Consumables
Orient Paper Announces Unaudited Preliminary Results for First Quarter Fiscal Year 2011
Tuesday 03. May 2011 - Orient Paper, Inc. (Amex: ONP) ("Orient Paper" or the "Company"), a leading manufacturer and distributor of diversified paper products in northern China, today announced unaudited preliminary results for the three months ended March 31, 2011. The Company will release full financial results and file its Form 10-Q on or before May 10, 2011 and will hold an earnings conference call to discuss its results.
For the three months ended March 31, 2011, the Company is expecting to report total unaudited revenue increased 25.6% to approximately $33.2 million from $26.5 million in the first quarter of 2010. During the quarter, the Company experienced lower tonnage sales of corrugating medium paper and lower gross profit margin from sales of offset printing paper sourced from third party suppliers. The Company is expecting unaudited net income to be approximately $4.9 million, or $0.26 per diluted share, up 55.2% from $3.1 million, or $0.21 per diluted share, for the same period last year.
Mr. Zhenyong Liu, Chairman and Chief Executive Officer of Orient Paper, stated, “We experienced robust growth in market demand and higher selling price of our products during the quarter as a result of the government-mandated capacity elimination in the second half of 2010. Regional demand for corrugating medium paper and medium-grade offset printing paper continued to grow in the first quarter of 2011 resulting in average selling price increases of over 26% and 12%, respectively, compared to the year ago period. Sales of our digital photo paper products experienced significant year-over-year growth as a result of our aggressive pricing strategy, and sales and marketing efforts. We produced 231 tons of digital photo paper in the month of March 2011, operating at over 100% of the original estimated production capacity of our photo paper coating lines. With continued favorable market conditions, we will be able to further ramp up our photo paper production during the rest of the year.”
Mr. Liu, added, “We are pleased to begin fiscal year 2011 on a positive note and anticipate strong revenue growth and profitability to be driven by our capacity expansion initiatives, growing market demand, attractive performance of our digital photo paper business, and tightening regional supply conditions. We are in the final stage of the new production equipment installation and look forward to beginning trial production of our new 360,000 tons per annum corrugating medium paper production line in June 2011 and commercial production at the beginning of the third quarter of 2011.”
Due to the delay in the commercial production of its new corrugating medium paper production line and adjustments for anticipated effect of inflation on its production costs and selling prices, the Company is revising 2011 guidance to revenues of between $172 million and $190 million, gross profit of between $35 million and $38 million, net income of between $22 million and $25 million, and basic and diluted earnings per share of between $1.22 and $1.35.