Orchids Paper Products Company reported unaudited earnings results for the fourth quarter and full year ended December 31, 2017. For the quarter, the company's net sales were $43.5 million, up $5.8 million, or 15.4% compared to the year-ago period. The company recognized net income of $8.9 million, or $0.85 per diluted share, in the fourth quarter of 2017 compared to net income of $2.6 million, or $0.25 per diluted share, in the fourth quarter of 2016. Excluding this tax benefit and certain other non-core items identified in the attached reconciliations of Non-GAAP and GAAP Measurements, fourth quarter 2017 adjusted net loss was $1.1 million, or a net loss of $0.11 per diluted share, compared to fourth quarter 2016 adjusted net earnings of $3.0 million, or $0.29 per diluted share. Operating loss was $506,000 compared to operating income of $2,986,000 a year ago. Loss before income taxes was $3,836,000 compared to income before income taxes of $2,182,000 a year ago. Earnings before Interest, Income Tax and Depreciation and Amortization (EBITDA) were $3,658,000 compared to $5,983,000 a year ago. Adjusted EBITDA was $5,573,000 compared to $6,260,000 a year ago. Net cash provided by operating activities was $5,150,000 compared to $7,568,000 a year ago.

For the full year of 2017, the company's net sales decreased $2.0 million, or 1.2%, compared to the year ended December 31, 2016. The company announced the net income in 2017 was $6.7 million or $0.64 per diluted share compared to net income of $12.8 million, or $1.24 per diluted share in 2016. Adjusted net loss was $1.8 million, or a net loss of $0.18 per diluted share, compared to 2016 adjusted net earnings of $14.9 million, or $1.44 per diluted share. Total net sales were $162,484,000 compared to $164,494,000 a year ago. Operating loss was $3,916,000 compared to operating income of $18,686,000 a year ago. Loss before income taxes was $8,826,000 compared to income before income taxes of $17,222,000 a year ago. Earnings before Interest, Income Tax and Depreciation and Amortization (EBITDA) were $10,829,000 compared to $31,835,000 a year ago. Adjusted EBITDA was $15,072,000 compared to $33,419,000 a year ago. Net cash provided by operating activities was $13,446,000 compared to $27,827,000 a year ago.

The company expects sales growth to continue to accelerate and margins to expand, driven by operating leverage. The company expects to see continued improvement in free cash-flow, throughout 2018 as the ramp in orders from the new customers improve earnings and as capital expenditures continue to decline. The company expects capital expenditures to decrease to approximately $5 million.