In the third quarter, we added a new Operator-in-Residence, or OIR, Miles Mamon to the KSX platform. Miles joined us from Morgan Stanley, where as Vice President he was responsible for acquisitions and asset management within the Merchant Banking and Real Estate Investing group. He began his career as an air and missile defense officer in the United States Army, where he served in a patriot missile unit supporting a NATO operation to protect the Turkish southern border during the Syrian Civil War. Miles holds a JD and an MBA from Northwestern and also a BA from Northwestern. We continue to believe that the future is extremely bright for the company given the talent we have on our team and the quality of opportunities they are identifying, pursuing, and closing.
I’d like to turn now to our trailing 12-month adjusted EBITDA run rate. On our last earnings call, we reiterated our range of $18 million to $19 million and indicated it was likely closer to $18 million than to $19 million. As a result of our recent acquisitions, we are increasing our trailing 12-month adjusted EBITDA run rate range to $19 million to 20 million. This includes the Extended Warranty companies, the existing KSX companies, as well as SPI, DDI, and NICR results. Kent will unpack this further in his comments. Looking ahead, our priorities for 2023 and beyond remain the same. Operational excellence, while strategically deploying capital to build a business that delivers sustainable long-term growth, generates positive cash flow from operations, and provides an attractive return for our shareholders.
We continue to target 2 to 3 new acquisitions per year that fit our clearly defined acquisition criteria and it will generate annualized EBITDA in the range of $1.5 million to $3 million dollars each. I’ll now turn the call over to Kent for a review of our financials. Kent?
Kent Hansen: Thank you, JT. Before I get started, as a reminder, during the fourth quarter of 2022, we began executing a plan to sell 1 of our subsidiaries, VA Lafayette, which owns a medical clinic whose sole tenant is the U.S. Veterans Administration. As part of our strategic shift away from the Leased Real Estate segment, 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. Loss from continuing operations was $797,000 for the third quarter of 2023 compared to income from continuing operations of $38.9 million last year. The third quarter of 2022 includes a one-time net gain of $37.9 million on the sale of PWSC.
Consolidated adjusted EBITDA was $2.3 million for the third quarter of 2023 compared to $3.6 million last year. Combined operating income for Extended Warranty and KSX was $2.8 million for the third quarter of 2023 compared to $3.2 million in the prior year. While the combined pro forma adjusted EBITDA, which excludes the results of PWSC that was sold last year, was $3.2 million in the third quarter of 2023 and $4.6 million in the third quarter of last year. Now, I’d like to break these down by reportable segment. In Extended Warranty, pro forma adjusted EBITDA was $2.1 million or 12.3% of pro forma revenue in the third quarter of 2023 compared to $3.8 million or 21.1% of pro forma segment revenue in the third quarter of last year. This decline was attributable to decreases in revenues, an increase in VSA claims, and a decrease in realized investment gains, which were partially offset by lower operating expenses.
First, let me go through the revenue decline. Revenues were down at both our VSA companies and Trinity. VSA revenues were down only 1.1% from prior year due to the continuing impact of payment pressures on end consumers resulting from higher interest rate environment and continued higher-than-expected price of used automobiles. While the price of a used automobile has fallen since the beginning of this year, the declines for the end consumer are not occurring as quickly as anticipated. It is difficult to predict when these macroeconomic trends will begin to ease. However, a bright spot is IWS, which sells through credit unions where the decline in IWS contracts sold is much lower than the overall market decline in loans placed. At Trinity, as JT discussed, lower revenue was due to decreases in equipment breakdown and maintenance support services as a result of mild weather conditions, which results in fewer service calls and as well as long lead times on parts and installations.
However, we continue to have strong backlog of orders in the Trinity Warranty business and as the supply chain frees up and machines are shipped and installed, we expect that the associated revenues will revert to historical growth trends. Next, the increase of VSA claims is due to an increase in the cost per claim or severity, while the number of claims or frequency was relatively stable. The increase in severity is a result of rising labor and parts costs, which continue to increase at rates higher than the general market inflation. Claims in the third quarter were $600,000 higher than the prior year, but were slightly down from Q2 2023 on both an absolute dollar basis and as a percentage of revenue. We continue to proactively assess our pricing to ensure that we are staying in front of any persistent claim severity increases.
