Orchids Paper Products Company reported results for the quarter ended June 30, 2017. Net sales decreased $1 million, or 2%. Major factors include: parent roll sales volume increased $3.7 million; converted-product sales volumes declined $2.3 million; and there was a decrease of $2.3 million in average converted-product prices, reflecting both the lower prices associated with new bids which became effective in 2017 and the product mix sold to a changing mix of customers.
Jeff Schoen, President
and CEO, stated, "As expected, the 2Q 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."
Orchids Paper Products Company produces a full line of tissue products, including paper towels, bathroom tissue and paper napkins.
