Orchids Paper Products Co. (TIS) research, news, and more from GeoInvesting

Company description

Mon, 16 Mar 2009 04:00:00 GMT

Orchids Paper Products Company is an integrated manufacturer of tissue paper products serving the private label consumer market. The Company produces a full line of tissue products, including paper towels, bathroom tissue and paper napkins. From its operations in Pryor, Oklahoma, Orchids Paper Products Company produces finished tissue products that it provides to retail chains throughout the central United States. "All of the paper we produce is made from recycled, pre-consumer, waste paper". This waste paper is primarily solid as bleached sulfate paper, or "SBS" paper.

Comments & Business Outlook

Thu, 09 Feb 2012 05:00:00 GMT

Fourth Quarter and Full Year 2011 Results

Net sales of converted product in the fourth quarter of 2011 were $23.8 million, a new quarterly record, and exceeded those of the prior year quarter by $7.2 million, or 44%, marking four consecutive quarters of increased converted product sales.
Total net sales in the fourth quarter of 2011 increased 15% to $25.7 million, compared with $22.3 million in the same period in 2010. Full year net sales increased $5.3 million, or 6%, to $97.8 million, compared with $92.5 million in 2010.
Fourth quarter 2011 net income was $2.7 million, an increase of $1.8 million compared with $940,000 of net income in the same period of 2010. Full year net income for 2011 was $6.2 million, an increase of $284,000, or 5%, compared with $5.9 million of net income in 2010.
Diluted net income per share for the fourth quarter 2011 was $0.35 per diluted share compared with $0.12 per diluted share in the same period in 2010. Full year diluted net income per share for 2011 was $0.80 compared with $0.76 per diluted share for 2010.

Mr. Robert Snyder, President and Chief Executive Officer, stated, "We are pleased to announce a new quarterly sales record in converted product for the fourth quarter of 2011 and the continued improvement in overall results in the quarter. This marks the fourth consecutive quarter of increased converted product sales, with fourth quarter 2011 sales being 44% greater than those achieved in the fourth quarter of the prior year. Net income and earnings per share both increased for the third consecutive quarter. Fiber prices significantly abated during the quarter and we begin 2012 at cost levels approximately 40% below the peak prices paid during the third quarter of 2011."

Mr. Snyder added, "Our order book remains strong despite entering a seasonally soft quarter and significant new business opportunities are active. As result, we are very positive about the short and long-term outlook and financial performance of the company."

GeoSpecial Notes

Wed, 25 Jan 2012 05:00:00 GMT

Removing TIS from the GeoSpecial List @ $18.74

Added to the GeoSpecial list on 11/10/2011 @ $13.80

Catalyst: Meaningful change in dividend pay out rate.

Peak performance: Reached a high of $19.00 on 1/23/2012 for a return of 37.7%.
Current road block: Stock has exceeded our near-term price target. We will revisit after the release of the company's 2011 year end press release.
Current Price: $18.78

GeoSpecial Notes

Mon, 21 Nov 2011 05:00:00 GMT

Special Situation Bulletin - Orchids Paper (TIS) (Previously made available only to premium members on November 11, 2011).

Three catalysts that could boost TIS shares:

Orchids Paper (TIS) was one of our first GeoBargain stocks since we launched GeoInvesting.com. We coded the stock as a GeoBargain on February 4, 2009 at $9.78 and removed it from this list on February 25, 2010 at $18.27. The stock attained a high price of $22.10 on January 13, 2010 during its tenure as a GeoBargain.

On February 25, 2010, we commented that we would visit this story once a planned capacity expansion took hold.

Three clues indicate that Orchids Paper may be entering an above average near-term EPS growth phase.

Up to November 10, 2011, we were still not impressed with the financial performance of TIS since its exit as a GeoBargain. But the October 26, 2011 third quarter financial press release showed some glimmers of hope.

Net sales in the third quarter of 2011 increased 6% to $26.1 million, a new quarterly record, compared with $24.5 million in the same period in 2010. Year-to-date net sales increased $1.9 million, or 3% to $72.2 million, compared with $70.2 million in the same period of 2010.
Third quarter 2011 net income was $1.6 million, an increase of $205,000, or 14%, compared with $1.4 million of net income in the same period of 2010. Year-to-date net income for 2011 was $3.5 million, a decrease of $1.5 million, or 30%, compared with $5.0 million of net income in the same period of 2010.
Diluted net income per share for the third quarter 2011 was $0.21 per diluted share compared with $0.18 per diluted share in the same period in 2010. Year-to-date diluted net income per share for 2011 was $0.45 compared with $0.64 per diluted share for the same period of 2010.
Compared to the second quarter of 2011, net sales in the current quarter increased $2.7 million, or 12%, net income increased $450,000, or 38%, and diluted net income per share increased $0.05 per diluted share.

The company may now have given us more than a just glimmer of hope on the morning of November 10, 2011 as management announced a 100% increase its quarterly dividend to an annual rate of $0.80. This could tell us that above average growth may be right around the corner.

Prior to this dividend boost and based on the prior day's closing price of $12.67, the market had assigned to TIS a dividend yield of about 3%. The stock's price responded to the dividend news by rising sharply to $14.61. Even at the higher price, the dividend yield now stands at near 6%. Boosting the quarterly dividend could lead to a vote of confidence by investors who may now view TIS as less risky investment.

As the Orchids Paper story may now embody less "perceived" risk, we will be watching to see if the market will fill the dividend yield gap by lifting shares. Said differently, dividend yields can be a way that the market assigns risk premiums to companies. The higher the yield demanded by investors, the lower the price; dividend yield is calculated by dividing a company's annual per share dividend by its stock price.

If the market was willing to price TIS with a yield of around 3% the day before the dividend increase and believes that the company's risk profile has at least remained the same, it should reduce the new and current dividend yield of around 6% should once again approach 3%. Per the formula this would occur through an increase in the price of TIS shares.

The fact that Orchids Paper increased its dividend over the course of one month into its fourth quarter and several days after the release of its 2011 third quarter financial results could indicate that the 2011 fourth quarter will be a good one. Comments in the dividend increase release were also positive.
The Company's President and Chief Executive Officer Bob Snyder said "Substantially increasing our dividend is reflective of our current performance and demonstrates the confidence that the Board of Directors has in our strategy and their continued optimistic outlook for the long-term growth of our Company. This dividend increase emphasizes our commitment to create long-term value for our stockholders."
Analyst estimates indicate that TIS has a GeoPowerranking (GPR) of three, meaning that the company is expected to grow EPS by at least 20% to 30% for 3 consecutive quarters. This would come after a string of 6 subpar quarters.

Quarter	2012 EPS	% Change	2011 EPS	% Change	2010 EPS
March	0.19 Est.	137.5%	0.08	-55.5%	0.18
June	0.22 Est.	37.5%	0.16	-42.9%	0.28
September		tbd	0.21	10%	0.19
December		tbd	0.24 Est.	100%	0.12

In the end, we think that market could assign TIS a P/E of 25 on 2011 analyst estimates of $0.68. This would translate into a price of $17.00 and a dividend yield of 4.7% ( mid point between new yield and old yield). Again, the increase in the dividend should also create a new higher floor for TIS shares.

We listened to the replay of the 2011 third quarter conference call to gauge the potential risks as well as near-term growth opportunities. During the call, management indicated that the 2011 4^th quarter will at least match the 2011 3^rd quarter performance which would lead to quarterly YOY EPS growth of 75%.

Please note that

TIS shares were slightly trending down prior to its earnings
We need more information on the company's plans to ignite revenue growth.
The company has been facing rising raw material cost challenges.

Please not that our message boards are an excellent way to stay abreast of breaking stories such as this one. After the Orchids Paper earnings release, we gave a brief synopsis about this situation, a reason why we urge you to subscribe to the exclusive boards which at times can be timelier.

Disclosure: Long TIS

Comments & Business Outlook

Thu, 10 Nov 2011 05:00:00 GMT

PRYOR, Okla., Nov. 9, 2011 /PRNewswire/ -- The Board of Directors of Orchids Paper Products Company (NYSE Amex: TIS) today announced that it has approved an increase in its quarterly cash dividend from $0.10 per outstanding share to $0.20 per outstanding share of the Company's common stock. The increased dividend will be effective for the dividend payable on December 21, 2011, to stockholders of record at the close of business on December 5, 2011.

The Company's President and Chief Executive Officer Bob Snyder said "Substantially increasing our dividend is reflective of our current performance and demonstrates the confidence that the Board of Directors has in our strategy and their continued optimistic outlook for the long-term growth of our Company. This dividend increase emphasizes our commitment to create long-term value for our stockholders."

GeoBargain Notes

Fri, 06 Nov 2009 05:00:00 GMT

On Wednesday, Oct. 28, Orchids Paper reported its 2009 third quarter results, posting solid earnings per share gains. This marks seven straight quarters of increased sales and EPS.

	3rd Quarter 2009	3rd Quarter 2008	Period Change
GAAP Revenue	$24.6 M	$23.3 M	5.58%
GAAP EPS	$0.52	$0.22	150.00%
Fully Diluted Shares	7,304,226	6,499,686	12.38%

The GeoTeam® listened to the Orchids conference call, seeking updates on the planned expansion of its converting paper operations.

The Company offered some insight into when its operations may begin to realize benefits from its plant expansion initiatives. Management indicated that it is on track to complete it converting line expansion by the end of the 2010 second quarter. It also believes that the new line will be in operation at full speed during the 2010 fourth quarter.

What Does this Mean for Orchids Financial Outlook?

Orchid's converting line business is currently operating at full capacity. This is evident by the gradual decrease in Orchid's revenue growth to approximately 5% in the third quarter. The company had experienced greater than 20% growth in 2008 and 2007. It is certainly impressive that even as revenue growth has eased, Orchid's profitability has strengthened as the Company is benefiting from recent cost savings initiatives.

Orchids Paper understands that revenue growth will have to eventually resume. The Company is banking on the addition of a new converting line and storage supply facility to fuel this growth as well as deliver $800 thousand to $900 thousand in annual cost savings.

Recall that Orchids also manufactures bulk paper rolls which it sells to customers who then convert paper into an end product.

Orchids Paper Product flow

1. Manufacture bulk paper (Annual Capacity of about 54 thousand tons)
2. Convert bulk paper into a private label finished product such as tissue to sell to customers like Dollar General. Annual converting manufacturing capacity is about 7 million cases (or about 42 thousand tons of bulk paper use)
3. About 12 thousand tons of paper roll supply available to sell into the market.

Orchids Paper achieves higher margins on its converting operations, which also has a more favorable growth profile compared to its bulk paper roll operations. Ideally, the Company would prefer a situation in which it could convert all 54 thousand tons of its paper rolls. That is precisely why Orchids Paper is installing another converting line. At full capacity, the Company will soon be able to produce 11 million cases (66 thousand tons) . It will be able convert its entire 55 thousand tons of paper capacity into final products. At full capacity Orchids Paper will also have to purchase about 11 tons of paper rolls in the open market.

Near-Term Growth

We think the next two quarters will still show impressive EPS growth and that revenue growth will resume above average growth in the 2010 third quarter, propelling EPS levels to new levels. The second quarter of 2010 may result in a flat EPS quarter, but we are postulating that investors will downplay this given

The growth opportunities present as the Company heads into the second half of 2010
The company's history of consistent growth.

Our assumptions may be conservative as bulk paper sales are beginning to strengthen and could provide for some upside surprise. Of course, this will be a non issue once the new converting line is operational and Orchids Paper will use all of its paper roll needs internally. We also have to monitor raw material costs such as recycling paper prices, which has been on the rise.

Research

Fri, 21 Aug 2009 04:00:00 GMT

This morning Orchids Paper Products announced the pricing of 750,000 common shares at $18.50. This represents an increase of 12% in Orchid's outstanding shares .

Normally the street might react negatively to this type of news. But in this case the market has seemed to embrace the move. The GeoTeam® is speculating that investors are initially agreeable to Orchid's intended use of the proceeds, believing it could dramatically improve the Company's growth profile.

Use of proceeds:

Construction of a warehouse
The purchase and installation of a new converting line
General corporate purposes

correlates with the company's previously stated goals:

"We currently are reviewing our logistics operations and our strategy of employing a third-party warehouse. The results of this study may indicate a need to expand our current warehouse facility and eliminate the use of the third-party warehouse. We are also studying a project to purchase a new converting line to aid in our strategy to increase sales and profitability and to consume all of our paper making production in our converting operation."

The most significant use of proceeds is the addition of an additional converting line. The GeoTeam® has participated in Orchids Paper Products conference calls and attended investor presentation meetings where investors expressed an eagerness for the Company to expand its converting division.

"We are currently approaching full capacity utilization of our converting operations."

This fact is reflected in 2010 estimates which portray earnings per share growing only 5% from 2009 forecasted levels.

Benefits TIS hopes to gain from the construction of a warehouse and the purchase and installation of a new converting line:

We plan to increase our converting capacity by approximately 4.0 million cases annually with the installation of a new converting line and construction of a warehouse. The Company's current 300,000 square-foot converting facility has the potential capacity to produce approximately 7.7 million cases of at-home tissue products a year. This represent a 48% increase in annual capacity.

Additional capacity will enable us to both increase sales of existing products and to provide the flexibility to manufacture higher tier products for sales to our core customer base and into new retail channel

We believe with additional capacity from our new converting line, we will be able to significantly increase the addressable customer base of our business.

We believe that having the additional capacity to provide both value and mid-tier product lines will enable us to meet a larger percentage of our customers' total tissue needs.

Our planned warehouse expansion and new converting line project, which we expect to be completed in 2010, should further improve our manufacturing efficiency and lower costs.

The GeoTeam® will monitor any revisions to analyst estimates. It is likely that 2009 EPS estimates may come down 12%, but see an increase in 2010 estimates. The 2010 EPS estimate will be dependent on when the conversion line is completed.

Financials

Wed, 05 Aug 2009 04:00:00 GMT

SECOND QUARTER 2009 vs. 2008 FINANCIAL SNAPSHOT ENDED SEPTEMBER

	2nd Quarter 2009	2nd Quarter 2008	Period Change
GAAP Revenue	$47.8 M	$42.6 M	12.0%
GAAP EPS	$0.55	$0.14	292.9%
Tax Rate	32.7%	32.6%	0.0%
Shares Outstanding	6.86 M	6.34M	8.2%

Source: See Release

FIRST QUARTER 2009 vs. 2008 FINANCIAL SNAPSHOT ENDED MARCH

	1st Quarter 2009	1st Quarter 2008	Period Change
GAAP Revenue	$23.6 M	$20.3 M	16.3%
GAAP EPS	$0.42	$0.09	360.7%
Tax Rate	37%	31%	16.1%
Shares Outstanding	6.68 M	6.55 M	2.0%

Source: See Release

FULL YEAR 2008 vs. 2007 FINANCIAL SNAPSHOT ENDED DECEMBER

	Full Year 2008	Full Year 2007	Period Change
GAAP Revenue	$90.2 million	$74.6 million	20.9%
GAAP EPS	$0.79	$0.40	97.5%
Tax Rate	29.8%	10.6%	182.1%
Shares Outstanding	6.54	6.46	1.2%

Source: See Release

Comments & Business Outlook

Wed, 05 Aug 2009 04:00:00 GMT

Commenting on 2009 second quarter results, Mr. Robert Snyder, President and Chief Executive Officer, stated, "I am very pleased with the record earnings and sales this quarter. Our financial performance continues to strengthen our balance sheet. We are excited about the future here at Orchids as we continue to grow our business. To that end, we have several projects underway, including the construction of a new warehousing complex that will be located adjacent to the converting plant. We are also evaluating the addition of another converting line."

Research

Tue, 04 Aug 2009 04:00:00 GMT

New article available for Orchids Paper Products

Potential Valuation Scenarios

Mon, 03 Aug 2009 04:00:00 GMT

Valuation Scenarios:

Coded as a GeoBargain on February 4, 2009 at a price of $9.74

Data Inputs:

Fiscal Year Ends in December

Date	2/26/09	4/25/09	08/03/09
Price	$1.98	$17.10	$22.85
12 Months Trailing EPS	$0.79	$1.12	$1.53
Published 2009 Analyst EPS Estimates	$1.40	$1.73	$2.07
Future EPS Growth Rate Based on 2009 Estimates	78%	119%	140%
Trailing P/E Ratio	12.63	15.27	14.93
PEG Ratio (P/E divided by growth rate)	0.63	0.13	0.11

Short-Term Valuation Scenarios

Date	2/26/09	4/25/09	05/03/09
Price Based on P/E of 25 on Four Quarters Trailing EPS	$19.75	$25.00	$38.25
Price Based on P/E of 20 on Four Quarters Trailing EPS	$15.8	$22.40	$30.60
Price Based on P/E of 15 on Four Quarters Trailing EPS	$21.0	$25.95	$31.05 ^a

^a Based on 2009 analyst estimates

Long-Term (12 Months Forward) Valuation Scenarios

Date	2/26/09	4/25/09	05/03/09
Price Based on P/E of 25 on 2009 Analyst EPS Estimates	$35.00	$43.25	$51.75
Price Based on P/E of 20 on 2009 Analyst EPS Estimates	$28.0	$34.60	$41.40

Peg Ratio Analysis - Common rule of thumb that PEG ratio should be less than 1.0

PEG Ratio Less than 1?

YES

These scenarios are not investment advice, but are scenarios based on some commonly used investment guidelines. They are provided to aid investors in making their own investment decisions.

Investor Presentations

Wed, 13 May 2009 04:00:00 GMT

The GeoTeam® attended the 2009 Taglich Brothers Annual Small Cap Equity Conference on May 5th, 2009 where Orchids Paper Products (AMEX: TIS) and Gulfstream Intl Group Inc (AMEX:GIA) presented their growth stories to analysts and potential investors. Both companies gave articulate presentations outlining recent accomplishments and future goals.

Orchids Paper Products' presentation has confirmed what the GeoTeam® discussed in previous research notes. In particular, the company’s primary goal centers around maximizing its conversion roll capacity. Recall that the conversion line has higher margins than the parent roll division. With its present capacity, the company will embark on gaining market share in its current geographic market. When asked about expanding its geographical reach the company stated that there are still significant market share gains to be captured in its current markets.

Going forward the company has scheduled projects to re-build certain conversion lines which should increase productivity and projects to improve the flexibility of certain conversion lines. Orchids Paper Products will also focus on the optimization of the $4.7 million conversion automation project that was completed in February 2009 and anticipates increased year over year production in the paper mill.

Research

Fri, 27 Feb 2009 05:00:00 GMT

Conference Call Note:

The GeoTeam participated in the TIS conference call conducted at 11:00 AM EST on February 26, 2009. The company did a good job addressing the following comments contained in its third quarter press release:

"We have seen softening in the parent roll market, both in price and demand, primarily due to a weakened away-from-home market. In order to balance our inventories, we expect to take some downtime on our older machines during the first quarter of 2009. The amount of downtime we expect to take is not completely clear at this time due to the uncertainty of the timing of the recovery of the away-from-home market; however we do not expect it to be significant."

It seems that this comment may have caused some investors to sell their TIS positions. However, the company did address the parent roll situation on the call implying that the negative impact on their business willll be minimal. As of the fourth quarter the parent roll business is less than 15% of revenues and decreasing. Also, the contribution of this business to the bottom line is less than the larger more profitable conversion business. The company's focus for the future is to grow their conversion business which, as confirmed on the call, was still strong and growing. The company seemed optimistic about the coming year.

Please see Orchids Paper updated valuation scenarios.

Research

Thu, 26 Feb 2009 05:00:00 GMT

TIS reports strong fourth quarter financial results.

The company did mention that they were seeing some weakness in their parent roll division. The parent roll business comprised approximately 17% their total 2008 sales and 13% of their fourth quarter 2008 sales. As a result they will be shutting down production on some older parent roll machines. The company believes this down time will not occur for a significant amount of time.

The GeoTeam® will participate in the conference call at 11:00 AM EST on February 26, 2009 and attempt to get some insight into the significance of the parent roll situation. The GeoTeam® believes that the affect on the business will be minimal as the parent roll margins are less than the converted roll margins.

Potential Valuation Scenarios

Thu, 26 Feb 2009 05:00:00 GMT

Valuation Scenarios

Data Inputs:

Fiscal Year Ends in December

Date	2/26/09
Price	$9.98
12 Months Trailing EPS	$0.79
Published 2009 Analyst EPS Estimates	$1.40
Future EPS Growth Rate Based on Estimates	78%
Trailing P/E Ratio	12.63
PEG Ratio (P/E divided by growth rate)	0.16

Short-Term Valuation Scenarios

Date	2/26/09
Price Based on P/E of 25 on Four Quarters Trailing EPS	$19.75
Price Based on P/E of 20 on Four Quarters Trailing EPS	$15.80
Price Based on P/E of 15 on Four Quarters Trailing EPS	$21.00

Long-Term (12 Months Forward) Valuation Scenarios

Date	2/26/09
Price Based on P/E of 25 on 2009 Analyst EPS Estimates	$35.0
Price Based on P/E of 20 on 2009 Analyst EPS Estimates	$28.0

Peg Ratio Analysis - Common rule of thumb that PEG ratio should be less than 1.0

PEG Ratio Less than 1?

YES

These scenarios are not investment advice, but are scenarios based on some commonly used investment guidelines. They are provided to aid investors in making their own investment decisions.

Financials

Thu, 26 Feb 2009 05:00:00 GMT

FOURTH QUARTER 2008 vs. 2007 FINANCIAL SNAPSHOT ENDED DECEMBER

	4th Quarter 2008	4th Quarter 2007	Period Change
GAAP Revenue	$24.3 million	$20.3 million	20%
GAAP EPS	$0.34	$0.13	162%

FULL YEAR 2008 vs. 2007 FINANCIAL SNAPSHOT ENDED DECEMBER

	Full Year 2008	Full Year 2007	Period Change
GAAP Revenue	$90.2 million	$74.6 million	20.9%
GAAP EPS	$0.79	$0.40	97.5%

Source: See Release

GeoBargain Notes

Thu, 26 Feb 2009 05:00:00 GMT

GeoBargain Update:

TIS now meets the minimum Return on Equity requirement of 15%.

The GeoTeam® prefers the Debt to Equity Ratio to be under 20%. TIS ratio is currently over 60%.

Financials

Fri, 13 Feb 2009 05:00:00 GMT

THIRD QUARTER 2008 vs. 2007 FINANCIAL SNAPSHOT ENDED SEPTEMBER

	3rd Quarter 2008	3rd Quarter 2007	Period Change
GAAP Revenue	$23.31 million	$19.22 million	21.28%
GAAP EPS	$0.22	$0.18	22.22%

GeoBargain Notes

Wed, 04 Feb 2009 05:00:00 GMT

The firm is nearing the GeoTeam® Return on Equity (ROE) requirement.
The Geoteam® would prefer the company to reduce its debt position.

Research

Mon, 29 Dec 2008 05:00:00 GMT

New Geo feature: The GeoTeam® does not limit its research to just Asia, thus we will also be including some commentary on stocks based in the United States.

Understanding TIS:

The company has two main product lines:

The production of Bulk Tissue (parent rolls): These products are sold to customers who then convert the rolls into finished products such as tissue paper.

The conversion on Bulk Tissue into finished products (paper towels, bathroom tissue and paper napkins).

Margins should improve going forward because:

The company is focusing on selling all of its parent roll capacity as converted products which have higher margins than parent rolls.

The company recently improved its conversion process by identifying and addressing the root issues that impair production. As a result of these efforts, conversion productivity from the beginning of September through mid-October improved approximately 20% compared with the run rate experienced in the first eight months of 2008.

The company can manufacture 100% of its paper roll needs due to the purchase of a new paper machine in 2006. Previously, the company had to purchase some of its paper roll inventory from the open market.

TIS is recession resistant

TIS manufactures tissue paper products for private label markets. The company might be able to benefit in a soft economy as consumers opt to buy cheaper private label brand products. The company sells its products to a wide variety of customers in addition to recession resistant discount retailers such as Walmart .

The following statement from the most recent SEC Annual Fling suggests the recession resistant nature of their business:

"Changes in the national economy, in general, do not materially affect the market for our products."

Strong Commentary

Comments in the recent third quarter report were very bullish:

'The current economic and credit crisis has had profound effects on many industries, however our current order backlog remains strong and we expect that situation to continue. While world-wide virgin pulp prices have seen significant decreases in recent months, the grades of waste paper we use to produce paper have not experienced price decreases to date.'

The company is fully taxed. They have shown impressive EPS growth rates in 2007 and 2008. They have had only two down quarters in the past 8 quarters. Analyst estimates show 2009 EPS growing 84% to $1.40, assuming the company meets 2008 estimates.

TIS is selling at only a 5 P/E on the 2009 earning estimate of $1.40 and a current PEG Ratio of .035. The GeoTeam will interview ASAP, keeping in mind that this industry tends to have a low P/E.

Initiating a position

Comments & Business Outlook

Mon, 29 Dec 2008 05:00:00 GMT

Commenting on the [3rd Qtr 2008] results, Mr. Robert Snyder, President and Chief Executive Officer, stated, 'We are very encouraged with the results of the third quarter, which included record sales and earnings. We achieved the record earnings despite a $274,000 consulting expense and unusually high maintenance and repair costs. Our program on continuous improvement in the converting operation is beginning to yield results as production levels in September and October have exceeded the prior eight month's trend by 20%. By the end of the quarter, we were able to implement our previously discussed product content and pricing changes. The tissue market remains strong with several opportunities available to sell our additional converting production. We believe we are well positioned to take advantage of these opportunities.' Additionally, Mr. Snyder stated, 'The current economic and credit crisis has had profound effects on many industries, however our current order backlog remains strong and we expect that situation to continue. While world-wide virgin pulp prices have seen significant decreases in recent months, the grades of waste paper we use to produce paper have not experienced price decreases to date.'