Tree Island Steel Announces First Quarter 2022 Results
May 04 2022 - 3:45PM
Tree Island Steel (''Tree Island'' or the ''Company'') (TSX: TSL)
announced today its financial results for the three months ended
March 31, 2022.
For the three‐month period ended March 31, 2022,
revenues increased by $25.9 million to $92.7 million as pricing
increases across all market segments allowed us to recover
escalating costs. Gross profit for the first quarter increased to
$20.8 million, from $12.6 million in the same period in 2021.
Adjusted EBITDA amounted to $18.8 million, compared to $10.7
million during the same period in 2021.
Inflationary cost increases continued in the
quarter, led by key raw materials, namely steel wire rod and zinc,
as well as freight, labour and utilities. Increased selling prices
recovered these costs in the period. Given the significant and
ongoing escalation in costs, we continue to closely manage
inventory positions and raw materials purchases.
“In the first quarter, we continued to
experience increased demand strength in commercial construction
activities in both Canada and the United States, as we supported
multiple projects with our concrete reinforcing products. Stable
demand has been seen in our other market segments of agriculture,
residential construction and industrial wire, as we additionally
balanced availability of raw materials and labour to support
customer delivery needs,” said Remy Stachowiak, President and COO
of Tree Island Steel.
“Results in the first quarter were very
positive, despite the continued inflationary cost environment and
ongoing constraints with supply chain and labour. We are closely
managing our financial position through this volatile market, “
said Amar S. Doman, Executive Chair of Tree Island Steel.
|
|
|
RESULTS FROM OPERATIONS |
($'000 unless otherwise stated) |
|
Three Months EndedMarch 31, |
|
2022 |
|
|
2021 |
|
|
|
|
Revenue |
92,746 |
|
|
66,842 |
|
Cost of sales |
(70,495 |
) |
|
(52,748 |
) |
Depreciation |
(1,416 |
) |
|
(1,467 |
) |
Gross profit |
20,835 |
|
|
12,627 |
|
Selling, general and administrative expenses |
(3,364 |
) |
|
(3,327 |
) |
Operating income |
17,471 |
|
|
9,300 |
|
Foreign exchange loss |
(113 |
) |
|
(113 |
) |
Financing expenses |
(494 |
) |
|
(566 |
) |
Other expenses |
(9 |
) |
|
- |
|
Income before income taxes |
16,855 |
|
|
8,621 |
|
Income tax expense |
(4,128 |
) |
|
(2,157 |
) |
Net income |
12,727 |
|
|
6,464 |
|
|
|
|
Net income per share |
0.45 |
|
|
0.22 |
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
|
December 31, |
|
Financial position as at: |
2022 |
|
|
2021 |
|
|
|
|
Total assets |
214,520 |
|
|
225,806 |
|
Total non-current financial liabilities |
37,288 |
|
|
38,907 |
|
|
|
|
|
|
|
Adjusted EBITDA |
|
|
($'000 unless otherwise states) |
|
|
|
Three Months EndedMarch 31, |
|
2022 |
|
|
2021 |
|
|
|
|
Operating income |
17,471 |
|
|
9,300 |
|
Add back depreciation |
1,416 |
|
|
1,467 |
|
Foreign exchange loss |
(113 |
) |
|
(113 |
) |
Adjusted EBITDA1 |
18,774 |
|
|
10,654 |
|
|
|
|
1 See definition on Adjusted EBITDA in Section 2 NON‐IFRS
MEASURES of the March 31, 2022, MD&A.
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 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 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 impact of COVID‐19 on the
Company, its customers and vendors, 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 and availability, 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, relocation of the Etiwanda operations,
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.
For further information contact:Ali Mahdavi, Investor
RelationsTree Island Steel(416) 962‐3300e‐mail:
amahdavi@treeisland.comWebsite: www.treeisland.com
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