BAODING, China, Nov. 12, 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 third
quarter ended September 30, 2020.
Third Quarter 2020 Unaudited Financial Results
|
|
For the
Three Months Ended September 30,
|
($
millions)
|
|
2020
|
|
2019
|
|
%
Change
|
Revenues
|
|
33.36
|
|
32.94
|
|
1.3%
|
Regular
Corrugating Medium Paper ("CMP")*
|
|
19.55
|
|
19.33
|
|
1.1%
|
Light-Weight
CMP**
|
|
5.08
|
|
5.02
|
|
1.2%
|
Offset Printing
Paper
|
|
6.13
|
|
7.04
|
|
-12.9%
|
Tissue Paper
Products
|
|
2.38
|
|
1.55
|
|
53.4%
|
Face
Masks
|
|
0.22
|
|
NM
|
|
NM
|
|
|
|
|
|
|
|
Gross
profit
|
|
2.57
|
|
5.37
|
|
-52.2%
|
Gross profit
(loss) margin
|
|
7.7%
|
|
16.3%
|
|
-8.6
pp****
|
Regular
Corrugating Medium Paper ("CMP")*
|
|
6.4%
|
|
14.7%
|
|
-8.3
pp****
|
Light-Weight
CMP**
|
|
9.4%
|
|
15.9%
|
|
-6.5
pp****
|
Offset Printing
Paper
|
|
18.9%
|
|
33.3%
|
|
-14.4pp****
|
Tissue Paper
Products***
|
|
-14.5%
|
|
-38.9%
|
|
24.4
pp****
|
Face
Masks
|
|
11.1%
|
|
NM
|
|
NM
|
|
|
|
|
|
|
|
Operating
income
|
|
0.18
|
|
3.35
|
|
-94.7%
|
Net
income
|
|
-0.52
|
|
2.34
|
|
-122.3%
|
EBITDA
|
|
3.57
|
|
7.11
|
|
-49.8%
|
Basic and
Diluted earnings (loss) per share
|
|
-0.02
|
|
0.11
|
|
-118.2%
|
|
|
|
|
|
|
|
* Products
from PM6
|
|
|
|
|
|
|
** Products
from PM1
|
|
|
|
|
|
|
*** Products
from PM8 and PM9
|
|
|
|
|
|
|
**** pp
represents percentage points
|
|
|
|
|
|
|
- Revenue slightly increased by 1.3% to $33.4 million, primarily attributable to an
increase in sales volume of tissue paper products and CMP
products.
- Gross profit decreased by 52.2% to $2.6
million. Total gross margin decreased by 8.6 percentage
point to 7.7%.
- Income from operations was $0.2
million, compared to income from operations of $3.4 million for the same period of last
year.
- Net loss was $0.5 million, or
loss of $0.02 per basic and diluted
share, compared to net income of $2.3
million, or $0.11 per basic
and diluted share, for the same period of last year.
- Earnings before interest, taxes, depreciation and amortization
("EBITDA") decreased by 49.8% to $3.6
million.
Mr. Zhenyong Liu, Chairman and
Chief Executive Officer of the Company, commented, "We continued to
make improvements in sales volume for this quarter as our
paper products business, along with the whole
industry, recovered from the pandemic. Our total revenue
increased to 33.4 million and our tissue paper products grew 53.4%
in revenue with total sales volume of 74,126 tonnes for
this quarter. Sales volumes for CMPs and offset printing paper
continued quarter-on-quarter growth and rebounded to the same level
as last year. Our ASPs recording a 10.4% sequential increase from
Q2 2020, experienced slight decreases compared to the Q3 2019.
"The Chinese government updated the Ban on Free Plastic Bags in
2020 and as the specific restrictions are implemented nationwide,
paper packing products are expected to become the main substitute
of plastic packages under the requirements, involving sectors such
as catering takeout, supermarket retailing, logistics and express
delivery. According to Huachuang Securities' market analysis on
substitute demand for cardboard paper in the aforementioned areas,
the market demand is expected to be 4.91 million tonnes. As such,
the company will take full advantage of the market opportunities
brought by the substitute demand for paper packages."
Revenue
For the third quarter of 2020, total revenue increased by
$0.4 million, or 1.3%, to
$33.4 million from $32.9 million for the same period of last year.
The increase in total revenue was mainly due to increase in sales
volume of tissue paper products, CMP and face masks.
The following table summarizes revenue, volume and ASP by
product for the third quarter of 2020 and 2019, respectively:
|
For the Three
Months Ended September 30,
|
|
2020
|
|
2019
|
|
Revenue
($'000)
|
|
Volume
(tonne)
|
|
ASP
($/tonne)
|
|
Revenue
($'000)
|
|
Volume
(tonne)
|
|
ASP
($/tonne)
|
Regular
CMP
|
19,554
|
|
48,107
|
|
406
|
|
19,332
|
|
47,487
|
|
407
|
Light-Weight
CMP
|
5,076
|
|
12,884
|
|
394
|
|
5,017
|
|
12,721
|
|
394
|
Offset Printing
Paper
|
6,126
|
|
10,280
|
|
596
|
|
7,038
|
|
10,198
|
|
690
|
Tissue Paper
Products
|
2,380
|
|
2,855
|
|
834
|
|
1,551
|
|
1,840
|
|
843
|
Total
|
33,136
|
|
74,126
|
|
447
|
|
32,938
|
|
72,246
|
|
456
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
($'000)
|
|
Volume (thousand
pieces)
|
|
ASP ($/thousand
pieces)
|
|
Revenue
($'000)
|
|
Volume ($/thousand
pieces)
|
|
ASP ($/thousand
pieces)
|
Face Masks
|
221
|
|
3,576
|
|
62
|
|
NM
|
|
NM
|
|
NM
|
Revenue from CMP, including both regular CMP and light-Weight
CMP, increased by $0.3 million, or
1.2%, to $24.6 million and accounted
for 73.8% of total revenue for the third quarter of 2020, compared
to $24.3 million, or 73.8% of total
revenue, for the same period of last year. The Company sold 60,991
tonnes of CMP at an ASP of $404/tonne
in the third quarter of 2020, compared to 60,209 tonnes at an ASP
of $404/tonne in the same period of
last year.
Of the total CMP sales, revenue from regular CMP increased by
$0.2 million, or 1.1%, to
$19.6 million, resulting from sales
of 48,107 tonnes at an ASP of $406/tonne, during the third quarter of 2020,
compared to revenue of $19.3 million,
resulting from sales of 47,487 tonnes at an ASP of $407/tonne, for the same period of last year.
Revenue from light-weight CMP increased by $0.06 million, or 1.2%, to $5.1 million, resulting from sales of 12,884
tonnes at an ASP of $394/tonne for
the third quarter of 2020, compared to revenue of $5.0 million, resulting from sales of 12,721
tonnes at an ASP of $394/tonne for
the same period of last year.
Revenue from offset printing paper decreased by $0.9 million, or 12.9%, to $6.1 million for the third quarter of 2020, from
$7.0 million for the same period of
last year. The Company sold 10,280 tonnes of offset printing paper
at an ASP of $596/tonne in the third
quarter of 2020, compared to 10,198 tonnes at an ASP of
$690/tonne in the same period of last
year.
Revenue from tissue paper products increased by $0.8 million, or 53.4%, to $2.4 million, resulting from sales of 2,855
tonnes at an ASP of $834/tonne, for
the third quarter of 2020, compared to revenue of $1.6 million, resulting from sales of 1,840
tonnes at an ASP of $843/tonne for
the same period of last year.
Revenue generated from selling face masks was $0.2 million for the third quarter ended
September 30, 2020. The Company sold
3,576 thousand pieces of face masks in the third quarter of
2020.
Gross Profit and Gross Margin
Total cost of sales increased by $3.2
million, or 11.7%, to $30.8
million for the third quarter of 2020 from $27.6 million for the same period of last year.
For paper products, overall cost of sales per tonne was
$415 for the third quarter of 2020,
compared to $382 for the same period
of last year. The increase in overall cost of sales was mainly due
to the increased manufacturing overhead costs and increased
material costs, specifically higher average unit purchase costs of
recycled paper board and recycled white scrap paper in the third
quarter of 2020. Average unit purchase costs of recycled paper
board and recycled white scrap paper, major raw material used for
production, was approximately $251/tonne and $297/tonne, respectively, for the third quarter
of 2020, compared to $200/tonne and
$258/tonne, respectively, 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 $380, $357, $483, and
$955, respectively, for the third
quarter of 2020, compared to $347,
$332, $461 and $1,171,
respectively, for the same period of last year. Total gross profit
was $2.6 million for the third
quarter of 2020, compare to the gross profit of $5.4 million for the same period of last year as
a result of factors described above. Overall gross margin was 7.7%
for the third quarter of 2020, compared to 16.3% 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 6.4%, 9.4%, 18.9%, -14.5% and 11.1%,
respectively, for the third quarter of 2020, compared to 14.7%,
15.9%, 33.3%,-38.9% and nil, respectively, for the same period of
last year.
Selling, General and Administrative Expenses
Selling, general and administrative expenses ("SG&A")
increased by $0.4 million, or 18.1%,
to $2.4 million for the third quarter
of 2020 from $2.0 million for the
same period of last year. The increase was mainly due to additional
expenditure on investment relation activities (e.g. consultancy,
board meeting etc.) and reversal of over-provision of lease
expenses for the lands of Heibei Tengsheng in the third quarter of
2019.
Income (loss) from Operations
Income from operations was $0.2
million for the third quarter of 2020, compared to income
from operations of $3.3 million for
the same period of last year. The decrease in income from
operations was primarily due to increased SG&A expenses and
decreased gross profit this quarter as discussed above. Operating
margin was 0.5% for the third quarter of 2020, compared to
operating margin of 10.2% for the same period of last year.
Net Income (Loss)
Net loss was $0.5 million, or
$0.02 loss per basic and diluted
share, for the third quarter of 2020, compared to net income of
$2.3 million, or $0.11 per basic and diluted share, for the same
period of last year.
EBITDA
EBITDA was $3.6 million for the
third quarter of 2020, compared to $7.1
million for the same period of last year.
Note 1: Non-GAAP Financial Measures
In addition to our U.S. GAAP results, this press release
includes a discussion of EBITDA, a non-GAAP financial measure as
defined by the Securities and Exchange Commission ("SEC"). The
Company defines EBITDA as net income before interest, income taxes,
depreciation and amortization. EBITDA is a key measure used by
management to evaluate our results and make strategic decisions.
Management believes this measure is useful to investors because it
is an indicator of operational performance. Because not all
companies use identical calculations, the Company's presentation of
EBITDA may not be comparable to similarly titled measures of other
companies, and should not be viewed as an alternative to measures
of financial performance or changes in cash flows calculated in
accordance with the U.S. GAAP.
Reconciliation of
Net Income to EBITDA
|
(Amounts expressed
in US$)
|
|
|
|
For the
Three Months Ended September 30,
|
($
millions)
|
|
2020
|
|
|
2019
|
Net income
(loss)
|
|
-0.52
|
|
|
2.34
|
Add: Income
tax
|
|
0.03
|
|
|
0.77
|
Net
interest expense
|
|
0.26
|
|
|
0.24
|
Depreciation and amortization
|
|
3.81
|
|
|
3.76
|
EBITDA
|
|
3.57
|
|
|
7.11
|
Nine Months Ended September 30,
2020 Financial Results
|
|
For the Nine
Months Ended September 30,
|
($
millions)
|
|
2020
|
|
2019
|
|
%
Change
|
Revenues
|
|
68.46
|
|
84.01
|
|
-18.5%
|
Regular
Corrugating Medium Paper ("CMP")*
|
|
42.65
|
|
52.44
|
|
-18.7%
|
Light-Weight
CMP**
|
|
11.59
|
|
13.69
|
|
-15.3%
|
Offset Printing
Paper
|
|
7.39
|
|
13.27
|
|
-44.3%
|
Tissue Paper
Products
|
|
5.77
|
|
4.60
|
|
25.3%
|
Face
Musks
|
|
1.07
|
|
NM
|
|
NM
|
|
|
|
|
|
|
|
Gross
profit
|
|
4.96
|
|
8.09
|
|
-38.7%
|
Gross profit
(loss) margin
|
|
7.2%
|
|
9.6%
|
|
-2.4
pp****
|
Regular
Corrugating Medium Paper ("CMP")*
|
|
7.3%
|
|
8.4%
|
|
-1.1
pp****
|
Light-Weight
CMP**
|
|
11.2%
|
|
7.1%
|
|
4.1 pp****
|
Offset Printing
Paper
|
|
19.7%
|
|
29.8%
|
|
-10.1
pp****
|
Tissue Paper
Products***
|
|
-24.8%
|
|
-27.0%
|
|
2.2 pp****
|
Face
Masks
|
|
49.5%
|
|
NM
|
|
NM
|
|
|
|
|
|
|
|
Operating
income (loss)
|
|
-3.49
|
|
0.71
|
|
-593.4%
|
Net
income
|
|
-3.94
|
|
0.07
|
|
-6110.9%
|
EBITDA
|
|
7.20
|
|
10.68
|
|
-32.6%
|
Basic and
Diluted earnings (loss) per share
|
|
-0.15
|
|
0.003
|
|
-5191.4%
|
|
|
|
|
|
|
|
* Products
from PM6
|
|
|
|
|
|
|
** Products
from PM1
|
|
|
|
|
|
|
*** Products
from PM8 and PM9
|
|
|
|
|
|
|
**** pp
represents percentage points
|
|
|
|
|
|
Revenue
For the nine months ended September 30,
2020, total revenue decreased by $15.5 million, or 18.5%, to $68.5 million from $84.0
million for the same period of last year. The decrease in
total revenue was mainly due to decrease in sales volume of Regular
CMP, offset printing paper and decrease in ASPs over all paper
products categories. The following table summarizes revenue, volume
and ASP by product for the nine months ended September 30, 2020 and 2019, respectively:
|
For the Nine
Months Ended September 30,
|
|
2020
|
|
2019
|
|
Revenue
($'000)
|
|
Volume
(tonne)
|
|
ASP
($/tonne)
|
|
Revenue
($'000)
|
|
Volume
(tonne)
|
|
ASP
($/tonne)
|
Regular
CMP
|
42,648
|
#
|
108,874
|
|
392
|
|
52,440
|
|
121,774
|
|
431
|
Light-Weight
CMP
|
11,594
|
|
30,384
|
|
382
|
|
13,693
|
|
32,728
|
|
418
|
Offset Printing
Paper
|
7,389
|
|
12,463
|
|
593
|
|
13,275
|
|
18,757
|
|
708
|
Tissue Paper
Products
|
5,766
|
|
6,923
|
|
833
|
|
4,600
|
|
4,697
|
|
979
|
Total
|
67,397
|
|
158,644
|
|
425
|
|
84,008
|
|
177,956
|
|
472
|
|
Revenue
($'000)
|
|
Volume (thousand
pieces)
|
|
ASP ($/thousand
pieces)
|
|
Revenue
($'000)
|
|
Volume ($/thousand
pieces)
|
|
ASP ($/thousand
pieces)
|
Face Masks
|
1,067
|
|
9,856
|
|
108
|
|
NM
|
|
NM
|
|
NM
|
Revenue from CMP, including both regular CMP and light-Weight
CMP decreased by $11.9 million, or
18%, to $54.2 million, and accounted
for 79.2% of total revenue for the first nine months of 2020,
compared to $66.1 million, or 78.7%
of total revenue for the same period of last year. The Company sold
139,258 tonnes of CMP at an ASP of $390/tonne in the first nine months of 2020,
compared to 154,502 tonnes at an ASP of $428/tonne in the same period of last year.
Of the total CMP sales, revenue from regular CMP decreased by
$9.8 million, or 18.7%, to
$42.6 million, resulting from sales
of 108,874 tonnes at an ASP of $392/tonne during the first nine months of 2020,
compared to revenue of $52.4 million,
resulting from sales of 121,774 tonnes at an ASP of $431/tonne for the same period of last year.
Revenue from light-weight CMP decreased by $2.1 million, or 15.3%, to $11.6 million, resulting from sales of 30,384
tonnes at an ASP of $382/tonne for
the first nine months of 2020, compared to revenue of $13.7 million, resulting from sales of 32,728
tonnes at an ASP of $418/tonne for
the same period of last year.
Revenue from offset printing paper decreased by $5.9 million, or 44.3%, to $7.4 million for the first nine months of 2020
from $13.3 million for the same
period of last year. The Company sold 12,463 tonnes of offset
printing paper at an ASP of $593/tonne in the first nine months of 2020,
compared to 18,757 tonnes at an ASP of $708/tonne in the same period of last year.
Revenue from tissue paper products increased by $1.2 million, or 25.3%, to $5.8 million, resulting from sales of 6,923
tonnes at an ASP of $833/tonne, for
the first nine months of 2020, compared to revenue of $4.6 million, resulting from sales of 4,697
tonnes at an ASP of $979/tonne for
the same period of last year.
Revenue generated from selling face masks was $1.1 million for the nine months ended
September 30, 2020. The Company sold
9,856 thousand pieces of face masks for the first nine months of
2020.
Gross Profit and Gross Margin
Total cost of sales decreased by $12.4
million, or16.3%, to $63.5
million for the first nine months of 2020 from $75.9 million for the same period of last year.
The decrease in overall cost of sales was mainly due to the
decreased sales volume of CMP and offset printing paper and
decreased material costs, specifically lower average unit purchase
costs of recycled paper board and white scrap paper in the first
nine months of 2020. Costs of sales per tonne for regular CMP,
light-weight CMP, offset printing paper, tissue paper products
were, $363, $339, $476, and
$1,040, respectively, for the first
nine months of 2020 compared to $394,
$389, $497, and $1,244,
respectively, for the same period of last year.
Total gross profit decreased by $3.1
million, or 38.7%, to $5.0
million for the first nine months of 2020 from $8.1 million for the same period of last year.
Overall gross margin decreased by 2.4 percentage points to 7.2% for
the first nine months of 2020 from 9.6% 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
7.3%, 11.2%, 19.7%, -24.8% and 49.5%, respectively, for the first
nine months of 2020, compared to 8.4%, 7.1%, 29.8%, -27.0% and nil,
respectively, for the same period of last year.
Selling, General and Administrative Expenses
SG&A expenses increased by $1.0
million, or 13.9%, to $8.4
million for the first nine months of 2020 from $7.4 million for the same period of last year. As
a percentage of total revenue, SG&A expenses was 12.3% for the
first nine months of 2020, compared to 8.8% for the same period of
last year.
Loss from Operations
Loss from operations increased by $4.2
million, or 593.4%, to $3.5
million for the first nine months of 2020 from income from
operations of $0.7 million for the
same period of last year. Operating loss margin was 5.1% for the
first nine months of 2020, compared to operating margin of 0.8% for
the same period of last year.
Net Loss
Net loss increased by $4 million,
or 6110.9%, to $3.9 million, or loss
per basic and diluted share of $0.15,
for the first nine months of 2020, compared to net income of
$0.07 million, or earnings per basic
and diluted share of $0.003, for the
same period of last year.
EBITDA
EBITDA decreased by $3.5 million,
or 32.6%, to $7.2 million for the
first nine months of 2020 from $10.7
million for the same period of last year.
Note 1: Non-GAAP Financial Measures
In addition to our U.S. GAAP results, this press release
includes a discussion of EBITDA, a non-GAAP financial measure as
defined by the Securities and Exchange Commission ("SEC"). The
Company defines EBITDA as net income before interest, income taxes,
depreciation and amortization. EBITDA is a key measure used by
management to evaluate our results and make strategic decisions.
Management believes this measure is useful to investors because it
is an indicator of operational performance. Because not all
companies use identical calculations, the Company's presentation of
EBITDA may not be comparable to similarly titled measures of other
companies, and should not be viewed as an alternative to measures
of financial performance or changes in cash flows calculated in
accordance with the U.S. GAAP.
Reconciliation of
Net Income to EBITDA
|
(Amounts expressed
in US$)
|
|
|
|
For the Nine
Months Ended September 30,
|
($
millions)
|
|
2020
|
|
|
2019
|
Net income
(loss)
|
|
-3.94
|
|
|
0.07
|
Add: Income
tax
|
|
0.58
|
|
|
-0.21
|
Net
interest expense
|
|
-0.74
|
|
|
-0.73
|
Depreciation and amortization
|
|
11.30
|
|
|
11.55
|
EBITDA
|
|
7.20
|
|
|
10.68
|
Cash, Liquidity and Financial Position
As of September 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 $8.21 million,
$10.77 million and $5.39 million, respectively, compared to
$5.84 million, $8.31 million and $7.37
million, respectively, at the end of 2019.
Net accounts receivable was $3.47
million as of September 30,
2020, compared to $3.12
million as of December 31,
2019. Net inventory was $8.58
million as of September 30,
2020, compared to $1.61
million at the end of 2019. As of September 30, 2020, the Company had current
assets of $30.41 million and current
liabilities of $16.86 million,
resulting in a working capital of $13.55
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 $2.37 million for the first nine months of 2020,
compared to net cash used in operating activities of $4.60 million for the same period of last year.
Net cash used in investing activities was $2.57 million for the first nine months of 2020,
compared to $6.45 million for the
same period of last year. Net cash provided by financing activities
was $2.24 million for the first nine
months of 2020, compared to net cash used in financing activities
of $5.22 million for the same period
of last year.
Recent development
On July 7, 2020, the Company
updated its non-medical single-use face masks business and
announced that it recognized revenue of RMB6.73 million through June 30, 2020 from sale of 6.28 million pieces
non-medical single-use face masks since launch of the production
line at the end of April 2020.
On September 24, 2020, the Company
announced that it was in advanced negotiations with one of its Top
5 customers, based in Shandong
Province, for orders of paper products and that the two
parties will further cooperate on product supply and purchase in
the coming quarters and definitive new contracts are expected to be
signed by the end of the year.
Earnings Conference Call
The Company's management will host a conference call to discuss
its third quarter 2020 financial results at 8:00 am US Eastern
Time on Friday, November 13, 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/9:00 pm Beijing Time) on Friday,
November 13, 2020
Conference Title: IT Tech Packaging, Inc. Third Quarter 2020
Earnings Conference Call
Conference ID: 7992118
To attend the conference call, please register in advance of the
conference using the link:
http://apac.directeventreg.com/registration/event/7992118 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/5b72a65n . 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 November
13, 2020 to 7:59 am ET on
November 21, 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 7992118 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 SEPTEMBER
30, 2020 AND DECEMBER 31, 2019
|
(Unaudited)
|
|
|
September
30,
|
|
|
December
31,
|
|
|
2020
|
|
|
2019
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
|
Cash and bank
balances
|
|
$
|
8,209,905
|
|
|
$
|
5,837,745
|
Restricted
cash
|
|
|
-
|
|
|
|
-
|
Accounts receivable
(net of allowance for doubtful accounts of $64,435 and $59,922 as
of September 30, 2020 and December 2019, respectively)
|
|
|
3,472,374
|
|
|
|
3,119,311
|
Inventories
|
|
|
8,582,912
|
|
|
|
1,607,463
|
Prepayments and other
current assets
|
|
|
9,930,262
|
|
|
|
11,613,241
|
Due from related
parties
|
|
|
215,192
|
|
|
|
1,863,479
|
|
|
|
|
|
|
|
|
Total current
assets
|
|
|
30,410,645
|
|
|
|
24,041,239
|
|
|
|
|
|
|
|
|
Prepayment on
property, plant and equipment
|
|
|
2,936,814
|
|
|
|
1,433,445
|
Finance lease
right-of-use assets, net
|
|
|
2,336,399
|
|
|
|
-
|
Property, plant, and
equipment, net
|
|
|
142,783,813
|
|
|
|
151,616,852
|
Value-added tax
recoverable
|
|
|
2,497,129
|
|
|
|
2,621,841
|
Deferred tax asset
non-current
|
|
|
12,365,164
|
|
|
|
10,485,053
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
$
|
193,329,964
|
|
|
$
|
190,198,430
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
|
Short-term bank
loans
|
|
$
|
6,314,151
|
|
|
$
|
6,163,814
|
Current portion of
long-term loans from credit union
|
|
|
3,803,175
|
|
|
|
1,605,459
|
Lease
liability
|
|
|
168,546
|
|
|
|
-
|
Accounts
payable
|
|
|
308,611
|
|
|
|
250,486
|
Advance from
customers
|
|
|
179,491
|
|
|
|
98,311
|
Notes
payable
|
|
|
-
|
|
|
|
-
|
Due to related
parties
|
|
|
657,433
|
|
|
|
539,985
|
Accrued payroll and
employee benefits
|
|
|
254,887
|
|
|
|
291,924
|
Other payables and
accrued liabilities
|
|
|
4,573,972
|
|
|
|
6,503,010
|
Income taxes
payable
|
|
|
599,782
|
|
|
|
1,382,471
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
|
16,860,048
|
|
|
|
16,835,460
|
|
|
|
|
|
|
|
|
Loans from credit
union
|
|
|
5,389,054
|
|
|
|
7,367,908
|
Deferred gain on
sale-leaseback
|
|
|
406,767
|
|
|
|
-
|
Lease liability -
non-current
|
|
|
385,650
|
|
|
|
-
|
Derivative
liability
|
|
|
1,199,585
|
|
|
|
-
|
|
|
|
|
|
|
|
|
Total liabilities
(including amounts of the consolidated VIE without recourse to the
Company of $17,636,464 and $19,558,568 as of September 30, 2020 and
December 31, 2019, respectively)
|
|
|
24,241,104
|
|
|
|
24,203,368
|
|
|
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
(1,852,602)
|
|
|
|
(6,057,537)
|
Retained
earnings
|
|
|
110,857,504
|
|
|
|
114,794,796
|
|
|
|
|
|
|
|
|
Total
stockholders' equity
|
|
|
169,088,860
|
|
|
|
165,995,062
|
|
|
|
|
|
|
|
|
Total Liabilities
and Stockholders' Equity
|
|
$
|
193,329,964
|
|
|
$
|
190,198,430
|
|
|
|
|
|
|
|
|
IT TECH PACKAGING,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE
INCOME
|
FOR THE THREE
AND NINE MONTHS ENDED
SEPTEMBER 30, 2020 AND 2019
|
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2020
|
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
33,357,451
|
|
|
$
|
32,937,917
|
|
$
|
68,463,575
|
|
$
|
84,008,157
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
|
(30,789,899)
|
|
|
|
(27,563,185)
|
|
|
(63,506,913)
|
|
|
(75,917,762)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
2,567,551
|
|
|
|
5,374,732
|
|
|
4,956,662
|
|
|
8,090,395
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
|
(2,390,920)
|
|
|
|
(2,024,547)
|
|
|
(8,445,356)
|
|
|
(7,413,879)
|
|
Gain on acquisition
of a subsidiary
|
|
|
-
|
|
|
|
(879)
|
|
|
-
|
|
|
30,518
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) from
Operations
|
|
|
176,631
|
|
|
|
3,349,306
|
|
|
(3,488,694)
|
|
|
707,034
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income
(Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
8,544
|
|
|
|
1,413
|
|
|
23,785
|
|
|
61,787
|
|
Subsidy
income
|
|
|
61,152
|
|
|
|
(2,800)
|
|
|
203,171
|
|
|
233,488
|
|
Interest
expense
|
|
|
(258,438)
|
|
|
|
(236,987)
|
|
|
(744,592)
|
|
|
(731,027)
|
|
Loss on derivative
liability
|
|
|
(482,515)
|
|
|
|
|
|
|
(510,380)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) Income
before Income Taxes
|
|
|
(494,626)
|
|
|
|
3,110,932
|
|
|
(4,516,710)
|
|
|
271,282
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for
Income Taxes
|
|
|
(26,348)
|
|
|
|
(772,905)
|
|
|
579,418
|
|
|
(205,780)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Loss)
Income
|
|
|
(520,974)
|
|
|
|
2,338,027
|
|
|
(3,937,292)
|
|
|
65,502
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
Comprehensive Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
|
6,670,510
|
|
|
|
(4,810,379)
|
|
|
4,204,935
|
|
|
(5,065,382)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Comprehensive Income (Loss)
|
|
$
|
6,149,536
|
|
|
$
|
(2,472,352)
|
|
$
|
267,643
|
|
$
|
(4,999,880)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Losses) Earnings
Per Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted
(Losses) Earnings per Share
|
|
$
|
(0.02)
|
|
|
$
|
0.11
|
|
$
|
(0.15)
|
|
$
|
0.003
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding –
Basic and Diluted
|
|
|
25,816,354
|
|
|
|
22,028,171
|
|
|
25,816,354
|
|
|
22,028,171
|
|
IT TECH PACKAGING,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
FOR THE
NINE MONTHS ENDED SEPTEMBER 30,
2020 AND 2019
|
(Unaudited)
|
|
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
|
2020
|
|
|
2019
|
|
|
|
|
|
|
|
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
|
|
Net income
|
|
$
|
(3,937,292)
|
|
|
$
|
65,502
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
11,301,703
|
|
|
|
11,547,650
|
Loss on derivative
liability
|
|
|
510,380
|
|
|
|
-
|
Loss from disposal
and impairment of property, plant and equipment
|
-
|
|
|
|
-
|
(Recovery from)
Allowance for bad debts
|
|
|
2,973
|
|
|
|
(339)
|
Share-based
compensation and expenses
|
|
|
1,242,000
|
|
|
|
-
|
Gain on acquisition
of a subsidiary
|
|
|
|
|
|
|
(30,518)
|
Deferred
tax
|
|
|
(1,582,754)
|
|
|
|
(1,853,728)
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(272,857)
|
|
|
|
16,894
|
Prepayments and other
current assets
|
|
|
2,099,669
|
|
|
|
185,780
|
Inventories
|
|
|
(6,758,500)
|
|
|
|
(4,307,754)
|
Accounts
payable
|
|
|
50,683
|
|
|
|
254,749
|
Advance from
customers
|
|
|
76,763
|
|
|
|
85,993
|
Notes
payable
|
|
|
-
|
|
|
|
(3,648,250)
|
Related
parties
|
|
|
1,767,888
|
|
|
|
367,277
|
Accrued payroll and
employee benefits
|
|
|
(43,025)
|
|
|
|
33,334
|
Other payables and
accrued liabilities
|
|
|
(1,292,657)
|
|
|
|
726,564
|
Income taxes
payable
|
|
|
(795,487)
|
|
|
|
1,155,880
|
Net Cash Provided
by Operating Activities
|
|
|
2,369,487
|
|
|
|
4,599,034
|
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
|
Purchases of
property, plant and equipment
|
|
|
(3,144,261)
|
|
|
|
(4,917,650)
|
Proceeds from sale of
property, plant and equipment
|
|
|
572,312
|
|
|
|
|
Acquisition of a
subsidiary
|
|
|
-
|
|
|
|
(1,531,531)
|
|
|
|
|
|
|
|
|
Net Cash Used in
Investing Activities
|
|
|
(2,571,949)
|
|
|
|
(6,449,181)
|
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
|
Proceeds from
issuance of shares and warrants, net
|
|
|
2,273,360
|
|
|
|
-
|
Proceeds from short
term bank loans
|
|
|
-
|
|
|
|
3,940,110
|
Proceeds from credit
union loans
|
|
|
-
|
|
|
|
2,334,880
|
Repayment of bank
loans
|
|
|
-
|
|
|
|
(11,499,285)
|
Payment of capital
lease obligation
|
|
|
(32,317)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash Provided
by (Used in) Financing Activities
|
|
|
2,241,043
|
|
|
|
(5,224,295)
|
|
|
|
|
|
|
|
|
Effect of Exchange
Rate Changes on Cash and Cash Equivalents
|
|
|
333,579
|
|
|
|
(237,122)
|
|
|
|
|
|
|
|
|
Net Increase
(Decrease) in Cash and Cash Equivalents
|
|
|
2,372,160
|
|
|
|
(7,311,564)
|
|
|
|
|
|
|
|
|
Cash, Cash
Equivalents and Restricted Cash - Beginning of
Period
|
|
|
5,837,745
|
|
|
|
12,117,425
|
|
|
|
|
|
|
|
|
Cash, Cash
Equivalents and Restricted Cash - End of Period
|
|
$
|
8,209,905
|
|
|
$
|
4,805,861
|
|
|
|
|
|
|
|
|
Supplemental
Disclosure of Cash Flow Information:
|
|
|
|
|
|
|
|
Cash paid for
interest, net of capitalized interest cost
|
|
$
|
509,783
|
|
|
$
|
659,613
|
Cash paid for income
taxes
|
|
$
|
1,784,107
|
|
|
$
|
888,881
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and bank
balances
|
|
|
8,209,905
|
|
|
|
4,805,861
|
Restricted
cash
|
|
|
-
|
|
|
|
-
|
Total cash, cash
equivalents and restricted cash shown in the statement of cash
flows
|
|
|
8,209,905
|
|
|
|
4,805,861
|
View original
content:http://www.prnewswire.com/news-releases/it-tech-packaging-inc-announces-third-quarter-2020-financial-results-301172087.html
SOURCE IT Tech Packaging, Inc.