Mr. Brett Newton reports

TORNADO GLOBAL HYDROVACS REPORTS RECORD 2023 RESULTS

Tornado Global Hydrovacs Ltd. has released its audited consolidated financial results for the year ended Dec. 31, 2023, with comparisons with last year. The audited 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 except per-share amounts.

2023 overview:

• The company achieved record sales, gross profit, EBITDAS (earnings before interest taxes, depreciation, amortization and stock compensation) and net income in 2023.
• 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.
• Net income per share (diluted) of 5.3 cents increased by 3.4 cents (178.9 per cent) compared with 1.9 cents in 2022. Net income of $7,342 increased by $4,887 (199.1 per cent) in 2023 compared with $2,455 in 2022. This increase was principally due to increased revenue and the associated increased EBITDAS.
• EBITDAS per share (diluted) of nine cents increased by 5.6 cents (164.7 per cent) compared with 3.4 cents in 2022. EBITDAS of $12,433 increased by $7,965 (178.3 per cent) compared with $4,468 in 2022. This increase was principally due to increased revenue and the associated increased gross profit.
• Revenue of $105,008 increased by $45,492 (76.4 per cent) in 2023 compared with $59,516 in 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 Custom Truck One Source; (iii) the increase in sales pricing to customers; and (iv) the increase in demand for hydrovac trucks in North America.
• Gross profit of $19,600 increased by $8,744 (80.5 per cent) compared with $10,856 in 2022 principally due to increased revenue. Gross profit was also positively impacted by the benefits from cost savings on parts sourced globally during 2023. However, gross profit was negatively impacted by the increased costs associated with materials purchased in North America during 2023.
• General and administrative expense of $7,572 increased in 2023 by $1,150 compared with $6,422 in 2022. The increase was principally due to general increased employee costs in North America to handle present and anticipated growth.

Q4 2023 overview:

• The company achieved record quarterly sales, gross profit, EBITDAS and net income in Q4 2023. This is the seventh consecutive quarter in which the company achieved record revenue.
• Net income per share (diluted) of 3.3 cents increased by 2.9 cents (725 per cent) compared with 0.4 cent in 2022. Net income of $4,559 increased by $4,006 (724.4 per cent ) compared with $553 in Q4 2022. This was principally due to the factors discussed above, with 2023 results partially offset by an increase in income tax expense of $1,965.
• EBITDAS per share (diluted) of 4.8 cents increased by 4.1 cents (585.71 per cent) compared with 0.7 cent in 2022. EBITDAS of $6,582 increased by $5,644 (601.7 per cent) compared with $938 in Q4 2022, due to increased revenue and gross profit.
• Revenue of $33,302 increased by $12,566 (60.6 per cent) compared with $20,736 in Q4 2022 as customer demand continued to grow, particularly sales relating to the supply contract and to Custom Truck. In Q4 2023, the company recorded the sale of IP relating to the proprietary hydrovac trucks for $3,933 (Q4 2022 -- $3,915).
• Gross profit of $8,249 increased by $5,445 (194.2 per cent) compared with $2,804 in Q4 2022 principally due to increased revenue. Gross profit in Q4 2023 and Q4 2022 also benefited from the gross profit on the sale of IP. Gross profit in Q4 2022 was negatively impacted by inventory adjustments resulting from year-end inventory count and warranty provisions and increased material and freight costs due to supply chain issues.

Outlook

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

• The anticipated increasing revenues and benefits from the supply contract with Ditch Witch;
• 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 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 United States to meet the expected demand increase;
• Expanded North American coverage for maintenance warranty and repair to serve customers better.

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 1,300 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 North America to safely excavate in urban areas and around critical infrastructure, greatly reducing infrastructure damage and related fatalities.

We seek Safe Harbor.