BAODING, China, March 7, 2019 /PRNewswire/ -- IT Tech Packaging,
Inc. (NYSE MKT: 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
fourth quarter and audited financial results for the
fiscal year ended December 31, 2018.
|
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|
|
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For the
Three Months Ended December 31,
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($
millions)
|
|
2018
|
|
2017
|
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%
Change
|
Revenues
|
|
24.99
|
|
35.44
|
|
-29.5%
|
Regular
Corrugating Medium Paper ("CMP")*
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19.77
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24.64
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-19.8%
|
Light-Weight
CMP**
|
|
5.30
|
|
5.15
|
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2.8%
|
Offset Printing
Paper
|
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0.00
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|
5.38
|
|
-100.0%
|
Tissue Paper
Products
|
|
0.00
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0.27
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-100.0%
|
Digital Photo
Paper
|
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0.00
|
|
0.00
|
|
NM
|
|
|
|
|
|
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Gross
profit
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2.24
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3.62
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-38.0%
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Gross profit
(loss) margin
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9.0%
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10.2%
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-1.2 pp
|
Regular
Corrugating Medium Paper ("CMP")*
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1 0.0%
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8.9%
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1.1 pp
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Light-Weight
CMP**
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4.9%
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10.0%
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-5.1 pp
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Offset Printing
Paper
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NM
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16.5%
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-16.5 pp
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Tissue Paper
Products
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NA
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5.8%
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NM
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Digital Photo
Paper
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NA
|
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NA
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NM
|
|
|
|
|
|
|
|
Operating
income (loss)
|
|
-5.08
|
|
-1.67
|
|
-203.4%
|
Net income
(loss)
|
|
-5.16
|
|
-1.64
|
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-215.6%
|
EBITDA
|
|
-1.66
|
|
2.04
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-181.7%
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Basic and
Diluted earnings (loss) per share
|
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-0.24
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-0.08
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-213.5%
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* Products
from PM6
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|
|
|
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** Products
from PM1
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|
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*** pp
represents percentage points
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- Revenue for the fourth quarter of 2018 decreased by 29.5% to
$25 million, primarily due to the
decrease in both sales volume and ASP of Regular CMP and no sales
recorded for offset printing paper.
- Gross profit for the fourth quarter of 2018 decreased by 38% to
$2.2 million. Gross margin decreased
by 1.2 percentage points to 9.0%. The gross margins for
Light-Weight CMP and Offset Printing Paper products continued to
decrease.
- Net loss was $5.2 million, or
loss per share of $0.24, compared to
net loss of $1.6 million, or loss per
share of $0.08, for the same period
of the prior year.
- Earnings before interest, taxes, depreciation and amortization
("EBITDA") decreased by 181.7% to $(1.7)
million.
Mr. Zhenyong Liu, Chairman and
Chief Executive Officer of the Company, commented, "With decreases
in both revenues and margins, our fourth quarter results
highlighted continued challenges facing our business. In late
January 2018, we temporarily
suspended production due to government-mandated restrictions on
natural gas supply. Though we resumed production in mid-March, the
Company incurred a net loss of $4
million in the first quarter of 2018. In the second half of
2018, we completed construction of one of our business expansion
projects, our first tissue paper production line, in Wei County
Industrial Park, launching it in December 2018. As production
in this line increases over the coming months, and with our
existing packaging equipment, we expect to see continuous cash flow
and improved financial conditions from 2019 sales. Looking ahead,
as China's paper market continues
to grow, government environmental protection heightens, and market
completion escalates, we will be focusing on actively diversifying
our product portfolio, opportunities for equipment upgrades,
reducing raw material costs, and leveraging new technologies."
Fourth Quarter 2018 Financial Results
Revenue
For the fourth quarter of 2018, total revenue decreased by
$10.45 million, or 29.5%, to
$24.99 million from $35.44 million for the same period of the prior
year. The decrease in total revenue was mainly due to the decrease
in both sales volume and ASP of Regular CMP and no sales recorded
for offset printing paper. The following table summarizes revenue,
volume and ASP by product for the fourth quarter of 2018 and 2017,
respectively:
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For the Three
Months Ended December 31,
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2018
|
|
2017
|
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Revenue
($'000)
|
|
Volume
(tonne)
|
|
ASP
($/tonne)
|
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Revenue
($'000)
|
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Volume
(tonne)
|
|
ASP
($/tonne)
|
Regular
CMP
|
19,765
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41,870
|
|
472
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24,638
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44,411
|
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555
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Light-Weight
CMP
|
5,296
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11,532
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459
|
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5,151
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9,294
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554
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Offset Printing
Paper
|
-
|
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-
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-
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5,381
|
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6,512
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826
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Tissue Paper
Products
|
-
|
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-
|
|
-
|
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269
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186
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1,448
|
Digital Photo
Paper
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Total
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25,061
|
|
53,402
|
|
469
|
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35,439
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60,403
|
|
587
|
Revenue from CMP, including both regular CMP and Light-Weight
CMP, decreased by $4.73 million, or
15.9%, to $25.06 million and
accounted for 100 % of total revenue for the fourth quarter of
2018, compared to $29.79 million, or
84.1% of total revenue, for the same period of the prior year. The
Company sold 53,402 tonnes of CMP at an ASP of $469/tonne in the fourth quarter of 2018,
compared to 53,705 tonnes at an ASP of $555/tonne in the same period of the prior
year.
Of the total CMP sales, revenue from regular CMP decreased by
$4.87 million, or 19.8%, to
$19.77 million, resulting from sales
of 41,871 tonnes at an ASP of $472/tonne, during the fourth quarter of 2018,
compared to revenue of $24.64
million, resulting from sales of 44,411 tonnes at an ASP of
$555/tonne, for the same period of
the prior year. Revenue from light-weight CMP increased by
$0.15 million, or 2.8%, to
$5.30 million, resulting from sales
of 11,533 tonnes at an ASP of $459/tonne for the fourth quarter of 2018,
compared to revenue of $5.15 million,
resulting from sales of 9,294 tonnes at an ASP of $554/tonne for the same period of the prior
year.
Revenue from offset printing paper decreased by $5.46 million, or 100%, to $0 million for the fourth quarter of 2018, from
$5.38 million for the same period of
the prior year. The Company sold 0 tonnes of offset printing paper
in the fourth quarter of 2018, compared to 6,512 tonnes at an ASP
of $826/tonne in the same period of
the prior year.
We had no revenue from tissue paper products for the fourth
quarter of 2018, compared to $0.27
million, resulting from sales of 185 tonnes at an ASP of
$1,456/tonne, for the fourth quarter
of 2017.
We process base tissue paper purchased from a long-term supplier
and produce finished tissue paper products, including toilet paper,
boxed and soft-packed tissues, handkerchief tissues and paper
napkins, as well as bathroom and kitchen paper towels that are
marketed and sold under the Dongfang Paper brand. In December 2018, we completed the construction and
installation and test of operation of PM8 and announced the
commercial launch of tissue paper production. We expect to commence
the full operation of production and sales of tissue paper products
in year 2019.
In June 2016, we suspended the
production of digital photo paper due to low market demand for our
products and now are considering renovating the line to produce
more competitive products. We expect that our digital photo paper
production will remain suspended for the near future.
Gross Profit and Gross Margin
Total cost of sales decreased by $9.08
million, or 28.5%, to $22.7
million for the fourth quarter of 2018, from $31.82 million for the same period of the prior
year. Cost of sales per tonne was $426 for the fourth quarter of 2018, compared to
$527 for the same period of the prior
year. The decrease in overall cost of sales per tonne was mainly
attributable to the decrease in the quantities of regular CMP sold,
partially offset by the increase in cost of recycled paper board
and increase in sales volume of light-weighted CMP in the fourth
quarter of 2018. Costs of sales per tonne for regular CMP and
light-weight CMP were, $425 and
$437, respectively, for the fourth
quarter of 2018, compared to $505 and
$499, respectively, for the same
period of the prior year.
Total gross profit decreased by $1.38
million, or 38%, to $2.24
million for the fourth quarter of 2018, from $3.6 million for the same period of the prior
year. The decrease in overall gross profit were mainly due to the
decrease in overall sales volume and decrease in average selling
prices of regular CMP and light-weight CMP as discussed above.
Overall gross margin was 9% for the fourth quarter of 2018,
compared to 10.2% for the same period of the prior year. Gross
margins for regular CMP, light-weight CMP were 10% and 4.9%,
respectively, for the fourth quarter of 2018, compared to 8.9% and
10%, respectively, for the same period of the prior year.
Selling, General and Administrative Expenses
Selling, general and administrative expenses ("SG&A")
increased by $0.44 million, or 14.7%,
to $3.43 million for the fourth
quarter of 2018 from $2.99 million
for the same period of the prior year. As a percentage of total
revenue, SG&A was 13.7% for the fourth quarter of 2018,
compared to 8.4% for the same period of the prior year.
Income(loss) from Operations
Loss from operations was $5.08
million for the fourth quarter of 2018, compared to loss
from operations of $1.67 million for
the same period of the prior year. Operating loss margin was 20.3%
for the fourth quarter of 2018, compared to operating loss margin
of 4.7% for the same period of the prior year.
Net Income (loss)
Net loss was $5.16 million, or
$0.24 per loss basic and diluted
share, for the fourth quarter of 2018, compared to net loss of
$1.64 million, or earnings per basic
and diluted share of $0.08, for the
same period of the prior year.
EBITDA
EBITDA decreased by $3.70 million,
or 181.7%, to $(1.7) million for the
fourth quarter of 2018 from $2.04
million for the same period of the prior year.
Note 1: Non-GAAP Financial Measures
In addition to our U.S. GAAP results, this press release
includes a discussion of EBITDA, a non-GAAP financial measure as
defined by the Securities and Exchange Commission ("SEC"). The
Company defines EBITDA as net income before interest, income taxes,
depreciation and amortization. EBITDA is a key measure used by
management to evaluate our results and make strategic decisions.
Management believes this measure is useful to investors because it
is an indicator of operational performance. Because not all
companies use identical calculations, the Company's presentation of
EBITDA may not be comparable to similarly titled measures of other
companies, and should not be viewed as an alternative to measures
of financial performance or changes in cash flows calculated in
accordance with the U.S. GAAP.
Reconciliation of
Net Income to EBITDA
|
(Amounts expressed
in US$)
|
|
|
|
|
|
For the
Three Months Ended December 31,
|
($
millions)
|
|
2018
|
|
|
2017
|
Net income
(loss)
|
|
-5.16
|
|
|
-1.64
|
Add: Income
tax
|
|
-0.22
|
|
|
-0.44
|
Net
interest expense
|
|
0.31
|
|
|
0.41
|
Depreciation and amortization
|
|
3.42
|
|
|
3.71
|
EBITDA
|
|
-1.66
|
|
|
2.04
|
Full Year 2018
Financial Results
|
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|
|
For the
Twelve Months Ended December 31,
|
|
($
millions)
|
|
2018
|
|
2017
|
|
%
Change
|
|
Revenues
|
|
86.75
|
|
117.02
|
|
-25.9%
|
|
Regular
Corrugating Medium Paper ("CMP")*
|
|
63.20
|
|
80.38
|
|
-21.4%
|
|
Light-Weight
CMP**
|
|
18.40
|
|
15.60
|
|
17.9%
|
|
Offset Printing
Paper
|
|
5.14
|
|
18.69
|
|
-72.5%
|
|
Tissue Paper
Products
|
|
0.00
|
|
2.36
|
|
-100.0%
|
|
Digital Photo
Paper
|
|
0.01
|
|
0.00
|
|
NM
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
5.8
|
|
20.0
|
|
-70.8%
|
|
Gross
margin
|
|
6.7%
|
|
17.1%
|
|
-10.3 pp
|
|
Regular
Corrugating Medium Paper ("CMP")*
|
|
7.7%
|
|
16.9%
|
|
-9.3 pp
|
|
Light-Weight
CMP**
|
|
5.0%
|
|
18.9%
|
|
-13.9 pp
|
|
Offset Printing
Paper
|
|
0.8%
|
|
17.3%
|
|
-16.6 pp
|
|
Tissue Paper
Products
|
|
N/A
|
|
6.4%
|
|
NM
|
|
Digital Photo
Paper
|
|
N/A
|
|
0.0%
|
|
NM
|
|
|
|
|
|
|
|
|
|
Operating
income (loss)
|
|
-11.2
|
|
4.7
|
|
-338.9%
|
|
Net income
(loss)
|
|
-10.5
|
|
1.7
|
|
-735.4%
|
|
EBITDA
|
|
3.4
|
|
19.4
|
|
-82.5%
|
|
Basic and
Diluted earnings per share
|
|
-0.49
|
|
0.08
|
|
-712.5%
|
|
|
|
|
|
|
|
|
|
* Products
from PM6
|
|
|
|
|
|
|
|
** Products
from PM1
|
|
|
|
|
|
|
|
*** pp
represents percentage points
|
|
|
|
|
|
|
|
Revenue
For the year ended December 31,
2018, total revenue decreased by $30.28 million, or 25.9%, to $86.75 million from $117.02 million for 2017. The decrease in total
revenue was mainly due to the decrease in sales volume of Regular
CMP and offset printing paper, which was partially offset by the
increase in ASP of these products.
We decreased the production volume of regular CMP, light-Weight
CMP and offset printing paper and sales of these products due to
environmental conditions in Northern
China. The government strengthened its pollution control and
rectification measures, resulting in restrictions on production in
the manufacturing industry. In addition, production of tissue paper
was suspended during the year 2018. In December 2018, we completed the construction and
installation and test of operation of PM8 and announced the
commercial launch of tissue paper production. We expect to commence
the full operation of production and sales of tissue paper products
in year 2019. As a result, the production volume of regular CMP,
light-Weight CMP and offset printing paper and sales of these
products decreased in 2018 as compared to 2017. The following table
summarizes revenue, volume and ASP by product for 2018 and 2017,
respectively:
|
For the Twelve
Months Ended December 31,
|
|
2018
|
|
2017
|
|
Revenue
($'000)
|
|
Volume
(tonne)
|
|
ASP
($/tonne)
|
|
Revenue
($'000)
|
|
Volume
(tonne)
|
|
ASP
($/tonne)
|
Regular
CMP
|
63,199
|
|
116,012
|
|
545
|
|
80,379
|
|
173,399
|
|
464
|
Light-Weight
CMP
|
18,397
|
|
34,646
|
|
531
|
|
15,600
|
|
33,690
|
|
463
|
Offset Printing
Paper
|
5,137
|
|
6,191
|
|
830
|
|
18,688
|
|
26,610
|
|
702
|
Tissue Paper
Products
|
-
|
|
-
|
|
-
|
|
2,357
|
|
1,804
|
|
1,306
|
Digital Photo
Paper
|
14
|
|
-
|
|
NM
|
|
-
|
|
-
|
|
-
|
Total
|
86,747
|
|
156,849
|
|
553
|
|
117,024
|
|
235,503
|
|
497
|
Revenue from CMP, including both regular CMP and light-Weight
CMP, decreased by $14.38 million, or
15%, to $81.60 million, and accounted
for 94.1% of total revenue for 2018, compared to $95.98 million, or 82.0% of total revenue for
2017. The Company sold 150,658 tonnes of CMP at an ASP of
$542/tonne in 2018, compared to
207,089 tonnes at an ASP of $463/tonne in 2017.
Of the total CMP sales, revenue from regular CMP decreased by
$17.18 million, or 21.4%, to
$63.20 million, resulting from sales
of 116,012 tonnes at an ASP of $545/tonne, for 2018, compared to revenue of
$80.38 million, resulting from sales
of 173,399 tonnes at an ASP of $464/tonne for 2017. Revenue from light-weight
CMP increased by $2.80 million, or
17.9%, to $18.40 million, resulting
from sales of 34,646 tonnes at an ASP of $531/tonne for 2018, compared to revenue of
$15.60 million, resulting from sales
of 33,690 tonnes at an ASP of $463/tonne for 2017.
Revenue from offset printing paper decreased by $13.55 million, or 72.5%, to $5.14 million for 2018, from $18.69 million for 2017. The Company sold 6,191
tonnes of offset printing paper at an ASP of $830/tonne in 2018, compared to 26,610 tonnes at
an ASP of $702/tonne in 2017.
Revenue from tissue paper products decreased from $2.36 million for 2017, or 100%, to $0 million, for 2018. The Company sold 0 tonnes
of tissue paper products, compared to 1,804 tonnes at an ASP of
$1,306/tonne in 2017.
Revenue from digital photo paper were $13,622 for year 2018. In June 2016, we suspended the production of digital
photo paper due to low market demand for our products and now are
considering renovating the line to produce more competitive
products. We expect that our digital photo paper production will
remain suspended for the near future.
Gross Profit and Gross Margin
Total cost of sales decreased by $16.16
million, or 16.65%, to $80.93
million for 2018, from $97.07
million for 2017. This was mainly a result of the
decrease in volume sold, partially offset by increase in cost of
recycled paper board and recycled white scrap paper. Cost of sales
per tonne was $516 for 2018, compared
to $412 for 2017. The increase in
overall cost of sales per tonne was mainly attributable to the
higher average unit purchase costs (net of applicable value added
tax) of recycled paper board in 2018 as compared to 2017. Costs of
sales per tonne for regular CMP, light-weight CMP, offset printing
paper and tissue paper products, $503, $504,
$823 and $nil, respectively, for
2018, compared to $385, $375, $581,
$1,222, respectively, for 2017.
Total gross profit decreased by $14.14
million, or 70.8%, to $5.82
million for 2018, from $19.96
million for 2017. Overall gross margin decreased by 10.3
percentage points to 6.7% for 2018 from 17.1% for 2017. Gross
margin for regular CMP, light-weight CMP, offset printing paper and
tissue paper, was 7.7%, 5.0%, 0.8% and nil, respectively, for 2018,
compared to 16.9%, 18.9%, 17.3% and 6.4%, respectively, for 2017.
The decrease in gross profit and gross margin were mainly due to
the increase in average unit purchase costs (net of applicable
value added tax) of recycled paper board and recycled white scrap
paper and decrease in overall sales volume, partially offset by an
increase in average selling prices as discussed above.
Selling, General and Administrative Expenses
Selling, general and administrative expenses ("SG&A")
increased by $1.79 million, or 15.8%,
to $13.10 million for 2018, from
$11.31 million for 2017. As a
percentage of total revenue, SG&A was 15.1% for 2018, compared
to 9.7% for 2017. The increase was mainly due to (i) compensation
expenses resulting from the issuance of 534,500 shares of common
stock under our compensatory incentive plans in the year ended
December 31, 2018, valued at
$470,360 and (ii) the depreciation of
idle equipment during the suspension of production in the first
quarter and third quarter of 2018.
Loss from Operations
Income from operations decreased by $15.86 million, or 338.9%, to operating loss of
$11.18 million for 2018 from
$4.68 million for 2017. Operating
loss margin was 12.9% for 2018, compared to 4.0% for 2017.
Net Income (loss)
Net loss was $10.55 million, or
$0.49 per loss basic and diluted
share, for 2018, compared to net income of $1.66 million, or earnings per basic and diluted
share of $0.08, for the same period
of the prior year.
EBITDA
EBITDA decreased by $16.00
million, or 82.5%, to $ 3.39
million for 2018, from $19.39
million for 2017.
Note 2: Non-GAAP Financial Measures
In addition to our U.S. GAAP results, this press release
includes a discussion of EBITDA, a non-GAAP financial measure as
defined by the Securities and Exchange Commission ("SEC"). The
Company defines EBITDA as net income before interest, income taxes,
depreciation and amortization. EBITDA is a key measure used by
management to evaluate our results and make strategic decisions.
Management believes this measure is useful to investors because it
is an indicator of operational performance. Because not all
companies use identical calculations, the Company's presentation of
EBITDA may not be comparable to similarly titled measures of other
companies, and should not be viewed as an alternative to measures
of financial performance or changes in cash flows calculated in
accordance with the U.S. GAAP.
Reconciliation of
Net Income to EBITDA
|
(Amounts expressed
in US$)
|
|
|
|
|
|
For the
Twelve Months Ended December 31,
|
($
millions)
|
|
2018
|
|
|
2017
|
Net income
(loss)
|
|
-10.55
|
|
|
1.66
|
Add: Income
tax
|
|
-1.85
|
|
|
0.66
|
Net
interest expense
|
|
1.49
|
|
|
2.43
|
Depreciation and amortization
|
|
14.29
|
|
|
14.63
|
EBITDA
|
|
3.39
|
|
|
19.39
|
Cash, Liquidity and Financial Position
Our cash, cash equivalents and restricted cash as of
December 31, 2018 was $12.12 million, an increase of $3.1 million, from $9.02
million as of December 31,
2017. Net cash provided by operating activities was
$9.79 million for 2018, compared to
$18.15 million for 2017. Net cash
used in investing activities was $2.2
million for 2018, compared to $9.32
million for 2017. Net cash used by financing activities was
$3.17 million for 2018, compared to
$4.92 million for 2017.
As of December 31, 2018, we had a
net working capital deficit of $5.48
million, an increase of $3.7
million, from the net working capital deficit of
$1.77 million at December 31, 2017. Substantially all cash and
cash equivalents are cash deposits in bank accounts. Restricted
cash of $3.64 million is deposited at
the Bank of Cangzhou for purpose of securing the bank acceptance
notes from the bank. The acceptance notes was paid off in January
2019.
Recent Development
In December 2018, the Company
commercially launched its tissue paper production, following
the completion of construction and equipment installation, the
receipt of proper approvals, including wastewater discharge permit,
from local authorities, and the success of trial production of its
first tissue paper production line, the PM8 Production Line which
is located at Wei County Industrial Park in Hebei Province, China, with annual production capacity of
15,000 tonnes.
Earnings Conference Call
The Company's management will host a conference call to discuss
its fourth quarter and fiscal year 2018 financial results
at 8:00 am US Eastern Time (5:00
am US Pacific Time/9:00 pm
Beijing Time) on Friday, March 8, 2019.
To attend the conference call, please dial in using the
information below. When prompted upon dialing-in, please provide
the conference ID or ask for the "IT Tech Packaging Fourth Quarter
and Fiscal Year 2018 Earnings Conference Call."
Date:
|
Friday, March 8,
2019
|
Time:
|
8:00 am ET
|
International Toll
Free:
|
United States:
+1-855-500-8701
Mainland China:
400-120-0654
Hong Kong:
800-906-606
International:
+65-6713-5440
|
Conference
ID:
|
1988048
|
This conference call will be broadcast live over the Internet,
and can be accessed by all interested parties
at http://www.itpacking.cn/ or
https://edge.media-server.com/m6/p/e5c2bjyr
Please access the link at least fifteen 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 March 8,
2019 to 8:59 am ET on
March 16, 2019. To listen, please
dial+1-855-452-5696 if calling from the
United States, or +61-290-034-211 if calling
internationally. Use the passcode 1988048 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 in
North China. Using recycled paper
as its primary raw material (with the exception of its digital
photo paper and tissue paper products), the Company produces and
distributes three categories of paper products: corrugating medium
paper, offset printing paper and tissue paper products. With
production based in Baoding, Xingtai and Wei County in North China's Hebei
Province, the Company 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. The Company
has been listed on the NYSE MKT since December 2009.
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:
Investor Relations:
Tony Tian,
CFA
Weitian Group LLC
Email: ttian@weitianco.com
Phone: +1-732-910-9692
IT TECH PACKING,
INC.
|
CONSOLIDATED
BALANCE SHEETS
|
AS OF DECEMBER 31,
2018 AND 2017
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2018
|
|
|
2017
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
Cash and bank
balances
|
|
$
|
8,474,809
|
|
|
$
|
2,895,790
|
|
Restricted
cash
|
|
|
3,642,616
|
|
|
|
6,121,637
|
|
Accounts receivable
(net of allowance for doubtful accounts of $58,707 and $37,626
as of December 31, 2018 and December 2017,
respectively)
|
|
|
2,876,632
|
|
|
|
1,843,682
|
|
Inventories
|
|
|
2,923,516
|
|
|
|
8,474,165
|
|
Prepayments and other
current assets
|
|
|
6,241,299
|
|
|
|
651,523
|
|
|
|
|
|
|
|
|
|
|
Total current
assets
|
|
|
24,158,872
|
|
|
|
19,986,797
|
|
|
|
|
|
|
|
|
|
|
Property, plant, and
equipment, net
|
|
|
167,829,716
|
|
|
|
189,388,709
|
|
Value-added tax
recoverable
|
|
|
2,810,331
|
|
|
|
3,041,416
|
|
Deferred tax asset
non-current
|
|
|
8,277,091
|
|
|
|
6,572,559
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
$
|
203,076,010
|
|
|
$
|
218,989,481
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
|
|
Short-term bank
loans
|
|
$
|
11,802,075
|
|
|
$
|
7,192,923
|
|
Current portion of
long-term loans from credit union
|
|
|
2,491,549
|
|
|
|
6,366,502
|
|
Accounts
payable
|
|
|
629,054
|
|
|
|
422,705
|
|
Notes
payable
|
|
|
3,642,616
|
|
|
|
6,121,637
|
|
Due to related
parties
|
|
|
413,336
|
|
|
|
60,378
|
|
Accrued payroll and
employee benefits
|
|
|
213,536
|
|
|
|
231,247
|
|
Other payables and
accrued liabilities
|
|
|
10,222,796
|
|
|
|
836,337
|
|
Income taxes
payable
|
|
|
219,305
|
|
|
|
525,804
|
|
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
|
29,634,267
|
|
|
|
21,757,533
|
|
|
|
|
|
|
|
|
|
|
Loans from credit
union
|
|
|
4,706,259
|
|
|
|
1,193,719
|
|
Loans from a related
party
|
|
|
2,185,569
|
|
|
|
10,712,865
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
(including amounts of the consolidated VIE without recourse to
the
Company of $34,008,908 and $31,235,520 as of
December 31, 2018 and 2017,
respectively)
|
|
|
36,526,095
|
|
|
|
33,664,117
|
|
|
|
|
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
|
|
|
|
|
Common stock,
500,000,000 shares authorized, $0.001 par value per share,
20,022,316 and 21,450,316 shares issued
and outstanding as of December 31,
2018 and 2017, respectively
|
|
|
22,360
|
|
|
|
21,450
|
|
Additional paid-in
capital
|
|
|
51,137,319
|
|
|
|
50,635,243
|
|
Statutory earnings
reserve
|
|
|
6,080,574
|
|
|
|
6,080,574
|
|
Accumulated other
comprehensive (loss) income
|
|
|
(3,263,952)
|
|
|
|
5,468,799
|
|
Retained
earnings
|
|
|
112,573,614
|
|
|
|
123,119,298
|
|
|
|
|
|
|
|
|
|
|
Total
stockholders' equity
|
|
|
166,549,915
|
|
|
|
185,325,364
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
and Stockholders' Equity
|
|
$
|
203,076,010
|
|
|
$
|
218,989,481
|
|
IT TECH PACKING,
INC.
|
CONSOLIDATED
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS)
|
FOR THE YEARS
ENDED DECEMBER 31, 2018 AND 2017
|
|
|
|
|
|
|
Year
Ended
|
|
|
|
December
31,
|
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
86,746,758
|
|
|
$
|
117,023,578
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
|
(80,926,357)
|
|
|
|
(97,067,627)
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
5,820,401
|
|
|
|
19,955,951
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
|
(13,098,373)
|
|
|
|
(11,307,395)
|
|
Loss from disposal of
property, plant and equipment
|
|
|
(9,881)
|
|
|
|
(1,677,262)
|
|
Loss on impairment of
assets
|
|
|
(3,894,461)
|
|
|
|
(2,291,027)
|
|
|
|
|
|
|
|
|
|
|
(Loss) Income from
Operations
|
|
|
(11,182,314)
|
|
|
|
4,680,267
|
|
|
|
|
|
|
|
|
|
|
Other Income
(Expense):
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
36,632
|
|
|
|
34,590
|
|
Subsidy
income
|
|
|
241,189
|
|
|
|
41,529
|
|
Interest
expense
|
|
|
(1,492,119)
|
|
|
|
(2,433,770)
|
|
|
|
|
|
|
|
|
|
|
(Loss) Income
before Income Taxes
|
|
|
(12,396,612)
|
|
|
|
2,322,616
|
|
|
|
|
|
|
|
|
|
|
Provision for
Income Taxes
|
|
|
1,850,928
|
|
|
|
(662,828)
|
|
|
|
|
|
|
|
|
|
|
Net (Loss)
Income
|
|
|
(10,545,684)
|
|
|
|
1,659,788
|
|
|
|
|
|
|
|
|
|
|
Other
Comprehensive (Loss) Income
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
|
(8,732,751)
|
|
|
|
10,910,190
|
|
|
|
|
|
|
|
|
|
|
Total
Comprehensive (Loss) Income
|
|
$
|
(19,278,435)
|
|
|
$
|
12,569,978
|
|
|
|
|
|
|
|
|
|
|
(Losses) Earnings
Per Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted
(Losses) Earnings per Share
|
|
$
|
(0.49)
|
|
|
$
|
0.08
|
|
|
|
|
|
|
|
|
|
|
Outstanding –
Basic and Diluted
|
|
|
21,618,305
|
|
|
|
21,450,316
|
|
IT TECH PACKING,
INC.
|
CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
|
FOR THE YEARS
ENDED DECEMBER 31, 2018 AND 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January
1,
2017
|
|
21,450,316
|
|
$
|
21,450
|
|
$
|
50,635,243
|
|
$
|
6,080,574
|
|
$
|
(5,441,391)
|
|
$
|
121,459,510
|
|
$
|
172,755,386
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation
adjustment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,910,190
|
|
|
|
|
|
10,910,190
|
|
Net income for the
year
of 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,659,788
|
|
|
1,659,788
|
|
Balance at
December
31, 2017
|
|
21,450,316
|
|
|
21,450
|
|
|
50,635,243
|
|
|
6,080,574
|
|
|
5,468,799
|
|
|
123,119,298
|
|
|
185,325,364
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of shares
to
officer and directors
|
|
534,500
|
|
|
535
|
|
|
469,826
|
|
|
|
|
|
|
|
|
|
|
|
470,361
|
|
Issuance of shares
to
Weitian
|
|
37,500
|
|
|
375
|
|
|
32,250
|
|
|
|
|
|
|
|
|
|
|
|
32,625
|
|
Foreign
currency
translation
adjustment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8,732,751)
|
|
|
|
|
|
(8,732,751)
|
|
Net loss for the year
of
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10,545,684)
|
|
|
(10,545,684)
|
|
Balance at
December
31, 2018
|
|
22,022,316
|
|
$
|
22,360
|
|
$
|
51,137,319
|
|
$
|
6,080,574
|
|
$
|
(3,263,952)
|
|
$
|
112,573,614
|
|
$
|
166,549,915
|
|
IT TECH PACKING,
INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
FOR THE YEARS
ENDED DECEMBER 31, 2018 AND 2017
|
|
|
|
Year Ended
|
|
|
|
December
31,
|
|
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
Net income
|
|
$
|
(10,545,684)
|
|
$
|
1,659,788
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
14,290,919
|
|
|
14,633,780
|
|
Loss from disposal
and impairment of property, plant and equipment
|
|
|
4,524,581
|
|
|
3,968,289
|
|
(Recovery from)
Allowance for bad debts
|
|
|
23,676
|
|
|
(45,309)
|
|
Share-based
compensation expenses
|
|
|
470,361
|
|
|
-
|
|
Deferred
tax
|
|
|
(2,089,439)
|
|
|
(3,010,577)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(1,183,782)
|
|
|
2,265,428
|
|
Prepayments and other
current assets
|
|
|
(5,726,546)
|
|
|
(79,264)
|
|
Inventories
|
|
|
5,322,320
|
|
|
(2,417,942)
|
|
Accounts
payable
|
|
|
234,448
|
|
|
(166,464)
|
|
Advance from
customers
|
|
|
-
|
|
|
(29,663)
|
|
Notes
payable
|
|
|
(2,261,147)
|
|
|
3,707,933
|
|
Due to related
parties
|
|
|
150,743
|
|
|
-
|
|
Accrued payroll and
employee benefits
|
|
|
(6,855)
|
|
|
8,111
|
|
Other payables and
accrued liabilities
|
|
|
6,878,137
|
|
|
(1,503,275)
|
|
Income taxes
payable
|
|
|
(291,119)
|
|
|
(839,047)
|
|
Net Cash Provided
by Operating Activities
|
|
|
9,790,613
|
|
|
18,151,788
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
|
Purchases of
property, plant and equipment
|
|
|
(2,198,852)
|
|
|
(9,380,702)
|
|
Proceeds from sale of
property, plant and equipment
|
|
|
-
|
|
|
59,066
|
|
|
|
|
|
|
|
|
|
Net Cash Used in
Investing Activities
|
|
|
(2,198,852)
|
|
|
(9,321,636)
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
|
Proceeds from related
party loans
|
|
|
4,522,295
|
|
|
-
|
|
Repayments of related
party loans
|
|
|
(12,813,169)
|
|
|
-
|
|
Proceeds from short
term bank loans
|
|
|
12,210,196
|
|
|
12,903,609
|
|
Repayment of bank
loans
|
|
|
(12,149,899)
|
|
|
(11,153,463)
|
|
Proceeds from credit
union loans
|
|
|
5,064,970
|
|
|
2,373,077
|
|
Payment of capital
lease obligation
|
|
|
-
|
|
|
(9,040,260)
|
|
|
|
|
|
|
|
|
|
Net Cash Used in
Financing Activities
|
|
|
(3,165,607)
|
|
|
(4,917,037)
|
|
|
|
|
|
|
|
|
|
Effect of Exchange
Rate Changes on Cash and Cash Equivalents
|
|
|
(1,326,156)
|
|
|
609,348
|
|
|
|
|
|
|
|
|
|
Net Increase
(Decrease) in Cash and Cash Equivalents
|
|
|
3,099,998
|
|
|
4,522,463
|
|
|
|
|
|
|
|
|
|
Cash,
Cash Equivalents and Restricted Cash - Beginning of
Year
|
|
|
9,017,427
|
|
|
4,494,964
|
|
|
|
|
|
|
|
|
|
Cash, Cash
Equivalents and Restricted Cash - End of Year
|
|
$
|
12,117,425
|
|
$
|
9,017,427
|
|
|
|
|
|
|
|
|
|
Supplemental
Disclosure of Cash Flow Information:
|
|
|
|
|
|
|
|
Cash paid for
interest, net of capitalized interest cost
|
|
$
|
1,866,093
|
|
$
|
1,359,343
|
|
Cash paid for income
taxes
|
|
$
|
515,001
|
|
$
|
3,247,406
|
|
|
|
|
|
|
|
|
|
Cash and bank
balances
|
|
|
8,474,809
|
|
|
2,895,790
|
|
Restricted
cash
|
|
|
3,642,616
|
|
|
6,121,637
|
|
Total cash, cash
equivalents and restricted cash shown in the statement of cash
flows
|
|
|
12,117,425
|
|
|
9,017,427
|
|
View original
content:http://www.prnewswire.com/news-releases/it-tech-packaging-inc-announces-fourth-quarter-and-fiscal-year-2018-financial-results-300808999.html
SOURCE IT Tech Packaging, Inc.