Revenue during the quarter dropped 10.01 percent to $37.71 million from $41.90 million in the previous year period. Gross margin for the quarter contracted 438 basis points over the previous year period to 15.06 percent. Total expenses were 92.08 percent of quarterly revenues, up from 87.10 percent for the same period last year. That has resulted in a contraction of 498 basis points in operating margin to 7.92 percent.

Operating income for the quarter was $2.99 million, compared with $5.40 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $6.26 million compared with $9.02 million in the prior year period. At the same time, adjusted EBITDA margin contracted 492 basis points in the quarter to 16.60 percent from 21.52 percent in the last year period.

Jeff Schoen, president and chief executive officer, stated, "Despite intense competitive pressures, year-over-year adjusted EBITDA increased 2%, the adjusted EBITDA margin increased from 19.4% to 20.3%, and Cost of sales, exclusive of depreciation, decreased 4.4% while Sales declined only 2.3%. In other words, improved cash margins and cost cutting helped offset the impact of the decline in sales.

The company has spent $77.68 million cash to meet investing activities during the year as against cash outgo of $75.19 million in the last year.

Cash flow from financing activities was $54.24 million for the year, down 9.20 percent or $5.50 million, when compared with the last year.

Cash and cash equivalents stood at $8.75 million as on Dec. 31, 2016, up 100.64 percent or $4.39 million from $4.36 million on Dec. 31, 2015.

Working capital increases sharply
Orchids Paper Products Company has recorded an increase in the working capital over the last year. It stood at $27 million as at Dec. 31, 2016, up 30.08 percent or $6.24 million from $20.75 million on Dec. 31, 2015. Current ratio was at 2.34 as on Dec. 31, 2016, up from 2.10 on Dec. 31, 2015.