Crosswinds Holdings Inc.
TSX : CWI

Crosswinds Holdings Inc.

March 25, 2015 16:00 ET

Crosswinds Holdings Inc. Reports 2014 Financial Results

TORONTO, ONTARIO--(Marketwired - March 25, 2015) - Crosswinds Holdings Inc. ("Crosswinds" or the "Company") (formerly C.A. Bancorp Inc.) (TSX:CWI) today announced its financial results for the three months and year ended December 31, 2014 in accordance with International Financial Reporting Standards (IFRS).

Financial Highlights

For the three months ended December 31, 2014, the Company reported:

A net loss of $632,000 or $0.12 per share based on the weighted average outstanding shares of 5,304,007 compared to net income of $2,044,000 or $0.17 per share for the fourth quarter of 2013 based on the weighted average outstanding shares of 12,269,280. During the quarter, the Company's cash resources were held as cash having been earmarked for deployment in its then pending joint venture investment in Monarch National Insurance Company (the "Monarch Joint Venture") which closed subsequent to year end. As described at the end of the third quarter, the Company incurred additional costs as it added personnel and expanded its active operations including the establishment of its wholly-owned subsidiary, Crosswinds AUM LLC, a registered investment advisor with the U.S. Securities and Exchange Commission.

For the year ended December 31, 2014, the Company reported:

A net loss of $301,000 or $0.04 per share based on the weighted average outstanding shares of 7,327,000 compared to net income of $4,220,000 or $0.34 per share for 2013 based on the weighted average outstanding shares of 12,269,280.

As at December 31, 2014, the Company's:

  • Cash and cash equivalents totaled $17.1 million or $3.23 per share;
  • Investments were valued at $4.0 million or $0.76 per share;
  • and Shareholders' equity (or net book value(1)) was $20.6 million or $3.89 per share.1
Statement of Operations Highlights
Three months ended
December 31
Year ended
December 31,
In C$ thousands except per share 2014 2013 2014 2013
Revenue $ 127 $ 478 $ 661 $ 1,848
Net results of investments - 1,713 654 3,808
Expenses (759 ) (147 ) (1,617 ) (1,436 )
Net (loss)/earnings $ (632 ) $ 2,044 $ (301 ) $ 4,220
Net (loss)/earnings per share $ (0.12 ) $ 0.17 $ (0.04 ) $ 0.34

The $654,000 net results of investments for the year ended December 31, 2014 includes the realized gain on the sale of the Company's interests in Digital Payment Technologies Corp. in January 2014 for proceeds of $15,918,000. The expenses of $759,000 in the three months ended December 31, 2014 include legal and other fees of $369,000 relating to the establishment of the Monarch Joint Venture.

Balance Sheet Highlights
In C$ millions except per share amounts December 31, 2014 December 31, 2013
Cash and marketable securities $ 17.1 $ 26.3
Investments in private entities 4.0 18.8
Other assets 0.1 0.3
Total Assets $ 21.2 $ 45.4
Total Liabilities 0.6 0.1
Total Shareholders' Equity $ 20.6 $ 45.3
Number of shares outstanding (millions) 5.3 12.3
Net book value per share $ 3.99 $ 3.69

Insurance Joint Venture

On March 20, 2015, the Company and Federated National Holding Company, an insurance holding company, announced the closing of the joint venture to form Monarch National Insurance Company, a Florida-based property and casualty insurance carrier.

Termination of Management Agreement

Effective January 1, 2015, the Company's management agreement with CDJ Global Catalyst LLC was terminated. Crosswinds and CDJ reached an agreement to internalize the management functions previously provided by CDJ. No additional compensation or termination fee was paid to CDJ in connection with the internalization.

Financial Information

For a comprehensive review of the Company's results, shareholders are encouraged to read the Company's audited annual financial statements as at December 31, 2014 and accompanying Management's Discussion and Analysis and Annual Information Form, 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.

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 2014 Annual Information Form, in the Management's Discussion and Analysis for the year ended December 31, 2014 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.

(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 December 31, 2014 and 2013. See the cautionary statement regarding use of Non-IFRS financial measures at the end of this release.

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