Not even the oil boom could flush Orchids Paper Products from the best performing stocks in this year's Oklahoma Inc.
The Pryor-based maker of bathroom tissue, paper towels and napkins is No. 3 — the third-best performing publicly traded stock in the state in 2012. It was No. 28 last year. The company has landed in the top five as often as not since debuting on the list in 2007. This year, it's one of just two non-energy companies in the top 15.
Orchids Paper is on a roll again — mostly in the private label end of the tissue paper business. It makes products sold as store brands in Walmart, Dollar General and other discount chains from huge “parent rolls” of paper also made on site in Pryor's Mid America Industrial Park. Its products also are sold under the brand names Colortex and Velvet.
Robert A. Snyder, president and CEO, just returned from Italy, where manufacturers of papermaking equipment honored Orchids Paper with an award.
In September, Dollar General awarded Orchids Paper its 2012 Pride Award for Private Label Vendor of the Year “in recognition of its innovation, dependability and excellence in its partnership with Dollar General” — chosen from all vendors, not just suppliers of paper products.
“Dollar General is a leader in its field and we are honored to be a long-term supplier to their organization,” Snyder said. “The award is a testament to the dedication of our team in achieving world class service and innovation to our customers.”
In October, Orchids Paper reported “new understandings with several retailers,” new customers as well as existing ones, that were expected to result in increased orders in the fourth quarter.
Combined with previously reported plans, shipments in the last quarter of this year should be 17 percent higher than in the second quarter and will be reflected in results in the first quarter of 2013, Snyder said.
“The addition of this new business is primarily the result of continued success in our new product and market development efforts to further penetrate mid-tier market opportunities,” he said.
Those successes came this fall. Orchids Paper's spot at No. 3 in Oklahoma Inc. was based on a year's worth of data ending June 30.
Orchids Paper, which trades under the ticker symbol TIS on the New York Stock Exchange, saw its earning per share rise 114 percent over the year. Revenues rose 10.7 percent and total return per share increased 45.6 percent over the same period.
Orchids Paper employs about 300 people. The 2009-10 construction of a new warehouse and a second converter line — where consumer products are made from the huge parent rolls — allowed the company to expand into higher-level segments of the private label market.
Stock analyst John Nobile with Taglich Brothers Inc., a New York City brokerage that helped launch Orchid Paper's initial public offering in 2005, considers TIS a “speculative buy.”
Forecast growth in the discount retail and dollar store segment of the economy could leave Orchids Products sitting pretty, even though the company does not have supply contracts with its customers, but operates by purchase orders, Nobile suggested in a recent report.
“Because Orchids products are daily consumable items, order streams are fairly consistent with no significant seasonal fluctuations. Changes in the national economy do not materially affect the market for Orchids' products,” he said.
Nobile, citing a report in Tissue World Magazine, also noted that “private label growth in the American tissue market has been steady. More and more consumers now prefer private labels as an alternative to more expensive branded products.”
Or, as Snyder put it in an interview with The Oklahoman: “We're in the business of producing a product — paper towels, tissue, napkins — that people use every day. The tissue business is more about population than the economy. As the population increases, the need for tissue products increases.”