Tree Island Steel Announces First Quarter 2014 Results
Q1 2014 versus Q1 2013 Financial Highlights(1):
- Volumes up by 27.3% to 35,136 tons
- Revenue increases by 20.6% to $45.9 million
- Gross Profit increases by 25.4% to $5.3 million, or 11.6% of
revenues
- EBITDA(2) (before foreign exchange) increases by 18% to $2.1
million
VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 13, 2014) - Tree
Island Steel Ltd. ("Tree Island" or the "Company") (TSX:TSL)
announced today its financial results for the three month period
ended March 31, 2014(1).
For the three-month period ended March 31, 2014, revenues
increased to $45.9 million versus $38.1 million for the same period
last year, representing a 20.6% increase. Volumes also increased by
27.3% to 35,136 tons, primarily driven by continued strength and
demand in a number of the Company's end-markets. Gross profit
continued its upward trend, amounting to $5.3 million, representing
a 25.4% improvement when compared to the same period in 2013. Gross
margin increased to 11.6% from 11.1%, while gross margin per ton
remained relatively unchanged at $151 per ton versus $153 per ton
due to increased competition in certain recovering markets. As a
result, EBITDA increased by 18% to $2.1 million from $1.8 million
during the corresponding period in 2013.
On April 21, 2014, the Company successfully renewed its senior
banking facility, on more favorable terms, with Wells Fargo Capital
Finance Corporation Canada. The five year secured banking facility
("Senior Credit Facility") has been increased from $40.0 million to
$60.0 million and now matures on April 21, 2019. Under the terms of
the Senior Credit Facility, up to $60.0 million may be borrowed for
the Company's financing requirements.
"2014 has started off strong with what appears to be a
sustainable recovery in many of our end-markets, resulting in
significant quarter one increases across many of our key financial
and operating metrics," said Dale R. MacLean, President and CEO of
Tree Island Steel. "Based on the activity level and traffic in our
markets and interaction with our customers, we maintain a positive
view for the remainder of the year."
"I am pleased with the Company's continued increase in its
market share, growing revenues and volumes while remaining
extremely focused on profitability," noted Amar S. Doman, Chairman
of Tree Island Steel. "The first quarter results are a testament to
our focus on profitable growth with revenues, volumes, gross
profit, EBITDA and net income showing significant year-over-year
improvement."
Summary of Results |
|
Three Months Ended March 31 |
|
|
|
2014 |
|
|
2013 |
|
($000's except for tonnage and per unit
amounts) |
|
|
|
|
|
|
Sales Volumes - Tons |
|
35,136 |
|
|
27,601 |
|
Sales |
$ |
45,923 |
|
$ |
38,093 |
|
Cost of sales |
|
(39,913 |
) |
|
(33,137 |
) |
Depreciation |
|
(698 |
) |
|
(720 |
) |
Gross profit |
|
5,312 |
|
|
4,236 |
|
Selling, general and administrative expenses |
|
(3,875 |
) |
|
(3,147 |
) |
Operating income |
|
1,437 |
|
|
1,089 |
|
|
Foreign exchange gain |
|
524 |
|
|
26 |
|
|
Loss on sale of property, plant and equipment |
|
(10 |
) |
|
- |
|
|
Changes in financial instruments recognized at fair value |
|
(138 |
) |
|
20 |
|
|
Financing Expenses |
|
(1,240 |
) |
|
(1,439 |
) |
Income (loss) before income taxes |
|
573 |
|
|
(304 |
) |
|
Income tax (expense) recovery |
|
(212 |
) |
|
167 |
|
Net income (loss) |
|
361 |
|
|
(137 |
) |
|
|
Operating income |
|
1,437 |
|
|
1,089 |
|
|
Add back depreciation |
|
698 |
|
|
720 |
|
EBITDA (a) |
|
2,135 |
|
|
1,809 |
|
|
Foreign exchange gain |
|
524 |
|
|
26 |
|
EBITDA including foreign exchange |
|
2,659 |
|
|
1,835 |
|
|
|
Net Income (Loss) |
|
361 |
|
|
(137 |
) |
Add back significant non-cash items |
|
|
|
|
|
|
Non-cash financing expenses |
|
263 |
|
|
654 |
|
Changes in financial instruments recognized at fair
value |
|
138 |
|
|
(20 |
) |
Deferred tax |
|
203 |
|
|
(179 |
) |
Adjusted net income a) |
|
965 |
|
|
318 |
|
|
|
Per share |
|
|
|
|
|
|
|
Net income (loss) per share - basic |
|
0.01 |
|
|
(0.01 |
) |
|
Net income (loss) per share - diluted |
|
0.01 |
|
|
(0.01 |
) |
Per ton |
|
|
|
|
|
|
|
Gross profit per ton |
|
151 |
|
|
153 |
|
|
EBITDA per ton |
|
61 |
|
|
66 |
|
|
|
|
|
As at March 31, |
|
|
As at December 31, |
|
Financial position |
|
2014 |
|
|
2013 |
|
|
Total assets |
$ |
102,940 |
|
$ |
85,635 |
|
|
Total non-current financial liabilities |
$ |
13,594 |
|
$ |
13,536 |
|
|
|
(a) See definition of EBITDA and Adjusted Net Income in
footnote 2 to the press release |
|
About Tree Island Steel
Tree Island Steel, headquartered in Richmond, British Columbia,
since 1964, through its four 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, 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, significant exposure to the Western
United States due to lack of geographic diversity, dependence on
the construction industry, transportation costs, foreign exchange
fluctuations, leverage and restrictive covenants, labour relations,
trade actions, dependence on key personnel and skilled workers,
reliance on key customers, 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.
(1) |
Please refer to our Q1 2014 MD&A for further information. |
(2) |
References made above to "EBITDA" are to operating profit plus
depreciation and references to "Adjusted Net Income" are to net
income per IFRS adjusted for certain non-cash items including
non-cash financing expenses, changes in fair value of convertible
instruments, and deferred income tax. EBITDA is a measure used by
many investors to compare issuers on the basis of ability to
generate cash flows from operations. Adjusted Net Income is a
measure for investors to understand the impact of significant
non-cash items that affect our results from operations. Neither
EBITDA nor Adjusted Net Income are earnings measures recognized by
IFRS and do not have a standardized meaning prescribed by IFRS. We
believe that EBITDA and Adjusted Net Income are important
supplemental measure in evaluating the Company's performance. You
are cautioned that EBITDA and Adjusted Net Income should not be
construed as alternatives to net income or loss, determined in
accordance with IFRS, or as indicators of performance. Our method
of calculating EBITDA and Adjusted Net Income may differ from
methods used by other issuers and, accordingly, our EBITDA or
Adjusted Net Income may not be comparable to similar measures
presented by other issuers. |
Tree Island Steel Ltd.Ali MahdaviInvestor Relations(416)
962-3300 or +1(866)
430-6247amahdavi@treeisland.comwww.treeisland.com
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