March 29, 2010
Vancouver, British Columbia-based Polaris Minerals Corp. today reported financial results for the year ended Dec. 31, 2009. (All financial results are in U.S. dollars unless otherwise noted.)
During 2009, the company had sales of $18.8 million, a 36-percent decrease over sales of $29.6 million generated in the prior year. At Dec. 31, 2009, the company had working capital of $10.6 million, including cash of $5.6 million, and no long term debt. The company’s cash position was enhanced by $2.7 million during the year through the sale of the company’s asset backed commercial paper investment.
The net loss for the year was $17.9 million ($0.34 loss per share) compared with the net loss of $9.8 million ($0.26 loss per share) for the year ending Dec. 31, 2008. The net loss was impacted by three exceptional items: an estimated impairment loss of $5.1 million associated with the intended sale of Pier B land in the Port of Long Beach, Calif., including the land, financing, permitting and holding costs incurred to date; a provision of $1.8 million associated with shipping commitments which will now be reversed in 2010 and foreign exchange losses of $1.4 million arising from the stronger Canadian dollar.
The company realized an adjusted EBITDA loss for the year of $4.3 million ($0.08 loss per share) compared with a gain of $1.2 million ($0.03 per share) in the prior year. Sales of sand and gravel totaled 1.42 million tons in 2009 compared with 2.32 million tons sold in 2008.
Subsequent to the year end the company finalized the refinancing of construction loans for the berthing tug used at Orca Quarry and will receive cash of CDN$2.3 million at the scheduled closing in early April, 2010.
“Several factors came together in 2009 that gave rise to significant challenges for Polaris: the unprecedented severity of the economic recession, related credit restrictions, delays in realizing positive impacts from the American stimulus spending and California state budget deficits, all of which inhibited construction activity,” Polaris President and CEO Herb Wilson said in a written statement. “During the year we focused on progressing our terminal development strategy in southern California and improving operating efficiencies at the Orca Quarry so that we will be well positioned to take advantage of the economic upturn which we expect to begin to positively impact construction material demand commencing later in 2010.
“We continue to believe that our business plan remains solid, albeit delayed at this time,” Wilson continued. “We are also encouraged by the level of interest that has been expressed in the purchase of the Pier B land in Long Beach and the benefits which will result from the development of an alternative site within the Port of Long Beach.”
Wilson also said that subsequent to the year end, Polaris agreed with its exclusive shipper to merge their existing agreements into a single Contract of Affreightment with a term of 20 years effective Jan. 1, 2010. The commercial shipping terms remain unchanged from previous agreements with annual tonnages phased to reflect the requirements of Polaris’ development program for new port terminal capacity.
Under the terms of the new Contract of Affreightment, the company made a payment to its shipper of US$6.85 million, of which US$500,000 was payable immediately and the balance will be paid, with interest at 7.5 percent per annum, under the terms of a secured credit facility maturing in 2017. The agreement allows Polaris to repay amounts outstanding at any time without penalty.
This financial summary should be read in conjunction with the company’s Dec. 31, 2009 Consolidated Financial Statements and Management’s Discussion and Analysis, both of which are available on www.sedar.com.
The company will host a conference call at 8:00 a.m. PDT on Tuesday, March 30, 2010. Investors and other interested parties may access the teleconference live by calling 888-231-8191 in North America or 647-427-7450 internationally.
A live Webcast of the conference call will be available at www.newswire.ca/en/webcast/viewEvent.cgi?eventID=3001680 andwill be archived for 90 days following the call.
The conference call will be recorded and available for replay at 11 a.m. PDT and will be available until April 13, 2010. To access the replay, dial 1-800-642-1687. The access code to hear the recording is 63940797.