Earnings Conference Call is Scheduled for Friday, November 10, 2017, 8:00 am ET
BAODING, China, Nov. 9, 2017 /PRNewswire/ -- Orient Paper, Inc.
(NYSE MKT: ONP) ("Orient Paper" or the "Company"), 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, 2017.
|
|
For the Three
Months Ended September 30,
|
($
millions)
|
|
2017
|
|
2016
|
|
%
Change
|
Revenues
|
|
33.5
|
|
37.5
|
|
-10.6%
|
Regular Corrugating
Medium Paper ("CMP")*
|
|
22.4
|
|
22.2
|
|
0.7%
|
Light-Weight
CMP**
|
|
5.0
|
|
4.2
|
|
19.5%
|
Offset Printing
Paper
|
|
5.5
|
|
9.3
|
|
-41.6%
|
Tissue Paper
Products
|
|
0.7
|
|
1.6
|
|
-59.5%
|
Digital Photo
Paper
|
|
0.0
|
|
0.1
|
|
-100.0%
|
|
|
|
|
|
|
|
Gross
profit
|
|
7.2
|
|
7.3
|
|
-1.5%
|
Gross
margin
|
|
21.6%
|
|
19.6%
|
|
-2.0 pp
|
Regular Corrugating
Medium Paper ("CMP")*
|
|
22.5%
|
|
16.0%
|
|
6.5 pp
|
Light-Weight
CMP**
|
|
25.8%
|
|
24.3%
|
|
1.5 pp
|
Offset Printing
Paper
|
|
15.6%
|
|
27.5%
|
|
-11.9 pp
|
Tissue Paper
Products
|
|
6.7%
|
|
12.4%
|
|
-5.7 pp
|
Digital Photo
Paper
|
|
NA
|
|
-26.4%
|
|
NM
|
|
|
|
|
|
|
|
Operating
income
|
|
2.7
|
|
4.7
|
|
-42.5%
|
Net income
|
|
1.6
|
|
3.0
|
|
-48.2%
|
EBITDA
|
|
6.5
|
|
8.5
|
|
-23.7%
|
Basic and Diluted
earnings per share
|
|
0.07
|
|
0.14
|
|
-48.2%
|
|
|
|
|
|
|
|
* Products from
PM6
|
|
|
|
|
|
|
** Products from
PM1
|
|
|
|
|
|
|
*** pp represents
percentage points
|
|
|
|
|
|
|
- Revenue decreased by 10.6% to $33.5
million, primarily attributable to a decrease in overall
sales volume and partially offset by an increase in blended average
selling prices ("ASPs") particularly for regular CMP and
Light-Weight CMP that increased by 59.4% and 47.9%, respectively.
The decrease in sales volume was primarily due to the continued
government-mandated restriction on production in compliance with
environmental regulation and due to our replacement of outdated
paper facilities.
- Gross profit decreased by 1.5% to $7.2
million. Gross margin increased by 2.0 percentage points to
21.6%. The increase in gross margin was primarily related to CMP as
a result of significant increase in ASP.
- Net income was $1.6 million, or
$0.07 per diluted share, compared to
$3.0 million, or $0.14 per diluted share, for the same period of
last year.
- Earnings before interest, taxes, depreciation and amortization
("EBITDA") decreased by 23.7% to $6.5
million.
Zhenyong Liu, Chairman and Chief
Executive Officer of Orient Paper, commented, "Our third quarter
results continued to be impacted by the government mandated
restriction on production. In addition, our production was
suspended in September 2017 during
the replacement of all of our coal burning boilers with gas boilers
in compliance with the latest government regulations. Total sales
volume decreased by 36.2% to 61,903 tonnes, leading to a 10.6%
decrease in total revenue in the third quarter. Gross margin
improved as a result of increase in ASPs for regular CMP and
light-weight CMP. Looking ahead, as the government continues to
promulgate and fully implement rules and regulations on
environmental protections, outdated productions in paper industry
are accelerating to phase out, we believe large-scale enterprises
like us will benefit from industry consolidation as a result of the
phasing out of outdated productions for a long-term sustainable
development. We expect the overall price and market demand will
show an upward trend in the near future and the Company's
operations will continue to improve."
Third Quarter 2017 Financial Results
Revenue
For the third quarter of 2017, total revenue decreased by
$4.0 million, or 10.6%, to
$33.5 million from $37.5 million for the same period of last year.
The decrease in total revenue was mainly due to decreases in sales
volume across all product categories and partially offset by
increase in blended ASP. The restrictions on our production volume
by the Chinese government remained in place during the quarter.
Additionally, our production was interrupted in September 2017 as we removed all coal burning
boilers and started to replace them with gas boilers in compliance
with the latest government regulation. Production was suspended
during the replacement of boilers. As a result, the production
volume of regular CMP, light-Weight CMP and offset printing paper
in the third quarter of 2017 declined and sales of these products
decreased accordingly. The following table summarizes revenue,
volume and ASP by product for the third quarter of 2017 and 2016,
respectively:
|
For the Three
Months Ended September 30,
|
|
2017
|
|
2016
|
|
Revenue
($'000)
|
|
Volume
(tonne)
|
|
ASP
($/tonne)
|
|
Revenue
($'000)
|
|
Volume
(tonne)
|
|
ASP
($/tonne)
|
Regular
CMP
|
22,397
|
|
43,202
|
|
518
|
|
22,248
|
|
68,422
|
|
325
|
Light-Weight
CMP
|
4,996
|
|
10,173
|
|
491
|
|
4,181
|
|
12,613
|
|
332
|
Offset Printing
Paper
|
5,454
|
|
8,035
|
|
679
|
|
9,339
|
|
14,571
|
|
641
|
Tissue Paper
Products
|
660
|
|
493
|
|
1,339
|
|
1,629
|
|
1,327
|
|
1,227
|
Digital Photo
Paper
|
-
|
|
-
|
|
-
|
|
65
|
|
38
|
|
1,702
|
Total
|
33,507
|
|
61,903
|
|
541
|
|
37,462
|
|
96,971
|
|
386
|
Revenue from CMP, including both regular CMP and light-Weight
CMP, increased by $1.0 million, or
3.6%, to $27.4 million and accounted
for 81.8% of total revenue for the third quarter of 2017, compared
to $26.4 million, or 70.6%, of total
revenue for the same period of last year. The Company sold 53,375
tonnes of CMP at an ASP of $513/tonne
in the third quarter of 2017, compared to 81,035 tonnes at an ASP
of $326/tonne in the same period of
last year.
Of the total CMP sales, revenue from regular CMP increased by
$0.1 million, or 0.7%, to
$22.4 million, resulting from sales
of 43,202 tonnes at an ASP of $518/tonne, during the third quarter of 2017,
compared to revenue of $22.2 million,
resulting from sales of 68,422 tonnes at an ASP of $325/tonne, for the same period of last year.
Revenue from light-weight CMP increased by $0.8 million, or 19.5%, to $5.0 million, resulting from sales of 10,173
tonnes at an ASP of $491/tonne for
the third quarter of 2017, compared to revenue of $4.2 million, resulting from sales of 12,613
tonnes at an ASP of $332/tonne for
the same period of last year.
Revenue from offset printing paper decreased by $3.9 million, or 41.6%, to $5.5 million for the third quarter of 2017, from
$9.3 million for the same period of
last year. The Company sold 8,035 tonnes of offset printing paper
at an ASP of $679/tonne in the third
quarter of 2017, compared to 14,571 tonnes at an ASP of
$641/tonne in the same period of last
year.
Revenue from tissue paper products decreased by $1.0 million, or 59.5%, to $0.7 million for the third quarter of 2017, from
$1.6 million for the same period of
last year. The Company sold 493 tonnes of tissue paper products at
an ASP of $1,339/tonne in the third
quarter of 2017, compared to 1,327 tonnes at an ASP of $1,227/tonne in the same period of last year.
We had no revenue from digital photo paper for the third quarter
of 2017, compared to $64,671,
resulting from sales of 38 tonnes at an ASP of $1,702/tonne, in the same period of last year. In
June 2016, we suspended the
production of digital photo paper due to low market demand for our
products and are now upgrading the production line to produce more
competitive products. We expect to resume our digital photo paper
production in the near future.
Gross Profit and Gross Margin
Total cost of sales decreased by $3.8
million, or 12.8%, to $26.3
million for the third quarter of 2017, from $30.1 million for the same period of last year.
Cost of sales per tonne was $425 for
the third quarter of 2017, compared to $311 for the same period of last year. The
increase in overall cost of sales per tonne was mainly attributable
to the higher average unit purchase costs of recycled paper board,
cost of recycled white scrap paper and additional subsidies to the
labors during the production restriction, and partially offset by
the use of natural gas and liquefied gas to replace coal into the
production. Costs of sales per tonne for regular CMP, light-weight
CMP, offset printing paper, tissue paper products, and digital
photo paper were, $402, $364, $573,
$1,249, and $nil, respectively, for
the third quarter of 2017, compared to $273, $251,
$464, $1,075, and $2,151,
respectively, for the same period of last year.
Total gross profit decreased by $0.1
million, or 1.5%, to $7.2
million for the third quarter of 2017, from $7.3 million for the same period of last year.
Overall gross margin increased by 2.0 percentage points to 21.6%
for the third quarter of 2017 from 19.6% for the same period of
last year. Gross margins for regular CMP, light-weight CMP,
offset printing paper, tissue paper products, and digital photo
paper were 22.5%, 25.8%, 15.6%, 6.7% and nil, respectively, for the
third quarter of 2017, compared to 16.0%, 24.3%, 27.5%, 12.4%, and
-26.4%, respectively, for the same period of last year.
Selling, General and Administrative Expenses
Selling, general and administrative expenses ("SG&A")
increased by $0.2 million, or 9.6%,
to $2.8 million for the third quarter
of 2017 from $2.6 million for the
same period of last year. As a percentage of total revenue,
SG&A was 8.5% for the third quarter of 2017, compared to 6.9%
for the same period of last year.
Income from Operations
Income from operations decreased by $2.0
million, or 42.5%, to $2.7
million for the third quarter of 2017, from $4.7 million for the same period of last year.
Operating margin was 8.1% for the third quarter of 2017, compared
to 12.6% for the same period of last year.
Net Income
Net income was $1.6 million, or
$0.07 per basic and diluted share,
for the third quarter of 2017, compared to $3.0 million, or $0.14 per basic and diluted share, for the same
period of last year.
EBITDA
EBITDA decreased by $2.0 million,
or 23.7%, to $6.5 million for the
third quarter of 2017 from $8.5
million for the same period of last year.
Note 1: Non-GAAP Financial Measures
In addition to our U.S. GAAP results, this press release
includes a discussion of EBITDA, a non-GAAP financial measure as
defined by the Securities and Exchange Commission ("SEC"). The
Company defines EBITDA as net income before interest, income taxes,
depreciation and amortization. EBITDA is a key measure used by
management to evaluate our results and make strategic decisions.
Management believes this measure is useful to investors because it
is an indicator of operational performance. Because not all
companies use identical calculations, the Company's presentation of
EBITDA may not be comparable to similarly titled measures of other
companies, and should not be viewed as an alternative to measures
of financial performance or changes in cash flows calculated in
accordance with the U.S. GAAP.
Reconciliation of
Net Income to EBITDA
(Amounts expressed
in US$)
|
|
|
For the Three
Months Ended September 30,
|
($
millions)
|
2017
|
|
2016
|
Net income
|
1.6
|
|
3.0
|
Add: Income
tax
|
0.5
|
|
1.0
|
Net
interest expense
|
0.6
|
|
0.7
|
Depreciation and amortization
|
3.8
|
|
3.8
|
EBITDA
|
6.5
|
|
8.5
|
Nine Months Ended September 30,
2017 Financial Results
|
|
For the Nine
Months Ended September 30,
|
($
millions)
|
|
2017
|
|
2016
|
|
%
Change
|
Revenues
|
|
81.6
|
|
103.4
|
|
-21.1%
|
Regular Corrugating
Medium Paper ("CMP")*
|
|
55.7
|
|
59.6
|
|
-6.5%
|
Light-Weight
CMP**
|
|
10.4
|
|
11.5
|
|
-8.8%
|
Offset Printing
Paper
|
|
13.3
|
|
26.9
|
|
-50.6%
|
Tissue Paper
Products
|
|
2.1
|
|
4.7
|
|
-55.7%
|
Digital Photo
Paper
|
|
0.0
|
|
0.7
|
|
-100.0%
|
|
|
|
|
|
|
|
Gross
profit
|
|
16.3
|
|
18.0
|
|
-9.2%
|
Gross
margin
|
|
20.0%
|
|
17.4%
|
|
2.6 pp
|
Regular Corrugating
Medium Paper ("CMP")*
|
|
20.5%
|
|
15.3%
|
|
5.2 pp
|
Light-Weight
CMP**
|
|
23.3%
|
|
23.9%
|
|
-0.6 pp
|
Offset Printing
Paper
|
|
17.7%
|
|
22.2%
|
|
-4.5 pp
|
Tissue Paper
Products
|
|
6.5%
|
|
12.0%
|
|
-5.5 pp
|
Digital Photo
Paper
|
|
NA
|
|
-58.7%
|
|
NM
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
6.4
|
|
8.3
|
|
-23.6%
|
Net income
(loss)
|
|
3.3
|
|
4.2
|
|
-22.3%
|
EBITDA
|
|
17.4
|
|
20.1
|
|
-13.6%
|
Basic and Diluted
earnings per share
|
|
0.15
|
|
0.20
|
|
-22.5%
|
|
|
|
|
|
|
|
* Products from
PM6
|
|
|
|
|
|
|
** Products from
PM1
|
|
|
|
|
|
|
*** pp represents
percentage points
|
|
|
|
|
|
|
Revenue
For nine months ended September 30,
2017, total revenue decreased by $21.8 million, or 21.1%, to $81.6 million from $103.4
million for the same period of last year. The decrease in
total revenue was mainly decreases in sales volume across all
product categories and partially offset by a moderate increase in
blended ASP. We removed all coal burning boilers and started to
replace them with gas boilers in September
2017 in compliance with the latest government regulations.
Production was suspended during the removal of boilers. In
addition, the restrictions on our production volume instated in
November 2016 by the government
remain in place. The following table summarizes revenue, volume and
ASP by product for the nine months ended September 30, 2017 and 2016, respectively:
|
For the Nine
Months Ended September 30,
|
|
2017
|
|
2016
|
|
Revenue
($'000)
|
|
Volume
(tonne)
|
|
ASP (
$/tonne)
|
|
Revenue
($'000)
|
|
Volume
(tonne)
|
|
ASP
($/tonne)
|
Regular
CMP
|
55,741
|
|
128,988
|
|
432
|
|
59,616
|
|
183,044
|
|
326
|
Light-Weight
CMP
|
10,449
|
|
24,396
|
|
428
|
|
11,453
|
|
34,478
|
|
332
|
Offset Printing
Paper
|
13,307
|
|
20,098
|
|
662
|
|
26,920
|
|
41,440
|
|
650
|
Tissue Paper
Products
|
2,087
|
|
1,619
|
|
1,289
|
|
4,715
|
|
3,788
|
|
1,245
|
Digital Photo
Paper
|
-
|
|
-
|
|
-
|
|
664
|
|
372
|
|
1,786
|
Total
|
81,584
|
|
175,101
|
|
466
|
|
103,368
|
|
263,122
|
|
393
|
Revenue from CMP, including both regular CMP and light-Weight
CMP, decreased by $4.9 million, or
6.9%, to $66.2 million, and accounted
for 81.1% of total revenue for the nine months ended September 30, 2017, compared to $71.1 million, or 68.8% of total revenue for the
same period of last year. The Company sold 153,384 tonnes of CMP at
an ASP of $432/tonne for the nine
months ended September 30, 2017,
compared to 217,522 tonnes at an ASP of $327/tonne in the same period of last year.
Of the total CMP sales, revenue from regular CMP decreased by
$3.9 million, or 6.5%, to
$55.7 million, resulting from sales
of 128,988 tonnes at an ASP of $432/tonne, for the nine months ended
September 30, 2017, compared to
revenue of $59.6 million, resulting
from sales of 183,044 tonnes at an ASP of $326/tonne for the same period of last year.
Revenue from light-weight CMP decreased by $1.0 million, or 8.8%, to $10.4 million, resulting from sales of 24,396
tonnes at an ASP of $428/tonne for
the nine months ended September 30,
2017, compared to revenue of $11.5
million, resulting from sales of 34,478 tonnes at an ASP of
$332/tonne for the same period of
last year.
Revenue from offset printing paper decreased by $13.6 million, or 50.6%, to $13.3 million for the nine months ended
September 30, 2017, from $26.9 million for the same period of last year.
The Company sold 20,098 tonnes of offset printing paper at an ASP
of $662/tonne for the nine months
ended September 30, 2017, compared to
41,440 tonnes at an ASP of $650/tonne
in the same period of last year.
Revenue from tissue paper products decreased by $2.6 million, or 55.7%, to $2.1 million, for the nine months ended
September 30, 2017, from $4.7 million for the same period of last year.
The Company sold 1,619 tonnes of tissue paper products at an ASP of
$1,289/tonne for the nine months
ended September 30, 2017, compared to
3,788 tonnes at an ASP of $1,245/tonne in the same period of last year.
We had no revenue from digital photo paper for the nine months
ended September 30, 2017, compared to
$0.7 million, resulting from sales of
372 tonnes at an ASP of $1,786/tonne,
in the same period of last year. In June
2016, we suspended the production of digital photo paper due
to low market demand for our products and are now upgrading the
production line to produce more competitive products. We expect to
resume our digital photo paper production in the near future.
Gross Profit and Gross Margin
Total cost of sales decreased by $20.1
million, or 23.6%, to $65.2
million for the nine months ended September 30, 2017, from $85.4 million for the same period of last year.
Cost of sales per tonne was $373 for
the nine months ended September 30,
2017, compared to $324 for the
same period of last year. The increase in overall cost of sales per
tonne was mainly due to higher average unit purchase costs of
recycled paper board, cost of recycled white scrap paper and
additional subsidies created by the Company to the labors
suspending work during the production restriction in September 2017 and partially offset by the use of
natural gas and liquefied gas to replace coal in the production.
Costs of sales per tonne for regular CMP, light-weight CMP, offset
printing paper, tissue paper products, and digital photo paper
were, $334, $328, $545,
$1,205, and $nil, respectively, for
the nine months ended September 30,
2017, compared to $276,
$253, $506, $1,095, and
$2,835, respectively, for the same
period of last year.
Total gross profit decreased by $1.6
million, or 9.2%, to $16.3
million for the nine months ended September 30, 2017, from $18.0 million for the same period of last year.
Overall gross margin increased by 2.6 percentage points to 20.0%
for the nine months ended September 30,
2017 from 17.4% 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 20.5%, 23.3%,
17.7%, 6.5% and nil, respectively, for the nine months ended
September 30, 2017, compared to
15.3%, 23.9%, 22.2%, 12.0%, and -58.7%, respectively, for the same
period of last year.
Selling, General and Administrative Expenses
Selling, general and administrative expenses ("SG&A")
decreased by $1.3 million, or 13.7%,
to $8.3 million for the nine months
ended September 30, 2017, from
$9.6 million for the same period of
last year. As a percentage of total revenue, SG&A was 10.2% for
the nine months ended September 30 of
2017, compared to 9.3% for the same period of last year.
Income from Operations
Income from operations decreased by $2.0
million, or 23.6%, to $6.4
million for the nine months ended September 30, 2017 from $8.3 million for the same period of last year.
Operating margin was 7.8% for the nine months ended September 30, 2017, compared to 8.0% for the same
period of last year.
Net Income
Net income was $3.3 million, or
$0.15 per basic and diluted share,
for the nine months ended September 30,
2017, compared to $4.2
million, or $0.20 per basic
and diluted share, for the same period of last year.
EBITDA
EBITDA decreased by $2.7 million,
or 13.6%, to $17.4 million for the
nine months ended September 30, 2017,
from $20.1 million for the same
period of last year.
Note 2: Non-GAAP Financial Measures
In addition to our U.S. GAAP results, this press release
includes a discussion of EBITDA, a non-GAAP financial measure as
defined by the Securities and Exchange Commission ("SEC"). The
Company defines EBITDA as net income before interest, income taxes,
depreciation and amortization. EBITDA is a key measure used by
management to evaluate our results and make strategic decisions.
Management believes this measure is useful to investors because it
is an indicator of operational performance. Because not all
companies use identical calculations, the Company's presentation of
EBITDA may not be comparable to similarly titled measures of other
companies, and should not be viewed as an alternative to measures
of financial performance or changes in cash flows calculated in
accordance with the U.S. GAAP.
Reconciliation of
Net Income to EBITDA
(Amounts expressed
in US$)
|
|
|
For the Nine
Months Ended September 30,
|
($
millions)
|
2017
|
|
2016
|
Net income
|
3.3
|
|
4.2
|
Add:
Income tax
|
1.1
|
|
2.1
|
Net
interest expense
|
2.0
|
|
2.1
|
Depreciation and amortization
|
11.0
|
|
11.7
|
EBITDA
|
17.4
|
|
20.1
|
Cash, Liquidity and Financial Position
As of September 30, 2017, the
Company had cash and cash equivalents, short-term debt (including
related party loan), current capital lease obligations, notes
payable and long-term debt (including related party loans) of
$6.5 million, $14.1 million, $nil, $6.0
million and $14.2 million,
respectively, compared to $2.3
million, $5.1 million,
$8.8 million, $2.2 million and $14.9
million, respectively, at the end of 2016. Net accounts
receivable was $0.1 million as of
September 30, 2017, compared to
$3.9 million as of December 31, 2016. Net inventory was $9.6 million as of September 30, 2017, compared to $5.6 million at the end of 2016. As of
September 30, 2017, the Company had a
net working capital deficit of $1.0
million, compared to $6.1
million at the end of 2016.
Net cash provided by operating activities was $16.8 million for the nine months ended
September 30, 2017, compared to
$8.6 million for the same period of
last year. Net cash used in investing activities was $7.6 million for the nine months ended
September 30, 2017, compared to
$7.7 million for the same period of
last year. Net cash used by financing activities was $5.4 million for the nine months ended
September 30 of 2017, compared to net
cash provided in financing activities of $2.2 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 2017 financial results at 8:00 am US Eastern
Time (5:00 am US Pacific
Time/9:00 pm Beijing
Time) on Friday, November 10, 2017.
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 2017
Earnings Conference Call".
Conference
Call
|
|
Date:
|
Friday, November 10,
2017
|
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:
|
6797929
|
This conference call will be broadcast live on the Internet and
can be accessed by all interested parties at
http://www.orientpaperinc.com/ or
https://edge.media-server.com/m6/p/sybi9bhf.
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 11:00 am ET on November
10, 2017 to 7:59 am ET on
November 18, 2017. 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 6797929 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 photo paper and tissue paper products), Orient Paper
produces and distributes three categories of paper products:
corrugating medium paper, offset printing paper and tissue paper
products.
With production based in Baoding and Xingtai 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, 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.
For more information, please contact:
Company Contact:
Orient Paper, Inc.
Email: ir@orientpaperinc.com
Investor Relations:
Tony
Tian,
CFA
Weitian Group LLC
Email: tony.tian@weitian-ir.com
Phone: +1-732-910-9692
ORIENT PAPER,
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE
INCOME
FOR THE THREE AND
NINE MONTHS ENDED SEPTEMBER 30, 2017 AND 2016
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2017
|
|
|
2016
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
33,507,053
|
|
|
$
|
37,462,066
|
|
$
|
81,584,395
|
|
|
$
|
103,368,291
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
|
(26,285,765)
|
|
|
|
(30,131,223)
|
|
|
(65,244,521)
|
|
|
|
(85,381,810)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
7,221,288
|
|
|
|
7,330,843
|
|
|
16,339,874
|
|
|
|
17,986,481
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
|
(2,848,699)
|
|
|
|
(2,599,698)
|
|
|
(8,319,590)
|
|
|
|
(9,641,408)
|
Loss from disposal of
property, plant and
equipment
|
|
|
(1,653,039)
|
|
|
|
-
|
|
|
(1,665,140)
|
|
|
|
(25,774)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
Operations
|
|
|
2,719,550
|
|
|
|
4,731,145
|
|
|
6,355,144
|
|
|
|
8,319,299
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income
(Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
5,503
|
|
|
|
14,832
|
|
|
29,259
|
|
|
|
95,226
|
Subsidy
income
|
|
|
410
|
|
|
|
-
|
|
|
41,223
|
|
|
|
-
|
Interest
expense
|
|
|
(647,963)
|
|
|
|
(677,576)
|
|
|
(2,023,577)
|
|
|
|
(2,094,448)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before
Income Taxes
|
|
|
2,077,500
|
|
|
|
4,068,401
|
|
|
4,402,049
|
|
|
|
6,320,077
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for
Income Taxes
|
|
|
(505,165)
|
|
|
|
(1,033,859)
|
|
|
(1,105,928)
|
|
|
|
(2,077,826)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income
|
|
|
1,572,335
|
|
|
|
3,034,542
|
|
|
3,296,121
|
|
|
|
4,242,251
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
Comprehensive Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
|
3,790,338
|
|
|
|
(1,263,906)
|
|
|
8,035,099
|
|
|
|
(5,009,467)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Comprehensive Income (Loss)
|
|
$
|
5,362,673
|
|
|
$
|
1,770,636
|
|
$
|
11,331,220
|
|
|
$
|
(767,216)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted
Earnings per Share
|
|
$
|
0.07
|
|
|
$
|
0.14
|
|
$
|
0.15
|
|
|
$
|
0.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding -
Basic and Diluted
|
|
|
21,450,316
|
|
|
|
21,450,316
|
|
|
21,450,316
|
|
|
|
21,404,627
|
ORIENT PAPER,
INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER
30, 2017 AND DECEMBER 31, 2016
(Unaudited)
|
|
|
|
September
30,
|
|
|
December
31,
|
|
|
2017
|
|
|
2016
|
|
|
(
Unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
3,953,938
|
|
|
$
|
2,005,288
|
Restricted
cash
|
|
|
6,026,910
|
|
|
|
2,162,318
|
Accounts
receivable
|
|
|
130,928
|
|
|
|
3,894,435
|
Inventories
|
|
|
9,561,773
|
|
|
|
5,592,230
|
Prepayments and other
current assets
|
|
|
51,229
|
|
|
|
451,349
|
|
|
|
|
|
|
|
|
Total current
assets
|
|
|
19,724,778
|
|
|
|
14,105,620
|
|
|
|
|
|
|
|
|
Property, plant, and
equipment, net
|
|
|
166,662,735
|
|
|
|
162,779,492
|
Deferred tax asset
non-current
|
|
|
4,709,214
|
|
|
|
2,804,019
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
$
|
191,096,727
|
|
|
$
|
179,689,131
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
|
Short-term bank
loans
|
|
$
|
10,245,747
|
|
|
$
|
5,045,409
|
Current portion of
long-term loans from credit union
|
|
|
3,766,819
|
|
|
|
-
|
Current obligations
under capital lease
|
|
|
|
|
|
|
8,786,528
|
Accounts
payable
|
|
|
11,020
|
|
|
|
559,952
|
Advance from
customers
|
|
|
|
|
|
|
28,831
|
Notes
payable
|
|
|
6,026,910
|
|
|
|
2,162,318
|
Due to a related
party
|
|
|
21,775
|
|
|
|
56,872
|
Accrued payroll and
employee benefits
|
|
|
337,957
|
|
|
|
206,642
|
Other payables and
accrued liabilities
|
|
|
1,561,446
|
|
|
|
2,424,751
|
Income taxes
payable
|
|
|
1,260,721
|
|
|
|
1,311,051
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
|
23,232,395
|
|
|
|
20,582,354
|
|
|
|
|
|
|
|
|
Loans from credit
union
|
|
|
1,295,786
|
|
|
|
4,843,592
|
Loans from a related
party
|
|
|
10,547,093
|
|
|
|
10,090,817
|
Deferred gain on
sale-leaseback
|
|
|
-
|
|
|
|
102,232
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
$
|
35,075,274
|
|
|
$
|
35,618,995
|
ORIENT PAPER,
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE
MONTHS ENDED SEPTEMBER 30, 2017 AND 2016
(Unaudited)
|
|
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
|
|
Net income
|
|
$
|
3,296,121
|
|
|
$
|
4,242,251
|
Adjustments to
reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
10,928,502
|
|
|
|
11,668,976
|
Loss from disposal of
property, plant and equipment
|
|
|
1,665,140
|
|
|
|
25,774
|
(Recovery from)
Allowance for bad debts
|
|
|
(78,562)
|
|
|
|
20,833
|
Share-based
compensation expenses
|
|
|
-
|
|
|
|
1,417,395
|
Deferred
tax
|
|
|
(2,034,373)
|
|
|
|
(1,515,689)
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
3,928,087
|
|
|
|
(1,041,625)
|
Prepayments and other
current assets
|
|
|
472,847
|
|
|
|
1,708,601
|
Inventories
|
|
|
(3,631,641)
|
|
|
|
1,482,013
|
Accounts
payable
|
|
|
(561,121)
|
|
|
|
1,064,764
|
Advance from
customers
|
|
|
(29,446)
|
|
|
|
-
|
Notes
payable
|
|
|
3,680,693
|
|
|
|
(11,392,982)
|
Due to a related
party
|
|
|
(36,807)
|
|
|
|
(341,790)
|
Accrued payroll and
employee benefits
|
|
|
120,250
|
|
|
|
(252,632)
|
Other payables and
accrued liabilities
|
|
|
(771,027)
|
|
|
|
911,234
|
Income taxes
payable
|
|
|
(107,105)
|
|
|
|
632,911
|
Net Cash Provided
by Operating Activities
|
|
|
16,841,558
|
|
|
|
8,630,034
|
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
|
Purchases of
property, plant and equipment
|
|
|
(7,628,798)
|
|
|
|
(7,713,993)
|
Proceeds from sale of
property, plant and equipment
|
|
|
58,632
|
|
|
|
39,344
|
Net Cash Used in
Investing Activities
|
|
|
(7,570,166)
|
|
|
|
(7,674,649)
|
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
|
Proceeds from related
party loans
|
|
|
-
|
|
|
|
14,000
|
Repayments of related
party loans
|
|
|
-
|
|
|
|
(6,090,257)
|
Proceeds from short
term bank loans
|
|
|
10,011,484
|
|
|
|
3,493,848
|
Proceeds from Rural
Credit Union loans
|
|
|
2,355,643
|
|
|
|
-
|
Repayment of bank
loans
|
|
|
(5,152,970)
|
|
|
|
(3,038,129)
|
Payment of capital
lease obligation
|
|
|
(8,973,845)
|
|
|
|
(542,678)
|
(Increase in) Release
of restricted cash
|
|
|
(3,680,693)
|
|
|
|
8,354,853
|
Net Cash (Used in)
Provided by Financing Activities
|
|
|
(5,440,381)
|
|
|
|
2,191,637
|
|
|
|
|
|
|
|
|
Effect of Exchange
Rate Changes on Cash and Cash Equivalents
|
|
|
341,627
|
|
|
|
(197,154)
|
|
|
|
|
|
|
|
|
Net Increase in
Cash and Cash Equivalents
|
|
|
4,172,638
|
|
|
|
2,949,868
|
|
|
|
|
|
|
|
|
Cash and Cash
Equivalents - Beginning of Period
|
|
|
2,332,646
|
|
|
|
2,641,917
|
|
|
|
|
|
|
|
|
Cash and Cash
Equivalents - End of Period
|
|
$
|
6,505,284
|
|
|
$
|
5,591,785
|
|
|
|
|
|
|
|
|
Supplemental
Disclosure of Cash Flow Information:
|
|
|
|
|
|
|
|
Cash paid for
interest, net of capitalized interest cost
|
|
$
|
1,359,343
|
|
|
$
|
1,746,568
|
Cash paid for income
taxes
|
|
$
|
3,247,406
|
|
|
$
|
2,960,604
|
View original
content:http://www.prnewswire.com/news-releases/orient-paper-inc-announces-third-quarter-2017-financial-results-300553516.html
SOURCE Orient Paper, Inc.