Tree Island Steel Announces First Quarter 2023 Results

VANCOUVER, British Columbia, Canada – May 4, 2023 – Tree Island Steel (”Tree Island” or the ”Company”) (TSX: TSL) announced today its financial results for the three months ended March 31, 2023.

For the three-month period ended March 31, 2023, revenues of $75.3 million were $17.5 million (19%) lower than the same period of 2022. The previously announced closure of our Etiwanda site resulted in lower volumes from that facility while reduced construction of large-scale distribution warehouses contributed to a drop in our engineered structural products sales. To a lesser degree, lower unit sales prices negatively impacted revenue.

First quarter gross profit of $11.8 million was $9.0 million lower than the same period of 2022. Margins were reduced as unit sales prices did not offset higher year-over-year raw material costs. Adjusted EBITDA was $9.8 million compared to $18.8 million in Q1 2022 for the same reason.

In the first quarter the company exercised its early termination option on the Etiwanda property which had been sold in December 2021. The site maintained reduced operations in the quarter while decommissioning various equipment. Certain Etiwanda machines will be relocated to other Tree Island facilities and recommissioned in Q2 and Q3.

“Our goal is to relocate and recommission certain Etiwanda equipment to other Tree Island sites during the next two quarters providing operating leverage and additional volumes in 2024. We believe the strength of our balance sheet gives us a solid financial foundation to expand our business” said Nancy Davies, Interim President and COO of Tree Island Steel.

“We will maintain close oversight of the business, as the consolidation efforts progress, and continue to monitor operations as we move forward in an unpredictable economic environment” said Amar Doman, Executive Chairman of Tree Island Steel.