Tree Island Steel Announces First Quarter 2015 Results

VANCOUVER, BRITISH COLUMBIA–(Marketwired – May 7, 2015) –

Q1 2015 Financial Highlights¹:

• Volumes up by 16.7% to 41,016 tons
• Revenue increases by 28.6% to $59.0 million
• Gross Profit increases by 54.9% to $8.2 million
• EBITDA²increases by 107.0% to $5.5 million

Tree Island Steel Ltd. (“Tree Island” or the “Company”) (TSX:TSL) announced today its financial results for the three month period ended March 31, 2015¹.

For the three‐month period ended March 31, 2015, revenues increased by 28.6 percent to $59.0 million versus $45.9 million for the same period last year. Volumes also increased by 16.7 percent to 41,016 tons from 35,136 last year. Revenue and volume growth were a result of continued robust demand in certain of the Company’s key end‐markets coupled with our sales efforts with existing and growing new customers. Gross profit was positively impacted due to productivity from additional production staffed hired and trained during 2014 and overall operating leverage gained from the increase in production volume. As such, our gross profit and gross margin improved to $8.2 million and 13.9 percent, compared to $5.3 million and 11.6 percent last year. The culmination of increased sales volumes and production efficiencies resulted in an EBITDA of $5.5 million, representing a 107.0 percent increase when compared to the same period in 2014.

“I am very pleased with our operational and financial performance during the first quarter resulting in a strong start to 2015,” noted Dale R. Maclean, President and CEO of Tree Island Steel. “Our growth strategy coupled with our focus on quality and customer service excellence continues to demonstrate positive results as we continue to expand and build on existing and new customer relationships.”

“Our Company is extremely well‐positioned in our marketplace” added Amar S. Doman, Chairman. “Our management and staff should be commended on our continued, improved fiscal performance.”

1. Please refer to our Q1 2015 MD&A for further information.
2. References made above to “EBITDA” are to operating profit plus depreciation and foreign exchange gains and losses. References to “Adjusted Net Income” are to net income per IFRS adjusted for certain non‐cash items including non‐cash financing expenses, changes in fair value of convertible instruments, and deferred income tax. EBITDA is a measure used by many investors to compare issuers on the basis of ability to generate cash flows from operations. Adjusted Net Income is a measure for investors to understand the impact of significant non‐cash items that affect our results from operations. Neither EBITDA nor Adjusted Net Income are earnings measures recognized by IFRS and do not have a standardized meaning prescribed by IFRS. We believe that EBITDA and Adjusted Net Income are important supplemental measure in evaluating the Company’s performance. You are cautioned that EBITDA and Adjusted Net Income should not be construed as alternatives to net income or loss, determined in accordance with IFRS, or as indicators of performance. Our method of calculating EBITDA and Adjusted Net Income may differ from methods used by other issuers and, accordingly, our EBITDA or Adjusted Net Income may not be comparable to similar measures presented by other issuers.

About Tree Island

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, 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, 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, significant exposure to the Western United States due to lack of geographic diversity, dependence on the construction industry, transportation costs, foreign exchange fluctuations, leverage and restrictive covenants, labour relations, trade actions, dependence on key personnel and skilled workers, reliance on key customers, 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.