Industry Press Releases

Orient Paper, Inc. announces Third quarter of 2015 Financial Results

Thursday, Nov 12, 2015
Pressreleases

Orient Paper, Inc., a leading manufacturer and distributor of diversified paper products in North China, today announced its unaudited financial results for the third quarter ended September 30, 2015. Because the Securities and Exchange Commission is closed today in observance of Veterans Day, the Company's quarterly report on Form 10-Q for the same quarter will be filed before the market open tomorrow, on Thursday, November 12, 2015.

Third quarter of 2015 Financial Highlights

   

For the Three Months Ended September 30,

($ millions)

 

2015

 

2014

 

% Change

Revenue

 

32.4

 

40.8

 

-20.5%

     Regular Corrugating Medium Paper ("CMP")*

 

19.0

 

24.4

 

-22.4%

     Light-Weight CMP**

 

3.7

 

4.9

 

-24.5%

     Offset Printing Paper

 

9.3

 

10.8

 

-14.1%

     Tissue Paper

 

0.3

 

0.0

 

NA

     Digital Photo Paper

 

0.2

 

0.6

 

-73.5%

             

Gross profit

 

6.4

 

6.4

 

0.1%

Gross margin

 

19.8%

 

15.7%

 

4.1%

     Regular Corrugating Medium Paper ("CMP")*

 

20.4%

 

12.2%

 

8.2%

     Light-Weight CMP**

 

30.7%

 

30.3%

 

0.3%

     Offset Printing Paper

 

16.5%

 

17.7%

 

-1.2%

     Tissue Paper

 

1.8%

 

NA

 

NA

     Digital Photo Paper

 

-93.2%

 

1.6%

 

NM

             

Operating income

 

2.6

 

4.9

 

-47.2%

Net income

 

1.7

 

3.4

 

-50.0%

EBITDA

 

7.8

 

7.0

 

11.7%

Basic and Diluted earnings per share

 

0.08

 

0.18

 

-53.5%

             

* Products from PM6

           

** Products from the newly renovated PM1

           

*** Reconciliation of EBITDA to Net Income at the back of the release 

  • •    Revenue decreased by 20.5% to $32.4 million, primarily due to government mandated temporary production suspension from August 20 to September 4, 2015.
  • •    Gross profit was $6.4 million, essentially unchanged from the same period of last year. Gross margin increased by 4.1 percentage points to 19.8%, primarily due to declines in unit material cost for regular CMP and energy cost as well as an increase in ASP of regular CMP.
  • •    EBITDA was $7.8 million, an increase of 11.7% from the same period of last year.
  • •    Net income was $1.7 million, or $0.08 per diluted share, compared to $3.4 million, or $0.18 per diluted share, for the same period of last year.
  • •    We completed the relocation and resumed the commercial production of digital photo paper production lines in August 2015.
  • •    We commenced the packaging operations of tissue paper products, that involves processing base tissue paper from long-term cooperative third party and producing finished products in Wei County Industry Park and generated approximately $0.3 million in sales on shipment of 208 tonnes of tissue paper in the third quarter.
     

Mr. Zhenyong Liu, Chairman and Chief Executive Officer of Orient Paper, commented, "The change in our third quarter revenue largely reflected the negative impact of the temporary production suspension from August 20 to September 4, 2015 mandated by the Baoding City government in connection with the International Association of Athletics Federations World Championship Games and the military parade commemorating the 70th anniversary of the end of World War II held in Beijing. Production of affected production lines was resumed on September 5, 2015 and has returned to its normal levels."  

Mr. Liu continued, "With the digital photo paper production lines up and running following the completion of its relocation in August, 2015 and the new tissue paper packaging lines ramping up, we expect to end the year on a high note amidst relatively benign pricing environment for both raw materials and our products."     

Three Months Ended September 30, 2015 Financial Results

Revenue

For the third quarter of 2015, total revenue decreased by $8.3 million, or 20.5%, to $32.4 million from $40.8 million for the same period of the last year. The decrease in total revenue was primarily due to the government mandated temporary production suspension of from August 20 to September 4, 2015.

 

For the Three Months Ended September 30,

 

2015

 

2014

 

Revenue
($'000)

 

Volume
(tonne)

 

ASP
($/tonne)

 

Revenue
($'000)

 

Volume
(tonne)

 

ASP
($/tonne)

Regular CMP

18,954

 

52,737

 

359

 

24,419

 

68,876

 

355

Light-Weight CMP

3,713

 

10,138

 

366

 

4,918

 

13,341

 

369

Offset Printing Paper

9,313

 

13,689

 

680

 

10,846

 

15,791

 

687

Tissue Paper

275

 

208

 

1,324

 

-

 

-

 

 NA 

Digital Photo Paper

151

 

38

 

3,983

 

571

 

146

 

3,908

Total

32,407

 

76,810

 

422

 

40,754

 

98,154

 

415

Revenue from CMP, including both Regular CMP and Light-Weight CMP, decreased by $6.7 million, or 22.7%, to $22.7 million and accounted for 69.9% of total revenue for the third quarter of 2015. This compared to $29.3 million, or 72.0% of total revenue for the same period of last year. The Company sold 62,875 tonnes of CMP with average selling price ("ASP") of $361/tonne in the third quarter of 2015, compared to 82,217 tonnes at $357/tonne in the same period of last year.

Of the total CMP sales, revenue from Regular CMP decreased by $5.5 million, or 22.4% to $19.0 million on volume of 52,737 tonnes and ASP of $359/tonne for the third quarter of 2015, compared to revenue of $24.4 million on volume of 68,876 tonnes and ASP of $355/tonne for the same period of last year. Revenue from Light-Weight CMP decreased by $1.2 million, or 24.5% to $3.7 million on volume of 10,138 tonnes and ASP of $366/tonne for the third quarter of 2015, compared to revenue of $4.9 million on volume of 13,341 tonnes and ASP of $369/tonne for the same period of the last year.

Revenue from offset printing paper decreased by $1.5 million, or 14.1%, to $9.3 million for the third quarter of 2015 from $10.8 million for the same period of last year. The Company sold 13,689 tonnes of Offset Printing Paper with ASP of $680/tonne in the third quarter of 2015, compared to 15,791 tonnes at $687/tonne in the same period of last year.

Revenue from tissue paper products was $0.3 million on volume of 208 tonnes at $1,324/tonne for the third quarter of 2015.

Revenue from digital photo paper was approximately $0.2 million for the third quarter of 2015, compared to $0.6 million for the same period of last year. The Company sold 38 tonnes of digital photo paper with ASP of $3,983/tonne in the third quarter of 2015, compared to 146 tonnes at $3,908/tonne in the same period of the last year. In October 2014, we shut down and disassembled our digital photo paper production facilities (our PM4 and PM5 production lines) for the relocation, as mandated by the local county government to a new workshop that we built across the street from our main production base, Xushui Paper Mill. We completed the relocation and resumed commercial production of our digital photo paper in August 2015. We expect to increase our digital photo paper production in the fourth quarter of 2015.

Gross Profit and Gross Margin

Total cost of sales decreased by $8.4 million, or 24.3%, to $26.0 million for the third quarter of 2015 from $34.3 million for the same period of the last year. Cost of sales per tonne was $338 for the third quarter of 2015, compared to $350 for the same period of last year. Costs of sales per tonne for Regular CMP, Light-Weight CMP, offset printing paper, tissue paper products, and digital photo paper were, $286, $254, $568, $1,301, and $7,695, respectively, for the third quarter of 2015, compared to $311, $257, $565, $nil, and $3,845, respectively, for the same period of last year.

Total gross profit was $6.4 million for the third quarter of 2015, essentially unchanged from the same period of last year. Total gross margin was 19.8% for the third quarter of 2015, compared to 15.7% for the same period of last year. The increase in total gross margin was primarily due to declines in unit material cost for regular CMP and energy cost as well as an increase in ASP of regular CMP.   

Gross margin for Regular CMP, Light-Weight CMP, offset printing paper, tissue paper products, and digital photo paper was 20.4%, 30.7%, 16.5%, 1.8% and -93.2%, respectively, for the third quarter of 2015, compared to 12.2%, 30.3%, 17.7%, nil, and 1.6%, respectively, for the same period of last year.

Income from Operations

Selling, general and administrative expenses ("SG&A") was $3.8 million for the third quarter of 2015, compared to $1.0 million for the same period of the last year.  The increase was primarily due to the increase in the depreciation costs associated with disassembling the digital photo production lines for relocation that was charged to SG&A and with the new facilities in the Wei County Industrial Park.

Income from operations decreased by $2.3 million, or 47.2%, to $2.6 million for the third quarter of 2015 from $4.9 million for the same period of last year. Operating margin was 8.0% for the third quarter of 2015, compared to 12.1% for the same period of last year.

Net Income

Net income decreased by $1.7 million, or 50.0%, to $1.7 million for the third quarter of 2015 from $3.4 million for the same period of last year. Basic and diluted earnings per share for the third quarter of 2015 were $0.08, compared to $0.18 for same period of last year.

EBITDA

Earnings before interest, taxes, depreciation and amortization ("EBITDA") increased by $0.8 million, or 11.7%, to $7.8 million for the third quarter of 2015 from $7.0 million for the same period of last year. See the reconciliation of EBITDA to Net Income below.

Nine Months Ended September 30, 2015 Financial Results

   

For the Nine Months Ended September 30,

($ millions)

 

2015

 

2014

 

% Change

Revenue 

 

100.2

 

104.3

 

-4.0%

     Regular Corrugating Medium Paper ("CMP")*

 

61.3

 

65.8

 

-6.8%

     Light-Weight CMP**

 

11.9

 

6.4

 

84.6%

     Offset Printing Paper

 

26.6

 

29.2

 

-9.0%

     Tissue Paper

 

0.3

 

0.0

 

NA

     Digital Photo Paper

 

0.2

 

2.9

 

-94.0%

             

Gross profit

 

21.9

 

17.2

 

27.2%

Gross margin

 

21.8%

 

16.5%

 

5.4%

     Regular Corrugating Medium Paper ("CMP")*

 

21.4%

 

14.0%

 

7.5%

     Light-Weight CMP**

 

31.4%

 

28.5%

 

2.9%

     Offset Printing Paper

 

19.4%

 

19.2%

 

0.1%

     Tissue Paper

 

1.8%

 

NA

 

NA

     Digital Photo Paper

 

-77.3%

 

19.2%

 

NM

             

Operating income

 

14.5

 

13.8

 

5.1%

Net income

 

9.4

 

9.5

 

-1.0%

EBITDA

 

25.1

 

19.8

 

27.1%

Basic and Diluted earnings per share

 

0.46

 

0.50

 

-7.9%

             

* Products from PM6

           

** Products from the newly renovated PM1

           

*** Reconciliation of EBITDA to Net Income at the back of the release

 

Revenue

For the nine months ended September 30, 2015, total revenue decreased by $4.1 million, or 4.0%, to $100.2 million from $104.3 million for the same period of last year. The decrease in total revenue was primarily due to the government mandated production suspension from August 20 to September 4, 2015 that more than offset strength in the first half of 2015.

 

For the Nine Months Ended September 30,

 

2015

 

2014

 

Revenue
($'000)

 

Volume
(tonne)

 

ASP
($/tonne)

 

Revenue
($'000)

 

Volume
(tonne)

 

ASP
($/tonne)

Regular CMP

61,273

 

165,959

 

369

 

65,757

 

181,984

 

361

Light-Weight CMP

11,893

 

31,623

 

376

 

6,443

 

17,556

 

367

Offset Printing Paper

26,575

 

38,545

 

689

 

29,202

 

42,664

 

684

Tissue Paper

275

 

208

 

1,324

 

-

 

-

 

 NA 

Digital Photo Paper

177

 

44

 

4,026

 

2,942

 

750

 

3,922

Total

100,194

 

236,379

 

424

 

104,344

 

242,954

 

429

Revenue from CMP, including both Regular CMP and Light-Weight CMP, increased by $1.0 million, or 1.3%, to $73.2 million and accounted for 73.0% of total revenue for the nine months ended September 30, 2015. This compared to $72.2 million, or 69.2% of total revenue for the same period of last year. The Company sold 197,582 tonnes of CMP with ASP of $370/tonne in the nine months ended September 30, 2015, compared to 199,540 tonnes at $362/tonne in the same period of last year.

Of the total CMP sales, revenue from Regular CMP decreased by $4.5 million, or 6.8%, to $61.3 million on volume of 165,959 tonnes and ASP of $369/tonne for the nine months ended September 30, 2015, compared to revenue of $65.8 million on volume of 181,984 tonnes and ASP of $361/tonne for the same period of last year. Revenue from Light-Weight CMP increased by $5.5 million, or 84.6%, to $11.9 million on volume of 31,623 tonnes and ASP of $376/tonne for the nine months ended September 30, 2015, compared to revenue of $6.4 million on volume of 17,556 tonnes and ASP of $367/tonne for the same period of last year.

Revenue from offset printing paper decreased by $2.6 million, or 9.0%, to $26.6 million for the nine months ended September 30, 2015 from $29.2 million for the same period of last year. The Company sold 38,545 tonnes of offset printing paper with ASP of $689/tonne in the nine months ended September 30, 2015, compared to 42,664 tonnes at $684/tonne in the same period of last year.

Revenue from tissue paper products was $0.3 million on volume of 208 tonnes at $1,324/tonne for the nine months ended September 30, 2015.

Revenue from digital photo paper was $0.2 million for the nine months ended September 30, 2015, compared to $2.9 million for the same period of last year. The Company sold 44 tonnes of digital photo paper with ASP of $4,026/tonne in the nine months ended September 30, 2015, compared to 750 tonnes at $3,921/tonne in the same period of last year. In October 2014, we shut down and disassembled our digital photo paper production facilities (our PM4 and PM5 production lines) for the relocation, as mandated by the local county government to a new workshop that we built across the street from our main production base, Xushui Paper Mill. We completed the relocation and resumed commercial production of our Digital Photo Paper in August 2015. We expect to increase our digital photo paper production in the fourth quarter of 2015.

Gross Profit and Gross Margin

Total cost of sales decreased by $8.8 million, or 10.1%, to $78.3 million for the nine months ended September 30, 2015 from $87.1 million for the same period of last year. Cost of sales per tonne was $331 for the nine months ended September 30, 2015, compared to $359 for the same period of last year. Costs of sales per tonne for Regular CMP, Light-Weight CMP, offset printing paper, tissue paper products, and digital photo paper were, $290, $258, $556, $1,301, and $7,138, respectively, for the nine months ended September 30, 2015, compared to $311, $262, $553, $nil, and $3,168, respectively, for the same period of  last year.

Total gross profit increased by $4.7 million, or 27.2%, to $21.9 million for the nine months ended September 30, 2015 from $17.2 million for the same period of last year. Total gross margin was 21.8% for the nine months ended September 30, 2015, compared to 16.5% for the same period of last year. Gross margin for Regular CMP, Light-Weight CMP, offset printing paper, tissue paper products, and digital photo paper was 21.4%, 31.4%, 19.4%, 1.8%, and -77.3%, respectively, for the nine months ended September 30, 2015, compared to 14.0%, 28.5%, 19.2%, nil, and 19.2%, respectively, for the same period of  last year.

Income from Operations

Selling, general and administrative expenses ("SG&A") was $7.4 million for the nine months ended September 30, 2015, compared to $2.9 million for the same period of  last year.  The increase was primarily due to the increase in the depreciation costs associated with disassembling the digital photo production lines for relocation that was charged to SG&A and with the new facilities in the Wei County Industrial Park.

Income from operations increased by $0.7 million, or 5.1%, to $14.5 million for the nine months ended September 30, 2015 from $13.8 million for the same period of last year. Operating margin was 14.5% for the nine months ended September 30, 2015, compared to 13.2% for the same period of last year.

Net Income

Net income decreased by $0.1 million, or 1.0%, to $9.4 million for the nine months ended September 30, 2015 from $9.5 million for the same period of last year. Basic and diluted earnings per share for the nine months ended September 30, 2015 were $0.46, compared to $0.50 for same period of last year.

EBITDA

Earnings before interest, taxes, depreciation and amortization ("EBITDA") increased by $5.4 million, or 27.1%, to $25.1 million for the nine months ended September 30, 2015 from $19.8 million for the same period of last year. See the reconciliation of EBITDA to Net Income below.

Cash, Liquidity and Financial Position

As of September 30, 2015, the Company had cash and cash equivalents, short-term debt (including notes payable), current capital lease obligations, long term debt and non-current capital lease obligations of $4.4 million, $14.9 million, $6.3 million, $19.4 million and $6.7 million, respectively. This compared to $3.9 million, $28.5 million, $12.3 million, $15.6 million and $4.1 million, respectively, at the end of 2014.

Net cash provided by operating activities was $10.7 million for the nine months ended September 30, 2015, compared to $35.8 million for the same period of last year. Net cash used in investing activities was $11.3 million for the nine months ended September 30, 2015, compared to $22.8 million for the same period of last year. Net cash provided by financing activities was $1.4 million for the nine months ended September 30, 2015, compared to net cash used in financing activities of $9.1 million for the same period of last year.

Earnings Conference Call:

The Company's management will host a conference call to discuss its third quarter of 2015 financial results at 8:00 am US Eastern Time (5:00 am US Pacific Time/ 9:00 pm Beijing Time) on Thursday, November 12, 2015.

To attend the conference call, please dial-in using the information below. When prompted upon dialing-in, please provide the conference ID or ask for the "Orient Paper Third quarter of 2015 Earnings Conference Call."

Conference Call

 

Date:

Thursday, November 12, 2015

Time:

8:00 am ET

International Toll Free:

United States: +1-855-500-8701

Mainland China: 400-120-0654

Hong Kong: 800-906-606

International: +65-6713-5440

Conference ID:

74355843

This conference call will be broadcast live over the Internet and can be accessed by all interested parties by clicking http://www.orientpaperinc.com/, or http://edge.media-server.com/m/p/9chxwpay.  

Please access the link at least fifteen minutes prior to the start of the call to register, download, and install any necessary audio software.

A playback will be available through November 26, 2015. To listen, please dial +1-855-452-5696 if calling from the United States, or +61-290-034-211 if calling internationally. Use the passcode 74355843 to access the replay.

About Orient Paper, Inc.

Orient Paper, Inc. ("Orient Paper") is a leading paper manufacturer in North China. Using recycled paper as its primary raw material (with the exception of its digital paper and tissue paper products), Orient Paper produces and distributes three categories of paper products: corrugating medium paper, offset printing paper, and other paper products, including digital photo paper and tissue paper products.

With production based in Baoding in North China's Hebei Province, Orient Paper is located strategically close to the Beijing and Tianjin region, home to a growing base of industrial and manufacturing activities and one of the largest markets for paper products consumption in the country.

Orient Paper's production facilities are controlled and operated by its wholly owned subsidiary Shengde Holdings Inc., which in turn controls and operates Baoding Shengde Paper Co., Ltd., and Hebei Baoding Orient Paper Milling Co., Ltd.

Founded in 1996, Orient Paper has been listed on the NYSE MKT under the ticker symbol "ONP" since December 2009. For more information about the Company, please visit http://www.orientpaperinc.com.

Safe Harbor Statements

This press release may contain forward-looking statements. These forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, including risks outlined in the Company's public filings with the Securities and Exchange Commission, including the Company's latest annual report on Form 10-K. All information provided in this press release speaks as of the date hereof. Except as otherwise required by law, the Company undertakes no obligation to update or revise its forward-looking statements.

ORIENT PAPER, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2015 AND DECEMBER 31, 2014

(Unaudited)

             
             
   

September 30,

   

December 31,

 
   

2015

   

2014

 
             

ASSETS

           

Current Assets

           

Cash and cash equivalents

 

$

4,363,721

   

$

3,891,473

 

Restricted cash

   

3,144,011

     

8,873,999

 

Accounts receivable (net of allowance for doubtful accounts of $78,346 and $76,125 as of September 30, 2015 and December 31, 2014, respectively)

   

3,849,006

     

3,730,123

 

Inventories

   

9,256,819

     

7,139,599

 

Prepayments and other current assets

   

450,673

     

2,919,668

 

Deferred tax assets - current

   

36,972

     

-

 
                 

Total current assets

   

21,101,202

     

26,554,862

 
                 

Prepayment on property, plant and equipment

   

1,433,669

     

1,490,440

 

Property, plant, and equipment, net

   

204,633,709

     

208,213,198

 

Value-added tax recoverable

   

3,205,450

     

3,228,075

 

Deferred tax asset – non-current

   

1,087,351

     

281,010

 
                 

Total Assets

 

$

231,461,381

   

$

239,767,585

 
                 

LIABILITIES AND STOCKHOLDERS' EQUITY

               

Current Liabilities

               

Short-term bank loans

 

$

6,288,022

   

$

9,805,524

 

Current portion of long-term loans from credit union

   

-

     

147,083

 

Current portion of related party loan

   

2,296,059

     

2,386,978

 

Current obligations under capital lease

   

6,323,396

     

12,258,488

 

Accounts payable

   

1,100,697

     

-

 

Notes payable

   

6,288,023

     

16,113,744

 

Due to a related party

   

337,120

     

227,900

 

Accrued payroll and employee benefits

   

247,684

     

492,765

 

Other payables and accrued liabilities

   

4,419,585

     

2,400,523

 

Income taxes payable

   

514,505

     

637,143

 
                 

Total current liabilities

   

27,815,091

     

44,470,148

 
                 

Loans from credit union

   

5,281,939

     

5,760,745

 

Loans from a related party

   

14,148,051

     

9,805,524

 

Deferred gain on sale-leaseback

   

334,451

     

695,389

 

Long-term obligations under capital lease

   

6,568,399

     

4,090,413

 
                 

Total liabilities

   

54,147,931

     

64,822,219

 
                 

Commitments and Contingencies

               
                 

Stockholders' Equity

               

Common stock, 500,000,000 shares authorized, $0.001 par value per share, 20,316,400 shares issued and outstanding as of September 30, 2015 and December 31, 2014

   

20,316

     

20,316

 

Additional paid-in capital

   

49,218,982

     

49,218,982

 

Statutory earnings reserve

   

6,080,574

     

6,080,574

 

Accumulated other comprehensive income

   

10,007,333

     

17,021,165

 

Retained earnings

   

111,986,245

     

102,604,329

 
                 

Total stockholders' equity

   

177,313,450

     

174,945,366

 
                 

Total Liabilities and Stockholders' Equity

 

$

231,461,381

   

$

239,767,585

 
 
 
 

 

ORIENT PAPER, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014

(Unaudited)

             
             
   

Three Months Ended

   

Nine Months Ended

 
   

September 30,

   

September 30,

 
   

2015

   

2014

   

2015

   

2014

 
                         

Revenues

 

$

32,406,877

   

$

40,754,205

   

$

100,194,363

   

$

104,344,334

 
                                 

Cost of sales

   

(25,990,316)

     

(34,343,357)

     

(78,307,555)

     

(87,141,643)

 
                                 

Gross Profit

   

6,416,561

     

6,410,848

     

21,886,808

     

17,202,691

 
                                 

Selling, general and administrative expenses

   

(3,814,782)

     

(995,613)

     

(7,355,144)

     

(2,893,828)

 

Loss from disposal of property, plant and equipment

   

-

     

(689,422)

     

-

     

(689,422)

 

Gain from disposal of assets held for sale

   

-

     

203,488

     

-

     

203,488

 
                                 

Income from Operations

   

2,601,779

     

4,929,301

     

14,531,664

     

13,822,929

 
                                 

Other Income (Expense):

                               

Interest income

   

9,985

     

35,090

     

65,184

     

79,938

 

Subsidy income

   

210,423

     

-

     

487,465

     

-

 

Interest expense

   

(566,122)

     

(344,191)

     

(2,350,233)

     

(888,028)

 
                                 

Income before Income Taxes

   

2,256,065

     

4,620,200

     

12,734,080

     

13,014,839

 
                                 

Provision for Income Taxes

   

(570,168)

     

(1,247,256)

     

(3,352,164)

     

(3,536,493)

 
                                 

Net Income

   

1,685,897

     

3,372,944

     

9,381,916

     

9,478,346

 
                                 

Other Comprehensive Income (Loss):

                               
                                 

Foreign currency translation adjustment

   

(7,190,713)

     

13,170

     

(7,013,832)

     

(1,077,496)

 
                                 

Total Comprehensive Income (Loss)

 

$

(5,504,816)

   

$

3,386,114

   

$

2,368,084

   

$

8,400,850

 
                                 

 Earnings Per Share:

                               

Basic Earnings per Share

 

$

0.08

   

$

0.18

   

$

0.46

   

$

0.50

 

Fully Diluted Earnings per Share

 

$

0.08

   

$

0.18

   

$

0.46

   

$

0.50

 
                                 

Weighted Average Number of Shares

                               

Outstanding - Basic

   

20,316,400

     

18,923,374

     

20,316,400

     

18,909,001

 

Outstanding - Fully Diluted

   

20,328,003

     

18,923,374

     

20,316,400

     

18,909,001

 
 
 
 

 

 

ORIENT PAPER, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014

(Unaudited)

       
       
   

Nine Months Ended

 
   

September 30,

 
   

2015

   

2014

 
             

Cash Flows from Operating Activities:

           

Net income

 

$

9,381,916

   

$

9,478,346

 

Adjustments to reconcile net income to net cash provided by operating activities:

               

Depreciation and amortization

   

10,061,558

     

5,877,824

 

Loss from disposal of property, plant and equipment

   

-

     

689,422

 

Gain from disposal of assets held for sale

   

-

     

(203,488)

 

Allowance for (Recovery from) bad debts

   

5,268

     

(15,855)

 

Deferred tax

   

(878,730)

     

481,138

 

Changes in operating assets and liabilities:

               

Accounts receivable

   

(273,781)

     

(841,053)

 

Prepayments and other current assets

   

2,326,204

     

12,139

 

Inventories

   

(2,458,300)

     

4,375,716

 

Accounts payable

   

1,132,548

     

(307,667)

 

Notes payable

   

(9,478,519)

     

16,262,014

 

Accrued payroll and employee benefits

   

(232,861)

     

(161,625)

 

Other payables and accrued liabilities

   

1,184,473

     

618,254

 

Income taxes payable

   

(101,216)

     

(480,000)

 

Net Cash Provided by Operating Activities

   

10,668,560

     

35,785,165

 
                 

Cash Flows from Investing Activities:

               

Proceeds from sale of property, plant and equipment

   

-

     

239,194

 

Proceeds from sale of assets held for sale

   

-

     

2,682,957

 

Purchases of property, plant and equipment

   

(58,213)

     

(25,767,813)

 

Payment for construction in progress

   

(11,254,087)

     

-

 

Net Cash Used in Investing Activities

   

(11,312,300)

     

(22,845,662)

 
                 

Cash Flows from Financing Activities:

               

Proceeds from issuance of shares and warrants, net

   

-

     

2,311,002

 

Proceeds from related party loans

   

5,242,483

     

643,500

 

Repayment of related party loans

   

(390,000)

     

(643,500)

 

Proceeds from short-term bank loans

   

3,234,990

     

6,504,805

 

Repayment of short-term bank loans

   

(6,469,979)

     

(4,878,604)

 

Repayment of loans from credit union

   

(412,461)

     

-

 

Payment of capital lease obligation

   

(5,378,582)

     

(4,095,015)

 

Release of (Increase in) restricted cash

   

5,548,008

     

(8,944,108)

 

Net Cash Provided by (Used in) Financing Activities

   

1,374,459

     

(9,101,920)

 
                 

Effect of Exchange Rate Changes on Cash and Cash Equivalents

   

(258,471)

     

(38,302)

 
                 

Net Increase in Cash and Cash Equivalents

   

472,248

     

3,799,281

 
                 

Cash and Cash Equivalents - Beginning of Period

   

3,891,473

     

3,131,163

 
                 

Cash and Cash Equivalents - End of Period

 

$

4,363,721

   

$

6,930,444

 
                 

Supplemental Disclosure of Cash Flow Information:

               

Cash paid for interest, net of capitalized cost

 

$

1,717,941

   

$

648,552

 

Cash paid for income taxes

 

$

4,332,110

   

$

3,535,355

 
 

 

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