Mr. Brett Newton reports

TORNADO GLOBAL HYDROVACS REPORTS RECORD THIRD QUARTER 2023 RESULTS

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

Third quarter 2023 overview and recent developments:

• The company achieved record quarterly sales, gross profit and EBITDAS (earnings before interest, tax, depreciation and amortization, non-cash impairment, gain/loss on disposal of fixed assets, and stock-based compensation). This is the sixth conservative quarter in which the company achieved record revenue.
• The hydrovac market continued to improve during Q3 2023, resulting in the improvement of 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 $27,110 increased 77.5 per cent in Q3 2023 compared with $15,269 in Q3 2022 as a result of: (i) the positive impact of the supply contract with Ditch Witch; (ii) the increase in sales from the exclusive sales arrangement with the company's United States strategic partner, Custom Truck One Source, a single-source provider of specialized truck and heavy equipment solutions, including sales, rentals and financing, that has an integrated network of 35 locations across North America; (iii) the increase in sales pricing to customers; and (iv) the increase in demand for hydrovac trucks in North America. Q3 2023 was a record for quarterly revenue for the company.
• Gross profit of $4,080 increased by $1,236 in Q3 2023 compared with $2,844 in Q3 2022, principally due to increased revenue. Gross profit was also positively impacted by the benefits from cost savings on parts sourced globally during Q3 2023. Nevertheless, this positive trend was partially offset by the increased costs associated with materials and labour during Q3 2023.
• EBITDAS of $2,181 increased 59.9 per cent in Q3 2023 compared with $1,364 in Q3 2022. This increase was due to the factors discussed above.
• The company earned net income of $944 in Q3 2023, which represents an increase of $108 compared with net income of $836 in Q3 2022. This increase was due to the factors discussed above. However, it was partially offset by an increase in stock-based compensation to $637 (2022 -- $20) as a result of options granted in Q3 and a higher income tax expense of $222 (2022 -- $35).

Outlook

Management expects the company's production and sales of hydrovac trucks in North America to continue to grow in the remainder of 2023 and in 2024 for the following reasons:

• The positive impact of the supply contract with Ditch Witch, including an anticipated total $3-million (U.S.) sale of IP in Q4 2023 upon meeting certain milestones related to the transfer of IP.
• The anticipated increasing revenues and benefits from the exclusive sales arrangement with its U.S. strategic partner, Custom Truck, that the company entered into in 2019.
• Expected continued spending on infrastructure in North America.
• 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's ability to continue 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 at the chassis manufacturer level and other supply chain issues related to other key hydrovac components, 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 Global is a pioneer and leader in the vacuum truck industry and has been a choice of oil field and utility 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.

We seek Safe Harbor.