Polaris announces Q1 2017 sales volumes and provides Update
Polaris announces Q1 2017 sales volumes and provides business update VANCOUVER, April 18, 2017 /CNW/ - Polaris Materials Corporation (TSX:PLS) (the "Company", "Polaris" or "we") today reported preliminary sales volumes for the quarter ended March 31, 2017 and provided a business update. Q1 2017 SALES VOLUMES Sales volumes in Q1 2017 were 561,000 tons, an increase of 9% over Q1 2016. Q1 sales volumes included 47,000 tons from our Long Beach terminal. Volumes in the quarter were higher at every point of sale aside from ex-quarry, which declined due to the previously disclosed completion of a major ex-quarry supply contract. Excluding the impact of ex-quarry sales, our volumes increased approximately 25% in the quarter. While activity improved from Q1 2016, heavy rains in California meant that the pace of business was modestly lower than our initial expectation for the quarter. Rainfall in most counties was 150-200% higher than long-term average levels, reaching over 100 inches of rain in some areas. Our current expectation is that construction activity will accelerate through the summer, and we continue to expect full year sales volumes consistent with our previous guidance. In Long Beach, we commenced deliveries to customers supplying the LA Rams stadium in early April, and expect to begin supplying material for the Silver Lake Water Treatment Facility project in the next few weeks. These two projects account for approximately 400,000 tons of demand for our high quality concrete aggregate products, most of which will come in 2017. BUSINESS UPDATE We are pleased to note that the State of California recently passed a US$52 billion, 10-year infrastructure spending bill, called the Road Repair and Accountability Act of 2017. This act authorizes $5.2 billion in annual spending in order to address needed repairs to local and state highways, bridges, transit and trade corridors, as well as transportation research and other items. The funding represents a more than 30% increase in state infrastructure spending and should have a significant, long-term benefit to state-wide aggregate demand for infrastructure projects. As with all government infrastructure spending programs, these funds will take some time to move from funding approval to project activity, so we would not expect to see RRAA-funded projects in our customers' pipelines until later in 2017 or into 2018. Current sales expectations for Q2 2017 are in the range of 600,000 to 800,000 tons, consistent with our full year expectations and current outlook for a strong second half of the year. We also expect to complete our first sale of fine sand in the second quarter, and we are pleased to note that the quarry has begun screening and placing material on the surge tunnel in preparation for the first shipload. We continue to pursue a number of opportunities which could provide upside over current expectations and will provide more detail on these opportunities as and when appropriate. Operating cost reductions at our quarry and in our logistics operations, as well as price improvements in a number of markets, are expected to contribute to significant improvements in unit margins versus 2016. Notably, the end of the previously mentioned ex-quarry contract means that our results for 2017 will reflect significant increases in headline prices and costs per ton, and continue to believe that focusing on our margins and EBITDA is the best way to evaluate our financial performance. Ken Palko, President and CEO, commented: "Q1 2017 was much more active overall than the same quarter in 2016 at most of our points of sale. We increased volumes overall for the quarter in spite of the end of the Hanson contract and extremely heavy rainfall in California. We expect activity to accelerate, particularly in the second half of the year, as our customers work to catch up on projects that were delayed by weather in Q1. Our team at the Orca Quarry has done a great job in advancing the stockpiling system capital project and we look forward to making our first sales of fine sand in Q2." About Polaris Materials Corporation: Polaris Materials Corporation is engaged in the development and operation of construction aggregate quarries in Canada to supply distribution facilities in the United States through coastal shipping. The Company's active construction aggregate interests consist of its Orca Sand and Gravel Quarry in British Columbia and two associated receiving terminals in Richmond and Long Beach, California. The Company also owns the Black Bear Project located in close proximity to the Orca Quarry, and a controlling interest in the Eagle Rock Quarry Project, located on the south coast of Vancouver Island. For further information, please contact: Nicholas Van Dyk Vice President, Investor Relations and Corporate Development Polaris Materials Corporation Tel: (604) 915-5000 Ext. 111 info@polarismaterials.com