Tree Island Steel announces its 2021 annual results and

VANCOUVER, British Columbia, March 02, 2022 (GLOBE NEWSWIRE) — Tree Island Steel (“Tree Island” or the “Company”) (TSX: TSL) today announced its financial results for the fiscal year ended December 31 2021.

For the three-month period ended December 31, 2021, revenue increased by $21.8 million to $76.0 million due to increased demand, particularly in commercial construction, as well as price increases in all market segments. Gross profit for the fourth quarter increased to $17.3 million from $6.6 million during the same period in 2020, driven by higher sales volumes during the period and the expenses management. Adjusted EBITDA was $12.6 million, compared to $4.5 million during the same period in 2020.

For the year ended December 31, 2021, revenue increased by $86.0 million to $301.8 million compared to 2020. The increase was primarily due to higher volumes shipped across all segments of market as well as rising prices. Gross profit increased from $25.9 million to $68.6 million. The increase in gross profit for the period is the result of higher sales volume, improved efficiency, operating leverage from increased volumes and cost management. Higher gross margins also resulted in adjusted EBITDA of $58.0 million, compared to $17.8 million during the same period in 2020.

“With increased construction in the residential and commercial sectors, as well as agricultural and industrial growth driving demand for yarn and yarn products, higher sales volumes were achieved in 2021,said Remy Stachowiak, president and chief operating officer of Tree Island Steel. “In this inflationary cost environment, with increases in raw materials, labor, freight, consumables and utilities, as well as labor constraints, we continue to closely manage our inventory and our operations.”

In November 2021, we purchased the Calgary property, which we previously leased, for a total of $11.3 million. This has not changed our operations in Calgary, but it will allow us to use the site in the future according to our business needs and will eliminate lease payment obligations.

In December 2021, we completed the sale of our Etiwanda land and building, with the proceeds resulting in a significant increase in net profit and cash flow for the year. Following this transaction, we entered into a two-year sale-leaseback for the facility and are currently reviewing options for relocating operations.

On March 2, 2022, the Board of Directors declared a regular quarterly dividend of $0.03 per share and an additional $1.20 per share as a special dividend on the issued and outstanding common shares of the Company, both payable on April 14, 2022 to holders of record at the close of business on March 31, 2022.

“We are very pleased with the results in 2021, as we continue to adapt to supply chain and workforce constraints, as well as rising costs. Despite this volatility, we remain focused on supporting our customers in all of our end markets,” said Amar S. Doman, Executive Chairman of Tree Island Steel.

($’000 unless otherwise specified)
Three months completed
The 31st of December,
Year ended
The 31st of December,
2021 2020 2021 2020
Income 75,954 54 199 301 848 215,894
Cost of sales (57,191 ) (46,105 ) (227,378 ) (184,008 )
Depreciation (1,440 ) (1,487 ) (5,843 ) (6,036 )
Gross profit 17,323 6,607 68,627 25,850
Selling, general and administrative expenses (5,833 ) (3,397 ) (16,367 ) (13,954 )
Operating result 11,490 3,210 52,260 11,896
Exchange loss (373 ) (226 ) (140 ) (173 )
Gain on property, plant and equipment 63,897 63,896 5
Financing costs (679 ) (590 ) (2,532 ) (4,335 )
Other expenses (4 ) (20 ) (6 ) (217 )
income before taxes 74,331 2,374 113,478 7,176
income tax expense (15,290 ) (682 ) (25,507 ) (2,045 )
Net revenue 59,041 1,692 87,971 5,131
Net earnings per share 2.08 0.06 3.09 0.18
Dividends per share 0.08 0.02 0.22 0.08

Financial situation at:

The 31st of December,
The 31st of December,
Total assets 225,806 146,549
Total non-current financial liabilities 38,907 71,236
Adjusted EBITDA
($’000 unless otherwise specified)
Three months completed
The 31st of December,
Year ended
The 31st of December,
2021 2020 2021 2020
Operating result 11,490 3,210 52,260 11,896
Add depreciation 1,440 1,487 5,843 6,036
Exchange loss (373 ) (226 ) (140 ) (173 )
Adjusted EBITDA1 12,557 4,471 57,963 17,759

1 See the definition of Adjusted EBITDA in section 2 NON‐IFRS MEASURES of the MD&A as at December 31, 2021.

About Tree Island Steel

Headquartered in Richmond, British Columbia since 1964, Tree Island Steel, through its four operating facilities in Canada and the United States, manufactures wire products for a diverse range of industrial applications. , residential, commercial and agricultural. Its products include Galvanized Wire, Bright Wire; a wide range of fasteners, including packaged, assembled and bulk nails; stucco reinforcement products; reinforcing mesh for concrete; fencing and other wire products. The Company markets these products under the Tree Island®, Halsteel®, K‐Lath®, TI Wire®, Tough Strand® and ToughPanel® brands.

Forward-looking statements

This press release contains forward-looking information regarding Tree Island, including its business, operations and strategies, its dividend policy and the declaration and payment of dividends thereunder, and its financial performance and conditions. Use of forward-looking terms such as “may”, “will”, “expect” or similar variations generally identify such statements. All statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Although management believes that the expectations reflected in the forward-looking statements are reasonable, such statements involve risks and uncertainties, including risks and uncertainties discussed under “Risk Factors” in Tree’s most recent Annual Information Form. Island and in management discussions and analyses.

The forward-looking statements contained herein reflect the current beliefs of management and are based on certain assumptions that management believes are reasonable based on 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 such statements, potential investors should specifically consider various factors, including the risks described in the Company’s most recent Annual Information Form and in management’s discussions and analysis, which may cause that actual results differ materially from any forward-looking statements. These risks and uncertainties include, but are not limited to: general economic, market and business conditions, the impact of the COVID‐19 pandemic on the business, the cyclical nature of our business and demand for our products, the financial condition of our customers, competition, pressure on volume and prices from competition from imports, deterioration of the Company’s liquidity, disruption of the supply of raw materials, volatility raw material costs, transportation costs, exchange rate fluctuations, indebtedness and covenants, labor relations, trade actions, dependence on key personnel and skilled workers, risks related to intellectual property, energy costs, uninsured loss, credit risk, operational risk, growth management, changes in tax, environmental and other legislation, and other risk s and uncertainties

This press release has been reviewed by the Company’s Board of Directors and its Audit Committee, and contains information current as of the date of this press release, unless otherwise indicated. Events occurring after that date could render the information contained herein inaccurate or misleading in any material respect. Readers are cautioned not to place undue reliance on such forward-looking information, and the Company’s management undertakes no obligation to publicly update or revise any forward-looking information, whether as a result of new information, events future or otherwise, except as required by applicable regulations. securities laws.

For more information, contact:
Ali Mahdavi, Investor Relations
Tree Island Steel
(416) 962‐3300
email: [email protected]

Lynn A. Saleh