Tree Island Steel Announces Executive Appointments and Second Quarter 2023 Results

VANCOUVER, British Columbia, Canada ‐ July 27, 2023 ‐ Tree Island Steel (”Tree Island” or the ”Company”) (TSX: TSL) announced today the appointment of Nancy Davies as Chief Operating Officer reporting to Executive Chairman Amar S. Doman and the appointment of Brian Liu as VP Finance and CFO. The Company also announced today its financial results for the six months ended June 30, 2023.

For the three‐month period ended June 30, 2023, revenues decreased by $34.8 million to $63.6 million, from $98.4 million in the same period in 2022. The decrease was the result of a reduction in steel pricing,
macroeconomic conditions, and lower shipped volume from the previously announced closure of our
Etiwanda facility. Gross profit for the second quarter decreased to $9.1 million, from $21.6 million in the same period in 2022, impacted by lower volumes and return of margins to more historic levels particularly in the industrial wire products. Adjusted EBITDA amounted to $6.8 million, compared to $19.3 million during the same period in 2022 from lower gross profit. In the quarter, we also incurred $2.1 million in restructuring costs associated with headcount reductions.

For the six months ended June 30, 2023, revenues decreased by $52.3 million to $138.9 million compared to 2022 and gross profit decreased to $20.9 million from $42.4 million. The decrease is for the same factors as in the quarter. This resulted in an Adjusted EBITDA of $16.6 million, compared to $38.0 million during the same period in 2022.

In June 2023, the Company successfully completed an early exit of the Etiwanda facility. Relocation of higher performing equipment to other locations was also completed during the quarter. Installation and
recommissioning of the relocated equipment is expected to complete through Q3, 2023.

“I am proud of our employees’ commitment and contribution, which enabled us to deliver another positive quarter in a challenging business environment and, in parallel, successfully exit the Etiwanda property early. With the relocation of certain equipment from the Etiwanda facility progressing forward, this will provide further operating leverage in the latter part of 2023,” said Nancy Davies, Chief Operating Officer of Tree Island Steel.

“With the reset in steel prices, we continue to closely engage and support our customers in all market segments, while prudently monitoring operations,” said Amar S. Doman, Executive Chair of Tree Island Steel.