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BAODING, China , May 10 2022 /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 first quarter ended March 31, 2022.
Mr. Zhenyong Liu , Chairman and Chief Executive Officer of the Company, commented, "In the first quarter of 2022, our business was significantly affected by the dynamic and challenging macro environment and resurgence of COVID-19. We have resumed our business operation, and we expect to actively improve our business plans and launch a series of initiatives to optimize our revenue structure and diversify our business to counter the adverse effects of COVID-19 and the governmental policy developments on our operations and financial results. Looking forward, we believe our business fundamentals will defend our leading position in the industry and we remain intently focused on ramping production,broadening the market, and driving long-term value for shareholders in 2022 and beyond."
First Quarter 2022Unaudited Financial Results
For the Three Months Ended March 31,
Regular Corrugating Medium Paper ("CMP")*
Regular Corrugating Medium Paper ("CMP")*
Basic and Diluted lossper share
*** Products from PM8 and PM9
For the first quarter of 2022, total revenue decreased by 36.1%, to approximately $15.48 million from approximately $24.21 million for the same period of last year. The decrease in total revenue was mainly due to the decrease in sales volume of regular CMP, offset printing paper and tissue paper products.
The following table summarizes revenue, volume and ASP by product for the first quarter of 2022 and 2021, respectively:
For the Three Months Ended March 31,
Revenue from CMP, including both regular CMP and light-Weight CMP, decreased by 27.5%, to approximately $15.03 million and accounted for 97.1% of total revenue for the first quarter of 2022, compared to approximately $20 .71 million, or 85.6% of total revenue for the same period of last year. The Company sold 29,086 tonnes of CMP at an ASP of $517/tonne in the first quarter of 2022, compared to 41,296 tonnes at an ASP of $502/tonne in the same period of last year.
Of the total CMP sales, revenue from regular CMP decreased by 22.8%, to approximately $13.10 million for the first quarter of 2022, compared to revenue of approximately $16.96 million for the same period of last year. The Company sold 25,245 tonnes of regular CMPat an ASP of $519/tonne during the first quarter of 2022, compared to 33,626 tonnes at an ASP of $504/tonne for the same period of last year. Revenue from light-weight CMP decreased by 48.6%, to approximately $1.93 million for the first quarter of 2022, compared to revenue of approximately $3.75 million for the same period of last year. The Company sold 3,841 tonnes of light-weight CMP at an ASP of $502/tonne for the first quarter of 2022, compared to 7,670 tonnes at an ASP of $489/tonne for the same period of last year.
Revenue from offset printing paper was nil for the first quarter of 2022, compared to revenue of approximately $2.12 million for the same period of last year. The Company sold 3,142 tonnes of offset printing paper at an ASP of $673/tonne in the first quarter of 2021.
Revenue from tissue paper products decreased by 68.2%, to approximately $0 .40 million for the first quarter of 2022, from approximately $1.25 million for the same period of last year. The Company sold 397 tonnes of tissue paper products at an ASP of $1,003/tonne for the first quarter of 2022, compared to 1,120 tonnes at an ASP of $1,117/tonne for the same period of last year.
Revenue from face masks decreased by 56.6%, to approximately $56 ,596 for the first quarter ended March 31, 2022, from $130,458 for the same period of last year. The Company sold 3,014 thousand pieces of face masks for the first quarter of2022, compared to 3,836 thousand pieces of face masks for the same period oflast year.
Gross Profit and Gross Margin
Total cost of sales decreased by 32.2%, to approximately $15.17 million for the first quarter of 2022 from approximately $22.38 million for the same period of last year. The decrease in overall cost of sales was mainly due to the decrease in sales quantity of regular CMP, offset printing paper and tissue paper products. Costs of sales per tonne for regular CMP, light-weight CMP, offset printing paper, and tissue paper products were $491, $461,$nil and $2,424, respectively, for the first quarter of 2022, compared to $462 , $435, $543 and $1,525, respectively, for the same period of last year.
Total gross profit was approximately $0.31 million for the first quarter of 2022, compare to the gross profit of approximately $1.83 million for the same period of last year as a result of factors described above. Overall gross margin was 2.0% for the first quarter of 2022, compared to 7.6% 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 5.4%, 8.2%, nil%, -141.5% and 29.5%, respectively, for the first quarter of 2022, compared to 8.5%, 10.9%, 19.4%, -36.5% and 18.8%, respectively, for the same period of last year.
Selling, General and Administrative Expenses
Selling, general and administrative expenses ("SG&A") increased by 29.2%, to approximately $3.30 million for the first quarter of 2022 from approximately $2.56 million for the same period of last year.
Loss from operations was approximately $2.96 million for the first quarter of 2022, a decrease of 308.2%, from loss from operations of approximately $0.72 million for the same period of last year. Operating loss margin was 19.1% for the first quarter of 2022, compared to operating loss margin of 3.0% for the same period of last year.
Net loss was approximately $2.49 million , or loss per share of $0.03 , compared to net loss of approximately $4.34 million , or loss per share of $0.12 , for the same period of last year.
EBITDA was approximately $1.20 million for the first quarter of 2022, compared to approximately negative $0.07 million for the same period of last year.
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
For the Three Months Ended March 31,
Cash, Liquidity and Financial Position
As of March 31, 2022, 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 related party loans) of approximately $15 .36 million, $13.58 million and $2.99 million, respectively, compared to approximately $11.20 million, $13.52 million and $2.98 million, respectively, as of December 31, 2021.
Net accounts receivable was approximately $4 .98 million as of March 31, 2022, compared to approximately $4.87 million as of December 31, 2021. Net inventory was approximately $4.35 million as of March 31, 2022, compared to approximately $5.84 million as of December 31, 2021. As of March 31, 2022, the Company had current assets of approximately $48.62 million and current liabilities of approximately $19.94 million, resulting in a working capital of approximately $28.68 million. This was compared to current assets of approximately $55.52 million and current liabilities of approximately $20.43 million , resulting in a working capital of approximately $35.09 million as of December 31, 2021.
Net cash provided by operating activities was approximately $4.41 million for the first quarter of 2022, compared to net cash used in operating activities of approximately $8.28 million for the same period of last year. Net cash used in investing activities was approximately $7.18 million for the first quarter of 2022, compared to approximately $0.04 million for the same period of last year. Net cash provided by financing activities was approximately $6.89 million for the first quarter of 2022, compared to approximately $41.79 million for the same period of last year.
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/.
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: [email protected] Tel: +86 312 8698215
Investor Relations Ascent Investor Relations LLC Ms. Tina Xiao Email: [email protected] Tel: +1-917-609-0333
AS OF MARCH 31, 2022 AND DECEMBER 31, 2021
Accounts receivable (net of allowance for doubtful accounts of $73,563 and $69,053 as of March 31, 2022 and December 31, 2021, respectively)
Prepayments and other current assets
Prepayment on property, plant and equipment
Finance lease right-of-use assets, net
Property, plant, and equipment, net
Current portion of long-term loans from credit union
Accrued payroll and employee benefits
Other payables and accrued liabilities
Total liabilities (including amounts of the consolidated VIE without recourse to the Company of $17,240,190 and $17,924,475 as of March 31, 2022 and December 31, 2021, respectively)
Common stock, 500,000,000 shares authorized, $0.001 par value per share, 99,049,900 shares issued and outstanding as of March 31, 2022 and December, 31,2021.
Total Liabilities and Stockholders' Equity
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021
Selling, general and administrative expenses
Gain (Loss) on derivative liability
Basic and Diluted Losses per Share
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021
Cash Flows from Operating Activities:
Adjustments to reconcile net income to net cash provided by operating activities:
(Gain) Loss on derivative liability
Changes in operating assets and liabilities:
Prepayments and other current assets
Accrued payroll and employee benefits
Other payables and accrued liabilities
Net Cash Provided by (Used in) Operating Activities
Cash Flows from Investing Activities:
Purchases of property, plant and equipment
Net Cash Used in Investing Activities
Cash Flows from Financing Activities:
Proceeds from issuance of shares and warrants, net
Payment of capital lease obligation
Loan repaid by a related party
Net Cash Provided by Financing Activities
Effect of Exchange Rate Changes on Cash and Cash Equivalents
Net Increase in Cash and Cash Equivalents
Cash, Cash Equivalents and Restricted Cash - Beginning of Period
Cash, Cash Equivalents and Restricted Cash - End of Period
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest, net of capitalized interest cost
Cash paid for income taxes
Total cash, cash equivalents and restricted cash shown in the statement of cash flows
SOURCE IT Tech Packaging, Inc.
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