EX-99.1 2 f8k110719ex99-1_ittechpack.htm PRESS RELEASE DATED NOVEMBER 7, 2019, ANNOUNCING UNAUDITED FINANCIAL RESULTS AND OPERATIONAL RESULTS OF THE COMPANY FOR THE THIRD QUARTER ENDED SEPTEMBER 30, 2019

Exhibit 99.1

 

IT Tech Packaging, Inc. Announces Third Quarter 2019 Financial Results

 

Continued Improvement in Margin and Profitability,

Strong Growth in Sales Volume, Net Income and Operating Income, with Increases of 53%, 266% and 313%, Respectively, in Q3 2019, Reached the Highest Level Since Q4 2016

 

Company to Host Earnings Conference Call on Friday, November 8, 2019, at 8:00 am EST

 

BAODING, China, November 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 third quarter ended September 30, 2019.

 

Mr. Zhenyong Liu, Chairman and Chief Executive Officer of the Company, commented, “We are pleased to report solid financial results for the third quarter of 2019 with 53.2% increases in sales volume across all three product categories, which reached the highest level since the fourth quarter of 2016. With continued turnarounds and recovery of the operation, we grew our top line by 23.3% and delivered 313.3%growth in operating income, in the third quarter of 2019, and tissue paper and offset printing paper products generated $1.6 million and $7.0 million revenues, respectively. With 326.8% and 266.4% growth in overall gross profit and net income, respectively, our margins and profitability improved significantly in the recorded quarter thanks to continued increase in sales volume for all products as well as decreases in cost of materials and operating expenses. Looking ahead, we expect that the stable order trend will continue to carry over into the rest of the year and 2020.”

 

Third Quarter 2019 Unaudited Financial Results

 

　  For the Three Months Ended
September 30,		 
($ millions)  2019   2018   % Change 
Revenues   32.94    26.72    23.3%
Regular Corrugating Medium Paper (“CMP”)*   19.33    19.22    0.6%
Light-Weight CMP**   5.02    6.85    -26.8%
Offset Printing Paper   7.04    0.66    973.5%
Tissue Paper Products   1.55    0.00    NM 
　   　    　    　 
Gross profit   5.37    1.26    326.8%
Gross profit (loss) margin   16.3%   4.7%   11.6 pp***
Regular Corrugating Medium Paper (“CMP”)*   14.7%   4.9%   9.8 pp***
Light-Weight CMP**   15.9%   5.1%   10.8 pp***
Offset Printing Paper   33.3%   -3.3%   36.6 pp***
Tissue Paper Products   -38.9%   NM    NM 
　   　    　    　 
Operating income (loss)   3.35    -1.57    313.3%
Net income   2.34    -1.40    266.4%
EBITDA   7.11    1.89    276.2%
Basic and Diluted earnings (loss) per share   0.11    -0.07    257.1%

 

*Products from PM6
**Products from PM1
***pp represents percentage points

 

 

 

 

●Total sales volume of CMP, offset printing paper and tissue paper products increased by 53.2% to 72,246 tonnes, reaching record highs since the fourth quarter 2016
●Revenue increased by 23.3% to $32.9 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 and offset printing paper
●Gross profit increased significantly by 326.8% to $5.4 million. Gross margin increased by 11.6 percentage point to 16.3%. The increase in gross profit were primarily due to the decrease in average cost of sales per tonne for CMP and offset printing paper, 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 and offset printing paper products. Gross margins over regular CMP , Light-Weight CMP products and offset printing paper product increased to 14.7%, 15.9% and 33.3%, respectively
●Income from operations increased by 313.3% to $3.3 million, compared to loss from operations of $1.6 million for the same period of last year
●Net income was $2.3 million, an increase of 3.7 million, or 266.4%, from net loss of $1.4 million for the same period of last year. Earnings per basic and diluted share was $0.11, compared to loss per basic and diluted share of $0.07 , for the same period of last year
●Earnings before interest, taxes, depreciation and amortization (“EBITDA”) increased by 276.2% to $7.1 million

 

Revenue

 

For the third quarter of 2019, total revenue increased by $6.2 million, or 23.3%, to $32.9 million from $26.7 million for the same period of last year. The increase in total revenue was mainly due to increases in sales volume of CMP products, offset printing paper and tissue paper products, partially offset by the decreases in average selling prices (ASP) for both CMP products and offset printing paper. Total sales volume of CMP, offset printing paper and tissue paper products during the period increased by 53.2% to 72,246 tonnes, compared to 47,149 tonnes sold during the same period of 2018.

 

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The following table summarizes revenue, volume and ASP by product for the third quarter of 2019 and 2018, respectively:

 

　  2019   2018 
　  Revenue
($’000)		   Volume
(tonne)		   ASP
($/tonne)		   Revenue
($’000)		   Volume
(tonne)		   ASP
($/tonne)		 
Regular CMP   19,332    47,487    407    19,219    33,928    566 
Light-Weight CMP   5,017    12,721    394    6,850    12,319    556 
Offset Printing Paper   7,038    10,198    690    656    902    727 
Tissue Paper Products   1,551    1,840    843    -    -    - 
Total   32,938    72,246    456    26,724    47,149    567 

 

Revenue from CMP, including both regular CMP and light-Weight CMP, decreased by $1.7 million, or 6.6%, to $24.3 million and accounted for 73.9% of total revenue for the third quarter of 2019, compared to $26.1 million, or 97.5% of total revenue, for the same period of last year. The Company sold 60,208 tonnes of CMP at an ASP of $404/tonne in the third quarter of 2019, compared to 46,247 tonnes at an ASP of $564/tonne in the same period of last year.

 

Of the total CMP sales, revenue from regular CMP slightly increased by $0.1 million, or 0.6%, to $19.3 million, resulting from sales of 47,487 tonnes at an ASP of $407/tonne, during the third quarter of 2019, compared to revenue of $19.2 million, resulting from sales of 33,928 tonnes at an ASP of $566/tonne, for the same period of last year. Revenue from light-weight CMP decreased by $1.8 million, or 26.8%, to $5.0 million, resulting from sales of 12,721 tonnes at an ASP of $394/tonne for the third quarter of 2019, compared to revenue of $6.8 million, resulting from sales of 12,319 tonnes at an ASP of $556/tonne for the same period of last year.

 

Revenue from offset printing paper increased by $6.4 million, or 973.5%, to $7.0 million for the third quarter of 2019, from $0.7 million for the same period of last year. The Company sold 10,198 tonnes of offset printing paper at an ASP of $690/tonne in the third quarter of 2019, compared to 902 tonnes at an ASP of $727/tonne in the same period of last year.

 

We produce 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. We launched the complete line of processing base tissue paper with designated capacity of 15,000 tonnes/year, and producing finished tissue paper products with designated capacity of 10,000 tonnes/year. With the launch of PM8 in December 2018, the production and sales of tissue paper products have increased steadily in 2019. Revenue from tissue paper products was $1.6 million, 4.7% of the total revenues and resulting from sales of 1,840 tonnes at an ASP of $843/tonne, for the third quarter of 2019.

 

Gross Profit and Gross Margin

 

Total cost of sales increased by $2.1 million, or 8.2%, to $27.6 million for the third quarter of 2019 from $25.5 million for the same period of last year. Overall cost of sales per tonne was $382 for the third quarter of 2019, compared to $540 for the same period of last 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, which decreased by 44.4% and 44%, respectively, in the third quarter of 2019. Costs of sales per tonne for regular CMP, light-weight CMP, offset printing paper, and tissue paper products were $347, $332, $461, and $1,171, respectively, for the third quarter of 2019, compared to $539, $528, $751 and $nil, respectively, for the same period of last year.

 

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Gross profit increased by $4.1 million, or 326.8%, to $5.4 million for the third quarter of 2019 from $1.3 million for the same period of last year. Overall gross margin was 16.3% for the third quarter of 2019, compared to 4.7% for the same period of last year. The increase in gross profit and gross margin were mainly related to the decrease in average cost of sales per tonne for CMP and offset printing paper, 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 and offset printing paper products. Gross margins for regular CMP, light-weight CMP, offset printing paper, and tissue paper products were 14.7%, 15.9%, 33.3%, and negative 38.9%, respectively, for the third quarter of 2019, compared to 4.9%, 5.1%, negative 3.3%, and nil, respectively, for the same period of last year.

 

Selling, General and Administrative Expenses

 

Selling, general and administrative expenses (“SG&A”) decreased by $0.8 million, or 28.5%, to $2.0 million for the third quarter of 2019 from $2.8 million for the same period of last year. The decrease was mainly related to less repair and maintenance costs incurred for the third 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 6.1% for the third quarter of 2019, compared to 10.6% for the same period of last year.

 

Income (loss) from Operations

 

Income from operations was $3.3 million for the third quarter of 2019, compared to loss from operations of $1.6 million for the same period of last year. The increase in income from operations was primarily due to substantial increase in gross profit combined with decreased SG&A expenses this year as discussed above. Operating margin was 10.2% for the third quarter of 2019, compared to operating loss margin of 5.9% for the same period of last year.

 

Net Income

 

Net income was $2.3 million, or $0.11 per basic and diluted share, for the third quarter of 2019, compared to net loss of $1.4 million, or $0.07 loss per basic and diluted share, for the same period of last year.

 

EBITDA

 

EBITDA was $7.1 million for the third quarter of 2019, compared to $1.9 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.

 

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Reconciliation of Net Income to EBITDA

(Amounts expressed in US$)

 

　  For the Three Months Ended
September 30,		 
($ millions)  2019   2018 
Net income (loss)   2.34    -1.40 
Add: Income tax   0.77    -0.54 
Net interest expense   0.24    0.37 
Depreciation and amortization   3.76    3.46 
EBITDA   7.11    1.89 

 

Nine Months Ended September 30, 2019 Financial Results

 

　  For the Nine Months Ended
September 30,		 
($ millions)  2019   2018   % Change 
Revenues   84.01    61.76    36.0%
Regular Corrugating Medium Paper (“CMP”)*   52.44    43.43    20.7%
Light-Weight CMP**   13.69    13.10    4.5%
Offset Printing Paper   13.27    5.21    154.7%
Tissue Paper Products   4.60    0.00    NM 
Digital Photo Paper   0.00    0.01    NM 
　   　    　    　 
Gross profit   8.09    3.58    126.0%
Gross margin   9.6%   5.8%   -3.8 pp 
Regular Corrugating Medium Paper (“CMP”)*   8.4%   6.6%   -1.8 pp 
Light-Weight CMP**   7.1%   5.1%   -2.0 pp 
Offset Printing Paper   29.8%   0.8%   29.0 pp 
Tissue Paper Products   -27.0%   N/A    NM 
　   　    　    　 
Operating income (loss)   0.71    -6.10    111.6%
Net income (loss)   0.07    -5.38    101.2%
EBITDA   12.55    5.05    148.5%
Basic and Diluted earnings per share   0.003    -0.25    101.2%

 

*Products from PM6
**Products from PM1
***pp represents percentage points

 

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Revenue

 

For the nine months ended September 30, 2019, total revenue increased by $22.2 million, or 36%, to $84 million from $61.8 million for the same period of last year. 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 during the period increased by 72% to 177,956 tonnes, compared to 103,446 tonnes sold during the same period of 2018.

 

The following table summarizes revenue, volume and ASP by product for the nine months ended September 30, 2019 and 2018, respectively:

 

　  For the Nine Months Ended
September 30,		 
　  2019   2018 
　  Revenue
($’000)		   Volume
(tonne)		   ASP
($/tonne)		   Revenue
($’000)		   Volume
(tonne)		   ASP
($/tonne)		 
Regular CMP   52,440    121,774    431    43,434    74,141    586 
Light-Weight CMP   13,693    32,728    418    13,101    23,114    567 
Offset Printing Paper   13,275    18,757    708    5,212    6,191    842 
Tissue Paper Products   4,600    4,697    979    -    -     NM 
Total   84,008    177,956    472    61,761    103,446    597 

 

Revenue from CMP, including both regular CMP and light-Weight CMP increased by $9.6 million, or 17%, to $66.1 million, and accounted for 78.7% of total revenue for the nine months ended September 30, 2019, compared to $56.5 million, or 91.6% of total revenue for the same period of last year. The Company sold 154,502 tonnes of CMP at an ASP of $428/tonne in the nine months ended September 30, 2019, compared to 97,255 tonnes at an ASP of $581/tonne in the same period of last year.

 

Of the total CMP sales, revenue from regular CMP increased by $9 million, or 20.7%, to $52.4 million, resulting from sales of 121,774 tonnes at an ASP of $431/tonne during the nine months ended September 30, 2019, compared to revenue of $43.4 million, resulting from sales of 74,141 tonnes at an ASP of $586/tonne for the same period of last year. Revenue from light-weight CMP increased by $0.6 million, or 4.5%, to $13.7 million, resulting from sales of 32,728 tonnes at an ASP of $418/tonne for the nine months ended September 30, 2019, compared to revenue of $13.1 million, resulting from sales of 23,114 tonnes at an ASP of $567/tonne for the same period of last year.

 

Revenue from offset printing paper increased by $8.1 million, or 154.7%, to $13.3 million for the nine months ended September 30, 2019 from $5.2 million for the same period of last year. The Company sold 18,757 tonnes of offset printing paper at an ASP of $708/tonne in the nine months ended September 30, 2019, compared to 6,191 tonnes at an ASP of $842/tonne in the same period of last year.

 

Revenue from tissue paper products was $4.6 million for the nine months ended September 30, 2019, resulting from sales of 4,697 tonnes of tissue paper products at an ASP of $979/tonne in the nine months ended September 30, 2019.

 

6

 

 

Gross Profit and Gross Margin

 

Total cost of sales increased by $17.8 million, or 30.5%, to $75.9 million for the nine months ended September 30, 2019 from $58.2 million for the same period of last year. The increase in overall cost of sales was mainly a result of the increase in sales volume, partially offset by the decrease of cost of recycled paper board and recycled white scrap paper. Average cost of sales per tonne for regular CMP, light-weight CMP and offset printing paper decreased by 28%, 27.7% and 40.5%, respectively. Costs of sales per tonne for regular CMP, light-weight CMP, offset printing paper, tissue paper products were, $394, $389, $497, and $1,244, respectively, for the nine months ended September 30, 2019, compared to $547, $538, $835, and $nil, respectively, for the same period of last year.

 

Total gross profit increased by $4.5 million, or 126%, to $8.1 million for the nine months ended September 30, 2019 from $3.6 million for the same period of last year. 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 decreased by 3.8 percentage points to 9.6% for the nine months ended September 30, 2019 from 5.8% for the same period of last year. Gross margins for regular CMP, light-weight CMP, offset printing paper and tissue paper products were 8.4%, 7.1%, 30.0% and negative 27.0%, respectively, for the nine months ended September 30,2019, compared to 6.6%, 5.1%, 0.8%, and nil, respectively, for the same period of last year.

 

Selling, General and Administrative Expenses

 

SG&A expenses decreased by $2.3 million, or 23.3%, to $7.4 million for the nine months ended September 30, 2019 from $9.7 million for the same period of last year. As a percentage of total revenue, SG&A expenses was 8.8% for the nine months ended September 30, 2019, compared to 15.7% for the same period of last year.

 

Income from Operations

 

Income from operations was$0.7 million for the nine months ended September 30, 2019, compared to loss from operations of $6.1 million for the same period of last year. Operating margin was 0.8% for the nine months ended September 30, 2019, compared to operating loss margin of 9.9% for the same period of last year.

 

Net Income

 

Net Income increased by $5.4 million, or 101.2%, to $0.07 million, or earnings per basic and diluted share of $0.003, for the nine months ended September 30, 2019. This compared to net loss of $5.4 million, or loss per basic and diluted share of $0.25, for the same period of last year.

 

EBITDA

 

EBITDA increased by $7.5 million, or 148.5%, to $12.6 million for the nine months ended September 30, 2019 from $5.1 million for the same period of last year.

 

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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)  2019   2018 
Net income (loss)   0.07    -5.38 
Add: Income tax   0.21    -1.63 
Net interest expense   0.73    1.18 
Depreciation and amortization   11.55    10.87 
EBITDA   12.55    5.05 

 

Cash, Liquidity and Financial Position

 

As of September 30, 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 related party loans) of $4.8 million, $7.4 million and $8.8 million, respectively, compared to $8.5 million, $14.3 million, and $6.9 million, respectively, at the end of 2018.

 

Net accounts receivable was $2.8 million as of September 30, 2019, compared to $2.9 million as of December 31, 2018. Net inventory was $7.0 million as of September 30, 2019, compared to $2.9 million at the end of 2018. As of September 30, 2019, the Company had current assets of $20.6 million and current liabilities of $61.0 million, resulting in a working capital deficit of $40.4 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 $4.6 million for the nine months ended September 30, 2019, compared to net cash provided by operating activities of $1.8 million for the same period of last year. Net cash used in investing activities was $6.4 million for the nine months ended September 30, 2019, compared to $1.8 million for the same period of last year. Net cash used in financing activities was $5.2 million for the nine months ended September 30, 2019, compared to net cash provided by financing activities of $0.8 million for the same period of last year.

 

Recent development

 

On October 31, 2019, the shareholders of the Company at the Company’s Annual Shareholders General Meeting adopted and approved the 2019 Omnibus Equity Incentive Plan of IT Tech Packaging, Inc. (the “2019 ISP”). Under the 2019 ISP, the Company has reserved a total of 2,000,000 shares of common stock for issuance as or under awards to be made to the directors, officers, employees and/or consultants of the Company and its subsidiaries.

 

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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 Third Quarter 2019 Earnings Conference Call.”

 

Date: Friday, November 8, 2019
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: 1585869

 

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/2ssokezr .

 

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 November 8, 2019 to 7:59 am EST on November 16, 2019. To listen, please dial+1-855-452-5696 if calling from the United States, or +61-281-990-299 if calling internationally. Use the passcode 1585869 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:
Melody Shi, CPA

EverGreen Consulting Inc.
Email: ir@changqingconsulting.com

 

9

 

 

IT TECH PACKAGING, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2019 AND DECEMBER 31, 2018

(Unaudited)

 

   September 30,   December 31, 
   2019   2018 
ASSETS        
         
Current Assets        
Cash and bank balances  $4,805,861   $8,474,809 
Restricted cash   -    3,642,616 
Accounts receivable (net of allowance for doubtful accounts of $56,638 and $58,707 as of September 30, 2019 and December 2018, respectively)   2,775,304    2,876,632 
Inventories   7,010,419    2,923,516 
Prepayments and other current assets   5,982,730    6,241,299 
           
Total current assets   20,574,314    24,158,872 
           
Property, plant, and equipment, net   153,108,508    167,829,716 
Value-added tax recoverable   2,620,515    2,810,331 
Deferred tax asset non-current   9,827,679    8,277,091 
Other non-current assets   45,273,629    - 
           
Total Assets  $231,404,645   $203,076,010 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
           
Current Liabilities          
Short-term bank loans  $6,362,312   $11,802,075 
Current portion of long-term loans from credit union   311,046    2,491,549 
Accounts payable   857,218    629,054 
Advance from customers   83,315    - 
Notes payable   -    3,642,616 
Due to related parties   766,544    413,336 
Accrued payroll and employee benefits   239,501    213,536 
Other payables and accrued liabilities   51,062,036    10,222,796 
Income taxes payable   1,332,680    219,305 
           
Total current liabilities   61,014,652    29,634,267 
           
Loans from credit union   6,701,636    4,706,259 
Loans from a related party   2,120,771    2,185,569 
           
Total liabilities (including amounts of the consolidated VIE without recourse to the Company of $67,168,878 and $34,008,908 as of September 30, 2019 and December 31, 2018, respectively)   69,837,059    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   22,684    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   (8,329,334)   (3,263,952)
Retained earnings   112,639,118    112,573,614 
           
Total stockholders’ equity   161,567,586    166,549,915 
           
Total Liabilities and Stockholders’ Equity  $231,404,645   $203,076,010 

 

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IT TECH PACKAGING, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018

(Unaudited)

 

   Three Months Ended   Nine Months Ended 
   September 30,   September 30, 
   2019   2018   2019   2018 
                 
Revenues  $32,937,917   $26,723,657   $84,008,157   $61,761,041 
                     
Cost of sales   (27,563,185)   (25,464,314)   (75,917,762)   (58,181,584)
                     
Gross Profit   5,374,732    1,259,343    8,090,395    3,579,457 
                     
Selling, general and administrative expenses   (2,024,547)   (2,829,933)   (7,413,879)   (9,670,992)
Gain (Loss) from disposal of property, plant and equipment   -    237    -    (10,026)
Gain on acquisition of a subsidiary   (879)   -    30,518    - 
                     
Income (Loss) from Operations   3,349,306    (1,570,353)   707,034    (6,101,561)
                     
Other Income (Expense):                    
Interest income   1,413    5,222    61,787    32,641 
Subsidy income   (2,800)   (5,786)   233,488    244,723 
Interest expense   (236,987)   (372,276)   (731,027)   (1,183,269)
                     
Income (Loss) before Income Taxes   3,110,932    (1,943,193)   271,282    (7,007,466)
                     
Provision for Income Taxes   (772,905)   538,231    (205,780)   1,626,222 
                     
Net Income (Loss)   2,338,027    (1,404,962)   65,502    (5,381,244)
                     
Other Comprehensive Loss                    
Foreign currency translation adjustment   (4,810,379)   (6,994,097)   (5,065,382)   (9,222,113)
                     
Total Comprehensive Loss  $(2,472,352)  $(8,399,059)  $(4,999,880)  $(14,603,357)
                     
Earnings (Losses) Per Share:                    
                     
Basic and Diluted Earnings (Losses) per Share  $0.11   $(0.07)  $0.003   $(0.25)
                     
Outstanding – Basic and Diluted   22,028,171    21,450,316    22,028,171    21,450,316 

 

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IT TECH PACKAGING, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018

(Unaudited)

 

   Nine Months Ended 
   September 30, 
   2019   2018 
         
Cash Flows from Operating Activities:        
Net income  $65,502   $(5,381,244)
Adjustments to reconcile net income to net cash provided by operating activities:          
Depreciation and amortization   11,547,650    10,873,536 
Loss from disposal and impairment of property, plant and equipment   -    10,026 
Allowance for bad debts   (339)   (11,444)
Gain on acquisition of a subsidiary   (30,518)   - 
Deferred tax   (1,853,728)   (1,629,706)
Changes in operating assets and liabilities:          
Accounts receivable   16,894    572,184 
Prepayments and other current assets   185,780    (3,528,818)
Inventories   (4,307,754)   3,562,834 
Accounts payable   254,749    (354,689)
Advance from customers   85,993    - 
Notes payable   (3,648,250)   (2,294,280)
Related parties   367,277    114,714 
Accrued payroll and employee benefits   33,334    (35,419)
Other payables and accrued liabilities   726,564    437,532 
Income taxes payable   1,155,880    (525,502)
Net Cash Provided by Operating Activities   4,599,034    1,809,724 
           
Cash Flows from Investing Activities:          
Purchases of property, plant and equipment   (4,917,650)   (1,812,280)
Acquisition of a subsidiary   (1,531,531)   - 
    　    　 
Net Cash Used in Investing Activities   (6,449,181)   (1,812,280)
           
Cash Flows from Financing Activities:          
Proceeds from related party loans   -    4,588,559 
Repayments of related party loans   -    (9,177,118)
Proceeds from short term bank loans   3,940,110    9,635,974 
Proceeds from credit union loans   2,334,880      
Repayment of bank loans   (11,499,285)   (4,282,655)
           
Net Cash (Used in) Provided by Financing Activities   (5,224,295)   764,760 
           
Effect of Exchange Rate Changes on Cash and Cash Equivalents   (237,122)   (677,172)
           
Net (Decrease) Increase in Cash and Cash Equivalents   (7,311,564)   85,032 
           
Cash, Cash Equivalents and Restricted Cash - Beginning of Period   12,117,425    9,017,427 
           
Cash, Cash Equivalents and Restricted Cash - End of Period  $4,805,861   $9,102,459 
           
Supplemental Disclosure of Cash Flow Information:          
Cash paid for interest, net of capitalized interest cost  $659,613   $1,409,695 
Cash paid for income taxes  $888,881   $522,547 
           
Cash and bank balances   4,805,861    5,468,315 
Restricted cash   -    3,634,144 
Total cash, cash equivalents and restricted cash shown in the statement of cash flows   4,805,861    9,102,459 

 

 

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