VANCOUVER, British Columbia, May 02, 2024 (GLOBE NEWSWIRE) -- Tree Island Steel ('Tree Island' or the 'Company') (TSX: TSL) announced today its financial results for the three months ended March 31, 2024.
For the three-month period ended March 31, 2024, revenues, net of freight and distribution costs, decreased by $18.7 million to $56.6 million, from $75.3 million in the same period in 2023. This was from a combination of lower shipped volume and reduced spreads between selling prices and raw material costs. This impacted gross profit for the first quarter which decreased to $4.8 million, from $11.8 million in the same period in 2023. Adjusted EBITDA amounted to $3.1 million, compared to $9.8 million during the same period in 2023.
"The first three months proved challenging due to slower demand in our product lines, as customers continue to tightly control their inventory levels. In addition to managing a fluctuating macro-economic environment, the Company is continuing to address operational challenges that have the potential to impact its future operating results and cashflows, including increasing environment and regulatory compliance requirements, and ongoing trade cases in Canada and the US. These market conditions will require careful management in order to maintain the Company's operating results," commented Nancy Davies, Chief Operating Officer of Tree Island Steel.
| RESULTS FROM OPERATIONS | |||
| Three Months Ended | |||
| ($'000 unless otherwise stated) | March 31, | ||
| 2024 | 2023 | ||
| Restated | |||
| Revenue | 60,590 | 79,749 | |
| Freight and distribution costs | 4,037 | 4,478 | |
| Subtotal | 56,553 | 75,271 | |
| Cost of sales | (50,409) | (62,157) | |
| Depreciation | (1,316) | (1,329) | |
| Gross profit | 4,828 | 11,785 | |
| Selling, general and administrative expenses | (3,391) | (3,484) | |
| Operating income | 1,437 | 8,301 | |
| Foreign exchange gain (loss) | 381 | 141 | |
| Loss on property, plant and equipment sale | - | (66) | |
| Site closure costs | - | (300) | |
| Interest Income | 208 | 137 | |
| Financing expenses | (561) | (436) | |
| Income before income taxes | 1,465 | 7,777 | |
| Income tax expense | (840) | (1,927) | |
| Net income | 625 | 5,850 | |
| Net income per share | 0.02 | 0.21 | |
| Dividends per share | 0.03 | 0.05 | |
| March 31, | December 31, | ||
| Financial position as at: | 2024 | 2023 | |
| Total assets | 174,028 | 174,260 | |
| Total non-current financial liabilities | 28,424 | 28,439 | |
| Adjusted EBITDA | |||
| Three Months Ended | |||
| ($'000 unless otherwise stated) | March 31, | ||
| 2024 | 2023 | ||
| Operating income | 1,437 | 8,301 | |
| Add back depreciation | 1,316 | 1,329 | |
| Foreign exchange (loss) gain | 381 | 141 | |
| Adjusted EBITDA1 | 3,134 | 9,771 | |
| 1See definition on Adjusted EBITDA in Section 2 NON-IFRS MEASURES of the March 31, 2024, MD&A. | |||
About Tree Island Steel
Tree Island Steel, headquartered in Richmond, British Columbia since 1964, through its operating facilities in Canada and the United States, produces wire products for a diverse range of industrial, residential construction, commercial construction and agricultural 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®, TI Wire®, ToughStrand® and ToughPanel® brand names.
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 forward-looking statements, prospective investors should specifically consider various factors including the risks outlined herein under the heading "Risk Factors" 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, public health epidemics, the economy and potentially its supply chain, the cyclical nature of our business and demand for our products, impact of any tax reassessments or appeals therefrom, financial condition of our customers, competition, deterioration in Tree Island Steel's liquidity, leverage, and restrictive covenants, disruption in the supply of raw materials, volatility in the costs of raw materials, dependence on the construction industry, transportation costs and availability, foreign exchange fluctuations, labour relations, trade actions, dependence on key personnel and skilled workers, reliance on key customers, environmental matters, intellectual property risks, energy costs, un-insured loss, credit risk, operating risk, management of growth, success of acquisition and integration strategies, 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.
For further information contact:
Ali Mahdavi, Investor Relations
Tree Island Steel
(416) 962-3300
e-mail: amahdavi@treeisland.com
Website: www.treeisland.com
