Decisive Dividend Corporation Reports Financial Results for the Fourth Quarter and Year Ended December 31, 2022

KELOWNA, BC, March 23, 2023 /CNW/ - Decisive Dividend Corporation (TSXV: DE) (the "Company" or "Decisive") today reported its financial results for the fourth quarter and year ended December 31, 2022.

Highlights of the Company's financial performance include the following:

• Record quarterly sales in Q4, which increased 72% to $30.8 million, compared to $17.9 million in Q4 2021.
• Record annual sales in fiscal 2022, which increased 58% to $98.6 million, compared to $62.5 million in 2021.
• Generated $4.0 million in Adjusted EBITDA* in Q4 2022, an increase of 92% relative to Q4 2021.
• Annual Adjusted EBITDA* of $13.7 million represents a 58% increase compared to 2021. Excluding government subsidies, 2022 Adjusted EBITDA* was 130% higher than 2021.
• Generated profit of $0.7 million, or $0.04 per share, in Q4 2022 bringing fiscal 2022 profit to $4.1 million, or $0.31 per share, which is an increase of 70% from the fiscal 2021 profit of $2.3 million, or $0.19 per share.
• Effective May 2022, the per share monthly dividend was increased to $0.030 from $0.025 previously. In March 2023, the Company announced that the per share monthly dividend would be increased further to $0.035, effective for the April 2023 dividend payment.

Selected Financial Highlights:

The following are selected financial highlights of Decisive for the year ended December 31, 2022. 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 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,		2022			2021		Change			2022			2021		Change
Sales	$	30,778		$	17,852		72 %		$	98,587		$	62,491		58 %
Gross profit		9,988			5,843		71 %			32,853			21,376		54 %
Gross profit %		32 %			33 %					33 %			34 %
Adjusted EBITDA*		4,018			2,091		92 %			13,667			8,657		58 %
Per share basic		0.27			0.17		57 %			1.05			0.73		44 %
Profit before tax		983			985		0 %			5,687			2,940		93 %
Profit		659			918		-28 %			4,084			2,282		79 %
Per share basic		0.04			0.08		-50 %			0.31			0.19		63 %
Per share diluted		0.04			0.07		-43 %			0.29			0.18		61 %
Free cash flow*		2,852			1,171		144 %			8,364			4,533		85 %
Per share basic		0.19			0.10		99 %			0.64			0.38		69 %
Free cash flow less maintenance capital*		2,686			1,030		161 %			7,410			3,867		92 %
Per share basic		0.18			0.09		113 %			0.57			0.32		75 %
Dividends declared		1,332			906		47 %			4,569			2,461		86 %
Per share basic		0.09			0.08		20 %			0.35			0.21		70 %
Dividend payout ratio*										62 %			64 %

* 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 it is 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 2022 Highlights:

• Consolidated sales increased 72% to $30.8 million compared to $17.9 million in Q4 2021.
• Consolidated gross profit increased 71% to $10.0 million from $5.8 million in Q4 2021.
• Consolidated gross profit percentages decreased to 32% from 33% in Q4 2021.
• Consolidated Adjusted EBITDA* increased to $4.0 million, up 92% relative to Q4 2021. 
• Strong performance across the portfolio of businesses, with each business experiencing robust customer demand.
• In the finished product segment, the two businesses acquired in 2022, Marketing Impact and ACR, each contributed meaningfully to the overall 124% increase in segment sales in the quarter. In addition, Blaze King sales increased 16% and Slimline sales increased 22% compared to Q4 2021.
• In the component manufacturing segment, Unicast sales increased 22%, Hawk sales increased 52%, and Northside sales were consistent compared to Q4 2021.
• Consolidated net profit in the quarter was $0.7 million, or $0.04 per share, compared to $0.9, or $0.08 per share, in Q4 2021.
• Consolidated free cash flow* increased to $2.9 million, up 144% relative to Q4 2021.

2022 Annual Highlights:

• Consolidated sales increased 58% to $98.6 million, compared to $62.5 million in 2021.
• Consolidated gross profit increased 54% to $32.9 million from $21.4 million in 2021. Excluding subsidies, gross profit was $13.0 million, or 66% higher than in 2021.
• Consolidated gross profit percentages declined to 33% from 34% in 2021, which was driven primarily by the decrease in government subsidies. Absent subsidies, year-to-date consolidated gross profit percentages were 1% higher than in 2021.
• Consolidated Adjusted EBITDA* increased to $13.7 million, up 58% relative to 2021, driven by the above noted increases in sales and gross profit. Excluding subsidies, Adjusted EBITDA* was $7.7 million, or 130%, higher than in 2021. 
• Sales in the finished product segment increased by $25.2 million, or 78%, relative to 2021, driven by the acquisitions of Marketing Impact and ACR, continued strong demand for Blaze King's products and increased sales of Slimline's agricultural sprayers and wastewater evaporators.
• Sales for the component manufacturing segment increased by $10.9 million, or 36%, relative to 2021 based on customer demand increases in each of Unicast, Hawk and Northside, driven by improving fundamentals in the sectors that those customers operate in.
• The Company's subsidiaries did not receive any government subsidies in the year (2021 - $2.7 million).
• Consolidated net profit was $4.1 million, or $0.31 per share, an increase of $2.3 million, or $0.12 per share compared to 2021.
• Consolidated free cash flow* increased to $8.4 million, up 84% relative to 2021.
• Effective May 2022, the per share monthly dividend was increased to $0.03 from $0.025 previously. The dividend payout ratio* for 2022 was 62%, compared to 64% in 2021. Of the dividends paid in 2022, $3.6 million were settled in cash and $0.8 million were reinvested in additional common shares of the Company, pursuant to the dividend reinvestment and cash purchase plan.

Jeff Schellenberg, Chief Executive Officer of Decisive, noted:

"Q4 was another excellent quarter for Decisive as we made further progress on all of our key strategic objectives. During the quarter, we achieved record quarterly operating results for the second straight quarter. We also completed the acquisition of ACR Heat Products Limited in early October, our second acquisition of 2022. The quarter capped off a tremendous 2022 for Decisive, a year in which we completed two acquisitions and achieved strong growth in all of our per share metrics, relative to the previous year.

Each of our portfolio companies continue to experience strong demand for their products as demonstrated by our record revenue and profitability levels, and robust growth, including in both businesses acquired in 2022. We view the enhanced performance of our portfolio of businesses as a key driver of our future growth and continue to invest in these businesses to support that growth and increase profitability. 

We are also very pleased to have announced an increase in the dividend for the second consecutive year, on the back of our 2022 operating results and demand outlook for our subsidiaries. The monthly dividend was increased to $0.035 per common share effective April 2023, up from the $0.03 per share per month which was set in April 2022, supported by the strong free cash flow per share generated by our subsidiaries.

We continue to have an active and growing pipeline of potential targets and completing our second acquisition of the year in Q4 2022, financed by an equity raise, demonstrates our commitment to continue growing through acquisition within our long-term funding target of 50% equity and 50% debt.

We had an eventful 2022 and look forward to providing further updates to our shareholders as we progress into 2023."

Outlook:

Decisive remains focused on continuing to drive performance in line with its overall strategic objectives including:

• Executing on the growth strategy with the acquisition of Marketing Impact Limited in April 2022 and ACR Heat Products Limited in October 2022.
• Building a strong and growing acquisition prospect pipeline.
• Continuing to build upon the strong demand across the portfolio of businesses expected into 2023.
• Optimizing operations, with an emphasis on increasing production capacity, improving operational efficiency and enhancing margins in the face of broad and steady customer demand trends.
• Increasing production capacity and improving operational efficiency, with an aggregate $2.2 million of growth capital expenditures* on manufacturing equipment made over the last two fiscal years.
• Providing sustainable and growing dividends to shareholders. Increasing the monthly dividend to $0.03 per share in May 2022 and again effective April 2023 to $0.035 per share.
• Creating balance sheet strength and flexibility through the renewal, extension and upsize of its credit facilities, as well as the equity raised through the private placement completed in September 2022.

Conference Call

Decisive will host a conference call for interested parties on Friday, March 24, 2023, at 8:00am Pacific Time (11:00am Eastern Time) to discuss the Company's Q4 and year end 2022 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:
Friday, March 24, 2023, at 8:00am Pacific Time / 11:00am Eastern Time
(please call 10 minutes ahead of time)

Participant Information:
Dial in number – Canada / United States (toll free): 1-800-319-4610
Dial in number – International: [phone]

Replay Information (replay available until March 31, 2023):
Replay number – Canada / United States (toll free): 1-800-319-6413
Replay number – International: [phone]
Replay access code 5001

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, 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, 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 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 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. 

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;
• 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 measures.

Adjusted EBITDA

(Stated in thousands of dollars)
	For the three months ended						For the year ended
December 31,		2022			2021			2022			2021
Profit for the period	$	659		$	918		$	4,084		$	2,282
Add (deduct):
Financing costs		740			497			2,524			2,079
Income tax expense		324			67			1,603			658
Amortization and depreciation		1,663			976			4,884			3,666
Acquisition and restructuring costs		440			115			1,077			115
Inventory fair value adjustments and write downs		22			27			22			27
Share-based compensation expense		19			16			143			256
Foreign exchange losses (gains)		176			(66)			(619)			54
Interest and other income		(7)			(404)			(20)			(408)
Gain on sale of equipment		(18)			(55)			(31)			(72)
Adjusted EBITDA		4,018			2,091			13,667			8,657

Free Cash Flow, Free Cash Flow Less Maintenance Capital, and Dividend Payout Ratio

(Stated in thousands of dollars)
	For the three months ended					For the year ended
For the year ended December 31,		2022			2021			2022			2021
Cash provided by operating activities	$	3,314		$	2,100		$	8,427		$	3,908
Add (deduct):
Changes in non-cash working capital		271			(120)			3,192			3,783
Income taxes paid		-			-			991			859
Current income tax expense		(143)			(186)			(1,743)			(1,080)
Acquisition and restructuring costs		439			115			1,078			115
Interest paid		(706)			(462)			(2,354)			(1,969)
Lease payments		(323)			(275)			(1,227)			(1,028)
Required principal repayments on debt		-			(1)			-			(55)
Free cash flow	$	2,852		$	1,171			8,364			4,533
Maintenance capital expenditures		(166)			(141)			(954)			(666)
Free cash flow less maintenance capital		2,686			1,030			7,410			3,867
Dividends declared		1,332			906			4,569			2,461
Dividend payout ratio								62 %			64 %

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, 2023 demand levels, increasing demand from customers, potential future acquisitions, and productivity and efficiency initiatives being explored to enhance margins. 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; pandemics; 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 warranty claims; litigation; reliance on technology, intellectual property, and information systems; 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.

SOURCE Decisive Dividend Corporation

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