Polaris Materials Corp. reported financial results for its fourth quarter and full year ending Dec. 31, 2015. In addition, the company announced the commencement of commercial operations at its Long Beach, Calif., terminal.
The company is reporting net income in 2015 of $0.9 million, compared to a net loss of $7.0 million in 2014. Gross profit for 2015 was $4.9 million, compared to $1.2 million in 2014, which is a new annual record as gross profit increased 307 percent from the prior year.
Sales of aggregates in the fourth quarter were 830,000 tons with revenue of $11.8 million, 11 percent and 18 percent, respectively, above the same quarter in 2014. For the full year ended Dec. 31, 2015, sales of aggregates of 2.9 million tons and revenue of $43.1 million were 14 percent and 5 percent, respectively, below the same period in the previous year.
Fourth quarter gross profit of $1.6 million ($1.93/ton) was an increase of 144 percent compared with $0.7 million ($0.88/ton) in the prior year quarter. Gross profit per ton for 2015 of $1.65 represents a new annual record, improving by $1.30/ton versus the $0.35/ton recorded in 2014.
The company began commercial sales from its terminal in the Port of Long Beach on Feb. 1, 2016, with regular sales to a customer in Los Angeles. The company has also secured a sales agreement with an established ready-mix producer in Los Angeles to provide materials for several major construction projects, with deliveries expected through the balance of 2016.
Polaris said it has been working closely with customers in San Francisco and Long Beach to provide additional clarity on expected shipments for 2016. "As a result of recent and ongoing discussions, we have increased confidence in our 2016 outlook but are not revising our full-year expectations at this time," the company stated. "To manage volumes and control costs around planned maintenance at one of our delivery points, Q1 2016 sales volumes are currently expected to be in the range of 550,000-600,000 tons, versus 718,000 tons in Q1 2015. Our customers will sell through inventories and will need to restock following completion of the planned maintenance, which has been factored into our full year volume outlook."
Ken Palko, president and CEO commented, "We are pleased to report our first full-year net income since becoming a public company, as well as record gross and operating margins and operating cash flow generation for the full year. The improved financial performance this year, and particularly in the third and fourth quarters, was driven by healthy average selling prices and reduced unit costs, together with the benefit of a favorable Canadian dollar exchange rate. Since announcing our outlook for the year on Jan. 21, we have achieved the start of commercial operations at the Long Beach Terminal, with substantial progress in firming up orders and delivery schedules in both San Francisco and Los Angeles. We have increased confidence in our outlook for the year, in spite of Q1 shipments expected to be lower than a record Q1 in 2015, and we continue to advance discussions in all our served markets with respect to sales, marketing and logistics."