Tree Island Steel Ltd.
TSX : TSL
TSX : TSL.DB

Tree Island Steel Ltd.

May 05, 2016 14:42 ET

Tree Island Steel Announces 2016 Results

VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 5, 2016) -

Q1 2016 Financial Highlights1

  • Revenue increases by 5.4% to $62.2 million
  • Gross Profit increases by 33.7% to $11.0 million
  • EBITDA2 increases by 21.9% to $6.7 million
  • Quarterly dividend increased from $0.01 per share to $0.02 per share

Tree Island Steel Ltd. ("Tree Island" or the "Company") (TSX:TSL) announced today its financial results for the three-month period ended March 31, 2016.

For the three-month period ended March 31, 2016, revenues increased by 5.4% to $62.2 million versus $59.0 million for the same period last year. Gross profit continued to be positively impacted by increased operational efficiencies, resulting in gross profit and gross margin amounting to $11.0 million and 17.7%, when compared to $8.2 million and 13.9% during the corresponding period in 2015. As a result, EBITDA for the three-month period increased by 21.9% to $6.7 million when compared to $5.5 million during the same period last year. The continued revenue and profitability growth during the first quarter of 2016 is primarily attributable to the Company's ongoing focus on sales and marketing strategies, operational efficiencies and cost management.

"We carried the momentum we achieved in 2015 into 2016," said Dale R. Maclean, President and CEO. "We will continue our efforts to further our success."

"On behalf of the Board of Directors, we are pleased with the continued growth of the business demonstrated in this first quarter of the year and with the consecutive year-over-year growth in EBITDA for the past sixteen quarters, with exception of the second quarter of 2014 where the Company made deliberate investments for growth which are now bearing the expected results," commented Amar S. Doman, Chairman of the Board of Directors.

The Company is also pleased to announce that its Board of Directors has declared an increase to the quarterly dividend from $0.01 per share to $0.02 per share on the issued and outstanding Common Shares of the Company. The quarterly dividend of $0.02 per share will be payable on July 15, 2016, to holders of record at the close of business on June 30, 2016.

1 Please refer to our 2016 MD&A for further information.

2 References made above to "EBITDA" are to operating profit plus depreciation and foreign exchange gains and losses. EBITDA is a measure used by many investors to compare issuers on the basis of ability to generate cash flows from operations. EBITDA is not an earnings measure recognized by IFRS and does not have a standardized meaning prescribed by IFRS. We believe that EBITDA is an important supplemental measure in evaluating the Company's performance. You are cautioned that EBITDA should not be construed as an alternative to net income or loss determined in accordance with IFRS or as an indicator of performance. Our method of calculating EBITDA may differ from methods used by other issuers and, accordingly, our EBITDA may not be comparable to similar measures presented by other issuers.

Summary of Results
($'000 unless otherwise stated)

Three Months Ended
March 31,
2016 2015
Revenue 62,240 59,043
Cost of sales (50,404) (50,065)
Depreciation (826) (744)
Gross profit 11,010 8,234
Selling, general and administrative expenses (4,882) (4,362)
Operating income 6,128 3,872
Foreign exchange gain (loss) (240) 892
Gain (loss) on sale of property, plant and equipment - (6)
Changes in financial liabilities recognized at fair value 450 (123)
Financing expenses (716) (849)
Income before income taxes 5,622 3,786
Income tax (expense) recovery (393) (1,669)
Net income 5,229 2,117
Operating Income 6,128 3,872
Add back depreciation 826 744
Foreign exchange gain (loss) (240) 892
EBITDA3 6,714 5,508
Net income per share ($/share) 0.17 0.07
Sales volume - Tons4 44,768 41,016
Gross profit per ton ($/ton) 246 201
EBITDA per ton ($/ton) 150 134
Financial Position as at: March 31, 2016 December 31, 2015
Total Assets 135,297 131,589
Total non-current financial liabilities 20,464 22,152

3 See definition of EBITDA in Section 2 NON-IFRS MEASURES of the 2016 Q1 MD&A.

4 Sales volumes excludes tons which were processed as part of tolling arrangements

About Tree Island Steel

Tree Island Steel, headquartered in Richmond, British Columbia, since 1964, through its five operating facilities in Canada and the United States, produces wire products for a diverse range of industrial, residential construction, commercial construction, agricultural, and specialty applications. Its products include galvanized wire, bright wire; a broad array of fasteners, including packaged, collated and bulk nails; stucco reinforcing products; concrete reinforcing mesh; fencing and other fabricated wire products. The Company markets these products under the Tree Island, Halsteel, K-Lath, Industrial Alloys, TI Wire, and Tough Strand brand names. The Company also owns and operates a China-based company that assists the international sourcing of products to Tree Island and its customers.

Forward-Looking Statements

This press release includes forward-looking information with respect to Tree Island including its business, operations and strategies, its dividend policy and the declaration and payment of dividends thereunder as well as financial performance and conditions. The use of forward-looking words such as, "may," "will," "expect" or similar variations generally identify such statements. Any statements that are contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Although management believes that expectations reflected in forward-looking statements are reasonable, such statements involve risks and uncertainties including risks and uncertainties discussed under the heading "Risk Factors" in Tree Island's most recent annual information form and management discussion and analysis.

The forward looking statements contained herein reflect management's current beliefs and are based upon certain assumptions that management believes to be reasonable based on the information currently available to management. By their very nature, forward looking statements involve inherent risks and uncertainties, both general and specific, and a number of factors could cause actual events or results to differ materially from the results discussed in the forward looking statements. In evaluating these statements, prospective investors should specifically consider various factors including the risks outlined in the Company's most recent annual information form and management discussion and analysis which may cause actual results to differ materially from any forward looking statement. Such risks and uncertainties include, but are not limited to: general economic, market and business conditions, the cyclical nature of our business and demand for our products, financial condition of our customers, competition, volume and price pressure from import competition, deterioration in the Company's liquidity, disruption in the supply of raw materials, volatility in the costs of raw materials, transportation costs, foreign exchange fluctuations, leverage and restrictive covenants, labour relations, trade actions, dependence on key personnel and skilled workers, intellectual property risks, energy costs, un-insured loss, credit risk, operating risk, management of growth, changes in tax, environmental and other legislation, and other risks and uncertainties set forth in our publicly filed materials.

This press release has been reviewed by the Company's Board of Directors and its Audit Committee, and contains information that is current as of the date of this press release, unless otherwise noted. Events occurring after that date could render the information contained herein inaccurate or misleading in a material respect. Readers are cautioned not to place undue reliance on this forward-looking information and management of the Company undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise except as required by applicable securities laws.

Contact Information