Mr. Brett Newton reports

TORNADO GLOBAL HYDROVACS REPORTS RECORD SECOND QUARTER 2023 RESULTS

Tornado Global Hydrovacs Ltd. has released its unaudited financial and operating results for the three-month period ended June 30, 2023, with comparisons with the same period last year. The unaudited condensed consolidated financial statements and related management discussion and analysis are available on the company's issuer profile in Canada on SEDAR+, in the United States on the OTC Markets website and on the company's website. All amounts reported in this news release are in thousands of Canadian dollars except per-share amounts.

Second quarter 2023 overview and recent developments:

• The company achieved record quarterly sales, gross profit, EBITDAS (earnings before interest taxes, depreciation, amortization and stock compensation) and net income.
• The economic environment continued to improve during Q2 2023, resulting in the improvement of all key operating financial metrics compared with the same period in 2022.
• In July, 2022, the company entered into a product supply and development agreement for the co-development and supply of customized hydrovac trucks with Ditch Witch, a division of The Toro Company. The supply contract contains a commitment for the delivery of a number of innovative, proprietary hydrovac trucks to Ditch Witch that are estimated to generate minimum gross revenue for the company in the amount of $44-million (U.S.) during the four-year term. In addition, the agreement provides for the transfer and sale of certain intellectual property rights (IP) relating to the proprietary hydrovac trucks developed for Ditch Witch.
• Revenue of $23,516 increased 76 per cent in Q2 2023 compared with $13,362 in Q2 2022 as a result of: (i) the positive impact of the supply contract with Ditch Witch; (ii) the increase in sales pricing to customers; and (iii) the increase in demand for hydrovac trucks in North America. The quarter was another record quarterly revenue for the company.
• Gross profit of $3,962 increased by $1,129 in Q2 2023 compared with $2,833 in Q2 2022 principally due to increased revenue. Gross profit was also positively impacted by the benefits from cost savings on parts sourced globally during Q2 2023. Gross profit was negatively impacted by increased material, labour and freight costs in Q2 2023.
• The company earned net income of $1,054 in Q2 2023, which represents an increase of $484 compared with net income of $570 in Q2 2022.
• EBITDAS of $2,011 increased 64.8 per cent in Q2 2023 compared with $1,220 in Q2 2022. This increase was due to increased revenue and gross profit.

Outlook

Management believes the company's business will continue to strengthen and expects the company's production and sales of hydrovac trucks in North America in 2023 to continue to grow and capitalize on the significantly increased production capacity at its Red Deer facility over the long term for the following reasons:

• The positive impact of the supply contract with Ditch Witch, including an anticipated total of $3-million (U.S.) cash proceeds in 2023 upon meeting certain milestones related to the transfer of IP;
• The anticipated increasing revenues and benefits from the exclusive sales agreement with its U.S. strategic partner, Custom Truck One Source, a single-source provider of specialized truck and heavy equipment solutions, including sales, rentals and financing, and has an integrated network of 35 locations across North America that the company entered into in 2019;
• Expected increased spending on infrastructure in North America, particularly in the United States as a result of the U.S. Infrastructure Bill passed in late 2021;
• The anticipated addition of new and innovative products to its product lines that will support the infrastructure, telecommunications, and oil and gas industries;
• The company's commitment to continuous improvement of its hydrovac truck design which in the company's view will result in compelling advantages over other hydrovac trucks currently offered in the market;
• The company continues to secure key manufacturing components, including chassis for customers, into future years through strategic relationships;
• The company has strengthened its dealer relationships in both Canada and the U.S. to meet the expected demand increase;
• Expanded North American coverage for maintenance warranty and repair to better serve customers;
• Increased sales pricing to customers to reflect changes in material and labour costs.

Limiting factors on the company's ability to meet increased demand include: (i) the possibility of chassis supply chain interruption due to chip shortages at the chassis manufacturer level and other supply chain issues related to other key hydrovac components caused by the COVID pandemic, the Russian invasion of Ukraine, and U.S./China tensions, Canada/China relations and China/Taiwan tensions; and (ii) general inflationary increases in components and labour. However, management believes that it will be able to manage these supply chain issues as a result of strategic decisions made by the company.

About Tornado Global Hydrovacs Ltd.

Tornado is a pioneer and leader in the vacuum truck industry and has been a choice of utility and oil field professionals with over 1,200 hydrovacs sold since 2005. The company designs and manufactures hydrovac trucks as well as provides heavy-duty truck maintenance operations in central Alberta. It sells hydrovac trucks to excavation service providers in the infrastructure and industrial construction and oil and gas markets. Hydrovac trucks use high-pressure water and vacuum to safely penetrate and cut soil to expose critical infrastructure for repair and installation without damage. Hydrovac excavation methods are quickly becoming a standard in the North America to safely excavate in urban areas and around critical infrastructure, greatly reducing infrastructure damage and related fatalities. In China, the company's subsidiary is used principally to source certain parts to the company's North America operations.

We seek Safe Harbor.