May 14, 2010. /Lesprom Network/. Orient Paper announced that 1Q revenue was $26.5 million, an increase of 48.3% from $17.8 million during the same period in 2009. Total white paper (the Company produced only medium-grade offset printing paper under this category in the 1Q 2010 and produced no high-grade offset printing paper or writing paper) sales revenue in the 1Q 2010 increased 75.4% or $7.1 million over total white paper sales revenue in the comparable period in 2009. In the 1Q 2010, the company sold 23,660 tons of total white paper, up 64.8% from 14,353 tons of white paper a year ago. To meet the strong market demand for medium-grade offset printing paper, which is partly fueled by the high wood pulp prices, the Company converted its writing paper production line to produce medium-grade offset printing paper in the third quarter of 2009 and has ramped up production of the converted line. In addition, revenue from corrugating medium paper increased 13.5% year-over-year to $9.5 million compared to $8.4 million in the same period last year. Demand for corrugating medium paper continued to increase in the first quarter of 2010 led by increase in regional manufacturing activities. The company's newly launched digital photo paper has contributed about $0.3 million in revenue during the quarter. Gross profit for the 1Q 2010 increased 45.1% to $4.8 million compared to $3.3 million for the 1Q 2009. Gross margin was 18.3% as compared to 18.7% during the same period in 2009. The slight decline in gross margin on a year over year basis was mainly due to higher energy costs. On a sequential basis, gross margin improved 0.4 percentage points from 17.9% in the 4Q 2009. Management expects gross margin to improve in the 2Q of fiscal 2010 as energy costs have stabilized. Net income in the 1Q 2010 increased to $3.1 million in the three months ended March 31, 2010, or $0.21 per basic and fully diluted share, as compared to net income of $2.3 million, or $0.20 per basic and fully diluted share, for the same period in 2009. Weighted average shares used in the calculation of diluted earnings per share were 14,893,712 in the 1Q 2010 compared to 11,275,497 in the 1Q 2009, due to additional shares issued during the company's private placement financing in October 2009. "In the 1Q 2010, demand for paper products was led by strong underlying growth in the regional economy, resulting in solid growth for Orient Paper," commented Mr. Zhenyong Liu, CEO of Orient Paper, Inc. "1Q marked a significant milestone in our product expansion strategy as we commenced production of our new digital photo paper production line, which is a high-end photo paper offering attractive margins. We have also successfully secured additional capital resources through a public offering to support our corrugating medium paper capacity expansion plans in 2010." Orient Paper, Inc., through its wholly owned subsidiaries, Shengde Holdings, Inc., controls and operates Baoding Shengde Paper Co., Ltd., and Hebei Baoding Orient Paper Milling Co., Ltd ("HBOP"). Founded in 1996, HBOP is engaged in the production and distribution of products such as corrugating medium paper, offset printing paper, writing paper, and other paper and packaging-related products in China.