BAODING, China, March 23, 2020 /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, 2019.
"Our revenues and profitability continued to improve in 2019 as
we shook off the effects of the 2018 production suspensions
resulting from air-pollution controls, in part due to our 2018
equipment upgrades. Our total revenue was $117.6 million, a 35.6% year-over-year increase,
resulting from a 59.5% growth of overall sales volume that was
partially offset by a 15% decrease in average selling prices over
all categories of products," commented by Mr. Zhengyong Liu,
Chairman and Chief Executive Officer of the Company.
"With 135.1% and 121.1% growth in gross profit and net income,
respectively, our margins and profitability substantially improved
in fiscal year 2019 thanks to a continued increase in sales volume
for all products, combined with decreases in operating expenses.
With completion of trial operation of our PM9 production line in
the fourth quarter of 2019, our tissue paper products recorded
total sales of $6.4 million from both
PM8 and PM9 in the year. In addition, with $20.4 million of sales, we delivered 297.8%
growth in offset printing paper for 2019.
"Despite a short delay in production resulting from Covid-19 in
China in early 2020, the
stabilization of orders in recent months gives us reason to be
optimistic for stable growth in 2020. As a leading papermaking
enterprises situated in Hebei
Province which surrounds Beijing-Tianjin, the largest metropolitan area in
North China, we have a large
market for our products and easy access to lower costs of raw
materials and logistics. Thus we will continue take such advantages
to improve our capabilities to deliver sustainable growth and
create long-term value to our shareholders."
Fourth Quarter 2019 Unaudited Financial Results
|
|
For the
Three Months Ended December 31,
|
($
millions)
|
|
2019
|
|
2018
|
|
%
Change
|
Revenues
|
|
33.61
|
|
24.99
|
|
34.5%
|
Regular
Corrugating Medium Paper ("CMP")*
|
|
19.61
|
|
19.77
|
|
-0.8%
|
Light-Weight
CMP**
|
|
5.08
|
|
5.30
|
|
-4.0%
|
Offset Printing
Paper
|
|
7.16
|
|
-0.08
|
|
NM
|
Tissue Paper
Products
|
|
1.75
|
|
0.00
|
|
NM
|
|
|
|
|
|
|
|
Gross
profit
|
|
5.60
|
|
2.24
|
|
149.9%
|
Gross profit
(loss) margin
|
|
16.7%
|
|
9.0%
|
|
7.7 pp****
|
Regular
Corrugating Medium Paper ("CMP")*
|
|
15.4%
|
|
10.0%
|
|
5.3 pp****
|
Light-Weight
CMP**
|
|
18.3%
|
|
4.9%
|
|
13.4
pp****
|
Offset Printing
Paper
|
|
33.7%
|
|
4.2%
|
|
29.5
pp****
|
Tissue Paper
Products***
|
|
-43.1%
|
|
-
|
|
NM
|
|
|
|
|
|
|
|
Operating
income (loss)
|
|
3.19
|
|
-5.08
|
|
162.8%
|
Net
income
|
|
2.16
|
|
-5.16
|
|
119.4%
|
EBITDA
|
|
7.00
|
|
-1.66
|
|
521.7%
|
Basic and
Diluted earnings (loss) per share
|
|
0.10
|
|
-0.24
|
|
142.1%
|
|
|
|
|
|
|
|
* Products
from PM6
|
|
|
|
|
|
|
** Products
from PM1
|
|
|
|
|
|
|
*** Products
from PM8 and PM9
|
|
|
|
|
|
|
**** pp
represents percentage points
|
|
|
|
|
|
|
- Total sales volume of CMP, offset printing paper and tissue
paper products increased by 36.1% to 72,654tonnes
- Revenue increased by 34.5% to $33.6
million, primarily attributable to increase in sales volume
of corrugating medium paper ("CMP"), offset printing paper and
tissue paper products, partially offset by the decreases in average
selling prices (ASP) for both CMP
- Gross profit increased by 149.9% to $5.6
million. Gross margin increased by 7.7 percentage point to
16.7%. The increase in gross profit were primarily due to the
decrease in average cost of sales per tonne for CMP, which was
attributable to the lower average unit purchase costs of recycled
paper board and recycled white scrap paper used as raw material for
CMP products. Gross margins over regular CMP, Light-Weight CMP
products and offset printing paper product increased to 15.4%,
18.3% and 33.7%, respectively
- Income from operations increased by 162.8% to $3.2 million, compared to loss from operations of
$5.1 million for the same period of
last year
- Net income was $2.2 million, an
increase of $7.4 million, or 119.4%,
from net loss of $5.2 million for the
same period of last year. Earnings per basic and diluted share was
$0.10, compared to loss per basic and
diluted share of $0.24, for the same
period of last year
- Earnings before interest, taxes, depreciation and amortization
("EBITDA") increased by 521.7% to $7
million
Revenue
For the fourth quarter of 2019, total revenue increased by
$8.6 million, or 34.5%, to
$33.6 million from $25 million for the same period of last year. The
increase in total revenue was mainly due to contribution of sales
from offset printing paper and tissue paper products, partially
offset by the decreases in average selling prices (ASP) for both
CMP products. Total sales volume of CMP, offset printing paper and
tissue paper products during the period increased by 36.1% to
72,654 tonnes, compared to 53,402 tonnes sold during the same
period of 2018.
The following table summarizes revenue, volume and ASP by
product for the fourth quarter of 2019 and 2018, respectively:
|
For the
Three Months Ended December 31,
|
|
2019
|
|
2018
|
|
Revenue
($'000)
|
|
Volume
(tonne)
|
|
ASP
($/tonne)
|
|
Revenue
($'000)
|
|
Volume
(tonne)
|
|
ASP
($/tonne)
|
Regular
CMP
|
19,610
|
|
47,063
|
|
417
|
|
19,765
|
|
41,871
|
|
472
|
Light-Weight
CMP
|
5,083
|
|
12,582
|
|
404
|
|
5,296
|
|
11,533
|
|
459
|
Offset Printing
Paper
|
7,162
|
|
10,450
|
|
685
|
|
(75)
|
|
-
|
|
NM
|
Tissue Paper
Products
|
1,751
|
|
2,558
|
|
684
|
|
-
|
|
-
|
|
-
|
Total
|
33,606
|
|
72,653
|
|
463
|
|
24,986
|
|
53,404
|
|
468
|
Revenue from CMP, including both regular CMP and light-Weight
CMP, decreased by $0.4 million, or
1.5%, to $24.7 million and accounted
for 73.5% of total revenue for the fourth quarter of 2019, compared
to $25 million, or 100% of total
revenue, for the same period of the prior year. The Company sold
59,646 tonnes of CMP at an ASP of $414/tonne in the fourth quarter of 2019,
compared to 53,402 tonnes at an ASP of $469/tonne in the same period of the prior
year.
Of the total CMP sales, revenue from regular CMP slightly
decreased by $0.2 million, or 0.8%,
to $19.6 million, resulting from
sales of 47,063 tonnes at an ASP of $417/tonne, during the fourth quarter of 2019,
compared to revenue of $19.8 million,
resulting from sales of 41,870 tonnes at an ASP of $472/tonne, for the same period of the prior
year. Revenue from light-weight CMP decreased by $0.2 million, or 4%, to $5.1 million, resulting from sales of 12,582
tonnes at an ASP of $404/tonne for
the fourth quarter of 2019, compared to revenue of $5.3 million, resulting from sales of 11,532
tonnes at an ASP of $459/tonne for
the same period of the prior year.
Revenues from offset printing paper was $7.2 million for the fourth quarter of 2019 and
$0 million for the same period of the
prior year. The Company sold 10,450 tonnes of offset printing paper
at an ASP of $685/tonne in the fourth
quarter of 2019.
With the completion of installation and trial operation of PM8
and PM9, the production and sales of tissue paper products have
increased steadily in 2019. Revenue from tissue paper products was
$1.8 million, resulting from sales of
2,558 tonnes at an ASP of $684/tonne,
for the fourth quarter of 2019.
Gross Profit and Gross Margin
Total cost of sales increased by $5.3
million, or 23.2%, to $28
million for the fourth quarter of 2019 from $22.7 million for the same period of last year.
The increase in the total cost of sales was mainly a result of the
increase in sales volume, partially offset by the decreases in
costs of recycled paper board and recycled white scrap paper.
Overall cost of sales per tonne was $388 for the fourth quarter of 2019, compared to
$426 for the same period of the prior
year. The decrease in overall cost of sales per tonne was mainly
due to decreased material costs, especially lower average unit
purchase costs of recycled paper board and recycled white scrap
paper in the fourth quarter of 2019. Costs of sales per tonne for
regular CMP, light-weight CMP, offset printing paper, and tissue
paper products were $353,
$330, $454, and $979,
respectively, for the fourth quarter of 2019, compared to
$425, $437, $nil and $nil, respectively, for the same
period of the prior year.
Gross profit increased by $3.4
million, or 149.9%, to $5.6
million for the fourth quarter of 2019 from $2.2 million for the same period of the prior
year. Overall gross margin was 16.7% for the fourth quarter of
2019, compared to 9.0% for the same period of the prior year. The
increase in gross profit and gross margin were mainly related to i)
the increase in sales volume of CMP, offset printing paper and
tissue paper and ii) the decrease of average unit purchase price of
recycled paper board as raw material for CMP, partially offset by
the decrease of ASP of CMP products. Gross margins for regular CMP,
light-weight CMP, offset printing paper, and tissue paper products
were 15.4%, 18.3%, 33.7%, and negative 43.1%, respectively, for the
fourth quarter of 2019, compared to 10.0%, 4.9%, 4.2%, and nil,
respectively, for the same period of the prior year.
Selling, General and Administrative Expenses
Selling, general and administrative expenses ("SG&A")
decreased by $1.1 million, or 30.9%,
to $2.3 million for the fourth
quarter of 2019 from $3.4 million for
the same period of the prior year. The decrease was mainly related
to less repair and maintenance costs incurred for the fourth
quarter of 2019 as all of our production resumed since the first
quarter of 2019, compared to the same period in 2018 that
production was suspended and additional repair and maintenance
costs incurred. As a percentage of total revenue, SG&A was 6.8%
for the fourth quarter of 2019, compared to 13.7% for the same
period of the prior year.
Income (loss) from Operations
Income from operations was $3.2
million for the fourth quarter of 2019, compared to loss
from operations of $5.1 million for
the same period of the prior year. The increase in income from
operations was primarily due to substantial increase in gross
profit combined with decreased SG&A expenses as discussed
above. Operating margin was 9.5% for the fourth quarter of 2019,
compared to operating loss margin of 20.3% for the same period of
the prior year.
Net Income
Net income was $2.2 million, or
$0.10 per basic and diluted share,
for the fourth quarter of 2019, compared to net loss of
$5.2 million, or $0.24 loss per basic and diluted share, for the
same period of the prior year.
EBITDA
EBITDA was $7 million for the
fourth quarter of 2019, compared to negative $1.7 million for the same period of the prior
year.
Note 1: Non-GAAP Financial Measures
In addition to our U.S. GAAP results, this press release
includes a discussion of EBITDA, a non-GAAP financial measure as
defined by the Securities and Exchange Commission ("SEC"). The
Company defines EBITDA as net income before interest, income taxes,
depreciation and amortization. EBITDA is a key measure used by
management to evaluate our results and make strategic decisions.
Management believes this measure is useful to investors because it
is an indicator of operational performance. Because not all
companies use identical calculations, the Company's presentation of
EBITDA may not be comparable to similarly titled measures of other
companies, and should not be viewed as an alternative to measures
of financial performance or changes in cash flows calculated in
accordance with the U.S. GAAP.
Reconciliation of
Net Income to EBITDA
|
(Amounts expressed
in US$)
|
|
|
|
For the
Three Months Ended December 31,
|
($
millions)
|
|
2019
|
|
|
2018
|
Net income
(loss)
|
|
2.16
|
|
|
-5.16
|
Add: Income
tax
|
|
0.88
|
|
|
-0.22
|
Net
interest expense
|
|
0.20
|
|
|
0.31
|
Depreciation and amortization
|
|
3.76
|
|
|
3.42
|
EBITDA
|
|
7.00
|
|
|
-1.66
|
Full Year 2019 Financial Results
|
|
For the
Twelve Months Ended December 31,
|
($
millions)
|
|
2019
|
|
2018
|
|
%
Change
|
Revenues
|
|
117.61
|
|
86.75
|
|
35.6%
|
Regular
Corrugating Medium Paper ("CMP")*
|
|
72.05
|
|
63.20
|
|
14.0%
|
Light-Weight
CMP**
|
|
18.78
|
|
18.40
|
|
2.1%
|
Offset Printing
Paper
|
|
20.44
|
|
5.14
|
|
297.8%
|
Tissue Paper
Products
|
|
6.35
|
|
0.00
|
|
NM
|
|
|
|
|
|
|
|
Gross
profit
|
|
13.68
|
|
5.82
|
|
135.4%
|
Gross
margin
|
|
11.6%
|
|
6.7%
|
|
4.9 pp****
|
Regular
Corrugating Medium Paper ("CMP")*
|
|
10.3%
|
|
7.7%
|
|
2.6 pp****
|
Light-Weight
CMP**
|
|
10.1%
|
|
5.0%
|
|
5.1 pp****
|
Offset Printing
Paper
|
|
31.2%
|
|
0.8%
|
|
30.4
pp****
|
Tissue Paper
Products***
|
|
-32.0%
|
|
NM
|
|
NM
|
|
|
|
|
|
|
|
Operating
income (loss)
|
|
3.90
|
|
-11.18
|
|
134.9%
|
Net income
(loss)
|
|
2.22
|
|
-10.55
|
|
121.1%
|
EBITDA
|
|
19.54
|
|
3.39
|
|
476.4%
|
Basic and
Diluted earnings per share
|
|
0.10
|
|
-0.49
|
|
120.4%
|
|
|
|
|
|
|
|
* Products
from PM6
|
|
|
|
|
|
|
** Products
from PM1
|
|
|
|
|
|
|
*** Products
from PM8 and PM9
|
|
|
|
|
|
|
**** pp
represents percentage points
|
|
|
|
|
|
|
Revenue
For the year ended December 31,
2019, total revenue increased by $30.9 million, or 35.6%, to $117.6 million from $86.7
million for 2018. The increase in total revenue was mainly
due to increase in sales volume of CMP, offset printing paper and
tissue paper products, which was partially offset by the decrease
in ASP of CMP and offset printing paper. Total sales volume of CMP,
offset printing paper and tissue paper products increased by 59.5%
to 250,144 tonnes, compared to 156,849 tonnes in 2018.
The following table summarizes revenue, volume and ASP by
product for the year ended December 31,
2019 and 2018, respectively:
|
For the
Twelve Months Ended December 31,
|
|
2019
|
|
2018
|
|
Revenue
($'000)
|
|
Volume
(tonne)
|
|
ASP
($/tonne)
|
|
Revenue
($'000)
|
|
Volume
(tonne)
|
|
ASP
($/tonne)
|
Regular
CMP
|
72,050
|
|
168,837
|
|
427
|
|
63,199
|
|
116,012
|
|
545
|
Light-Weight
CMP
|
18,776
|
|
45,310
|
|
414
|
|
18,397
|
|
34,646
|
|
531
|
Offset Printing
Paper
|
20,436
|
|
29,207
|
|
700
|
|
5,137
|
|
6,191
|
|
830
|
Tissue Paper
Products
|
6,351
|
|
6,790
|
|
935
|
|
-
|
|
-
|
|
NM
|
Total
|
117,614
|
|
250,144
|
|
470
|
|
86,747
|
|
156,849
|
|
553
|
Revenue from CMP, including both regular CMP and light-Weight
CMP increased by $9.2 million, or
11.3%, to $90.8 million, and
accounted for 77.2% of total revenue for the year ended
December 31, 2019, compared to
$81.6 million, or 94.1% of total
revenue for 2018. The Company sold 214,147 tonnes of CMP at an ASP
of $424/tonne in the year ended
December 31, 2019, compared to
150,658 tonnes at an ASP of $542/tonne in 2018.
Of the total CMP sales, revenue from regular CMP increased by
$8.9 million, or 14.0%, to
$72.1 million, resulting from sales
of 168,837 tonnes at an ASP of $427/tonne during the year ended December 31, 2019, compared to revenue of
$63.2 million, resulting from sales
of 116,012 tonnes at an ASP of $545/tonne for 2018. Revenue from light-weight
CMP increased by $0.4 million, or
2.1%, to $18.8 million, resulting
from sales of 45,310 tonnes at an ASP of $414/tonne for the year ended December 31, 2019, compared to revenue of
$18.4 million, resulting from sales
of 34,646 tonnes at an ASP of $531/tonne for 2018.
Revenue from offset printing paper increased by $15.3 million, or 297.8%, to $20.4 million for the year ended December 31, 2019 from $5.1 million for 2018. The Company sold 29,207
tonnes of offset printing paper at an ASP of $700/tonne in the year ended December 31, 2019, compared to 6,191 tonnes at an
ASP of $830/tonne in 2018.
Revenue from tissue paper products was $6.4 million for the year ended December 31, 2019, resulting from sales of 6,790
tonnes of tissue paper products at an ASP of $935/tonne in the year ended December 31, 2019.
Gross Profit and Gross Margin
Total cost of sales increased by $23
million, or 28.5%, to $104
million for the year ended December
31, 2019 from $80.9 million
for 2018. The increase in overall cost of sales was mainly a result
of the increase in sales volume, partially offset by the decrease
of purchase cost of recycled paper board and recycled white scrap
paper. Costs of sales per tonne for regular CMP, light-weight CMP,
offset printing paper, tissue paper products were, $383, $372,
$481, and $1,235, respectively, for the year ended
December 31, 2019, compared to
$503, $504, $823, and
$nil, respectively, for 2018.
Total gross profit increased by $7.8
million, or 135.1%, to $13.6
million for the year ended December
31, 2019 from $5.8 million for
2018. The increase was mainly due to (i) the increase in quantities
sold of CMP, offset printing paper, tissue paper and (ii) the
decrease of material purchase price of CMP and offset printing
paper, partially offset by the decrease of ASP of these products.
Overall gross margin increased by 4.9 percentage points to 11.6%
for the year ended December 31, 2019
from 6.7% for 2018. Gross margins for regular CMP, light-weight
CMP, offset printing paper and tissue paper products were 10.3%,
10.1%, 31.2% and negative 32%, respectively, for the year ended
December 31, 2019, compared to 7.7%,
5.0%, 0.8%, and nil, respectively, for 2018.
Selling, General and Administrative Expenses
SG&A expenses decreased by $3.3
million, or 25.3%, to $9.8
million for the year ended December
31, 2019 from $13.1 million
for 2018. As a percentage of total revenue, SG&A expenses was
8.3% for the year ended December 31,
2019, compared to 15.1% for 2018.
Income from Operations
Income from operations was $3.9
million for the year ended December
31, 2019, compared to loss from operations of $11.2 million for 2018. Operating margin was 3.3%
for the year ended December 31, 2019,
compared to operating loss margin of 12.9% for 2018.
Net Income
Net Income increased by $12.8
million, or 121.1%, to $2.2
million, or earnings per basic and diluted share of
$0.10, for the year ended
December 31, 2019. This compared to
net loss of $10.5 million, or loss
per basic and diluted share of $0.49,
for 2018.
EBITDA
EBITDA increased by $16.2 million,
or 476.4%, to $19.5 million for the
year ended December 31, 2019 from
$3.4 million in 2018.
Note 1: Non-GAAP Financial Measures
In addition to our U.S. GAAP results, this press release
includes a discussion of EBITDA, a non-GAAP financial measure as
defined by the Securities and Exchange Commission ("SEC"). The
Company defines EBITDA as net income before interest, income taxes,
depreciation and amortization. EBITDA is a key measure used by
management to evaluate our results and make strategic decisions.
Management believes this measure is useful to investors because it
is an indicator of operational performance. Because not all
companies use identical calculations, the Company's presentation of
EBITDA may not be comparable to similarly titled measures of other
companies, and should not be viewed as an alternative to measures
of financial performance or changes in cash flows calculated in
accordance with the U.S. GAAP.
Reconciliation of
Net Income to EBITDA
|
(Amounts expressed
in US$)
|
|
|
|
For the
Twelve Months Ended December 31,
|
($
millions)
|
|
2019
|
|
|
2018
|
Net income
(loss)
|
|
2.22
|
|
|
-10.55
|
Add: Income
tax
|
|
1.08
|
|
|
-1.85
|
Net
interest expense
|
|
0.93
|
|
|
1.49
|
Depreciation and amortization
|
|
15.30
|
|
|
14.29
|
EBITDA
|
|
19.54
|
|
|
3.39
|
Cash, Liquidity and Financial Position
As of December 31, 2019, the
Company had cash and bank balances, short-term debt (including
short-term bank loans, current portion of long-term loans from
credit union and related party loans) and long-term debt (including
loans from credit union and loans from a related party) of
$5.8 million, $8.3 million and $7.4million, respectively, compared to
$8.5 million, $14.7 million, and $6.9
million, respectively, at the end of 2018.
Net accounts receivable was $3.1
million as of December 31,
2019, compared to $2.9 million
as of December 31, 2018. Net
inventory was $1.6 million as of
December 31, 2019, compared to
$2.9 million at the end of 2018. As
of December 31, 2019, the Company had
current assets of $24.0 million and
current liabilities of $16.8 million,
resulting in a working capital of $7.2
million. This compared to current assets of $24.2 million, current liabilities of
$29.6 million and working capital
deficit of $5.5 million at the end of
2018.
Net cash provided by operating activities was $7.5 million for the year ended December 31, 2019, compared to net cash provided
by operating activities of $9.2
million for 2018. Net cash used in investing activities was
$7.9 million for the year ended
December 31, 2019, compared to
$2.2 million for 2018. Net cash used
in financing activities was $5.8
million for the year ended December
31, 2019, compared to net cash used in financing activities
of $3.2 million for 2018.
Recent development
On November 20, 2019, the Company
announced the commercial launch of a new tissue paper
production line the PM9, following the success of its trial
production, the receipt of its disposed wastewater discharge
permits and construction completion acceptance from Chinese
environmental authorities.
On December 3, 2019, the Company
and Asia Symbol (Shandong) Pulp
and Paper Co. Ltd. agreed to further cooperation into aspects of
technologies and enterprise supply chain, based on the existing
pulp paper supply cooperation arrangement. The new partnership
specifically involves technology exchange between ITP and Asia
Symbol on a regular basis, and ITP's adding into Asia Symbol's
supply chain traceability system to make sure products' quality and
environmental requirements.
On December 16, 2019, Hebei
Baoding Dongfang Paper Co., Ltd., the Company's major operating
entity entered into a supplement acquisition agreement with
Tengsheng Paper and its shareholders to extend the acquisition
agreement signed on June 25, 2019,
pursuant to which the consideration for acquiring Tengsheng Paper
shall be in cash and any balance payment for the purchase price
shall be paid no later than December 31,
2021.
On March 10, 2020, the Company
announced that it had resumed 70%
of its full capacity of production as of March 5, 2020, following the strict measures put
in place for the control and prevention of the Covid-19 spread over
the country.
Earnings Conference Call
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 2019 Earnings Conference Call."
Date:
|
Tuesday, March 24,
2020
|
Time:
|
8:00 am
EST
|
International Toll
Free:
|
United States:
+1-866-519-4004
Mainland China:
400-620-8038
Hong Kong:
800-906-601
International:
+65-6713-5090
|
Conference
ID:
|
8192168
|
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/kyuy25ew .
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 EST on March 24,
2020 to 8:59 am EST on
April 1, 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 8192168 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 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 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:
At the Company Email:
ir@itpackaging.cn
Tel: +86 0312 8698215
Investor Relations:
Janice Wang
EverGreen Consulting Inc.
Email: ir@changqingconsulting.com
IT TECH PACKAGING,
INC.
|
CONSOLIDATED
BALANCE SHEETS
|
AS OF DECEMBER 31,
2019 AND 2018
|
|
|
|
December
31,
|
|
|
December
31,
|
|
|
|
2019
|
|
|
2018
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
Cash and bank
balances
|
|
$
|
5,837,745
|
|
|
$
|
8,474,809
|
|
Restricted
cash
|
|
|
-
|
|
|
|
3,642,616
|
|
Accounts receivable
(net of allowance for doubtful accounts of $59,922 and $58,707
as
of December 31, 2019 and December 2018,
respectively)
|
|
|
3,119,311
|
|
|
|
2,876,632
|
|
Inventories
|
|
|
1,607,463
|
|
|
|
2,923,516
|
|
Prepayments and other
current assets
|
|
|
11,613,241
|
|
|
|
6,241,299
|
|
Due from related
parties
|
|
|
1,863,479
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Total current
assets
|
|
|
24,041,239
|
|
|
|
24,158,872
|
|
|
|
|
|
|
|
|
|
|
Prepayment on
property, plant and equipment
|
|
|
1,433,445
|
|
|
|
-
|
|
Property, plant, and
equipment, net
|
|
|
151,616,852
|
|
|
|
167,829,716
|
|
Value-added tax
recoverable
|
|
|
2,621,841
|
|
|
|
2,810,331
|
|
Deferred tax asset
non-current
|
|
|
10,485,053
|
|
|
|
8,277,091
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
$
|
190,198,430
|
|
|
$
|
203,076,010
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
|
|
Short-term bank
loans
|
|
$
|
6,163,814
|
|
|
$
|
11,802,075
|
|
Current portion of
long-term loans from credit union
|
|
|
1,605,459
|
|
|
|
2,491,549
|
|
Accounts
payable
|
|
|
250,486
|
|
|
|
629,054
|
|
Advance from
customers
|
|
|
98,311
|
|
|
|
-
|
|
Notes
payable
|
|
|
-
|
|
|
|
3,642,616
|
|
Due to related
parties
|
|
|
539,985
|
|
|
|
413,336
|
|
Accrued payroll and
employee benefits
|
|
|
291,924
|
|
|
|
213,536
|
|
Other payables and
accrued liabilities
|
|
|
6,503,010
|
|
|
|
10,222,796
|
|
Income taxes
payable
|
|
|
1,382,471
|
|
|
|
219,305
|
|
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
|
16,835,460
|
|
|
|
29,634,267
|
|
|
|
|
|
|
|
|
|
|
Loans from credit
union
|
|
|
7,367,908
|
|
|
|
4,706,259
|
|
Loans from a related
party
|
|
|
-
|
|
|
|
2,185,569
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
(including amounts of the consolidated VIE without recourse to
the
Company of $19,460,257 and $34,008,908 as of December
31, 2019 and 2018,
respectively)
|
|
|
24,203,368
|
|
|
|
36,526,095
|
|
|
|
|
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
|
|
|
|
|
Common stock,
500,000,000 shares authorized, $0.001 par value per share,
22,054,816
shares issued
|
|
|
22,685
|
|
|
|
22,360
|
|
Additional paid-in
capital
|
|
|
51,154,544
|
|
|
|
51,137,319
|
|
Statutory earnings
reserve
|
|
|
6,080,574
|
|
|
|
6,080,574
|
|
Accumulated other
comprehensive loss
|
|
|
(6,057,537)
|
|
|
|
(3,263,952)
|
|
Retained
earnings
|
|
|
114,794,796
|
|
|
|
112,573,614
|
|
|
|
|
|
|
|
|
|
|
Total
stockholders' equity
|
|
|
165,995,062
|
|
|
|
166,549,915
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
and Stockholders' Equity
|
|
$
|
190,198,430
|
|
|
$
|
203,076,010
|
|
IT TECH PACKAGING,
INC.
|
CONSOLIDATED
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS)
|
FOR THE YEARS
ENDED DECEMBER 31, 2019 AND 2018
|
|
|
|
Year
Ended
|
|
|
|
December
31,
|
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
117,614,886
|
|
|
$
|
86,746,758
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
|
(103,935,368)
|
|
|
|
(80,926,357)
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
13,679,518
|
|
|
|
5,820,401
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
|
(9,781,719)
|
|
|
|
(13,098,373)
|
|
Loss from disposal of
property, plant and equipment
|
|
|
-
|
|
|
|
(3,904,342)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) from
Operations
|
|
|
3,897,799
|
|
|
|
(11,182,314)
|
|
|
|
|
|
|
|
|
|
|
Other Income
(Expense):
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
64,717
|
|
|
|
36,632
|
|
Subsidy
income
|
|
|
261,136
|
|
|
|
241,189
|
|
Interest
expense
|
|
|
(926,368)
|
|
|
|
(1,492,119)
|
|
|
|
|
|
|
|
|
|
|
Income (Loss)
before Income Taxes
|
|
|
3,297,284
|
|
|
|
(12,396,612)
|
|
|
|
|
|
|
|
|
|
|
Provision for
Income Taxes
|
|
|
(1,076,102)
|
|
|
|
1,850,928
|
|
|
|
|
|
|
|
|
|
|
Net Income
(Loss)
|
|
|
2,221,182
|
|
|
|
(10,545,684)
|
|
|
|
|
|
|
|
|
|
|
Other
Comprehensive Loss
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
|
(2,793,585)
|
|
|
|
(8,732,751)
|
|
|
|
|
|
|
|
|
|
|
Total
Comprehensive Loss
|
|
$
|
(572,403)
|
|
|
$
|
(19,278,435)
|
|
|
|
|
|
|
|
|
|
|
Earnings (Losses)
Per Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted
Earnings (Losses) per Share
|
|
$
|
0.10
|
|
|
$
|
(0.49)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding –
Basic and Diluted
|
|
|
22,034,905
|
|
|
|
21,618,305
|
|
IT TECH PACACKING,
INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
FOR THE YEARS
ENDED DECEMBER 31, 2019 AND 2018
|
|
|
|
Year
Ended
|
|
|
|
December
31,
|
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
|
Net income
|
|
$
|
2,221,182
|
|
|
$
|
(10,545,684)
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
15,304,039
|
|
|
|
14,290,919
|
|
Allowances for
obsolete inventories, net
|
|
|
75,719
|
|
|
|
-
|
|
Loss from disposal
and impairment of property, plant and equipment
|
|
|
-
|
|
|
|
3,904,342
|
|
(Recovery from) for
bad debts
|
|
|
2,192
|
|
|
|
23,676
|
|
Share-based
compensation expenses
|
|
|
-
|
|
|
|
470,361
|
|
Deferred
tax
|
|
|
(2,369,683)
|
|
|
|
(2,089,439)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(294,882)
|
|
|
|
(1,183,782)
|
|
Prepayments and other
current assets
|
|
|
(5,392,916)
|
|
|
|
(5,726,546)
|
|
Inventories
|
|
|
1,207,958
|
|
|
|
5,322,320
|
|
Accounts
payable
|
|
|
(372,728)
|
|
|
|
234,448
|
|
Advance from
customers
|
|
|
99,472
|
|
|
|
-
|
|
Notes
payable
|
|
|
(3,625,921)
|
|
|
|
(2,261,147)
|
|
Related
parties
|
|
|
(1,757,231)
|
|
|
|
150,743
|
|
Accrued payroll and
employee benefits
|
|
|
82,813
|
|
|
|
(6,855)
|
|
Other payables and
accrued liabilities
|
|
|
1,169,967
|
|
|
|
6,878,137
|
|
Income taxes
payable
|
|
|
1,180,493
|
|
|
|
(291,119)
|
|
Net Cash Provided
by Operating Activities
|
|
|
7,530,474
|
|
|
|
9,170,374
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
|
|
Purchases of
property, plant and equipment
|
|
|
(6,416,481)
|
|
|
|
(2,198,852)
|
|
Acquisition of a
subsidiary
|
|
|
(1,450,368)
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Net Cash Used in
Investing Activities
|
|
|
(7,866,849)
|
|
|
|
(2,198,852)
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
|
|
Proceeds from related
party loans
|
|
|
-
|
|
|
|
4,522,295
|
|
Repayments of related
party loans
|
|
|
(2,175,553)
|
|
|
|
(12,813,169)
|
|
Proceeds from short
term bank loans
|
|
|
10,152,579
|
|
|
|
12,210,196
|
|
Proceeds from credit
union loans
|
|
|
4,206,068
|
|
|
|
5,064,970
|
|
Repayment of bank
loans
|
|
|
(17,955,561)
|
|
|
|
(12,149,899)
|
|
|
|
|
|
|
|
|
|
|
Net Cash Used in
Financing Activities
|
|
|
(5,772,467)
|
|
|
|
(3,165,607)
|
|
|
|
|
|
|
|
|
|
|
Effect of Exchange
Rate Changes on Cash and Cash Equivalents
|
|
|
(170,838)
|
|
|
|
(705,917)
|
|
|
|
|
|
|
|
|
|
|
Net (Decrease)
Increase in Cash and Cash Equivalents
|
|
|
(6,279,680)
|
|
|
|
3,099,998
|
|
|
|
|
|
|
|
|
|
|
Cash, Cash
Equivalents and Restricted Cash - Beginning of Year
|
|
|
12,117,425
|
|
|
|
9,017,427
|
|
|
|
|
|
|
|
|
|
|
Cash, Cash
Equivalents and Restricted Cash - End of Year
|
|
$
|
5,837,745
|
|
|
$
|
12,117,425
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Disclosure of Cash Flow Information:
|
|
|
|
|
|
|
|
|
Cash paid for
interest, net of capitalized interest cost
|
|
$
|
926,368
|
|
|
$
|
1,393,759
|
|
Cash paid for income
taxes
|
|
$
|
2,250,546
|
|
|
$
|
515,001
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and bank
balances
|
|
|
5,837,745
|
|
|
|
8,474,809
|
|
Restricted
cash
|
|
|
-
|
|
|
|
3,642,616
|
|
Total cash, cash
equivalents and restricted cash shown in the statement of cash
flows
|
|
|
5,837,745
|
|
|
|
12,117,425
|
|
View original
content:http://www.prnewswire.com/news-releases/it-tech-packaging-inc-announces-fourth-quarter-and-fiscal-year-2019-financial-results-301028167.html
SOURCE IT Tech Packaging, Inc.