Note 2 - Related Party Transactions and Fabrica

9 Months Ended

Sep. 30, 2017

Note 2 — Related Party Transactions and Fabrica

On May 5, 2014, Orchids Paper Products Company and its wholly owned subsidiary, Orchids Mexico, entered into an asset purchase agreement (“APA”) with Fabrica to acquire certain assets and 100% of the U.S. business of Fabrica. On June 3, 2014, the Company closed on the transaction set forth in the APA, and in connection therewith, entered into a supply agreement (“Supply Agreement”) and a lease agreement (“Equipment Lease Agreement”) (collectively, the “Fabrica Transaction”).

The Company entered into the following transactions with Fabrica during the three and nine-month periods ended September 30:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
	(In thousands)				(In thousands)
Products purchased under the Supply Agreement	$	7,308	$	8,003	$	21,536	$	26,447
Amounts billed to Fabrica under the Equipment
Lease Agreement	$	545	$	518	$	1,538	$	1,242
Parent rolls purchased by Fabrica	$	1,282	$	-	$	3,116	$	867

Goodwill

There were no changes to the $7.6 million goodwill recognized from the Fabrica Transaction during the three and nine-month periods ended September 30, 2017 and 2016. No goodwill impairment has been recorded as of September 30, 2017.