Orchids Paper Products Company reported results for the quarter ended March 31, 2017. Net sales decreased $12.4 million, or 26%, primarily due to heavy promotional activity by brand-competitors and other competitive pressures. 1Q 2017 total net sales were $35.3 million, compared to $47.7 million in 1Q 2016, as the company said in the press release received by Lesprom Network.
To assist in summarizing the changes that occurred in 1Q 2017, a bridge follows, intended to show the significant changes in EBITDA between the 1Q and the immediately preceding quarter, the 4Q 2016. EBITDA of $6 million in the 4Q 2016 is being compared to EBITDA of $2.7 million in the 1Q 2017.
Jeff Schoen, President and CEO, stated, "As we expected, the first half of 2017 was going to be a challenging period until the new business awarded started to be produced and shipped. Sales were negatively impacted in January and February by one-time inventory reductions in preparation for a restage of private label programs that started to ship in March. Costs were negatively impacted by the continued effect of start-up costs for our Barnwell, South Carolina plant. Looking to the 2Q, production of the new volume that we announced in January, representing 3.0MM cases or more of new business, has begun, which we expect to be fully implemented by the beginning of 3Q. As previously stated, we expect the new volume to generate in the area of $15 million to $20 million of EBITDA and to attain a run rate of $50 million to $60 million of EBITDA when our new capacity is sold out.”
Orchids Paper Products Company is a national supplier of high quality consumer tissue products primarily serving the at home private label consumer market. The Company produces a full line of tissue products, including paper towels, bathroom tissue and paper napkins.
