BAODING, China, August 11, 2020 /PRNewswire/ -- IT Tech
Packaging, Inc. (NYSE American: ITP) ("IT Tech Packaging" or the
"Company"), a leading manufacturer and distributor of diversified
paper products in North China,
today announced its unaudited financial results for the second
quarter ended June 30, 2020.
Second Quarter
2020 Unaudited Financial Results
|
|
|
For the
Three Months Ended June 30,
|
($
millions)
|
|
2020
|
|
2019
|
|
%
Change
|
Revenues
|
|
26.36
|
|
33.62
|
|
-21.6%
|
Regular
Corrugating Medium Paper ("CMP")*
|
|
17.37
|
|
20.88
|
|
-16.8%
|
Light-Weight
CMP**
|
|
4.50
|
|
5.31
|
|
-15.2%
|
Offset Printing
Paper
|
|
1.26
|
|
6.24
|
|
-79.8%
|
Tissue Paper
Products
|
|
2.38
|
|
1.19
|
|
100.2%
|
Face
Masks
|
|
0.85
|
|
NM
|
|
NM
|
|
|
|
|
|
|
|
Gross
profit
|
|
2.56
|
|
2.91
|
|
-12.0%
|
Gross profit
(loss) margin
|
|
9.7%
|
|
8.7%
|
|
1.1 pp****
|
Regular
Corrugating Medium Paper ("CMP")*
|
|
9.0%
|
|
7.7%
|
|
1.3 pp****
|
Light-Weight
CMP**
|
|
12.5%
|
|
6.7%
|
|
5.9 pp****
|
Offset Printing
Paper
|
|
23.7%
|
|
26.0%
|
|
-2.3pp****
|
Tissue Paper
Products***
|
|
-15.7%
|
|
-56.7%
|
|
41.0
pp****
|
Face
Masks
|
|
59.5%
|
|
NM
|
|
NM
|
|
|
|
|
|
|
|
Operating
income (loss)
|
|
-0.80
|
|
0.53
|
|
-250.2%
|
Net
income
|
|
-0.98
|
|
0.45
|
|
-317.8%
|
EBITDA
|
|
2.90
|
|
4.63
|
|
-37.4%
|
Basic and
Diluted earnings (loss) per share
|
|
-0.04
|
|
0.02
|
|
-282.3%
|
|
|
|
|
|
|
|
* Products
from PM6
|
|
|
|
|
|
|
** Products
from PM1
|
|
|
|
|
|
|
*** Products
from PM8 and PM9
|
|
|
|
|
|
|
**** pp
represents percentage points
|
|
|
|
|
|
|
- Revenue decreased by 21.6% to $26.4
million, primarily attributable to a 13%-21% decrease in
average selling prices (ASPs) for all paper products and
substantial decrease in sales volume of offset printing paper,
partially offset by the increases in sales volume of tissue paper
products.
- Gross profit decreased by 12.0% to $2.6
million. Total gross margin increased by 1.1 percentage
point to 9.7%. Gross margins increased from a range of 1.3 to
41 percentage points over all paper products except for offset
printing paper. Gross margin for face masks was 59.5%.
- Loss from operations was $0.8
million, compared to income from operations of $0.5 for the same period of last year.
- Net loss was $1.0 million, or
loss of $0.04 per basic and diluted
share, compared to net income of $0.5
million, or $0.02 per basic
and diluted share, for the same period of last year.
- Earnings before interest, taxes, depreciation and amortization
("EBITDA") decreased by 37.4% to $2.9
million.
Mr. Zhenyong Liu, Chairman and
Chief Executive Officer of the Company, commented, "Despite our
sales and operations were impacted by the COVID-19 pandemic during
the first quarter, we made improvements in the second quarter as
our paper products business recovered and new face mask business
launched in April generated revenue of 0.9 million with gross
margin of 59.5%. Our tissue paper continued a 100% growth in
revenue and hit a record high with sales volume of 2,884 tonnes.
Due to the pandemic impact to downstream industry, we experienced a
13% to 21% decrease in ASPs over all paper products
categories, however, except for offset printing paper, we did not
see much sales volume fluctuation from our paper products during
the second quarter, so we expect the ASPs for all paper
products will be stabilized as the ante-pandemic economy recovery
continues through the whole industry chain. "
Revenue
For the second quarter of 2020, total revenue decreased by
$7.3 million, or 21.6%, to
$26.4 million from $33.6 million for the same period of last year.
The decrease in total revenue was mainly due to flat sales volume
from CMP products, decreases in ASPs for all paper products and a
substantial decrease in sales volume of offset printing paper,
partially offset by the increase in sales volume of tissue paper
products.
The following table summarizes revenue, volume and ASP by
product for the second quarter of 2020 and 2019, respectively:
|
For the
Three Months Ended June 30,
|
|
2020
|
|
2019
|
|
Revenue
($'000)
|
|
Volume
(tonne)
|
|
ASP
($/tonne)
|
|
Revenue
($'000)
|
|
Volume
(tonne)
|
|
ASP
($/tonne)
|
Regular
CMP
|
17,372
|
|
46,979
|
|
370
|
|
20,883
|
|
47,994
|
|
435
|
Light-Weight
CMP
|
4,503
|
|
12,611
|
|
357
|
|
5,311
|
|
12,582
|
|
422
|
Offset Printing
Paper
|
1,262
|
|
2,183
|
|
578
|
|
6,237
|
|
8,559
|
|
729
|
Tissue Paper
Products
|
2,380
|
|
2,884
|
|
825
|
|
1,189
|
|
1,254
|
|
948
|
Total
|
26,362
|
|
64,657
|
|
408
|
|
33,620
|
|
70,389
|
|
478
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
($'000)
|
|
Volume
(thousand pieces)
|
|
ASP
($/thousand pieces)
|
|
Revenue
($'000)
|
|
Volume
($/thousand pieces)
|
|
ASP
($/thousand pieces)
|
Face
Masks
|
846
|
|
6,280
|
|
135
|
|
NM
|
|
NM
|
|
NM
|
Revenue from CMP, including both regular CMP and light-Weight
CMP, decreased by $4.3 million, or
16.5%, to $21.9 million and accounted
for 83% of total revenue for the second quarter of 2020, compared
to $26.2 million, or 77.9% of total
revenue, for the same period of last year. The Company sold 59,590
tonnes of CMP at an ASP of $367/tonne
in the second quarter of 2020, compared to 60,576 tonnes at an ASP
of $432/tonne in the same period of
last year.
Of the total CMP sales, revenue from regular CMP decreased by
$3.5 million, or 16.8%, to
$17.4 million, resulting from sales
of 46,979 tonnes at an ASP of $370/tonne, during the second quarter of 2020,
compared to revenue of $20.9 million,
resulting from sales of 47,994 tonnes at an ASP of $435/tonne, for the same period of last year.
Revenue from light-weight CMP decreased by $0.8 million, or 15.2%, to $4.5 million, resulting from sales of 12,611
tonnes at an ASP of $357/tonne for
the second quarter of 2020, compared to revenue of $5.3 million, resulting from sales of 12,582
tonnes at an ASP of $422/tonne for
the same period of last year.
Revenue from offset printing paper decreased by $5.0 million, or 79.8%, to $1.3 million for the second quarter of 2020, from
$6.2 million for the same period of
last year. The Company sold 2,183 tonnes of offset printing paper
at an ASP of $578/tonne in the second
quarter of 2020, compared to 8,559 tonnes at an ASP of $729/tonne in the same period of last year.
Revenue from tissue paper products increased by $1.2 million, or 100.2%, to $2.4 million, resulting from sales of 2,884
tonnes at an ASP of $825/tonne, for
the second quarter of 2020, compared to revenue of $1.2 million, resulting from sales of 1,254
tonnes at an ASP of $948/tonne for
the same period of last year.
Revenue generated from selling face masks were $0.8 million for the second quarter ended
June 30, 2020. The Company sold 6,280
thousand pieces of face masks in the second quarter of 2020.
Gross Profit and Gross Margin
Total cost of sales decreased by $6.9
million, or 22.5%, to $23.8
million for the second quarter of 2020 from $30.7 million for the same period of last year.
For paper products, overall cost of sales per tonne was
$368 for the second quarter of 2020,
compared to $436 for the same period
of last year. The decrease in overall cost of sales was mainly due
to the decreased sales volume of offset printing paper, decreased
manufacturing overhead costs and decreased material costs,
specifically lower average unit purchase costs of recycled paper
board in the second quarter of 2020. Average unit purchase costs of
recycled paper board, major raw material used for our production,
was approximately $195/tonne for the
second quarter of 2020, compared to $230/tonne for the same period of last year.
Costs of sales per tonne for regular CMP, light-weight CMP, offset
printing paper, and tissue paper products were $336, $312,
$441, and $955, respectively, for the second quarter of
2020, compared to $402, $394, $539 and
$1,486, respectively, for the same
period of last year. Total gross profit was $2.6 million for the second quarter of 2020,
compare to the gross profit of $2.9
million for the same period of last year as a result of
factors described above. Overall gross loss margin was 9.7% for the
second quarter of 2020, compared to 8.7% for the same period of
last year. Gross profit (loss) margins for regular CMP,
light-weight CMP, offset printing paper, tissue paper products and
face mask products were 9.0%, 12.5%, 23.7%, -15.7% and 59.5%,
respectively, for the second quarter of 2020, compared to 7.7%,
6.7%, 26.0%,-56.7% and nil, respectively, for the same period of
last year.
Selling, General and Administrative Expenses
Selling, general and administrative expenses ("SG&A")
increased by $1.0 million, or 39.4%,
to $3.4 million for the second
quarter of 2020 from $2.4 million for
the same period of last year. The increase was mainly related to
the issuance of shares of common stock to officers, directors and
employees of the Company, as compensatory incentive, and the
issuance of shares of common stock to a consultant as compensation
of service.
Income (loss) from Operations
Loss from operations was $0.8
million for the second quarter of 2020, compared to income
from operations of $0.5 million for
the same period of last year. The loss from operations was
primarily due to increased SG&A expenses and decreased gross
profit this quarter as discussed above. Operating loss margin was
3.0% for the second quarter of 2020, compared to operating margin
of 1.6% for the same period of last year.
Net Income (Loss)
Net loss was $1.0 million, or
$0.04 loss per basic and diluted
share, for the second quarter of 2020, compared to net income of
$0.5 million, or $0.02 per basic and diluted share, for the same
period of last year.
EBITDA
EBITDA was $2.9 million for the
second quarter of 2020, compared to $4.6
million for the same period of last year.
Note 1: Non-GAAP Financial Measures
In addition to our U.S. GAAP results, this press release
includes a discussion of EBITDA, a non-GAAP financial measure as
defined by the Securities and Exchange Commission ("SEC"). The
Company defines EBITDA as net income before interest, income taxes,
depreciation and amortization. EBITDA is a key measure used by
management to evaluate our results and make strategic decisions.
Management believes this measure is useful to investors because it
is an indicator of operational performance. Because not all
companies use identical calculations, the Company's presentation of
EBITDA may not be comparable to similarly titled measures of other
companies, and should not be viewed as an alternative to measures
of financial performance or changes in cash flows calculated in
accordance with the U.S. GAAP.
Reconciliation of
Net Income to EBITDA
|
(Amounts expressed
in US$)
|
|
|
For the
Three Months Ended June 30,
|
($
millions)
|
|
2020
|
|
|
2019
|
Net income
(loss)
|
|
-0.98
|
|
|
0.45
|
Add: Income
tax
|
|
-0.08
|
|
|
0.08
|
Net
interest expense
|
|
0.24
|
|
|
0.24
|
Depreciation and amortization
|
|
3.72
|
|
|
3.86
|
EBITDA
|
|
2.90
|
|
|
4.63
|
First Half of 2020
Financial Results
|
|
|
For the Six
Months Ended June 30,
|
($
millions)
|
|
2020
|
|
2019
|
|
%
Change
|
Revenues
|
|
35.11
|
|
51.07
|
|
-31.3%
|
Regular
Corrugating Medium Paper ("CMP")*
|
|
23.09
|
|
33.11
|
|
-30.3%
|
Light-Weight
CMP**
|
|
6.52
|
|
8.68
|
|
-24.9%
|
Offset Printing
Paper
|
|
1.26
|
|
6.24
|
|
-79.8%
|
Tissue Paper
Products
|
|
3.39
|
|
3.05
|
|
11.1%
|
Face
Masks
|
|
0.85
|
|
NM
|
|
NM
|
|
|
|
|
|
|
|
Gross
profit
|
|
2.39
|
|
2.72
|
|
-12.0%
|
Gross profit
(loss) margin
|
|
6.8%
|
|
5.3%
|
|
1.5 pp****
|
Regular
Corrugating Medium Paper ("CMP")*
|
|
8.0%
|
|
4.7%
|
|
3.3 pp****
|
Light-Weight
CMP**
|
|
12.6%
|
|
2.0%
|
|
10.6
pp****
|
Offset Printing
Paper
|
|
23.7%
|
|
26.0%
|
|
-2.3
pp****
|
Tissue Paper
Products***
|
|
-32.1%
|
|
-21.0%
|
|
-11.1
pp****
|
Face
Masks
|
|
59.5%
|
|
NM
|
|
NM
|
|
|
|
|
|
|
|
Operating
income (loss)
|
|
-3.67
|
|
-2.64
|
|
-38.7%
|
Net
income
|
|
-3.42
|
|
-2.27
|
|
-50.3%
|
EBITDA
|
|
3.96
|
|
5.44
|
|
-27.2%
|
Basic and
Diluted earnings (loss) per share
|
|
-0.14
|
|
-0.10
|
|
-35.7%
|
|
|
|
|
|
|
|
* Products
from PM6
|
|
|
|
|
|
|
** Products
from PM1
|
|
|
|
|
|
|
*** Products
from PM8 and PM9
|
|
|
|
|
|
|
**** pp
represents percentage points
|
|
|
|
|
|
|
Revenue
For first half of 2020, total revenue decreased by $16.0 million, or 31.3%, to $35.1 million from $51.1
million for the same period of last year. The decrease in
total revenue was mainly due to decrease in sales volume of CMP,
offset printing paper and decrease in ASPs over all paper products
categories. The following table summarizes revenue, volume and ASP
by product for the first half of 2020 and 2019, respectively:
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six
Months Ended June 30,
|
|
2020
|
|
2019
|
|
Revenue
($'000)
|
|
Volume
(tonne)
|
|
ASP
($/tonne)
|
|
Revenue
($'000)
|
|
Volume
(tonne)
|
|
ASP
($/tonne)
|
Regular
CMP
|
23,094
|
|
60,767
|
|
380
|
|
33,108
|
|
74,286
|
|
446
|
Light-Weight
CMP
|
6,518
|
|
17,500
|
|
372
|
|
8,676
|
|
20,006
|
|
434
|
Offset Printing
Paper
|
1,262
|
|
2,183
|
|
578
|
|
6,237
|
|
8,560
|
|
729
|
Tissue Paper
Products
|
3,386
|
|
4,069
|
|
832
|
|
3,049
|
|
2,857
|
|
1,067
|
Total
|
34,261
|
|
84,519
|
|
405
|
|
51,070
|
|
105,709
|
|
483
|
|
Revenue
($'000)
|
|
Volume
(thousand pieces)
|
|
ASP
($/thousand pieces)
|
|
Revenue
($'000)
|
|
Volume
($/thousand pieces)
|
|
ASP
($/thousand pieces)
|
Face
Masks
|
846
|
|
6,280
|
|
135
|
|
NM
|
|
NM
|
|
NM
|
Revenue from CMP, including both regular CMP and light-Weight
CMP decreased by $12.2 million, or
29.1%, to $29.6 million, and
accounted for 84.4% of total revenue for the first half of 2020,
compared to $41.8 million, or 81.8%
of total revenue for the same period of last year. The Company sold
78,267 tonnes of CMP at an ASP of $378/tonne in the first half of 2020, compared to
94,292 tonnes at an ASP of $443/tonne
in the same period of last year.
Of the total CMP sales, revenue from regular CMP decreased by
$10.0 million, or 30.3%, to
$23.1 million, resulting from sales
of 60,767 tonnes at an ASP of $380/tonne during the first half of 2020,
compared to revenue of $33.1 million,
resulting from sales of 74,286 tonnes at an ASP of $446/tonne for the same period of last year.
Revenue from light-weight CMP decreased by $2.2 million, or 24.9%, to $6.5 million, resulting from sales of 17,500
tonnes at an ASP of $372/tonne for
the first half of 2020, compared to revenue of $8.7 million, resulting from sales of 20,006
tonnes at an ASP of $434/tonne for
the same period of last year.
Revenue from offset printing paper decreased by $5.0 million, or 79.8%, to $1.3 million for the first half of 2020 from
$6.2 million for the same period of
last year. The Company sold 2,183 tonnes of offset printing paper
at an ASP of $578/tonne in the first
half of 2020, compared to 8,560 tonnes at an ASP of $729/tonne in the same period of last year.
Revenue from tissue paper products increased by $0.3 million, or 11.1%, to $3.4 million, resulting from sales of 4,069
tonnes at an ASP of $832/tonne, for
the first half of 2020, compared to revenue of $3.0 million, resulting from sales of 2,857
tonnes at an ASP of $1,067/tonne for
the same period of last year.
Gross Profit and Gross Margin
Total cost of sales decreased by $15.6
million, or 32.3%, to $32.7
million for the first half of 2020 from $48.4 million for the same period of last year.
The decrease in overall cost of sales was mainly due to the
decreased sales volume of offset printing paper, decreased
manufacturing overhead costs and decreased material costs,
specifically lower average unit purchase costs of recycled paper
board in the first half of 2020. Costs of sales per tonne for
regular CMP, light-weight CMP, offset printing paper, tissue paper
products were, $350, $325, $441, and
$1,099, respectively, for the first
half of 2020 compared to $425,
$425, $539, and $1,291,
respectively, for the same period of last year.
Total gross profit decreased by $0.3
million, or 12.0%, to $2.4
million for the first half of 2020 from $2.7 million for the same period of last year.
Overall gross margin increased by 1.5 percentage points to 6.8% for
the first half of 2020 from 5.3% for the same period of last year.
Gross margins for regular CMP, light-weight CMP, offset printing
paper, tissue paper products and face mask products were 8.0%,
12.6%, 23.7%, -32.1% and 59.5%, respectively, for the first half of
2020, compared to 4.7%, 2.0%, 26.0%, -21.0% and nil, respectively,
for the same period of last year.
Selling, General and Administrative Expenses
SG&A expenses increased by $0.7
million, or 11.6%, to $6.0
million for the first half of 2020 from $5.4 million for the same period of last year. As
a percentage of total revenue, SG&A expenses was 17.1% for the
first half of 2020, compared to 10.6% for the same period of last
year.
Loss from Operations
Loss from operations increased by $1.0
million, or 38.7%, to $3.7
million for the first half of 2020 from loss from operations
of $2.6 million for the same period
of last year. Operating loss margin was 10.4% for the first half of
2020, compared to 5.2% for the same period of last year.
Net Loss
Net loss increased by $1.1
million, or 50.3%, to $3.4
million, or loss per basic and diluted share of $0.14, for the first half of 2020, compared
to net loss of $2.3 million, or loss
per basic and diluted share of $0.10,
for the same period of last year.
EBITDA
EBITDA decreased by $1.4 million,
or 27.2%, to $4.0 million for the
first half of 2020 from $5.4 million
for the same period of last year.
Note 1: Non-GAAP Financial Measures
In addition to our U.S. GAAP results, this press release
includes a discussion of EBITDA, a non-GAAP financial measure as
defined by the Securities and Exchange Commission ("SEC"). The
Company defines EBITDA as net income before interest, income taxes,
depreciation and amortization. EBITDA is a key measure used by
management to evaluate our results and make strategic decisions.
Management believes this measure is useful to investors because it
is an indicator of operational performance. Because not all
companies use identical calculations, the Company's presentation of
EBITDA may not be comparable to similarly titled measures of other
companies, and should not be viewed as an alternative to measures
of financial performance or changes in cash flows calculated in
accordance with the U.S. GAAP.
Reconciliation of
Net Income to EBITDA
|
(Amounts expressed
in US$)
|
|
|
|
|
|
|
|
|
For the Six
Months Ended June 30,
|
($
millions)
|
|
2020
|
|
|
2019
|
Net income
(loss)
|
|
-3.42
|
|
|
-2.27
|
Add: Income
tax
|
|
-0.61
|
|
|
-0.57
|
Net
interest expense
|
|
0.49
|
|
|
0.49
|
Depreciation and amortization
|
|
7.50
|
|
|
7.79
|
EBITDA
|
|
3.96
|
|
|
5.44
|
Cash, Liquidity and Financial Position
As of June 30, 2020, the Company
had cash and bank balances, short-term debt (including bank loans,
current portion of long-term loans from credit union and related
party loans), and long-term debt (including loan from credit union)
of $12.83 million, $10.39 million and $5.18
million, respectively, compared to $5.84 million, $8.31
million and $7.37 million,
respectively, at the end of 2019.
Net accounts receivable was $3.16
million as of June 30, 2020,
compared to $3.12 million as of
December 31, 2019. Net inventory was
$5.85 million as of June 30, 2020, compared to $1.61 million at the end of 2019. As of
June 30, 2020, the Company had
current assets of $27.80 million and
current liabilities of $16.6 million,
resulting in a working capital of $11.21
million. This was compared to current assets of $24.04 million and current liabilities of
$16.84 million, resulting in a
working capital of $7.21 million at
the end of 2019.
Net cash provided by operating activities was $5.86 million for the first half of 2020,
compared to net cash used in operating activities of $0.81 million for the same period of last year.
Net cash used in investing activities was $0.98 million for the first half of 2020,
compared to $5.02 million for the
same period of last year. Net cash provided by financing activities
was $2.27 million for the first half
of 2020, compared to net cash used in financing activities of
$5.29 million for the same period of
last year.
Recent development
On April 29, 2020, the Company
launched its production line of non-medical single-use face masks
as planned, following the completion of raw materials preparation,
trial run of the equipment and the sample products inspection.
On April 30, 2020, the Company
entered into a securities purchase agreement with certain
institutional investors to purchase approximately $2.6 million worth of its common stock in a
registered direct offering and warrants to purchase shares of
common stock in a concurrent private placement. Under the terms of
the securities purchase agreement, as amended, the Company has
agreed to sell 4.4 million shares of the Company's common stock and
issue warrants to purchase up to an additional 4.4 million shares
of the Company's common stock in a concurrent private placement
transaction.
On May 5, 2020, the Company
announced it planned the commercial launch of a new tissue paper
production line (the "PM10"). The Company has signed an agreement
to purchase paper machine with paper machine supplier and expects
to launch commercial production of the PM10 following the success
of its trial run.
On June 24, 2020, the Company
announced that Dongfang Paper expects to launch the construction of
a combined heat and power generation project utilizing biomass
technology with the total construction area of 80,373 square meters
which is located in its Wei County production base.
Earnings Conference Call
The Company's management will host a conference call to discuss
its second quarter 2020 financial results at 8:00 am US
Eastern Time on Wednesday, August 12, 2020. To attend the
conference call, please use the information below.
Date/Time: 8:00 am US Eastern Time
(5:00 am US Pacific Time/8:00 pm Beijing Time) on Wednesday,
August 12, 2020
Conference Title: IT Tech Packaging, Inc. Second Quarter 2020
Earnings Conference Call
Conference ID: 5729875
To attend the conference call, please register in advance of the
conference using the link:
http://apac.directeventreg.com/registration/event/5729875 to
complete the online registration at least 15 minutes prior to the
start of the call. Upon registering, the conference access
information including participant dial-in numbers, a Direct Event
passcode and a registrant ID will be provided to you via an
email.
This conference call will be broadcast live on the Internet and
can be accessed by all interested parties at
https://edge.media-server.com/mmc/p/fnexvsa9 . Please
access the link at least 15 minutes prior to the start of the call
to register, download, and install any necessary audio
software.
A playback will be available through 11:00 am ET on August 12,
2020 to 9:59 am ET on
August 19, 2020. To listen, please
dial+1-855-452-5696 if calling from the
United States, or +61-281-990-299 if calling
internationally. Use the conference ID 5729875 to access the
replay.
About IT Tech Packaging, Inc.
Founded in 1996, IT Tech Packaging, Inc. is a leading
manufacturer and distributor of diversified paper products and
single-use face masks in North
China. Using recycled paper as its primary raw material
(with the exception of its tissue paper products), ITP produces and
distributes three categories of paper products: corrugating medium
paper, offset printing paper and tissue paper products. With
production based in Baoding and Xingtai in North China's Hebei
Province, ITP is located strategically close to the
Beijing and Tianjin region, home to a growing base of
industrial and manufacturing activities and one of the largest
markets for paper products consumption in the country. ITP has been
listed on the NYSE American since December 2009. For more information, please
visit: http://www.itpackaging.cn/ .
Safe Harbor Statements
This press release may contain forward-looking statements. These
forward-looking statements involve inherent risks and uncertainties
that could cause actual results to differ materially from those
projected or anticipated, including risks outlined in the Company's
public filings with the Securities and Exchange Commission,
including the Company's latest annual report on Form 10-K. All
information provided in this press release speaks as of the date
hereof. Except as otherwise required by law, the Company undertakes
no obligation to update or revise its forward-looking
statements.
For more information, please contact:
At the Company
Email: ir@itpackaging.cn
Tel: +86 0312 8698215
Investor Relations:
EverGreen Consulting Inc.
Janice Wang
+86-13811768559
+1-908-510-2351
Email: ir@changqingconsulting.com
IT TECH PACKAGING,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
AS OF JUNE 30,
2020 AND DECEMBER 31, 2019
(Unaudited)
|
|
|
|
June
30,
|
|
|
December
31,
|
|
|
|
2020
|
|
|
2019
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
Cash and bank
balances
|
|
$
|
12,828,030
|
|
|
$
|
5,837,745
|
|
Restricted
cash
|
|
|
-
|
|
|
|
-
|
|
Accounts receivable
(net of allowance for doubtful accounts of $57,531 and $59,922 as
of June 30, 2020 and December 31, 2019, respectively)
|
|
|
3,164,142
|
|
|
|
3,119,311
|
|
Inventories
|
|
|
5,852,472
|
|
|
|
1,607,463
|
|
Prepayments and other
current assets
|
|
|
5,874,642
|
|
|
|
11,613,241
|
|
Due from related
parties
|
|
|
85,526
|
|
|
|
1,863,479
|
|
|
|
|
|
|
|
|
|
|
Total current
assets
|
|
|
27,804,812
|
|
|
|
24,041,239
|
|
|
|
|
|
|
|
|
|
|
Prepayment on
property, plant and equipment
|
|
|
1,412,529
|
|
|
|
1,433,445
|
|
Property, plant, and
equipment, net
|
|
|
142,422,375
|
|
|
|
151,616,852
|
|
Value-added tax
recoverable
|
|
|
2,444,304
|
|
|
|
2,621,841
|
|
Deferred tax asset
non-current
|
|
|
11,348,246
|
|
|
|
10,485,053
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
$
|
185,432,266
|
|
|
$
|
190,198,430
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
|
|
Short-term bank
loans
|
|
$
|
6,073,875
|
|
|
$
|
6,163,814
|
|
Current portion of
long-term loans from credit union
|
|
|
3,658,450
|
|
|
|
1,605,459
|
|
Accounts
payable
|
|
|
848,390
|
|
|
|
250,486
|
|
Advance from
customers
|
|
|
184,132
|
|
|
|
98,311
|
|
Notes
payable
|
|
|
-
|
|
|
|
-
|
|
Due to related
parties
|
|
|
657,433
|
|
|
|
539,985
|
|
Accrued payroll and
employee benefits
|
|
|
251,868
|
|
|
|
291,924
|
|
Other payables and
accrued liabilities
|
|
|
4,518,691
|
|
|
|
6,503,010
|
|
Income taxes
payable
|
|
|
399,051
|
|
|
|
1,382,471
|
|
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
|
16,591,890
|
|
|
|
16,835,460
|
|
|
|
|
|
|
|
|
|
|
Loans from credit
union
|
|
|
5,183,982
|
|
|
|
7,367,908
|
|
Derivative
liability
|
|
|
717,070
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
(including amounts of the consolidated VIE without recourse to the
Company of $16,746,095 and $19,460,257 as of June 30, 2020 and
December 31, 2019, respectively)
|
|
|
22,492,942
|
|
|
|
24,203,368
|
|
|
|
|
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
|
|
|
|
|
Common stock,
500,000,000 shares authorized, $0.001 par value per share,
28,514,816 and 22,054,816 shares issued
|
|
|
28,515
|
|
|
|
22,055
|
|
Additional paid-in
capital
|
|
|
53,974,869
|
|
|
|
51,155,174
|
|
Statutory earnings
reserve
|
|
|
6,080,574
|
|
|
|
6,080,574
|
|
Accumulated other
comprehensive loss
|
|
|
(8,523,112)
|
|
|
|
(6,057,537)
|
|
Retained
earnings
|
|
|
111,378,478
|
|
|
|
114,794,796
|
|
|
|
|
|
|
|
|
|
|
Total
stockholders' equity
|
|
|
162,939,324
|
|
|
|
165,995,062
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
and Stockholders' Equity
|
|
$
|
185,432,266
|
|
|
$
|
190,198,430
|
|
IT TECH PACKAGING,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE
INCOME
|
FOR THE THREE AND
SIX MONTHS ENDED JUNE 30, 2020 AND 2019
(Unaudited)
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
|
June
30,
|
|
|
June
30,
|
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
26,362,273
|
|
|
$
|
33,619,948
|
|
|
$
|
35,106,124
|
|
|
$
|
51,070,240
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
|
(23,803,444)
|
|
|
|
(30,711,819)
|
|
|
|
(32,717,014)
|
|
|
|
(48,354,577)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
2,558,829
|
|
|
|
2,908,129
|
|
|
|
2,389,110
|
|
|
|
2,715,663
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
|
(3,357,472)
|
|
|
|
(2,407,859)
|
|
|
|
(6,054,435)
|
|
|
|
(5,389,332
)
|
|
Gain on acquisition
of a subsidiary
|
|
|
-
|
|
|
|
31,397
|
|
|
|
-
|
|
|
|
31,397
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) Income from
Operations
|
|
|
(798,643)
|
|
|
|
531,667
|
|
|
|
(3,665,325)
|
|
|
|
(2,642,272)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income
(Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
9,451
|
|
|
|
1,556
|
|
|
|
15,241
|
|
|
|
60,374
|
|
Subsidy
income
|
|
|
(979)
|
|
|
|
236,288
|
|
|
|
142,019
|
|
|
|
236,288
|
|
Interest
expense
|
|
|
(241,436)
|
|
|
|
(238,771)
|
|
|
|
(486,154)
|
|
|
|
(494,040)
|
|
Loss on derivative
liability
|
|
|
(27,865)
|
|
|
|
-
|
|
|
|
(27,865)
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) Income
before Income Taxes
|
|
|
(1,059,472)
|
|
|
|
530,740
|
|
|
|
(4,022,084)
|
|
|
|
(2,839,650)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for
Income Taxes
|
|
|
79,441
|
|
|
|
(80,670)
|
|
|
|
605,766
|
|
|
|
567,125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Loss)
Income
|
|
|
(980,031)
|
|
|
|
450,070
|
|
|
|
(3,416,318)
|
|
|
|
(2,272,525)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
Comprehensive Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
|
124,179
|
|
|
|
(3,548,683)
|
|
|
|
(2,465,575)
|
|
|
|
(255,003)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Comprehensive Loss
|
|
$
|
(855,852)
|
|
|
$
|
(3,098,613)
|
|
|
$
|
(5,881,893)
|
|
|
$
|
(2,527,528)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Losses) Earnings
Per Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted
(Losses) Earnings per Share
|
|
$
|
(0.04)
|
|
|
$
|
0.02
|
|
|
$
|
(0.14)
|
|
|
$
|
(0.10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding –
Basic and Diluted
|
|
|
24,444,761
|
|
|
|
22,022,316
|
|
|
|
24,444,761
|
|
|
|
22,022,316
|
|
IT TECH PACKAGING,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
FOR THE SIX MONTHS
ENDED JUNE 30, 2020 AND 2019
(Unaudited)
|
|
|
|
|
Six Months
Ended
|
|
|
|
June
30,
|
|
|
|
2020
|
|
|
2019
|
|
|
|
|
|
|
|
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
|
Net income
|
|
$
|
(3,416,318)
|
|
|
$
|
(2,272,525)
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
7,496,314
|
|
|
|
7,789,459
|
|
Loss on derivative
liability
|
|
|
27,865
|
|
|
|
-
|
|
(Recovery from)
Allowance for bad debts
|
|
|
(1,525)
|
|
|
|
6,224
|
|
Share-based
compensation and expenses
|
|
|
1,242,000
|
|
|
|
-
|
|
Gain on acquisition
of a subsidiary
|
|
|
-
|
|
|
|
(31,397)
|
|
Deferred
tax
|
|
|
(1,021,699)
|
|
|
|
(1,259,134)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(89,311)
|
|
|
|
(311,265)
|
|
Prepayments and other
current assets
|
|
|
5,739,395
|
|
|
|
60,694
|
|
Inventories
|
|
|
(4,291,622)
|
|
|
|
(2,920,950)
|
|
Accounts
payable
|
|
|
604,823
|
|
|
|
502,310
|
|
Advance from
customers
|
|
|
87,729
|
|
|
|
102,170
|
|
Notes
payable
|
|
|
-
|
|
|
|
(3,691,999)
|
|
Related
parties
|
|
|
1,878,231
|
|
|
|
161,857
|
|
Accrued payroll and
employee benefits
|
|
|
(35,990)
|
|
|
|
39,237
|
|
Other payables and
accrued liabilities
|
|
|
(1,394,793)
|
|
|
|
558,026
|
|
Income taxes
payable
|
|
|
(968,474)
|
|
|
|
454,984
|
|
Net Cash Provided
by (Used in) Operating Activities
|
|
|
5,856,625
|
|
|
|
(812,309)
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
|
|
Purchases of
property, plant and equipment
|
|
|
(981,150)
|
|
|
|
(3,472,355)
|
|
Acquisition of a
subsidiary
|
|
|
-
|
|
|
|
(1,549,384)
|
|
|
|
|
|
|
|
|
|
|
Net Cash Used in
Investing Activities
|
|
|
(981,150)
|
|
|
|
(5,021,739)
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
|
|
Proceeds from
issuance of shares and warrants, net
|
|
|
2,273,360
|
|
|
|
-
|
|
Proceeds from short
term bank loans
|
|
|
-
|
|
|
|
3,987,359
|
|
Proceeds from credit
union loans
|
|
|
-
|
|
|
|
2,362,879
|
|
Repayment of bank
loans
|
|
|
-
|
|
|
|
(11,637,180)
|
|
|
|
|
|
|
|
|
|
|
Net Cash Provided
by (Used in) Financing Activities
|
|
|
2,273,360
|
|
|
|
(5,286,942)
|
|
|
|
|
|
|
|
|
|
|
Effect of Exchange
Rate Changes on Cash and Cash Equivalents
|
|
|
(158,550)
|
|
|
|
137,936
|
|
|
|
|
|
|
|
|
|
|
Net Increase
(Decrease) in Cash and Cash Equivalents
|
|
|
6,990,285
|
|
|
|
(10,983,054)
|
|
|
|
|
|
|
|
|
|
|
Cash, Cash
Equivalents and Restricted Cash - Beginning of
Period
|
|
|
5,837,745
|
|
|
|
12,117,425
|
|
|
|
|
|
|
|
|
|
|
Cash, Cash
Equivalents and Restricted Cash - End of Period
|
|
$
|
12,828,030
|
|
|
$
|
1,134,371
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Disclosure of Cash Flow Information:
|
|
|
|
|
|
|
|
|
Cash paid for
interest, net of capitalized interest cost
|
|
$
|
288,463
|
|
|
$
|
445,860
|
|
Cash paid for income
taxes
|
|
$
|
1,369,690
|
|
|
$
|
222,278
|
|
|
|
|
|
|
|
|
|
|
Cash and bank
balances
|
|
|
12,828,030
|
|
|
|
1,134,371
|
|
Restricted
cash
|
|
|
-
|
|
|
|
-
|
|
Total cash, cash
equivalents and restricted cash shown in the statement of cash
flows
|
|
|
12,828,030
|
|
|
|
1,134,371
|
|
View original
content:http://www.prnewswire.com/news-releases/it-tech-packaging-inc-announces-second-quarter-2020-financial-results-301110462.html
SOURCE IT Tech Packaging, Inc.