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Now I'll turn the call over to Angelo.Angelo Brisimitzakis Thanks, Peggy. Good morning, everyone. Thanks for joining us today. I’m sure it didn’t come as a surprise to anyone that weather was a challenge for us this quarter. It’s our most winter-dependent quarter with deicing typically making up approximately 2/3 of our company’s earnings. The first quarter snow data and highway deicing volumes that we published earlier this month gave you some idea of the mild weather conditions in the primary regions of North America we serve. In reality, it wasn’t just our service area that seemed more like spring than winter. According to a report published by NOAA this month, this was the warmest first quarter in the US’s lower 48 states since they began keeping records in 1895. It was also mild in the UK and in southern Ontario. In total, the North American cities we track and report on recorded the fewest snow days for a full winter season in at least 15 years. From time to time I’ve been asked to describe the worst case weather scenario for our deicing business. From now on, I’ll just point to the winter of 2011-2012. But given this context, I think most people will also agree that the first quarter helped prove what we’ve said all along. Our salt business is remarkably resilient. Though salt segment sales volumes for $3.6 million tons was the lowest first quarter volume since we became a public company in 2003, our salt segment sales of $254.3 million were well ahead of any first quarter period prior to the heavy snowfall year of 2008, and removing the effects of the tornado, our pro forma salt segment operating margin percentage increased a 200 basis points over the first quarter of 2011 despite a less favorable product mix.
These results demonstrate the real underlying growth of our salt segment operating earnings, which we can attribute to the improvements we’ve made in pro forma per-unit salt costs. Rod will discuss the impact of the tornado on our results in just a few moments.Now, unfortunately, the reality is that the impact of the mild winter isn’t fully behind us yet. It’s likely that bid volumes will be lower this year, though it’s hard to know how much lower. The reference points I can give you are that after a very mild 2009-2010 winter, bid volumes were down 3%, while after the very mild 1999-2000 winter, bid volumes were down 4%. The bottom line is that our customers probably have more inventory than they normally do at this time of the year. We know from history that most customers can only hold a small percentage of their full season’s requirements at any time. Each customer is different, though, and there isn’t any accurate way to get a good sense of how much salt customers are holding in aggregate, so we won’t know what the actual impact is on bid volumes until we receive a representative sample of bids, and that won’t happen until around mid to late June. We’ll update you as we know more. For those customers who have typical min/max supply contracts but didn’t meet their bid minimum take requirements, we’ve been attempting to negotiate new agreements that would allow the unmet contract volume commitment to roll over into the upcoming winter season commitment, extend the deadline for physically taking last season’s salt, and to provide for a reasonable price increase. For some other customers who have taken or are taking the minimum orders, but not enough to materially affect our second quarter highway deicing sales volumes, and some contracts don’t expire for a while, so we haven’t had meaningful conversations with them yet.
There are a number of customers, particulary in Canada and the UK who don't have minimum purchase requirements in their contracts, so it’s a mixed bag so far and it’s too early to say where all these scenarios will land. And we really can’t predict very well on bid prices right now, but they may end up less than the average increase we have historically achieved.Read the rest of this transcript for free on seekingalpha.com