Tisk Tisk

-By Sam B | [email protected]

Down 54% this year, Orchids Paper Products Company (TIS) has been looking for a way to reverse its fortunes. Last week, the company announced that it has acquired a major new business award from a new customer in a new distribution channel—the company recently completed its ultra premium facility in Barnwell, SC— the company stated that this customer is expected to be a top 5 Orchids' customer with shipments beginning in the fourth quarter 2017. Jeff Schoen, the President & CEO, stated that he believes this customer will boost revenue to $220 to $240 million. 2016 revenue was $165 million.

The company expects lower capital spending going forward at approximately $5 million compared to $80 million spent last year. The company mentioned in its Q2 call that the stock is grossly undervalued but outlined a risk "Given our story is a positive one, we expect to resolve the debt concerns through a refinancing program with our existing banks or with an alternative debt structure in Q3."

A risk is that Orchids is looking for the correct way to refinance the debt and is trying not to do an equity raise. Net sales dropped $10 million for the first 6 months of the year. The company also discussed possible mezzanine financing, which is typically more expensive.

Join the best Message Board on the internet to rate and comment on this article and others

comments powered by Disqus