Orchids Paper Products Company Reports 2017 Second Quarter Results
(USA, August 7, 2017) Orchids Paper Products Company (NYSE American: TIS) today reported results for the quarter ended June 30, 2017.
Jeff Schoen, President and Chief Executive Officer, stated, “As expected, the second quarter was not a good one, financially speaking. Sales volumes continued at relatively low historical levels through May, and then in June the previously announced new business with its resultant revenues kicked-in. The June sales volume equates to an ongoing annualized rate in the $180 million to $190 million range and a case sales rate of 12 million to 13 million cases. Effectively, we recovered the sales volumes lost in 2016 to competitors’ activity.
“The challenges for Orchids now are to sell out the Company’s newly increased paper capacity, gained through the introduction of the Barnwell, South Carolina facility and to optimize the Company’s total cost structure. The cost structure will be improved through a combination of increases in capacity utilization, operating efficiencies, reassessments and realignments of costs with production requirements, and specific identified cost reduction projects.”
“The paper machine at Barnwell, SC, was completed in June and remains on its start-up curve and meeting quality expectations. Our cost of sales is too high reflecting, in part, the inefficiencies of starting-up Barnwell; however, we expect, that as sell out all of the Company’s existing capacity, operating costs per ton will decline significantly. In June we saw the average cost per unit produced decrease, however the bottom-line impact of this reduction was offset by a liquidation of older higher-cost inventory. We expect to optimize both quality and cost by the end of 2017, which will increase our competitiveness in the ultra-premium and premium product channels.”
“The new capacity at Barnwell represents about 35,000 tons of ultra-premium and premium tissue paper. Combined with our existing conventional capacity, the total available paper capacity for the Company now represents about 135,000 tons. We continue to engage in new private-label bids, market our new innovative brands, and work toward growing market share in the premium and ultra-premium segments with new customers to broaden and diversify our customer base.”
To learn more, please visit: www.orchidspaper.com (Source: Orchids Paper Products Company)