Kelowna, British Columbia – TheNewswire - October 28, 2021 –  Decisive Dividend Corporation (TSXV:DE) (the “Company” or “Decisive”) today reported its financial results for the three and nine months ended September 30, 2021.

 

Highlights of the Company’s financial performance in Q3 2021 include the following:

• - Consolidated sales increased 40% to $16.5 million in Q3 2021 compared to $11.8 million in Q3 2020.

  - The quarterly sales increase brings consolidated sales for the first nine months to $44.6 million, an increase of $11.0 million, or 33%, relative to the first nine months of 2020.

  - Generated $1.8 million in Adjusted EBITDA* in Q3 2021, a decrease of 25% relative to Q3 2020 due to lower government subsidies received. Excluding subsidies, Q3 2021 Adjusted EBITDA* was 24% higher than Q3 2020.

  - Adjusted EBITDA* in the first nine months of 2021 of $6.6 million represents an 8% increase compared to the first nine months of 2020

  - Entered into a refinancing agreement that increases Decisive’s liquidity and debt availability with lower overall borrowing costs and increased flexibility through less restrictive financial covenants and greater ability to fund both operations and acquisitions

 

Selected Financial Highlights:

 

The following are selected financial highlights of Decisive for the three and nine months ended September 30, 2021. All amounts are expressed in Canadian dollars. The Company’s unaudited interim condensed consolidated financial statements as well as its management’s discussion and analysis (“MD&A”) are posted on SEDAR and on Decisive’s website (www.decisivedividend.com).

 

(Stated in thousands of dollars, except per share amounts)
	For the three months ended								For the nine months ended
September 30,		2021			2020		Change			2021			2020		Change
Sales	$	16,500		$	11,823		40%		$	44,639		$	33,643		33%
Gross profit		5,064			5,098		-1%			15,533			14,058		10%
Gross profit %		31%			43%					35%			42%
Adjusted EBITDA*		1,837			2,452		-25%			6,566			6,076		8%
Per share basic		0.15			0.21		-27%			0.55			0.52		5%
Profit (loss) before tax		593			636		-7%			1,955			(150)		nm
Profit (loss)		489			375		30%			1,364			(708)		nm
Per share basic		0.04			0.03		33%			0.11			(0.06)		nm
Per share diluted		0.04			0.03		33%			0.11			n/a		nm
Dividends declared		841			-		100%			1,555			1,037		50%
Per share basic		0.07			-		100%			0.13			0.09		46%

 

* Adjusted EBITDA is defined as earnings before finance costs, income taxes, depreciation, amortization, foreign exchange gains or losses, other non-cash items such as gains or losses recognized on the fair value of contingent consideration items, asset impairment and restructuring costs, and any unusual non-operating one-time items such as acquisition costs.  Adjusted EBITDA is not a defined performance measure under International Financial Reporting Standards (IFRS) and therefore may not be comparable to similar measures presented by other issuers, but it is used by Management to assess the performance of the Company and its segments. See the MD&A for a reconciliation of applicable IFRS measures to non-IFRS measures.

 

nm – not meaningful

Q3 2021 Highlights:

 

• - Consolidated sales increased 40% to $16.5 million compared to $11.8 million in Q3 2020.

  - Consolidated gross profit of $5.1 million similar to Q3 2020. Excluding subsidies, Q3 2021 gross profit was 8% higher than Q3 2020

  - Consolidated gross profit percentages declined to 31% from 43% in the comparative period of 2020. This was driven by a change in sales mix relative to Q3 2020, decreased government subsidies, a lower exchange rate on United States dollar denominated sales, and supply chain and labour availability challenges, which resulted in material, freight, and labour cost increases.

  - Consolidated Adjusted EBITDA* decreased to $1.8 million, down 25% relative to Q3 2020due to lower government subsidies received. Excluding subsidies, Q3 2021 Adjusted EBITDA* was 24% higher than Q3 2020

  - Blaze King’s robust performance continued in the quarter, with a 16% increase in sales relative to Q3 2020.

  - Slimline sales in the quarter decreased relative to Q32020, based on decreases in wastewater evaporator sales, which more than offset increases in its agricultural sprayer and parts divisions

  - Hawk, Unicast and Northside each experienced dramatic increases in customer demand relative to Q3 2020 which led to a 93% increase in sales for that segment. The results for these businesses were more affected by supply chain and labour availability challenges compared to Q3 2020.

  - The Company’s subsidiaries received $0.5 million in subsidies from the Canada Emergency Wage Subsidy (“CEWS”) and Canada Emergency Rent Subsidy (“CERS”) programs in the quarter (Q3 2020 - $1.4 million).

  - Consolidated net profit in the quarter was $0.4 million, or $0.04 per share, an increase of $0.1 million, or $0.01 per share, compared to Q3 2020.

 

2021 Year-to-Date Highlights:

 

• - Consolidated sales increased 33% to $44.6 million, compared to $33.6 million in the first nine months of 2020.

  - Consolidated gross profit increased 11% to $15.5 million from $14.1 million in the first nine months of 2020. Excluding subsidies, year-to-date 2021 gross profit was 10% higher than the same period in 2020

  - Consolidated gross profit percentages declined to 35% from 42% in the first nine months of 2020

  - Consolidated Adjusted EBITDA* increased to $6.6 million, up 8% relative to the first nine months of 2020, driven by the above noted increases in sales and gross profit. Excluding subsidies, year-to-date 2021 Adjusted EBITDA* was 13% higher than the same period in 2020.

  - Sales in the finished product segment increased by $4.9 million, or 27%, relative to the first nine months of 2020, driven by strong demand for Blaze King’s products and its increased market share after new EPA regulations took effect in May 2020

  - Sales for the component manufacturing segment increased by $6.1 million, or 40%, relative to the first nine months of 2020 based on customer demand increases driven by improving fundamentals in the sectors that those customers operate in.

  - The Company’s subsidiaries received $2.7 million in subsidies from the CEWS, CERS and paycheck protection programs in the first nine months of 2021 (2020 - $2.7 million)

  - Consolidated net profit in the first nine months of the year was $1.4 million, or $0.11 per share, an increase of $2.1 million, or $0.17 per share, compared to the first nine months of 2020. The net loss in the first nine months of 2020 included a $1.4 million non-cash impairment loss recorded against Hawk’s goodwill

Jeff Schellenberg, Chief Executive Officer of Decisive, noted:

 

“Q3 was a solid quarter for Decisive from both an operational and financial perspective. Underlying Adjusted EBITDA continues to increase as the magnitude of available subsidies reduces. Blaze King, continues to witness strong demand which, coupled with improved year-over-year demand for Slimline’s agricultural sprayers, should continue to drive performance of the Company’s finished product segment in Q4. In addition, increasing demand levels from our subsidiaries’ customers in the oil and gas, cement, commercial vehicle, and forestry sectors bolstered sales in the component manufacturing segment. These trends look to be continuing in Q4 and into 2022 as commodity pricing trends, including in the oil and gas sector, continue to be positive. While margins are being pressured by supply chain and labour availability challenges, we will continue to be vigilant in managing our costs and optimizing our operations to counter these pressures and meet the growing demand from our subsidiaries’ customers.

 

We believe we are well positioned to drive our buy, build and hold business model forward and are continuing to work towards completing our next acquisition from our healthy, and growing, pipeline of potential targets. We look forward to providing further updates to our shareholders as we progress on this front.”

 

Outlook:

 

• - Continuing to build a strong and growing acquisition prospect pipeline by identifying and evaluating potential acquisitions to bolster diversity and add strength and resilience to operations.

  - Enhancing balance sheet strength and flexibility, including through the refinancing agreement entered into September 2021, which has the Company well positioned to take advantage of potential acquisition opportunities as they arise.

  - Stabilizing overall performance through a volatile economic environment as a result of the diversity of the portfolio

  - Witnessing improved demand for the products of each portfolio business as subsidy programs offered by the governments of Canada and the United States either conclude or continue to reduce in magnitude and scope

  - Experiencing supply chain and labour availability challenges to varying degrees in each portfolio business.

  - Increasing production capacity and improving operational efficiency, with $0.7 million in equipment purchased for Blaze King and $0.2 million in equipment purchased for Northside to date in 2021.

  - Exploring further productivity and automation initiatives to help mitigate the effect of cost increases and labour shortages, meet the expected future demand levels of the Company’s customers, and capitalize on future market expansion opportunities.

  - Maintaining the monthly dividend at $0.025 per share, the level it was increased to in September 2021.

 

About Decisive Dividend Corporation

 

Decisive Dividend Corporation is an acquisition-oriented company, focused on opportunities in manufacturing. The Company’s purpose is to be the sought-out choice for exiting legacy-minded business owners, while supporting the long-term success of the businesses acquired, and through that, creating sustainable and growing shareholder returns. The Company uses a disciplined acquisition strategy to identify already profitable, well-established, high quality manufacturing companies that have a sustainable competitive advantage, a focus on non-discretionary products, steady cash flows, growth potential and established, strong leadership.

       

For more information on Decisive, or to sign up for email notifications of Company press releases, please visit www.decisivedividend.com.

 

FOR FURTHER INFORMATION PLEASE CONTACT:

 

Jeff Schellenberg, Chief Executive Officer  

Rick Torriero, Chief Financial Officer

 

#201, 1674 Bertram Street

Kelowna, BC V1Y 9G4

Telephone: (250) 870-9146

 

Cautionary Statements

 

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

 

Forward-Looking Statements

Certain statements contained in this press release constitute forward-looking information. These statements relate to future events or future performance. The use of any of the words “could”, “intend”, “expect”, “believe”, “will”, “projected”, “estimated” and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on management’s current beliefs, assumptions and expectations as to the outcome and timing of such future events.  Actual future results may differ materially. In particular, this press release contains forward-looking information relating to the future prospects of the Company and its operating subsidiaries, the Company's long-term strategic and operational plans, Q4 2021 demand levels and commodity pricing trends, increasing demand from customers, potential future acquisitions, potential future capital expenditures surrounding productivity and automation initiatives being explored, as well as forward-looking information relating to the impact of the ongoing COVID-19 pandemic and future government subsidies on the operations and financial results of the Company and its subsidiaries. Risk factors that could cause actual results or outcomes to differ materially from the results expressed or implied by forward-looking information include, among other things: general economic conditions; pandemic; competition; government regulation; environmental regulation; access to capital; market trends and innovation; climate risk; general uninsured losses; risk related to acquisitions; dependence on customers, distributors and strategic relationships; supply and cost of raw materials and purchased parts; operational performance and growth; implementation of the growth strategy; product liability and warrant claims; litigation; reliance on technology and intellectual property risks; availability of future financing; interest rates and debt financing; income tax matters; foreign exchange; dividends; trading volatility of common shares; dilution risk; reliance on management and key personnel; employee and labour relations; and conflicts of interest, all as more particularly described in the most recent annual MD&A of the Company available on the Company’s profile at www.sedar.com. There can be no assurance as to the future financial performance of the Company or that the board of directors of the Company will declare or pay any dividends in the future or, if dividends are declared and paid, there can be no assurance as to the frequency or amount of such dividends. The Company cautions the reader that the risk factors referenced above are not exhaustive. The forward-looking information contained in this release is made as of the date hereof and the Company is not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward-looking information. The foregoing statements expressly qualify any forward-looking information contained herein.

 

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