Tree Island Steel Announces 2016 Results
By Marketwired News
By Marketwired News
VANCOUVER, BRITISH COLUMBIA–(Marketwired – May 5, 2016) –
Q1 2016 Financial Highlights1
- Revenue increases by 5.4% to $62.2 million
- Gross Profit increases by 33.7% to $11.0 million
- EBITDA2 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 $0.02 per share will be payable on July 15, 2016, to holders of record at the close of business on June 30, 2016.
1Please refer to our 2016 MD&A for further information.
2References made above to “EBITDA” are to operating profit plus depreciation and foreign exchange gains and losses. EBITDA is a measure used by many investors to compare issuers on the basis of ability to generate cash flows from operations. EBITDA is not an earnings measure recognized by IFRS and does not have a standardized meaning prescribed by IFRS. We believe that EBITDA is an important supplemental measure in evaluating the Company’s performance. You are cautioned that EBITDA should not be construed as an alternative to net income or loss determined in accordance with IFRS or as an indicator of performance. Our method of calculating EBITDA may differ from methods used by other issuers and, accordingly, our EBITDA may not be comparable to similar measures presented by other issuers.
Summary of Results
($’000 unless otherwise stated)
|Three Months Ended|
|Cost of sales||(50,404)||(50,065)|
|Selling, general and administrative expenses||(4,882)||(4,362)|
|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)|
|Income before income taxes||5,622||3,786|
|Income tax (expense) recovery||(393)||(1,669)|
|Add back depreciation||826||744|
|Foreign exchange gain (loss)||(240)||892|
|Net income per share ($/share)||0.17||0.07|
|Sales volume – Tons4||44,768||41,016|
|Gross profit per ton ($/ton)||246||201|
|EBITDA per ton ($/ton)||150||134|
|Financial Position as at:||March 31, 2016||December 31, 2015|
|Total non-current financial liabilities||20,464||22,152|
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.
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.
Tree Island Steel Ltd.