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Discontinued Operations (Tables)
 9 Months Ended
Sep. 30, 2024
Discontinued Operations and Disposal Groups [Abstract]  
Summary of Gain on Sale of CIS

The gain on sale of CIS is calculated as follows:

Total consideration at closing

$

46,552

 

First contingent consideration

 

4,894

 

Second and third contingent considerations

 

8,030

 

Total consideration

$

59,476

 

 

 

 

Less:

 

 

Carrying value of CIS net assets

$

556

 

Transaction costs

 

4,153

 

Gain on sale of CIS

$

54,767

 
Summary of Discontinued Operations

The major assets and liabilities that comprise the carrying value of CIS’s net assets as of August 30, 2024 and December 31, 2023, are presented as follows:

 

 

August 30,
2024

 

 

December 31,
2023

 

 

 

 

 

 

 

 

Cash

 

$

7,184

 

 

$

462

 

Premiums receivable

 

 

30,603

 

 

 

5

 

Intercompany receivable

 

 

—

 

 

 

3,104

 

Other assets

 

 

2,190

 

 

 

—

 

Total assets

 

$

39,977

 

 

$

3,571

 

 

 

 

 

 

 

 

Less:

 

 

 

 

 

 

Premiums payable

 

$

33,272

 

 

$

26

 

Commissions payable

 

 

1,800

 

 

 

86

 

Unearned commissions

 

 

2,052

 

 

 

119

 

Other liabilities

 

 

2,297

 

 

 

170

 

Total liabilities

 

$

39,421

 

 

$

401

 

 

 

 

 

 

 

 

Total carrying value of CIS net assets

 

$

556

 

 

$

3,170

 

Below represents statements of operations of the discontinued operations for the three and nine months ended September 30, 2024 and 2023:

Discontinued Operations

 

Consolidated Statement of Operations

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Revenue and Other Income from operations

 

 

 

 

 

 

 

 

 

 

 

 

Commission revenue

 

$

8,662

 

 

$

560

 

 

$

32,944

 

 

$

1,950

 

Investment income

 

 

48

 

 

 

11

 

 

 

86

 

 

 

76

 

Other income

 

 

181

 

 

 

30

 

 

 

376

 

 

 

112

 

Total revenue and other income from operations

 

 

8,891

 

 

 

601

 

 

 

33,406

 

 

 

2,138

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

Policy acquisition costs

 

 

7,040

 

 

 

585

 

 

 

29,099

 

 

 

1,462

 

Administrative expenses

 

 

1,344

 

 

 

310

 

 

 

5,023

 

 

 

1,027

 

Total expenses

 

 

8,384

 

 

 

895

 

 

 

34,122

 

 

 

2,489

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations before income taxes

 

 

507

 

 

 

(294

)

 

 

(716

)

 

 

(351

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Gains from sale and disposal transactions

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of CIS

 

 

54,767

 

 

 

—

 

 

 

54,767

 

 

 

—

 

Gain on sale of SSU

 

 

6,459

 

 

 

—

 

 

 

6,459

 

 

 

—

 

Gain from sale of renewal rights

 

 

—

 

 

 

2,335

 

 

 

—

 

 

 

2,335

 

Total gains from sale and disposal transactions

 

 

61,226

 

 

 

2,335

 

 

 

61,226

 

 

 

2,335

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

61,733

 

 

 

2,041

 

 

 

60,510

 

 

 

1,984

 

Equity earnings (loss) in Affiliate, net of tax

 

 

(189

)

 

72

 

 

 

97

 

 

 

(103

)

Income tax expense (benefit)

 

 

1,368

 

 

 

457

 

 

 

1,834

 

 

 

464

 

Net income from discontinued operations

 

$

60,176

 

 

$

1,656

 

 

$

58,773

 

 

$

1,417

 

 

The Company’s accounting policy for net cash received from the sale of discontinued operations is to show a cash inflow from investing activities in continuing operations. As such, the Company reflected $46.0 million in proceeds received from the sale of discontinued operations in the investing section of our cash flow.

Below represents statements of cash flows of the discontinued operations for the nine months ended September 30, 2024 and 2023:

Discontinued Operations Statement of Cash Flows

 

Nine Months Ended
September 30,

 

 

 

2024

 

 

2023

 

Cash flows from Operating Activities

 

 

 

 

 

 

Net income from discontinued operations

 

$

58,773

 

 

$

1,417

 

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

 

 

 

 

 

 

Gains on sale of CIS

 

 

(54,767

)

 

 

—

 

Gain on sale of SSU

 

 

(6,459

)

 

 

—

 

Gain from sale of renewal rights

 

 

—

 

 

 

(2,500

)

Equity (earnings) loss in subsidiary

 

 

(97

)

 

103

 

Allocated expense from Corporate

 

 

1,147

 

 

144

 

Other

 

 

755

 

 

 

(35

)

 

 

 

 

 

 

 

Changes in Assets & Liabilities:

 

 

 

 

 

 

Premiums receivable

 

 

(30,598

)

 

 

2

 

Settlement of intercompany balances

 

 

(2,507

)

 

 

—

 

Change in deferred acquisition costs

 

 

1,933

 

 

 

(41

)

Intercompany receivables

 

 

4,154

 

 

 

(2,955

)

Other receivables

 

 

(1,692

)

 

 

276

 

Income taxes payable

 

 

(655

)

 

 

462

 

Premiums payable

 

 

33,272

 

 

 

—

 

Other liabilities

 

 

3,463

 

 

 

(2,423

)

Net cash provided by (used in) operating activities

 

 

6,722

 

 

 

(5,550

)

 

 

 

 

 

 

 

Cash flows from Investing Activities

 

 

 

 

 

 

Cash disposed in CIS sale

 

 

(7,184

)

 

 

—

 

Proceeds from sale of renewal rights

 

 

—

 

 

 

2,500

 

Additional true-up Contribution to SSU

 

 

—

 

 

 

(934

)

Net cash provided by (used in) investing activities

 

 

(7,184

)

 

 

1,566

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in cash from discontinued operations

 

 

(462

)

 

 

(3,984

)

Cash at beginning of period from discontinued operations

 

 

462

 

 

 

4,864

 

Cash at end of period from discontinued operations

 

 

-

 

 

 

880