Crosswinds Holdings Inc.
TSX : CWI

Crosswinds Holdings Inc.

November 16, 2015 08:00 ET

Crosswinds Holdings Inc. Reports Third Quarter 2015 Financial Results

TORONTO, ONTARIO--(Marketwired - Nov. 16, 2015) - Crosswinds Holdings Inc. ("Crosswinds" or the "Company") (TSX:CWI) today announced its financial results for the three and nine months ended September 30, 2015.

Financial Highlights

For the three months ended September 30, 2015, the Company reported:

  • Net loss of $(395,000) or $(0.07) per share compared to net loss of $(21,000) or $(0.00) per share for the third quarter of 2014.

For the nine months ended September 30, 2015, the Company reported:

  • Net loss of $(1.1 million) or $(0.19) per share compared to net income of $330,000 or $0.04 per share for the nine months ended September 30, 2014.

As at September 30, 2015, the Company reported:

  • Cash and cash equivalents of $1.7 million or $0.31 per share;
  • Investments carried at $22.3 million or $4.20 per share;
  • Shareholders' equity attributable to Crosswinds' shareholders (or net book value(1)) of $21.3 million or $4.03 per share.1
Statement of Operations Highlights

Three months ended Sept. 30
Nine months ended Sept. 30
In C$ thousands except per share 2015 2014 2015 2014
Revenue $ 185 $ 137 $ 426 $ 534
Net results of investments 74 161 254 654
Expenses (654 ) (319 ) (1,808 ) (858 )
Net income (loss) (395 ) (21 ) $ (1,128 ) $ 330
Net income (loss) per share $ (0.07 ) $ (0.00 ) $ (0.19 ) $ 0.04

The net loss during the three and nine months ended September 30, 2015 was primarily due to a non-cash compensation expense related to deferred share units ("DSUs") granted in April 2015. The amount of the share-based expense was $237,086 for the third quarter and $1,100,609 for the nine months ended September 30, 2015. The DSUs have been designed to create further alignment between the Company's shareholders and its management and directors. The total share-based payments to be expensed over the vesting periods is $1.6 million; in the third quarter of 2015, 15% was expensed. The remaining amounts will be expensed quarterly until the fourth quarter of 2016 on a declining graded scale.

Balance Sheet Highlights
In C$ millions except per share amounts September 30, 2015 December 31, 2014
Cash and cash equivalents $ 1.7 $ 17.1
Investments in an associate and private entity 22.3 4.0
Other assets 0.1 0.1
Total Assets $ 24.1 $ 21.2
Total Liabilities .2 0.6
Total Shareholders' Equity $ 23.9 $ 20.6
Number of shares outstanding (millions) 5.3 5.3
Net book value per share $ 4.51 $ 3.89
Net book value per share attributable to the non-controlling interest $ (0.48 ) $ nil
Net book value per share attributable to the shareholders of Crosswinds $ 4.03 $ 3.89

Financial Information Change of Address

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 September 30, 2015, copies of which will be available on the Company's website at www.crosswindsinc.com and on SEDAR at www.sedar.com.

Change of Address

Effective November 16, 2015, the Company's New York address will be 14 Wall Street, Suite 5D, New York, New York, 10004. The Company's Toronto address is 365 Bay Street, Suite 400, Toronto, Ontario, M5H 2Y1.

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 three and nine months ended September 30, 2015 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 September 30, 2015. See the cautionary statement regarding use of Non-IFRS financial measures at the end of this news release.

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