8-K
KINGSTONE COMPANIES, INC. (KINS)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 29, 2024
KINGSTONE COMPANIES, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 000-01665 | 36-2476480 |
|---|---|---|
| (State or other jurisdiction <br><br> of incorporation) | (Commission <br><br> File Number) | (IRS Employer <br><br> Identification No.) |
| 15 Joys Lane<br><br> <br>Kingston, New York | 12401 | |
| --- | --- | |
| (Address of principal executive offices) | (Zip code) |
Registrant's telephone number, including area code (845) 802-7900
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $0.01 par value per share | KINS | NASDAQ Capital Market |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter):
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition. |
|---|
On October 29, 2024, Kingstone Companies, Inc. (the “Company”) issued a press release announcing certain preliminary financial results for the period ended September 30, 2024 (the “Press Release”). The Press Release also announced that the Company will hold a conference call for analysts and investors on November 13, 2024 at 8:30 A.M. ET. to discuss its third quarter results, and that the Company’s financial results news release is scheduled to be issued shortly after the stock markets close on the previous day, November 12, 2024. A copy of the Press Release is furnished as Exhibit 99.1 hereto.
The information furnished with this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any other filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as expressly set forth by specific reference in such a filing.
| Item 7.01 | Regulation FD Disclosure. |
|---|
See Item 2.02 above.
The information in the Press Release is being furnished, not filed, pursuant to this Item 7.01. Accordingly, the information in the Press Release will not be incorporated by reference into any registration statement filed by the Company under the Securities Act unless specifically identified therein as being incorporated therein by reference. The furnishing of the information in this Current Report on Form 8-K with respect to the Press Release is not intended to, and does not, constitute a determination or admission by the Company that the information in this Report with respect to the Press Release is material or complete, or that investors should consider this information before making an investment decision with respect to any security of the Company.
| Item 9.01 | Financial Statements and Exhibits. | |
|---|---|---|
| (d) | Exhibits: | |
| --- | --- | --- |
| 99.1 | Press release, dated October 29, 2024, issued by Kingstone Companies, Inc. | |
| 104 | Cover Page Interactive Data File (embedded within the inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| KINGSTONE COMPANIES, INC. | ||
|---|---|---|
| Dated: October 29, 2024 | By: | /s/ Jennifer Gravelle |
| Jennifer Gravelle | ||
| CFO |
FOR IMMEDIATE RELEASE
Kingstone Announces Record Operating Profitability and Growth
and Schedules Third Quarter 2024 Conference Call
Kingston, NY — October 29, 2024 – Kingstone Companies, Inc. (Nasdaq: KINS) (the “Company” or “Kingstone”), a Northeast regional property and casualty insurance holding company, announced today certain preliminary financial results for its third quarter and nine months ended September 30, 2024, and announced that it will hold its third quarter 2024 financial results conference call on Wednesday, November 13, 2024, at 8:30 a.m. Eastern Time. The financial results news release is expected to be issued after the market closes on Tuesday, November 12, 2024.
Preliminary Results
(Estimated and Unaudited)
Third Quarter 2024 (all metrics are compared to Third Quarter 2023):
| • | Direct written premium growth^1^ of 28%; Core^2^ direct written premium growth^1^ of 39%. |
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| • | Consolidated GAAP combined ratio of 72%, a 38 percentage point improvement. |
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| • | Net loss ratio of 39%, a 40 percentage point improvement. |
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| • | Catastrophe loss & LAE of $582 thousand included in the net loss ratio. |
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| • | Net expense ratio of 33%, a 1 percentage point increase. |
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| • | Operating income per basic share^1^ of $0.55 versus an operating loss per basic share^1^ of $(0.27). |
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| • | Operating income per diluted share^1^ of $0.50 versus an operating loss per diluted share^1^ of $(0.27). |
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Nine Months Ended September 30, 2024 (all metrics are compared to Nine Months Ended September 30, 2023):
| • | Direct written premium growth^1^ of 15%; Core^2^ direct written premium growth^1^ of 25%. |
|---|---|
| • | Consolidated GAAP combined ratio of 81%, a 30 percentage point improvement. |
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| • | Net loss ratio of 49%, a 29 percentage point improvement. |
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| • | Catastrophe loss & LAE of $2.5M included in the net loss ratio. |
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| • | Net expense ratio of 32%, a 1 percentage point improvement. |
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| • | Operating income per basic share^1^ of $1.07 versus an operating loss per basic share of $(0.89). |
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| • | Operating income per diluted share^1^ of $0.97 versus an operating loss per diluted share of $(0.89). |
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^1^These measures are not based on GAAP; definitions and reconciliations to the most directly comparable GAAP measures are below. See “Definitions and Non-GAAP Measures”.
^2^Kingstone refers to New York business as its “core” business and the business outside of New York as its “non-core” business. The aggregate of “core” and “non-core” direct written premium growth is represented by direct written premium growth.
Conference Call Details
Wednesday, November 13, 2024, at 8:30 a.m. Eastern Time
To participate please dial:
U.S. toll free 1-877-423-9820
International 1-201-493-6749
Participants are asked to dial-in approximately 10 minutes before the conference call is scheduled to begin. The conference call can also be accessed via webcast in the “Events & Presentations” tab of the Company’s website or by clicking here. The webcast will be archived and accessible for approximately 30 days.
Definitions and Non-GAAP Measures
Direct written premiums represent the total premiums charged on policies issued by the Company during the respective fiscal period. Net premiums earned, the GAAP measure most comparable to direct written premiums, are net written premiums (i.e., direct written premiums less premiums ceded to reinsurers) that are pro-rata earned during the fiscal period presented. All of the Company’s policies are written for a twelve-month period. Management uses direct written premiums, along with other measures, to gauge the Company’s performance and evaluate results. Direct written premiums are provided as supplemental information, not as a substitute for net premiums earned, and do not reflect the Company’s net premiums earned.
The table below reconciles preliminary direct written premiums to preliminary net premiums earned for the periods presented:
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30, | September 30, | |||||||||||||||||
| % | % | |||||||||||||||||
| 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||||||||
| (000’s except percentages) | ||||||||||||||||||
| Direct Written Premiums Reconciliation: | ||||||||||||||||||
| Direct written premiums | $ | 66,627 | $ | 51,992 | 28.1 | % | $ | 169,447 | $ | 147,237 | 15.1 | % | ||||||
| Ceded written premiums^1^ | (46,081 | ) | (48,317 | ) | (4.6 | ) | (69,381 | ) | (75,964 | ) | (8.7 | ) | ||||||
| Net written premiums | 20,545 | 3,675 | 459.0 | 100,065 | 71,273 | 40.4 | ||||||||||||
| Change in unearned premiums | 12,862 | 24,263 | (47.0 | ) | (7,535 | ) | 14,428 | (152.2 | ) | |||||||||
| Net premiums earned | $ | 33,407 | $ | 27,938 | 19.6 | % | $ | 92,531 | $ | 85,701 | 8.0 | % | ||||||
| (Components may not sum due to rounding) | ||||||||||||||||||
| ^1^Components of ceded written premiums balances from prior year periods were reclassified to conform with the current year presentation. The<br> reclassification had no effect on the Company’s previously reported financial condition, results of operations or cash flows. |
Operating income (loss) per basic share is basic income (loss) per share exclusive of net gains (losses) on investments, net of tax. Net income (loss) per basic share is the GAAP measure most closely comparable to operating income (loss) per basic share.
Management uses operating income (loss) per basic share, along with other measures, to gauge the Company’s performance and evaluate results, which can be skewed when including net gains (losses) on investments and may vary significantly between periods. Operating income (loss) per basic share is provided as supplemental information, not as a substitute for net income (loss) per basic share, and does not reflect the Company’s overall profitability.
The following table reconciles preliminary basic income (loss) per share to preliminary basic operating income (loss) per share for the periods indicated:
| For the Three Months Ended | For the Nine Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | |||||||||
| Basic income per common share | Basic loss per common share | Basic income per common share | Basic loss per common share | |||||||||
| Operating Income (Loss) per Basic Common Share Reconciliation: | ||||||||||||
| Net income (loss) | $ | 0.61 | $ | (0.33 | ) | $ | 1.16 | $ | (0.85 | ) | ||
| Net realized (gain) loss on investments, net of taxes | $ | (0.06 | ) | $ | 0.06 | $ | (0.09 | ) | $ | (0.04 | ) | |
| Operating income (loss) | $ | 0.55 | $ | (0.27 | ) | $ | 1.07 | $ | (0.89 | ) |
Operating income (loss) per diluted share is diluted income (loss) per share exclusive of net gains (losses) on investments, net of tax. Net income (loss) per diluted share is the GAAP measure most closely comparable to operating income (loss) per diluted share.
Management uses operating income (loss) per diluted share, along with other measures, to gauge the Company’s performance and evaluate results, which can be skewed when including net gains (losses) on investments and may vary significantly between periods. Operating income (loss) per diluted share is provided as supplemental information, not as a substitute for net income (loss) per diluted share, and does not reflect the Company’s overall profitability.
The following table reconciles preliminary diluted income (loss) per share to preliminary diluted operating income (loss) per share for the periods indicated:
| For the Three Months Ended | For the Nine Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | |||||||||
| Diluted income per common share | Diluted loss per common share | Diluted income per common share | Diluted loss per common share | |||||||||
| Operating Income (Loss) per Diluted Common Share Reconciliation: | ||||||||||||
| Net income (loss) | $ | 0.55 | $ | (0.33 | ) | $ | 1.05 | $ | (0.85 | ) | ||
| Net realized (gain) loss on investments, net of taxes | $ | (0.05 | ) | $ | 0.06 | $ | (0.09 | ) | $ | (0.04 | ) | |
| Operating income (loss) | $ | 0.50 | $ | (0.27 | ) | $ | 0.97 | $ | (0.89 | ) | ||
| (Components may not sum due to rounding) |
Disclaimer and Forward-Looking Statements
The estimated, unaudited financial results indicated above are based on information available as of October 29, 2024, remain subject to change based on management's ongoing review of the Company’s third quarter results and are forward-looking statements (see below). The actual results may be materially different and are affected by the risk factors and uncertainties identified in Kingstone's annual and quarterly filings with the Securities and Exchange Commission.
This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, may be forward-looking statements. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. These statements involve risks and uncertainties that could cause actual results to differ materially from those included in forward-looking statements due to a variety of factors. For more details on factors that could affect expectations, see Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023.
The risks and uncertainties include, without limitation, the following:
| • | the risk of significant losses from catastrophes and severe weather events; |
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| • | risks related to the lack of a financial strength rating from A.M. Best; |
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| • | risks related to our indebtedness due on June 30, 2026, including due to the need to comply with certain financial covenants<br> and limitations on the ability of our insurance subsidiary to pay dividends to us; |
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| • | adverse capital, credit and financial market conditions; |
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| • | the unavailability of reinsurance at current levels and prices; |
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| • | the exposure to greater net insurance losses in the event of reduced reliance on reinsurance; |
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| • | the credit risk of our reinsurers; |
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| • | the inability to maintain the requisite amount of risk-based capital needed to grow our business; |
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| • | the effects of climate change on the frequency or severity of weather events and wildfires; |
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| • | risks related to the limited market area of our business; |
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| • | risks related to a concentration of business in a limited number of producers; |
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| • | legislative and regulatory changes, including changes in insurance laws and regulations and their application by our<br> regulators; |
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| • | limitations with regard to our ability to pay dividends; |
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| • | the effects of competition in our market areas; |
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| • | our reliance on certain key personnel; |
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| • | risks related to security breaches or other attacks involving our computer systems or those of our vendors; and |
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| • | our reliance on information technology and information systems. |
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Kingstone undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
About Kingstone Companies, Inc.
Kingstone is a northeast regional property and casualty insurance holding company whose principal operating subsidiary is Kingstone Insurance Company (“KICO”). KICO is a New York domiciled carrier writing business through retail and wholesale agents and brokers. KICO is actively writing personal lines and commercial auto insurance in New York, and in 2023 was the 15^th^ largest writer of homeowners insurance in New York. KICO is also licensed in New Jersey, Rhode Island, Massachusetts, Connecticut, Pennsylvania, New Hampshire, and Maine.
Investor Relations Contact:
Karin Daly
Vice President
The Equity Group Inc.
kdaly@equityny.com