VANCOUVER, Nov. 10, 2015 /PRNewswire/ - Polaris Materials Corporation (TSX:PLS) (the "Company" or "Polaris") today reported the financial results for its third quarter ending September 30, 2015. The financial results are in US dollars unless otherwise noted.

HIGHLIGHTS

Three months ended September 30, 2015


Third quarter gross profit of $1.6 million was an increase of 116% over the same period in the previous year;
Gross profit per ton of $2.13 represented the highest recorded rate for any quarter by the Company and triple the $0.70 gross profit per ton recorded in 2014.
The Company recorded its fifth consecutive quarter of positive adjusted EBITDA in the third quarter of $2.0 million ($2.80/ton) compared with $0.7 million ($0.67/ton) last year for the same quarter.
Nine months ended September 30, 2015


Gross profit for the nine months ended September 30, 2015 was $3.3 million compared with $0.5 million over the same period in the previous year
Adjusted EBITDA for the first nine months of 2015 was $4.1 million compared with $0.1 million over the same period in the previous year



For the three months ended September 30, 2015, the Company had net income attributable to shareholders of $954,000 ($0.01 per share) compared with a net loss attributable to shareholders of $2.1 million ($0.02 loss per share) in the same period in the previous year, an improvement of $3.1 million. For the nine months ended September 30, 2015, the Company had net income attributable to shareholders of $197,000 ($0.00 per share) compared with a net loss attributable to shareholders of $5.2 million ($0.06 loss per share) in the same period in the previous year, an improvement of $5.4 million. Sales of aggregates in the third quarter were 730,000 tons with revenue of $10.4 million, 29% and 23%, respectively, below the same quarter in 2014. For the nine months ended September 30, 2015, sales of aggregates of 2.1 million tons and revenue of $31.2 million were 21% and 11%, respectively, below the same period in the previous year.

Ken Palko, President and CEO, commented: "We were pleased to report another record gross profit per ton in the quarter which again demonstrates the Company's continuing margin expansion. The strong financial performance this quarter was driven by increased average selling prices and reduced unit costs, together with the benefit of a favourable Canadian dollar exchange rate. The combination of these factors produced our best quarterly financial results to date including adjusted EBITDA of $2.0 million, or $2.80 per ton, compared with $688,000, or $0.67 per ton last year for the same quarter. The sales volume in the third quarter was a reflection of the time required to effect positive changes to product distribution following the disruption reported in the second quarter, and not a reflection of a change in the markets. Sales improved in the third quarter of 2015 when compared to the first two quarters of the year, as the Company's Strategic Alliance Partner introduced a new supply chain management initiative. It is pleasing to report that sales in October 2015 have further increased to meet original budget expectations and that construction activity remains relatively robust in northern California. We were also pleased to see the House of Representatives pass the Surface Transportation and Reauthorization and Reform Act earlier this month, contributing to a very positive outlook for US construction activity."

Third Quarter 2015 Financial Results Compared to Third Quarter 2014

Aggregate sales for the quarter were 730,000 tons, a 29% decrease when compared with the third quarter of 2014. Revenue for the three months ended September 30, 2015 decreased by 23% to $10.4 million compared with the revenue of $13.4 million for the three months ended September 30, 2014. Despite lower than expected volumes, current quarter revenue benefited from an increased proportion of sales delivered to San Francisco, as opposed to those sold ex-quarry, and from selling price increases compared to the third quarter of 2014. The average selling price during the third quarter of $14.24/ST increased by $1.23/ST over the same period in 2014. When compared with 2014, price variance for the quarter was a favorable 5% due to price increases. A favorable sales mix variance of 2% was due to increased sales to customers with delivered pricing.

Cost of goods sold per ton for the current quarter decreased by $0.21 per ton to $12.11 compared to the cost of goods sold per ton for the same period in 2014 of $12.31. Somewhat higher delivery costs due to increased sales mix to customers that include freight were partially offset by the declining Canadian dollar, as quarry costs are incurred in Canadian dollars and translated into US dollars for reporting purposes.

Gross profit for the third quarter improved significantly over the prior year. Gross profit was $1.6 million or $2.13/ST in the third quarter or more than triple the $0.70/ST achieved in the third quarter of 2014, which represented the highest quarterly gross profit and gross profit per ton recorded by the Company. Gross profit improved by $0.8 million or 116% over the prior year comparative of $0.7 million. The Company continues to focus on margin expansion through pricing and cost control.

Current quarter selling, general and administrative ("SG&A") expenses of $1.3 million, decreased 39%, compared with $2.1 million during the same quarter in 2014. The decrease is principally due to lower share-based employee benefits, a non-cash charge. Total SG&A during the quarter was 12.3% of sales compared to 15.7% of sales during the same quarter in 2014. Additionally, the Company recorded a foreign exchange gain of $1.1 million on US dollar receivables held by its Canadian subsidiary, Orca Sand & Gravel Limited Partnership.

The Company recorded net income attributable to shareholders of $954,000 ($0.01 per share income) during the three months ended September 30, 2015, compared to a net loss attributable to shareholders of $2.1 million ($0.02 loss per share) during the three months ended September 30, 2014.

Adjusted EBITDA and EBITDA for the third quarter also improved over their year-on-year comparatives (see Non-IFRS Measures for details). Notably, the Company recorded its fifth consecutive quarter of positive adjusted EBITDA with the third quarter metric at $2.0 million ($2.80/ST), which was an improvement of $1.4 million over the three months ending September 30, 2014. EBITDA for the third quarter of 2015 was $1.9 million ($2.65/ST), an improvement of $2.9 million over the prior year comparative.

This financial summary should be read in conjunction with the Company's September 30, 2015, Consolidated Interim Financial Statements and the corresponding Management's Discussion and Analysis, both of which are available on the Company's website and at www.sedar.com.

Conference Call and Webcast Details

The Company will host a conference call on Wednesday, November 11th, 2015 at 8:00 am Pacific Time (11:00am Eastern). Details to access the call live are as follows:


Via telephone, toll-free, calling 1-888-390-0546 in North America or 416-764-8688 in Toronto.
Via webcast at: http://bit.ly/1KZMFvt

The webcast will be archived for 14 days following the call at the above noted link. The conference call will also be recorded and available for replay until Wednesday, November 25, 2015. To access the replay, dial 1-888-390-0541 or 416-764-8677 and use Playback Passcode 915674# to hear the recording.