Orchids Paper Products Company ecntly reported results for the first quarter of 2016, which included record net sales and Adjusted EBITDA of $47.7 million and $11.6 million, respectively, exceeding the previous records of $46.8 million and $10.2 million, respectively, set in the third quarter of 2015. Converted product net sales were $45.3 million, exceeding the previous record of $43.7 million set in the third quarter of 2015. Results for the first quarter of 2016 do not include any amounts related to the business interruption insurance claim for the incident that occurred in the Company's converting operation in the fourth quarter of 2015.
Jeff Schoen, President and Chief Executive Officer, stated, "I am extremely pleased that, after achieving an approximate 20% improvement in sales and Adjusted EBITDA in 2015, we have continued to grow significantly in 2016, with a very strong performance in the first quarter. This success is, in part, due to several of the strategic projects we have undertaken over the past couple of years to improve quality, increase efficiencies, increase capacity and reduce overall costs, as well as new product development efforts and our partnership with Fabrica. As we look forward into 2016, we will continue to make improvements in quality and cost although the normal headwinds associated with the start-up of our South Carolina facility could affect earnings for several quarters. Additionally, we exceeded our 20,000 ton annual limit under the Fabrica supply agreement in March. As a result, until the contract resets on June 1, we will share margins under the terms of the contract, which we expect will reduce our earnings in the second quarter by approximately $1.0 million compared to the first quarter."
Mr. Schoen continued, "We met our commitment to begin shipping converted product from the South Carolina facility in Q1. We have added new business to the site and are progressing well on our start-up curve. The second converting line is scheduled to come on-line late in the second quarter of 2016. Construction of the paper machine is underway and on schedule to start up in the first quarter of 2017. The start-up of our South Carolina facility on plan, the performance of our Oklahoma operation in the first quarter of 2016, and the continued results from our long-term partnership with Fabrica have us on plan to meet our long term sales, EBITDA, and EPS goals, which we expect will provide increasing returns for our shareholders."
Source : pulpapernews.com