IT Tech Packaging, Inc. Announces Unaudited Preliminary Financial Results for Third Quarter 2020

Rhea-AI Summary

IT Tech Packaging, Inc. (NYSE American: ITP) announced its preliminary financial results for Q3 2020, reporting $33.4 million in total revenue, a 1.3% increase over Q3 2019. The company achieved a historic sales volume of 74,126 tonnes, with paper product sales growing despite flat revenue year-over-year. However, gross profit plummeted 52.2% to $2.6 million, and the net loss reached $(0.5) million. The increase in raw material costs, particularly recycled paper, has significantly impacted profitability. The company plans to control costs and expand market share moving forward.

Positive

• Total revenue increased by 1.3% YoY to $33.4 million.
• Historic sales volume of 74,126 tonnes recorded, indicating strong order retention.

Negative

• Gross profit decreased by 52.2% to $2.6 million.
• Net income loss of $(0.5) million compared to income of $2.3 million in Q3 2019.
• Increased raw material costs negatively impacted profit margins.

BAODING, China, Nov. 5, 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 preliminary results for the quarter ended September 30, 2020. The Company anticipates filing its quarterly report on Form 10-Q for the period ended September 30, 2020 with the U.S. Securities and Exchange Commission and releasing its earnings before the market opens on Thursday, November 12, 2020. The Company expects to host a conference call to discuss its third quarter financial results at 8:00 am Eastern Time (5:00 am Pacific Time/ 9:00 pm Beijing Time) on Friday, November 13, 2020.

Selected Third Quarter 2020 Financial Results (Unaudited and Preliminary)

		For the Three Months Ended September 30,
		2020		2019		% Change
Total Revenue ($M)		$33.4		$32.9		1.3%
Paper Products:
Sales volume (tonnes)
Regular Corrugating Medium Paper ("CMP")*		48,107		47,487		1.3%
Light-Weight CMP**		12,884		12,721		1.3%
Tissue Paper Products***		2,855		1,840		55.2%
Offset Printing Paper		10,280		10,198		0.8%
Average selling price ($/tonne)
Regular Corrugating Medium Paper ("CMP")*		$406		$407		-0.3%
Light-Weight CMP**		$394		$394		0.0%
Tissue Paper Products***		$834		$843		-1.1%
Offset Printing Paper		$596		$690		-13.6%
Face Masks:
Sales volume (pieces)		3,576,000		N/A		N/A
Average selling price ($/piece)		$0.06		N/A		N/A
Gross profit ($M)		$2.6		$5.4		-52.2%
Income (loss) from operations ($M)		$0.2		$3.3		-94.7%
Net income (loss) ($M)		$(0.5)		$2.3		-122.3%
Diluted earnings (loss) per share ($)		$(0.02)		$0.11		-118.2%
* Products from PM6
** Products from PM1
*** Products from PM8 and PM9

Mr. Zhenyong Liu, Chairman and Chief Executive Officer of IT Tech Packaging, Inc. commented, "As capacity of all production lines were fully resumed during the Q3 2020, we continued to improve our operations, particularly the sales volume and average selling prices, and we recorded a 26.5% growth in revenues, compared to the second quarter 2020, despite that our revenues in Q3 2020 were flat, compared to the same period last year. Our sales volume for the quarter reached a historic high of 74,126 tonnes since Q4 2016, which shows our capability to retain a solid orders stream. Thanks to the continuous decline in pulp prices since early this year, the gross loss of tissue paper products continued to narrow this quarter. However, our Q3 total profits were obviously impacted by increase in cost of raw materials of our paper products, such as recycled paper board and recycled white scrape paper."

Since August this year, price rise of recycled paper in the upstream has spread from the five major recycled paper bases in Hebei, Tianjin, Dongguan, Shenyang and Quanzhou, which has been transmitted to mid-stream paper product manufacturing enterprises. Thus it brought about an increase in cost of our paper products made from recycled paper other than tissue paper. In the coming quarters, we expect to focus on profit improvement over all products categories by controlling raw material costs via strengthening close collaborations with material suppliers, constantly deploy sales channels to mitigate impact from downstream market fluctuations and further expansion of market share to secure more orders."

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

 

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SOURCE IT Tech Packaging, Inc.

FAQ

What were IT Tech Packaging's Q3 2020 financial results?

IT Tech Packaging reported total revenue of $33.4 million for Q3 2020, a 1.3% increase from the previous year.

What is the net income loss for IT Tech Packaging in Q3 2020?

The company reported a net income loss of $(0.5) million in Q3 2020.

When will IT Tech Packaging release its Q3 2020 earnings report?

IT Tech Packaging plans to release its Q3 2020 earnings on November 12, 2020.

How did IT Tech Packaging perform in terms of sales volume in Q3 2020?

The sales volume for Q3 2020 reached 74,126 tonnes, the highest since Q4 2016.

What challenges did IT Tech Packaging face in Q3 2020?

The company faced increased raw material costs that negatively impacted profitability.