Tickers: XTSX:DE, XTSX:DE.P
June 1, 2018 / TheNewswire / Kelowna, British Columbia – Decisive Dividend Corporation (TSX-V: DE) (the "Corporation") reported its financial results for the three-month period ended March 31, 2018. All amounts are in Canadian currency. The results have been posted on SEDAR and on our website.
James Paterson, Chief Executive Officer of Decisive, said:
"Our results for the three months ended March 31, 2018 were another record high first quarter for the Company. Our businesses have continued their momentum from the fourth quarter of 2017, and we are excited about what the future looks like for us. We have undertaken a number of initiatives in the quarter that will continue to support our growth plans, oversee operations, address challenges and provide for steady dividends for the shareholders of Decisive Dividend Corporation."
Q1 2017 Financial and Operating Highlights:
– Consolidated revenue was $ 5.5m, an increase of 8.0%
– Gross profit was $ 2.3m, an increase of 3.1%
– Profit for the period was $ 0.3m, an increase of $ 0.5m, or 247.4%
– Cash from operations, before working capital adjustments, was $ 0.8m, an increase of 99.2%
– Dividends declared during the first quarter were $ 0.09 per share. Total dividends paid for the quarter were $ 0.6m, an increase of 22.2%
Review of Results – Blaze King
During the three-month period ended March 31, 2018, Blaze King recorded revenues of $ 3,261,965 (2017 – $ 3,005,063). The 8.5% increase in sales over the same period in the prior year is a continuation of the sales strength seen in the fourth quarter of 2017. Blaze King has experienced continued success with its early buy program as dealers and distributors took advantage of sales and shipping.
Blaze King’s business is highly seasonal, with the first and second quarters being the weakest of the year. Traditionally, Blaze King has experienced between 35% – 40% of its sales in the first two quarters of the year, and 60% – 65% of its sales in the last two quarters of the year. Blaze King has substantial fixed costs that do not meaningfully fluctuate with product demand in the short-term. This pattern is expected to continue through 2018.
Management of Blaze King believes that the Blaze King brand has significant opportunities for growth in both the wood and gas stove sectors of the hearth products industry. After two years of rigorous in-house testing, the Sirocco 30 unit passed the ULEB (Ultra-Low Emission Burners) testing in New Zealand, opening up new markets for legacy products. Additionally, Blaze King is currently working on its first gas fireplace insert, the Clarity 31 Insert. Blaze King expects to have this gas insert ready for production in the summer of 2018. The second offering in the Blaze King gas line up, the Clarity 2118 Gas fireplace, has been tested and approved and is expected to be ready for sale in Q2 2018.
Review of Results – Unicast
In the three-month period ended March 31, 2018, Unicast recorded revenues of $ 2,199,727 (2017 – $ 2,052,600) and had cost of manufacturing of $ 1,118,958 (2017 – $ 1,226,633), which resulted in a gross margin of $ 1,080,769, or 49.1% (2017 – $ 825,967, or 40.2%).
The market for Unicast’s wear parts continues to be buoyant as the economy continues to grow in both the United States and Canada, and increased infrastructure spending has caused continued upward demand on the cement industry. Unicast is also seeing increasing demand from non-traditional markets such as Latin America, Australia and the Philippines. Suppliers in China have been impacted by the pollution controls and inspections implemented by the Chinese government. Consistent with many companies that utilize factories in China, emissions inspections and shutdowns have resulted in late deliveries to customers. We continue to manage supplier risk through the use of secondary vendors to meet demand with sufficient time to prevent any major delays.
"As I have noted previously, we maintain a long-term perspective when looking at our businesses," stated Mr. Paterson. "And as I look to the future, I am very optimistic: our prospects for the near term are on track with our expectations and our operations are well-positioned to provide continued, sustainable growth going forward. We have continued to execute on our acquisition strategy in recent months and subsequent to the end of the first quarter, we entered into two share purchase agreements. We are extremely excited about the proposed acquisitions we announced on May 14, 2018, each of which will grow our customer base, expand product offerings to our existing customers and will diversify our overall business risk profile."
Management believes that the Corporation is positioned for future growth, and is continually looking for further acquisitions to bolster diversity, which adds strength and resilience to operations. The Corporation has continued to execute on its acquisition strategy in recent months. As noted above, subsequent to the period end, the Corporation has entered into two share purchase agreements. The Corporation closed the Slimline Manufacturing Ltd. Transaction on May 30, 2018 and anticipates closing Hawk Machine Works Ltd. in the second quarter. These transactions serve to further diversify DDC, significantly expand our manufacturing customer base, and strategically strengthen our product offerings. While DDC is still actively seeking new acquisitions, it is likely this pace will slow while the focus is placed on closing and integrating these companies.
About Decisive Dividend Corporation
Decisive Dividend Corporation is an acquisition-oriented company, focusing on the manufacturing sector. The Corporation uses a disciplined acquisition strategy to identify already profitable, established companies that have strong management teams, generate steady cash flow, operate in non-cyclical markets, and have opportunity for future growth.
FOR FURTHER INFORMATION PLEASE CONTACT:
Mr. David Redekop, Chief Financial Officer
#201, 1674 Bertram Street
Kelowna, BC V1Y 9G4
Telephone: (250) 870-9146
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 proposed financings. 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: the failure to successfully complete the proposed financings; identification of target companies meeting the Corporation’s standards; and and all other risks associated with the businesses carried on by operating subsidiaries of the Corporation. The Corporation cautions the reader that the above list of risk factors is not exhaustive. The forward-looking information contained in this release is made as of the date hereof and the Corporation 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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