3/30/2010
NEWS BRIEFS

Wire producer Tree Island Industries Ltd. reported 2009 revenue of $165.6 million, an EBITDA loss adjusted for foreign exchange of $36.5 million and a full-year net loss of $26.9 million. Inventories were reduced by 68.4%, or $72.9 million.

Total sales volumes declined by 42.6% in 2009, with volumes to the industrial/OEM, commercial construction and residential construction markets experienced the most significant reduction. Sales volumes reflected the historically low demand for its products, as well as the impact of restrictions on working capital, which led the company to focus production resources on more profitable product lines, and away from higher-volume, lower-margin products.

“2009 was the most challenging year in our history as residential construction markets reached a 50-year low and we faced significant financing risks in our business,” said CEO Ted Leja. “We took appropriate steps to address these issues, and our business viability and future prospects have improved as a result.”

Those steps included resolving loan defaults, securing “alternate” credit sources and converting amounts owning into long-term debt. The company also sold surplus land at its Richmond manufacturing facility.

Tree Island continued to reorganize its operations in line with market conditions. The company closed its Fontana manufacturing and Corona distribution facilities, both located in California. Activities from these operations were consolidated into remaining facilities to ensure the continued supply of a full range of Tree Island’s quality products to customers. Workforce reductions also continued, with the company reducing its hourly workforce by 50% and its salaried workforce by 32% since July 2008.

Tree Island warned that raw material costs are on the rise, with steel prices up approximately 30% since January 2010. This price inflation reflects higher costs for the iron ore and scrap metal used to make steel. In response to the higher steel costs, Tree Island and competitors have announced price increases for finished products. ©2010 GlobalFastenerNews.com

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Related Links:

• Tree Island