Orchids Paper Products Company reported unaudited earnings results for the first quarter ended March 31, 2018. For the quarter, the company reported total net sales of $48,248,000 against $35,354,000 a year ago. Operating loss was $993,000 against $883,000 a year ago. This represents an increase of 37% over the first quarter of 2017 and 11% over the fourth quarter. Strong revenue growth was driven by increases in premium and ultra-premium businesses as well as increased parent roll sales. Loss before income taxes was $4,227,000 against $1,233,000 a year ago. Net loss was $2,294,000 against $860,000 a year ago. Basic and diluted net loss per share was $0.21 against $0.08 a year ago. Adjusted net loss was $1,170,000 against $559,000 a year ago. Adjusted net loss per diluted share was $0.11 against $0.05 a year ago. Earnings before interest, income taxes, depreciation, and amortization (EBITDA) were $3,468,000 against $2,741,000 a year ago. Adjusted EBITDA was $5,306,000 against $3,123,000 a year ago. The year-over-year improvement in adjusted EBITDA is due to the favorable impact of the increased sales volume, combined with higher average selling prices due to mix. Operating cash outflow excluding changes in working capital was $293,000 against operating cash inflow excluding changes in working capital of $7,376,000 a year ago. Net cash used in operating activities was $2,539,000 against cash flow from operating activities of $3,613,000 a year ago. Debt at the end of the quarter was $172 million, up from $169 million in the prior quarter, as company drew on line of credit to sign the capital expenditures and changes in working capital, which was primarily related to an increase in accounts receivable associated with the higher sales volume.

The company expects significant improvements in productivity by the end of second quarter approaching 2,400 to 2,700 tons per month. With current demonstrated capabilities in the 1,700 to 2,000 tons per month, the end of curve from capacity on the Barnwell machine is between 3,000 and 3,200 tons per month, depending on mix.

The company expects to continue to increase sales throughout 2018 as the company improve productivity on assets and increase the penetration of premium and ultra-premium sales.