Mr. Zhenyong Liu, Chairman and CEO of Orient Paper, commented, "2012 has been a difficult year for the paper industry in China and product prices have been weak for the most part. As we disclosed to the market in previous quarters, there were also operational disruptions back in the second and early third quarters that have all been resolved. Nevertheless, we were able to record the highest quarterly revenue ever in the 4Q for $43.5 million and also successfully began the ramp-up of our new CMP production line PM6, which boosted our sales volume by 154% in the 4Q. We will continue to accelerate this ramp up for 2013.
Gross profit in the 4Q 2012 was $6.7 million, down 20% from $8.4 million for the 4Q 2011. The decline was mainly due to the falling average selling prices of the offset printing paper and CMP.
Excluding the impact of interest expenses, income tax expenses, depreciation and amortization, EBITDA, a non-GAAP measurement, was $5.2 million, down 40.9% from $8.7 million. Excluding the one-off impairment loss, EBITDA was $8 million, (refer to Note 2 for a discussion of non-GAAP financial measures, including the reconciliation EBITDA to net income), mainly because of the $2.8 million one-off impairment loss charge for the PM1 renovation project.
Net income was $2 million, down 63.6% from $5.5 million. Basic and diluted earnings per share for the 4Q 2012 were $0.11 compared to $0.30 for the corresponding period of 2011.
Orient Paper, Inc. is a leading paper manufacturer in North China. Using recycled paper as its primary raw material, Orient Paper produces and distributes three types of paper products namely, packaging paper (corrugating medium paper), offset printing paper, and other paper products, including digital photo paper, and household/tissue paper that the company is currently expanding into.