VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 4, 2017) -
Q1 2017 Financial Highlights 1 |
|
Volumes increased by 14.7% to 51,336 tons |
|
Revenues increased by 1.3% to $63.0 million |
|
Gross profit amounted to $7.5 million |
|
EBITDA earned was $4.2 million |
1 Please refer to our Q1 2017 MD&A for further information. |
Tree Island Steel Ltd. ("Tree Island" or the "Company") (TSX:TSL) announced today its financial results for
the three-month period ended March 31, 2017.
For the three-month period ended March 31, 2017, revenues were $63.0 million versus $62.2 million during the corresponding
period in 2016, with an increase in volumes of 14.7% in the quarter. Expected increases in demand and business activity in our
end markets during the quarter resulted in revenues and volumes increasing when compared to the same period last year despite the
reduction in sales from the Stainless product lines, which were divested in Q3 2016. Gross profit for the three months was $7.5
million versus $11.0 million during the same period in 2016 on account of rising raw material input costs relative to the same
time last year. As a result of this rapid rise in input costs, the spread between raw material prices and selling prices narrowed
and gross profit margin in the quarter was 11.9% compared to 17.7% in the same period last year. The lower gross profit margin
resulted in EBITDA for the quarter amounting to $4.2 million, compared to $6.7 million during the same period in 2016.
"As noted in our previous communications, we anticipated that gross margins would be compressed in the early part of this year
as a result of the rapid increase in raw materials prices experienced by our industry in the latter part of 2016. This quarter we
introduced a series of intended price increases to better off set this rise in raw material input costs, resulting in market
prices for our finished goods moving upwards in the quarter and continuing into the following quarter," said Dale R. MacLean,
President and CEO. "We are encouraged by the support of our customers as confirmed by the increased volumes during the quarter,
notwithstanding these necessary price increases, and we will continue to transition price adjustments into the market to
counteract the inflationary raw material input costs as necessary. We remain confident in our long term plans and will continue
to move forward with increased planned production investments in the United States and Canadian operations, expanding our
resources in the appropriate areas to continue to grow our business."
"We continue to address and adapt to market conditions in a manner that is consistent with our long‐term plan and will
continue to act deliberately and responsibly to maintain growth momentum that is consistent with the past several years with
price discipline as a key part of our core focus," said Amar S. Doman, Chairman of Tree Island Steel Ltd.
Summary of Results
($'000 unless otherwise stated)
|
|
Three Months Ended |
|
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March 31, |
|
|
2017 |
|
2016 |
|
|
|
|
|
Revenue |
|
63,040 |
|
62,240 |
|
Cost of sales |
|
(54,729) |
|
(50,404) |
|
Depreciation |
|
(816) |
|
(826) |
Gross profit |
|
7,495 |
|
11,010 |
|
Selling, general and administrative expenses |
|
(4,221) |
|
(4,882) |
Operating income |
|
3,274 |
|
6,128 |
|
Foreign exchange gain (loss) |
|
97 |
|
(240) |
|
Gain (loss) on sale of property, plant and equipment |
|
(47) |
|
- |
|
Other expenses |
|
- |
|
- |
|
Changes in financial liabilities recognized at fair value |
|
10 |
|
450 |
|
Financing expenses |
|
(711) |
|
(716) |
Income before income taxes |
|
2,623 |
|
5,622 |
|
Income tax (expense) recovery |
|
(873) |
|
(393) |
Net income (loss) |
|
1,750 |
|
5,229 |
Operating Income |
|
3,274 |
|
6,128 |
|
Add back depreciation |
|
816 |
|
826 |
|
Foreign exchange gain (loss) |
|
97 |
|
(240) |
EBITDA2 |
|
4,187 |
|
6,714 |
Net income per share |
|
0.06 |
|
0.17 |
Dividends per share |
|
0.02 |
|
0.02 |
Sales volume (tons) 3 |
|
51,336 |
|
44,768 |
Gross profit per ton ($/ton) |
|
146 |
|
246 |
EBITDA per ton ($/ton) |
|
82 |
|
150 |
Financial Position as at: |
|
December 31, 2016 |
Total Assets |
|
|
|
137,455 |
Total non-current financial liabilities |
|
|
|
19,090 |
2 See definition of EBITDA and Adjusted Net Income in Section 2
NON-IFRS MEASURES of the 2017 MD&A. |
3 Sales volume 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 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® and Tough Strand® 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 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.