. I noticed- Mm-hmm. the Limbach stock price was up a whole bunch today. Can you maybe comment on what that is and what you plan to do with that? You know, obviously, anytime you see a million-dollar gain, that's that seems like a positive thing, but would love to understand kind of a little bit more about what's going on there. Yeah. That gain is related to warrants that we received in Limbach as part of the SPAC sponsorship that Kingsway sponsored all the way back in 2016 when Limbach went public via a reverse merger. They're 400,000 $15 strike warrants in Limbach. They're available to cashless exercise, and they expire in July. You know, provided the stock price is higher than the strike price, we will cashless exercise for Limbach shares. Those shares will be restricted for 6 months, I believe. Then we would be able to monetize that asset. Got it. Have you already exercised that, or how does that work in terms of, you know. I guess that's a really good thing that the stock was up 17% today. Yeah, maybe if you could give a little bit more color on, you know, whether you've exercised it or not or what your plans are. You know, we went through a process to just test the cashless exercise to make sure that we had all of the machinations of that understood and could do it timely. We exercised a small portion of them in the last week or so. I think the thinking was we would wait to get through earnings and the potential that they would get added to the Russell and see what the momentum in the stock is heading into the expiration. We'll continue to monitor that with a view to sort of maximizing the value. You get a little leverage by not exercising them if the stock price continues to go up. We're keeping an eye on it. Okay, great. All sounds good. Really appreciate it, guys. I will go off the line. Good luck with everything, and again, appreciate all the comments and color. You bet. Thanks, Adam. Thank you. Once again, if anyone has a question at this time, you may press star one on your keypad to enter the queue to ask a question. Once again, that'll be star one at this time if you would like to join the queue to ask a question. Please hold a moment while we pull for questions. There are no further questions in queue at this time. I would now like to turn the floor back to management for closing remarks. James, did you have any questions that were sent via email? I wanna make sure that if people submitted questions via email, that we had an opportunity to address those. Absolutely. Yes, 3 did come in. You know, the first question that came in was: Is there a targeted hold exit period for investments in the accelerated segment, or are these investments entered into with the expectation of holding indefinitely unless for a compelling external bid? Yeah, I think that what I would say is that our general preference would be to hold a great asset indefinitely. We don't go into an investment with a preconceived idea of an exit. That said, if like the question asked, if we got a compelling external bid that, you know, allowed us to realize a return and redeploy that capital at a higher rate of return, then we would certainly do that. I think that, you know, our goal here is to build and compound with the great businesses that we're buying with sort of an indefinite horizon. Great. thank you. The second question that came in was: Can JT or Kent comment on the run rate operating costs of the Holdco? What are those currently, and what level of consolidated EBITDA is required for KFS to cash flow? Thanks, James. This is Kent. I think I'll talk about, you know, the Holdco run rate expenses. When I say Holdco, it means the, you know, the corporate team as well as the KSX team that hasn't sort of migrated to one of the operations yet. If we look at sort of like the cash only spend and not taking into account interest expense because that's variable and it's only a small part of our chops that are left. We are targeting, you know, run rate cash expense, say $1 million-$1.2 million-ish per quarter. Great. The third and final question that came in online was: What would the management team need to see to engage in buybacks? What are the targets that would trigger them? It does close with saying, "Looking forward to the discussion in next week's Investor Day. Yeah. I think I touched a little bit on that in the comments, in the presentation. You know, I think that our goal would be to do buybacks in a way that is accretive to our view of intrinsic value per share. Any buybacks we do would be at a discount to that view. That's where we would be looking to repurchase shares. Great. That does conclude the questions that came in online. J.T., I throw it back to you for any closing comments. Okay. Well, thanks everyone for participating in the call this afternoon. Really appreciate your attendance, and, look forward to seeing all of you next week in New York for our Investor Day. Thanks, and have a great afternoon. Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.