IT Tech Packaging, Inc. Announces First Quarter 2024 Unaudited Financial Results
IT Tech Packaging, Inc. announced unaudited financial results for Q1 2024, reporting a revenue of $6.86 million with a profit of $0.40 million. Despite industry challenges, the company aims to optimize operations and explore new markets for growth.
The company reported an increase in gross profit by 224.08% to $0.40 million.
The gross profit margin improved by 7.21 percentage points to 5.81%.
The company aims to optimize raw material structure and minimize purchase price for production efficiency.
Revenue decreased by 65.32% to $6.86 million, mainly due to production suspensions.
Net loss increased by 37.08% to $3.75 million, with a loss per share of $0.37.
EBITDA decreased significantly to negative $0.02 million from $1.21 million.
Insights
Analyzing the first quarter financial results of IT Tech Packaging, Inc., it's evident that the company has experienced a significant decline in revenue of
The increase in Selling, General and Administrative (SG&A) expenses by
From a market dynamics perspective, IT Tech Packaging's mention of sluggish demand and intense competition, both domestic and from imports, alongside interest rate hikes, provides a macroeconomic context for the industry's performance. Investors should be aware of these wider economic pressures, as they are likely to persist and can influence the company's ability to rebound in the near term.
The company's approach to combat these challenges includes optimizing raw material structure, exploring new products and market diversification, which are constructive strategies. However, their effectiveness will largely depend on the execution and market response in a tough economic climate. The proactive policies by the Chinese government to stimulate the economy could benefit the sector in the long run, yet the exact impact on IT Tech Packaging's bottom line remains uncertain, warranting a cautious outlook.
Looking closely at IT Tech Packaging's supply chain and inventory management, the increase in net inventory, though marginal, in conjunction with a significant revenue decline, could indicate overstocking or slowing demand that an investor would find troubling. While the company aims to maintain efficient production and quality control, the reported measures may not suffice if the demand for their products continues to drop.
It's also critical to assess the company's financial position and liquidity, as their current liabilities are close to overtaking current assets, which could put pressure on their working capital and liquidity status in the forthcoming quarters. The noted increase in net accounts receivable is another point of interest, suggesting potential collection challenges or extended credit terms in a bid to maintain sales, which could affect cash flows.
BAODING, China, May 10, 2024 /PRNewswire/ -- IT Tech Packaging, Inc. (NYSE American: ITP) ("IT Tech Packaging" or the "Company"), a leading manufacturer and distributor of diversified paper products in
Mr. Zhenyong Liu commented: "In the first quarter of FY2024, we realized revenue of approximately
First Quarter 2024 Unaudited Financial Results
For the Three Months Ended March 31, | ||||||
($ millions) | 2024 | 2023 | % Change | |||
Revenues | 6.86 | 19.79 | -65.32 % | |||
Regular Corrugating Medium Paper ("CMP")* | 5.75 | 16.47 | -65.08 % | |||
Light-Weight CMP** | 1.08 | 3.06 | -64.83 % | |||
Offset Printing Paper | - | - | n/a | |||
Tissue Paper Products | - | 0.22 | n/a | |||
Face Masks | - | 0.04 | n/a | |||
Gross profit | 0.40 | -0.28 | 224.08 % | |||
Gross profit margin | 5.81 % | -1.40 % | 7.21 pp**** | |||
Regular Corrugating Medium Paper ("CMP")* | 5.68 % | 1.93 % | 3.75 pp**** | |||
Light-Weight CMP** | 3.32 % | 3.96 % | -0.64 pp**** | |||
Offset Printing Paper | - | - | n/a | |||
Tissue Paper Products*** | - | -316.80 % | n/a | |||
Face Masks | - | -7.97 % | n/a | |||
Operating income | -3.50 | -2.77 | -26.31 % | |||
Net loss | -3.75 | -2.73 | -37.08 % | |||
EBITDA | -0.02 | 1.21 | -101.65 % | |||
Basic and Diluted earnings per share | -0.37 | -0.27 | -37.04 % | |||
* Products from PM6 | ||||||
** Products from PM1 | ||||||
*** Products from PM8 and PM9 | ||||||
**** pp represents percentage points |
- Revenue decreased by
65.32% to approximately , mainly due to the production suspension of corrugating medium paper ("CMP") in January and February of 2024, and production suspension of tissue paper products in the first quarter of 2024.$6.86 million - Gross profit was approximately
, compared with gross loss of$0.40 million for the same period of last year. Total gross profit margin increased by 7.21 percentage point to$0.28 5.81% . - Loss from operations was approximately
, compared to loss from operations of approximately$3.50million million for the same period of last year.$2.77 - Net loss was approximately
, or loss per share of$3.75 million , compared to net loss of approximately$0.37 , or loss per share of$2.73 million , for the same period of last year.$0.27 - Earnings before interest, taxes, depreciation and amortization ("EBITDA") was approximately negative
, compared to$0.02 million for the same period of last year.$1.21 million
Revenue
For the first quarter of 2024, total revenue decreased by
The following table summarizes revenue, volume and ASP by product for the first quarter of 2024 and 2023, respectively:
For the Three Months Ended March 31, | ||||||||||||
2024 | 2023 | |||||||||||
Revenue | Volume | ASP | Revenue | Volume | ASP | |||||||
Regular CMP | 5,751 | 15,640 | 368 | 16,468 | 41,663 | 395 | ||||||
Light-Weight CMP | 1,076 | 3,030 | 355 | 3,060 | 8,019 | 382 | ||||||
Offset Printing Paper | - | - | - | - | - | - | ||||||
Tissue Paper Products | - | - | - | 223 | 191 | 1,167 | ||||||
Total | 6,827 | 18,670 | 366 | 19,751 | 49,873 | 396 | ||||||
Revenue | Volume | ASP | Revenue | Volume | ASP | |||||||
Face Masks | - | - | - | 35 | 1,105 | 32 |
Revenue from CMP, including both regular CMP and light-Weight CMP, decreased by
Of the total CMP sales, revenue from regular CMP decreased by
Revenue from offset printing paper was $nil for the first quarter of 2024 and 2023.
Revenue from tissue paper products was $nil and
Revenue generated from selling face mask were $nil and
Gross Profit (Loss) and Gross Margin
Total cost of sales decreased by
Total gross profit was approximately
Selling, General and Administrative Expenses
Selling, general and administrative expenses ("SG&A") increased by
Loss from Operations
Loss from operations was approximately
Net Loss
Net loss was approximately
EBITDA
EBITDA was approximately
Note 1: Non-GAAP Financial Measures
In addition to our
Reconciliation of Net Income to EBITDA
(Amounts expressed in US$)
For the Three Months Ended March 31, | |||||
($ millions) | 2024 | 2023 | |||
Net loss | -3.75 | -2.73 | |||
Add: Income tax | 0.04 | - | |||
Net interest expense | 0.21 | 0.25 | |||
Depreciation and amortization | 3.48 | 3.69 | |||
EBITDA | -0.02 | 1.21 |
Cash, Liquidity and Financial Position
As of March 31, 2024, 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
Net accounts receivable was approximately
Net cash provided by operating activities was approximately
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
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: +86 312 8698215
IT TECH PACKAGING, INC. | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
AS OF MARCH 31, 2024 AND DECEMBER 31, 2023 | |||||||
(unaudited) | |||||||
March 31, | December 31, | ||||||
2024 | 2023 | ||||||
ASSETS | |||||||
Current Assets | |||||||
Cash and bank balances | $ | 4,514,020 | $ | 3,918,938 | |||
Restricted cash | 903,540 | 472,983 | |||||
Accounts receivable (net of allowance for doubtful | 2,386,177 | 575,526 | |||||
Inventories | 3,492,364 | 3,555,235 | |||||
Prepayments and other current assets | 17,677,417 | 18,981,290 | |||||
Due from related parties | 1,041,314 | 853,929 | |||||
Total current assets | 30,014,832 | 28,357,901 | |||||
Prepayment on property, plant and equipment | - | - | |||||
Operating lease right-of-use assets, net | 503,221 | 528,648 | |||||
Property, plant, and equipment, net | 160,205,120 | 163,974,022 | |||||
Value-added tax recoverable | 1,872,931 | 1,883,078 | |||||
Deferred tax asset non-current | - | - | |||||
Total Assets | $ | 192,596,104 | $ | 194,743,649 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current Liabilities | |||||||
Short-term bank loans | $ | 845,666 | $ | 423,567 | |||
Current portion of long-term loans | 8,116,984 | 6,874,497 | |||||
Lease liability | 102,154 | 100,484 | |||||
Accounts payable | 241,779 | 4,991 | |||||
Advance from customers | 110,787 | 136,167 | |||||
Notes payable | 246,501 | - | |||||
Due to related parties | 730,095 | 728,869 | |||||
Accrued payroll and employee benefits | 310,687 | 237,842 | |||||
Other payables and accrued liabilities | 13,869,095 | 12,912,517 | |||||
Total current liabilities | 24,573,748 | 21,418,934 | |||||
Long-term loans | 3,241,720 | 4,503,932 | |||||
Lease liability - non-current | 491,908 | 483,866 | |||||
Derivative liability | 20 | 54 | |||||
Total liabilities (including amounts of the consolidated | 28,307,396 | 26,406,786 | |||||
Commitments and Contingencies | |||||||
Stockholders' Equity | |||||||
Common stock, 50,000,000 shares authorized, | 10,066 | 10,066 | |||||
Additional paid-in capital | 89,172,771 | 89,172,771 | |||||
Statutory earnings reserve | 6,080,574 | 6,080,574 | |||||
Accumulated other comprehensive loss | (10,857,153) | (10,555,534) | |||||
Retained earnings | 79,882,450 | 83,628,986 | |||||
Total stockholders' equity | 164,288,708 | 168,336,863 | |||||
Total Liabilities and Stockholders' Equity | $ | 192,596,104 | $ | 194,743,649 |
IT TECH PACKAGING, INC. | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME | |||||||
FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023 | |||||||
(Unaudited) | |||||||
Three Months Ended | |||||||
March 31, | |||||||
2024 | 2023 | ||||||
Revenues | $ | 6,863,841 | $ | 19,790,877 | |||
Cost of sales | (6,464,728) | (20,067,876) | |||||
Gross Profit (Loss) | 399,113 | (276,999) | |||||
Selling, general and administrative expenses | (3,900,783) | (2,495,362) | |||||
Loss from Operations | (3,501,670) | (2,772,361) | |||||
Other Income (Expense): | |||||||
Interest income | 2,183 | 136,268 | |||||
Interest expense | (210,290) | (249,169) | |||||
Gain (Loss) on derivative liability | 34 | 152,097 | |||||
Loss before Income Taxes | (3,709,743) | (2,733,165) | |||||
Provision for Income Taxes | (36,793) | - | |||||
Net Loss | (3,746,536) | (2,733,165) | |||||
Other Comprehensive (Loss) Income | |||||||
Foreign currency translation adjustment | (301,619) | 2,502,756 | |||||
Total Comprehensive Loss | $ | (4,048,155) | $ | (230,409) | |||
Losses Per Share: | |||||||
Basic and Diluted Losses per Share | $ | (0.37) | $ | (0.27) | |||
Outstanding – Basic and Diluted | 10,065,920 | 10,065,920 |
IT TECH PACKAGING, INC. | ||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR | ||||||
THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023 | ||||||
(Unaudited) | ||||||
Three Months Ended | ||||||
March 31, | ||||||
2024 | 2023 | |||||
Cash Flows from Operating Activities: | ||||||
Net income | $ | (3,746,536) | $ | (2,733,165) | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Depreciation and amortization | 3,481,788 | 3,686,243 | ||||
(Gain) Loss on derivative liability | (34) | (152,097) | ||||
(Gain) Loss from disposal and impairment of property, plant and equipment | - | 12,926 | ||||
(Recovery from) Allowance for bad debts | 36,942 | (246,386) | ||||
Allowances for inventories, net | (2,951) | |||||
Changes in operating assets and liabilities: | ||||||
Accounts receivable | (1,847,112) | (1,988,921) | ||||
Prepayments and other current assets | 1,276,805 | 9,461,336 | ||||
Inventories | 59,612 | (3,062,782) | ||||
Accounts payable | 236,603 | (5,101) | ||||
Advance from customers | (25,123) | - | ||||
Notes payable | 246,299 | - | ||||
Related parties | (187,484) | (128,625) | ||||
Accrued payroll and employee benefits | 73,213 | 126,986 | ||||
Other payables and accrued liabilities | 1,022,398 | 263,712 | ||||
Income taxes payable | - | (424,198) | ||||
Net Cash Provided by Operating Activities | 624,420 | 4,809,928 | ||||
Cash Flows from Investing Activities: | ||||||
Purchases of property, plant and equipment | (9,027) | (295,018) | ||||
Net Cash Used in Investing Activities | (9,027) | (295,018) | ||||
Cash Flows from Financing Activities: | ||||||
Proceeds from short term bank loans | 422,488 | - | ||||
Proceeds from long term loans | - | 2,623,410 | ||||
Repayment of bank loans | - | (2,915) | ||||
Payment of capital lease obligation | - | (55,849) | ||||
Net Cash Provided by Financing Activities | 422,488 | 2,564,646 | ||||
Effect of Exchange Rate Changes on Cash and Cash Equivalents | (12,242) | 146,516 | ||||
Net Increase in Cash and Cash Equivalents | 1,025,639 | 7,226,072 | ||||
Cash, Cash Equivalents and Restricted Cash - Beginning of Period | 4,391,921 | 9,524,868 | ||||
Cash, Cash Equivalents and Restricted Cash - End of Period | $ | 5,417,560 | $ | 16,750,940 | ||
Supplemental Disclosure of Cash Flow Information: | ||||||
Cash paid for interest, net of capitalized interest cost | $ | 137,340 | $ | 84,040 | ||
Cash paid for income taxes | $ | $ | 424,198 | |||
Cash and bank balances | 4,514,020 | 16,750,940 | ||||
Restricted cash | 903,540 | - | ||||
Total cash, cash equivalents and restricted cash shown in the statement of cash flows | 5,417,560 | 16,750,940 |
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SOURCE IT Tech Packaging, Inc.
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