Polaris Minerals Corporation (TSX:PLS) today reported financial results for the third quarter ended September 30, 2008. All financial results are in US Dollars unless otherwise noted.
During the quarter the Company generated positive cash flow from operations of $635,000, compared to a use of $220,000 cash for operations in the second quarter of 2008. Revenues of $9.0 million for the third quarter represented a 37% increase over the second quarter and a 65% increase over the $5.4 million for the quarter ending September 30, 2007. At September 30, 2008, the Company had cash and cash equivalents of $9.4 million, and debt that included a CDN$20 million short term bridge loan and $3.8 million of capital leases on mobile plant.
Loss from operations for the quarter, net of stock-based compensation, was $2.2 million, compared with a loss of $0.7 million in the quarter ended September 30, 2007. The Company's net loss reported was $3.2 million, ($0.09 per share) compared with a net loss of $1.9 million ($0.05 per share) for the quarter ended September 30, 2007. This increased loss is primarily the result of one time charges for stock based compensation and a change in the fair value of debt.
Herb Wilson, Chief Operating Officer, said: "The Company's gross margin in the quarter was significantly impacted by the high cost of fuel surcharges from its shipping contractor, reflecting record high world oil prices in June and July compounded by a time lag between changes in crude oil prices and incurred fuel charges. The benefit of reducing oil prices is now emerging midway through the fourth quarter and the Company's supply contracts allow for the recovery of 2008 surcharges in 2009". He added: "We are pleased to have generated positive cash from operations in the quarter. We sold 694,000 tons of sand and gravel in the third quarter, the highest quarterly sales since operations began, bringing total sales for the first three quarters in 2008 to 1.71 million tons. Fourth quarter shipments continue to be dispatched at a good pace and we expect to ship 2.1 to 2.5 million tons in 2008. We have maintained a strong cash balance despite the current economic headwinds in the construction industry and are focused on preserving this position going forward".
Commenting on 2009, Mr. Wilson said: "We expect that the combination of higher prices for our products and moderating energy costs will significantly benefit margins in 2009. Although volume visibility for 2009 is challenging, we currently estimate that total sales will be similar to, or slightly higher than 2008. However, until we can get a clearer picture of various macroeconomic factors, including Federal and State infrastructure spending and the outcome of recent efforts to ease credit restrictions on the private sector, we are unable to be more specific on 2009 expectations." -- www.cnxmarketlink.com
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