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VANCOUVER, British Columbia, Canada – November 10, 2022 – Tree Island Steel (”Tree Island” or the ”Company”) (TSX: TSL) announced today its financial results for the nine months ended September 30, 2022.
For the three-month period ended September 30, 2022, revenues decreased by $4.4 million to $80.2 million with lower U.S. demand, particularly in the construction and industrial market segments. Gross profit for the third quarter decreased to $14.6 million, from $21.8 million in the same period in 2021 from lower volumes. Adjusted EBITDA amounted to $12.2 million, compared to $20.0 million during the same period in 2021.
For the nine months ended September 30, 2022, revenues increased by $45.4 million to $271.3 million when compared to 2021. The increase is primarily due to prior pricing increases across all market segments. Gross profit increased to $57.0 million from $51.3 million with these increased selling prices recovering overall inflationary cost increases. The higher gross margins also resulted in an Adjusted EBITDA of $50.3 million, compared to $45.4 million during the same period in 2021.
In the third quarter of 2022, we experienced increased volume over prior year third quarter in the Canadian market, notably in the agricultural and commercial construction market segments, supporting fencing, agricultural wire and welded wire reinforcement product demand. However, demand slowed in the U.S. market in the quarter, with residential, commercial construction and industrial customers reducing purchasing volume in volatile economic conditions.
On November 10, 2022 the Board of Directors declared a quarterly dividend of $0.03 per share and an additional $0.02 per share as a special dividend on the issued and outstanding Common Shares of the Company, payable on January 16, 2023 to holders of record at the close of business on December 31, 2022.
During the three months ending September 30, 2022 $5.9 million of term debt was settled and subsequent to the quarter end, the remaining outstanding balance of $5.7 million on the Senior Term Loan was paid in full.
On November 7, 2022 the Company announced that it has renewed its normal course issuer bid to purchase up to 1,410,000 shares. The period of the normal course issuer bid will extend from November 9, 2022 to November 8, 2023.
“With the near term economic uncertainty, we remain cautious in our outlook for steel wire and wire products, requiring ongoing diligent management of raw materials, finished goods inventory and overall financial position. “ said Remy Stachowiak, President and COO of Tree Island Steel.
“We will continue to adapt to market conditions while remaining committed to long term profitability, supporting the improved financial position we have achieved over the past several years”, said Amar S. Doman, Executive Chair of Tree Island Steel.