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VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 05/05/16 --
Q1 2016 Financial Highlights(1)
-- Revenue increases by 5.4% to $62.2 million -- Gross Profit increases by 33.7% to $11.0 million -- EBITDA(2) 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 ------------------------ EBITDA(3) 6,714 5,508 ------------------------ ------------------------ Net income per share ($/share) 0.17 0.07 Sales volume - Tons(4) 44,768 41,016 Gross profit per ton ($/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 20,464 22,152 liabilities
(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.
Contacts:
Tree Island Steel Ltd.
Ali Mahdavi
Investor Relations
(416) 962-3300
amahdavi@treeisland.com
www.treeisland.com
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