Decisive Dividend Corporation Reports Financial Results for the Fourth Quarter and Year Ended December 31, 2024

KELOWNA, BC, March 18, 2025 /CNW/ - Decisive Dividend Corporation (TSXV: DE) (the "Company" or "Decisive") today reported its financial results for the fourth quarter and year ended December 31, 2024.

Recent Operating Highlights

• Decisive and its diversified portfolio of manufacturing businesses undertook numerous initiatives throughout the last year that resulted in the strongest quarter of the year in Q4 2024, marking the strongest fourth quarter in the Company's history.
• Consolidated sales increased 5% to $37.6 million in Q4 2024 compared to $35.7 million in Q4 2023.
• Decisive generated $7.3 million in Adjusted EBITDA* in Q4 2024, an increase of 2% relative to Q4 2023.
• Consolidated sales in Q4 2024 were 17% higher than in Q3 2024, 31% higher than in Q2 2024, and 28% higher than in Q1 2024.
• Overall Adjusted EBITDA* in Q4 2024 was 30% higher than in Q3 2024, 113% higher than in Q2 2024 and 84% higher than in Q1 2024.
• To the date of this press release, 2025 consolidated order levels have outpaced the same periods in both 2023 and 2024, with consolidated sales outpacing 2024 and approaching 2023 levels in those same periods while being based on more balanced contributions from across the Group.
• The hearth industry businesses are performing in line with 2024 from an orders and sales perspective, while improved performance across the other businesses has driven the overall comparison to 2023. There are also several new products that will be introduced across the portfolio this year that should further support improved performance in 2025 and beyond.
• The steps Decisive and subsidiary management took to work through the challenges faced in 2024, including continued product and customer development, and the investments in growth capital expenditures through the last year have better positioned each of Decisive's businesses to deliver long term organic growth.

Jeff Schellenberg, Chief Executive Officer of Decisive, noted:

"2024 wrapped up with the strongest Q4 in the history of the business. This strong performance was a result of the across-the-board effort of our subsidiaries to add profitable new customers and increase operating efficiency through the calendar year, which we saw beginning to bear fruit in Q3 2024 after a challenging first half of the year. The significant improvement in operating performance illustrates the quality of the portfolio of companies and the capability of their leadership teams to take steps to methodically improve subsidiary business performance. 

The strength of our operating results also demonstrated the strength in the free cash flow generation capabilities of our business and our ability to support the current dividend level, with our three-month dividend payout ratio being 55% in Q4 2024. While our full year payout ratio of 96% remained similar to our Q3 TTM payout ratio, we expect to see our per share financial metrics and TTM payout ratio improve in Q1 2025, based upon expected continued improvement in operating results in Q1 2025. Improvement in these results will also result in improved financing capacity and should support improvement in our cost of capital to support further acquisition activity in 2025, which we continue to actively work towards as we nurture and grow our acquisition pipeline and execute on opportunities within it. 

As we have previously stated, the diversified nature of the portfolio of businesses we own, the differentiated products these businesses produce, the size of the addressable markets these products are sold into, and the decisions and investments being made by our leadership group to build teams, strategies and processes that support these longer term growth objectives give us confidence in Decisive's business model and the potential for long-term growth within it."

Selected Financial Information:

The following is selected financial information of Decisive for the quarter and year ended December 31, 2024. All amounts are expressed in Canadian dollars. The Company's  consolidated financial statements as well as its management's discussion and analysis ("MD&A") are posted on SEDAR+ at www.sedarplus.ca and on Decisive's website (www.decisivedividend.com).

(Stated in thousands of dollars, except per share amounts)
	For the three months ended								For the year ended
December 31,		2024			2023		Change			2024			2023		Change
Sales	$	37,564		$	35,668		5 %		$	127,853		$	134,881		-5 %
Gross profit		14,634			13,796		6 %			47,869			52,763		-9 %
Gross profit %		39 %			39 %					37 %			39 %
Adjusted EBITDA*		7,298			7,181		2 %			20,306			25,204		-19 %
Per share basic		0.37			0.38		-3 %			1.05			1.45		-28 %
Profit		1,870			2,424		-23 %			2,011			8,333		-76 %
Per share basic		0.10			0.13		-23 %			0.10			0.48		-79 %
Free cash flow*		5,121			4,772		7 %			11,794			15,626		-25 %
Per share basic		0.26			0.25		4 %			0.61			0.90		-32 %
Free cash flow less maintenance capital*		4,844			4,491		8 %			10,866			14,282		-24 %
Per share basic		0.25			0.24		4 %			0.56			0.82		-32 %
Dividends declared		2,656			2,266		17 %			10,401			7,732		35 %
Per share basic		0.14			0.12		17 %			0.54			0.44		23 %
Dividend payout ratio*										96 %			54 %

* Adjusted EBITDA, Free Cash Flow, Free Cash Flow Less Maintenance Capital, and Dividend Payout Ratio are not recognized financial measures under International Financial Reporting Standards (IFRS) and therefore may not be comparable to similar measures presented by other issuers but are used by management to assess the performance of the Company and its segments. A reader should not place undue reliance on any Non-IFRS financial measures. See "Non-IFRS Financial Measures" later in this press release for detailed descriptions of these measures and reconciliations of applicable IFRS measures to non-IFRS measures.

Q4 2024 Results:

• Consolidated sales increased 5% to $37.6 million compared to sales of $35.7 million in Q4 2023. The increase was driven by Component Manufacturing segment sales which more than offset decreases in Finished Product segment sales. Each of the Component Manufacturing segment businesses experienced sales increases, however the most significant contributions were from the ongoing strong performance at Northside and results from Techbelt, which was acquired in April 2024. In terms of the Finished Product segment, the decrease in Q4 2024 sales was a result of lower backlogs at Blaze King and ACR to start the quarter compared to Q4 2023. However, stronger order activity in Q4 2024 compared to Q4 2023, as well as the effects of improved pricing and foreign exchange rates, limited hearth sales declines. Also, within the Finished Product Segment, Marketing Impact and IHT sales both continued to improve in Q4 2024 relative to the first half of 2024 and were each consistent with Q4 2023. Additionally, both Slimline and Capital I sales increased in the quarter relative to Q4 2023, with both Slimline's agricultural sprayer sales and wastewater evaporator sales ahead of last year and Capital I sales improving on sales to an oil and gas customer as part of a joint contract awarded with Hawk and Unicast.
• Consolidated gross profit increased 6% to $14.6 million from $13.8 million in Q4 2023, based primarily on the increase in sales with gross profit percentages consistent year-over-year.
• Consolidated Adjusted EBITDA* increased to $7.3 million, up 2% relative to Q4 2023 Adjusted EBITDA*. 
• Consolidated net profit in the quarter was $1.9 million, or $0.10 per share, compared to net profit of $2.4 million, or $0.13 per share, in Q4 2023.
• Consolidated free cash flow* increased 7% to $5.1 million relative to Q4 2023.
• Increased sales in the quarter, as described above, was the main driver of the increase in Adjusted EBITDA* and free cash flow* relative to Q4 2023. Increases in financing costs and non-cash share-based compensation impacted net profit and net profit per share in the quarter relative to Q4 2023.

2024 Annual Results:

• Consolidated sales decreased 5% to $127.9 million, compared to $134.9 million in 2023. The decrease was driven by lower sales in the first nine months of 2024 compared to 2023. Overall sales decreases for the year were a result of decreases in Finished Product segment sales that were partially offset by increases in Component Manufacturing segment sales. The Finished Product segment sales decreases were driven primarily by decreases in hearth product sales, which were impacted by lower demand backlogs, lower energy prices, reduced overall consumer spending, warmer weather and general macro-economic pressures. Increases in year-over-year Component Manufacturing segment sales were driven by a strong year of sales at Northside as well as the sales generated in the businesses acquired in 2023 and 2024, namely, Micon, Procore, and Techbelt. Consolidated sales and order activity improved in Q4 2024 relative to Q4 2023, and that positive momentum has continued into Q1 2025.
• Consolidated gross profit decreased 9% to $47.9 million from $52.8 million in 2023, driven primarily by decreased sales in the first three quarters of 2024.
• Consolidated gross profit percentages decreased to 37% from 39% in 2023 driven primarily by a change in product mix and the negative impact of fixed overhead costs on lower overall sales.
• Consolidated Adjusted EBITDA* decreased to $20.3 million, a decrease of 19% relative to 2023. 
• Consolidated net profit was $2.0 million, or $0.10 per share, a decrease of $6.3 million, or $0.38 per share compared to 2023.
• Consolidated free cash flow* decreased 25% to $11.8 million relative to 2023.
• Annual goodwill impairment testing that considered past experience, economic trends and industry trends, including challenging agricultural industry conditions, resulted in $4.5 million in non-cash impairment losses in 2024. A significant portion of the impairment losses related to the goodwill recorded on the acquisition of IHT, which was directly impacted by challenging agricultural industry conditions, and the value of which included the estimated fair value of contingent consideration at the time of acquisition, premised on IHT meeting certain earnings targets for a three-year period post-acquisition. A review of contingent consideration liabilities associated with historical acquisitions resulted in a $4.5 million reduction to the estimated amount required to settle the obligations. Overall, the above impairment losses were more than offset by the reduction in the fair value of accrued contingent consideration recorded on historical acquisitions, including IHT. Although this did not have a significant impact on overall net profit, this highlights a strength in Decisive's acquisition structure where it pays reasonable up-front acquisition multiples on historical earnings, with the ability for vendors of the businesses acquired to earn more only if those businesses perform to specified levels post-acquisition.
• Lower sales in the first nine months of the year, as described above, and the increase in the scale of the organization and the associated operating expenses relative to 2023, were the main drivers of the decrease in Adjusted EBITDA*, net profit, and free cash flow* relative to 2023.

Conference Call

Decisive will host a conference call for interested parties to discuss the Company's Q4 2024 and year end 2024 results. The call will be hosted by Jeff Schellenberg, Decisive's Chief Executive Officer and Rick Torriero, Chief Financial Officer.

Details for those who wish to participate in this conference call are as follows:

Conference Call Details:
Wednesday, March 19, 2025, at 8:00am Pacific Time / 11:00am Eastern Time
(please call 10 minutes ahead of time)

Participant Information:
To join the conference call without operator assistance, you may register and enter your phone number at https://emportal.ink/4i9qFGk to receive an instant automated call back.

You can also dial direct to be entered into the call by an operator:
Dial in number – North America (toll free): 1-888-510-2154
Dial in number – United Kingdom (toll free): 0800 279 7040
Dial in number – International: [phone]

Replay Information (replay available until March 26, 2025):
Replay number – North America (toll free): 1-888-660-6345
Replay number – International: [phone]
Replay access code 55699#

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.

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.

Non-IFRS Financial Measures

In this press release, reference is made to "Adjusted EBITDA", "Free Cash Flow", "Growth Capital Expenditures", "Maintenance Capital Expenditures" and "Dividend Payout Ratio", which are not recognized financial measures under IFRS Accounting Standards, but are believed to be meaningful in the assessment of the Company's performance as defined below.

"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, share-based compensation, and restructuring costs, and other non-operating items such as acquisition costs.

Adjusted EBITDA is a financial performance measure that management believes is useful for investors to analyze the results of the Company's operating activities prior to consideration of how those activities are financed and the impact of non-operating charges related to planned or completed acquisitions, foreign exchange, taxation, depreciation, amortization, and impairment charges.

The most directly comparable financial measure is profit or loss. Adjusted EBITDA per share is also presented, which is calculated by dividing Adjusted EBITDA, as defined above, by the weighted average number of shares outstanding during the period.

"Free Cash Flow" is defined as cash provided by operating activities, as defined by IFRS Accounting Standards, adjusted for changes in non-cash working capital, timing considerations between current income tax expense and income taxes paid, interest payments, required principal payments on long-term debt and right of use lease liabilities, and any unusual non-operating one-time items such as acquisition and restructuring costs (as described above).

Free Cash Flow is a financial performance measure used by management to analyze the cash generated from operations before the impact of changes in working capital items or other unusual items and after giving effect to expected income taxes thereon, as well as required interest and principal payments on long-term debt and right of use lease liabilities.

The most directly comparable financial measure is cash provided by operating activities. Adjustments made to cash provided by operating activities in the calculation of Free Cash Flow include other IFRS Accounting Standards measures, including changes in non-cash working capital, current income tax expense, income taxes paid, interest paid, and principal payments on long-term debt and right of use lease liabilities.

Free Cash Flow per share is also presented, which is calculated by dividing Free Cash Flow, as defined above, by the weighted average number of shares outstanding during the period.

"Free Cash Flow Less Maintenance Capital" is defined as Free Cash Flow, as defined above, less Maintenance Capital Expenditures, as defined below. Free Cash Flow Less Maintenance Capital is a financial performance measure used by management to analyze the cash generated from operations before the impact of changes in working capital items or other unusual items and after giving effect to expected income taxes thereon, as well as required interest and principal payments on long-term debt and right of use lease liabilities, and capital expenditures required to sustain the current operations of the Company.

The Company presents Free Cash Flow Less Maintenance Capital Expenditures per share, which is calculated by dividing Free Cash Flow Less Maintenance Capital, as defined above, by the weighted average number of shares outstanding during the period.

"Growth and Maintenance Capital Expenditures" maintenance capital expenditures are defined as capital expenditures required to maintain the operations of the Group at the current level and are net of proceeds from the sale of property and equipment. Growth capital expenditures are defined as capital expenditures that are expected to generate incremental cash inflows and are not considered by management in determining the cash flows required to sustain the current operations of the Company. While there are no comparable IFRS Accounting Standards measures for Maintenance Capital Expenditures or Growth Capital Expenditures, the total of Maintenance Capital Expenditures and Growth Capital Expenditures is equivalent to the total purchases of property and equipment, net of proceeds from the sale of property and equipment, on the Company's statement of cash flows.

"Dividend Payout Ratio" the Company presents a dividend payout ratio, which is calculated by dividing dividends declared by the Company by Free Cash Flow Less Maintenance Capital, as defined above. The Dividend Payout Ratio is a financial ratio used by management to analyze the percentage of cash generated from operations, before the impact of changes in working capital items or other unusual items and after giving effect to expected income taxes thereon, as well as required interest and principal payments on long-term debt and right of use lease liabilities, and capital expenditures required to sustain the current operations of the Company, returned to shareholders as dividends. Dividend Payout Ratio is analyzed on a trailing twelve-month basis in order to reduce the impact of seasonality on the analysis. 

While the above Non-IFRS financial measures are used by management to assess the historical financial performance of the Company, readers are cautioned that:

• Non-IFRS financial measures, such as Adjusted EBITDA, Free Cash Flow, Growth Capital Expenditures, Maintenance Capital Expenditures and Dividend Payout Ratio, are not recognized financial measures under IFRS Accounting Standards;
• The Company's method of calculating Non-IFRS financial measures may differ from that of other corporations or entities and therefore may not be directly comparable to measures utilized by other corporations or entities;
• Non-IFRS financial measures should not be viewed as an alternative to measures that are recognized under IFRS such as profit or loss or cash provided by operating activities; and
• A reader should not place undue reliance on any Non-IFRS financial measures.

Set forth below are reconciliations of Non-IFRS financial measures to their most relevant IFRS Accounting Standards measures.

Adjusted EBITDA

(Stated in thousands of dollars)
	For the three months ended						For the year ended
December 31,		2024			2023			2024			2023
Profit for the period	$	1,870		$	2,424		$	2,011		$	8,333
Add (deduct):
Financing costs		1,440			1,083			5,639			3,795
Income tax expense		921			736			1,246			3,417
Amortization and depreciation		2,574			2,574			9,694			7,895
Acquisition and restructuring costs		154			1			1,038			1,001
Impairment losses		4,456			-			4,456			-
Inventory fair value adjustments and write downs		363			28			369			28
Share-based compensation expense		508			108			1,289			745
Foreign exchange losses (gains)		(480)			220			(854)			96
Other income		(4,501)			(5)			(4,538)			(9)
Gain on sale of equipment		(7)			12			(44)			(97)
Adjusted EBITDA		7,298			7,181			20,306			25,204

Free Cash Flow

(Stated in thousands of dollars)
	For the three months ended					For the year ended
December 31,		2024			2023			2024			2023
Cash provided by operating activities	$	4,987		$	7,861		$	12,776		$	15,789
Add (deduct):
Changes in non-cash working capital		2,274			(2,052)			4,458			4,117
Income taxes paid		(81)			1,376			2,107			4,306
Current income tax expense		(227)			(865)			(836)			(4,274)
Acquisition and restructuring costs		154			1			1,038			1,001
Interest paid		(1,360)			(1,058)			(5,391)			(3,650)
Lease payments		(571)			(431)			(2,127)			(1,492)
Required principal repayments on debt		(55)			(60)			(231)			(171)
Free cash flow	$	5,121		$	4,772			11,794			15,626

Free Cash Flow Less Maintenance Capital and Dividend Payout Ratio

(Stated in thousands of dollars)
	For the three months ended					For the year ended
December 31,		2024			2023			2024			2023
Free cash flow	$	5,121		$	4,772		$	11,794		$	15,626
Maintenance capital expenditures		(277)			(281)			(928)			(1,344)
Free cash flow less maintenance capital		4,844			4,491			10,866			14,282
Dividends declared		2,656			2,266			10,401			7,732
Dividend payout ratio								96 %			54 %

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 "believes", "expects", "could", "will", "may", "intends", "projects", "anticipates", "plans", "estimates", "continues" and similar words or the negative and grammatical variations thereof 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, Q1 2025 demand levels, demand from customers, the timing of product sales and/or deliveries under existing customer contracts or orders received from customers, potential future acquisitions, and improved operating performance in Q1 2025 leading to increased per share financial metrics, payout ratio improvement, improved financing capacity and improved cost of capital. 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: (i) operational risks, including risks 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 warranty claims; litigation; reliance on technology, intellectual property, and information systems; (ii) financial risks, including risks relating to the availability of future financing; interest rates and debt financing; income tax matters; foreign exchange; dividends; trading volatility of common shares; dilution risk; (iii) external risks, including risks relating to general economic conditions; government regulation (including trade restrictions and tariffs); pandemics; competition; environmental regulation; access to capital; market trends and innovation; climate risk; general uninsured losses; and (iv) human capital risks, including 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.sedarplus.ca. There can also 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.

SOURCE Decisive Dividend Corporation

FOR FURTHER INFORMATION PLEASE CONTACT: Jeff Schellenberg, Chief Executive Officer; Rick Torriero, Chief Financial Officer, #260 - 1855 Kirschner Road, Kelowna, BC V1Y 4N7, Telephone: [phone]