BAODING, China, Aug. 13, 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 North China, today announced its unaudited financial results for the second quarter ended June 30, 2024.
| Second Quarter 2024 Unaudited Financial Results
| ||||||
| For the Three Months Ended June 30,
| ||||||
| ($ millions) |
| 2024 | 2023
| % Change
| ||
| Revenues | 26.25
| 30.02
| -12.56 % | |||
| Regular Corrugating Medium Paper ("CMP")*
| 21.98 |
| 21.93 |
| 0.24 % | |
| Light-Weight CMP** |
| 4.23 |
| 4.54 | -6.93 %
| |
| Offset Printing Paper |
| - | 3.16 | n/a | ||
| Tissue Paper Products | - | 0.34 | n/a | |||
| Face Masks | - | 0.04 | n/a | |||
| Gross profit (loss) | 3.27 | 1.18 | 176.75 % | |||
| Gross profit margin | 12.44 % | 3.93 % | 8.51 pp**** | |||
| Regular Corrugating Medium Paper ("CMP")* | 12.22 % | 6.81 % | 5.41 pp**** | |||
| Light-Weight CMP** | 12.82 % | 7.14 % | 5.68 pp**** | |||
| Offset Printing Paper | - | 2.42 % | n/a | |||
| Tissue Paper Products*** | - | -206.06 % | n/a | |||
| Face Masks | - | -8.06 % | n/a | |||
| Operating income (loss) | 0.55 | -0.52 | 205.60 % | |||
| Net income (loss) | -0.08 | -1.25 | 93.80 % | |||
| EBITDA | 3.93 | 2.83 | 38.87 % | |||
| Basic and Diluted earnings (loss) per share | -0.01 | -0.12 | -93.33 % | |||
| * Products from PM6 | ||||||
| ** Products from PM1 | ||||||
| *** Products from PM8 and PM9 | ||||||
| **** pp represents percentage points | ||||||
- Revenue decreased by 12.56% to approximately $26.25 million, mainly due to the production suspension of offset printing paper and tissue paper products in the second quarter of 2024.
- Gross profit was approximately $3.27 million, compared with gross profit of $1.18 for the same period of last year. Total gross profit margin increased by 8.51 percentage point to 12.44%.
- Income from operations was approximately $0.55 million, compared to loss from operations of approximately $0.52 million for the same period of last year.
- Net loss was approximately $0.08 million, or loss per share of $0.01, compared to net loss of approximately $1.25 million, or loss per share of $0.12, for the same period of last year.
- Earnings before interest, taxes, depreciation and amortization ("EBITDA") was approximately $3.93 million, compared to $2.83 million for the same period of last year.
For the second quarter of 2024, total revenue decreased by 12.56%, to approximately $26.25 million from approximately $30.02 million for the same period of last year. This was mainly due to the production suspension of offset printing paper and tissue paper products in the second quarter of 2024.
The following table summarizes revenue, volume and ASP by product for the second quarter of 2024 and 2023, respectively:
| For the Three Months Ended June 30, | ||||||||||||
| 2024 | 2023 | |||||||||||
| Revenue ($'000) | Volume (tonne) | ASP ($/tonne) | Revenue ($'000) | Volume (tonne) | ASP ($/tonne) | |||||||
| Regular CMP | 21,984 | 62,813 | 350 | 21,931 | 60.063 | 365 | ||||||
| Light-Weight CMP | 4,229 | 12,552 | 337 | 4,544 | 12,877 | 353 | ||||||
| Offset Printing Paper | - | - | - | 3,156 | 5,403 | 584 | ||||||
| Tissue Paper Products | - | - | - | 344 | 293 | 1,175 | ||||||
| Total | 26,213 | 75,365 | 348 | 29,976 | 78,636 | 381 | ||||||
| Revenue ($'000) | Volume (thousand pieces) | ASP ($/thousand pieces) | Revenue ($'000) | Volume (thousand pieces) | ASP ($/thousand pieces) | |||||||
| Face Masks | - | - | - | 44 | 1,411 | 31 | ||||||
Revenue from CMP, including both regular CMP and light-Weight CMP, decreased by 0.99%, to approximately $26.21 million and accounted for 99.86% of total revenue for the second quarter of 2024, compared to approximately $26.48 million, or 88.19% of total revenue for the same period of last year. The Company sold 75,365 tonnes of CMP at an ASP of $348/tonne in the second quarter of 2024, compared to 72,940 tonnes at an ASP of $363/tonne in the same period of last year.
Of the total CMP sales, revenue from regular CMP increased by 0.24%, to approximately $21.98 million for the second quarter of 2024, compared to revenue of approximately $21.93 million for the same period of last year. The Company sold 62,813 tonnes of regular CMP at an ASP of $350/tonne during the second quarter of 2024, compared to 60,063 tonnes at an ASP of $365/tonne for the same period of last year. Revenue from light-weight CMP decreased by 6.93%, to approximately $4.23 million for the second quarter of 2024, compared to revenue of approximately $4.54 million for the same period of last year. The Company sold 12,552 tonnes of light-weight CMP at an ASP of $337/tonne for the second quarter of 2024, compared to 12,877 tonnes at an ASP of $353/tonne for the same period of last year.
Revenue from offset printing paper was $nil and $3.16 million for the second quarter of 2024 and 2023. Production of offset printing products was suspended during the second quarter of 2024.
Revenue from tissue paper products was $nil and $0.34 million for the three months ended June 30, 2024 and 2023, respectively. Production of tissue paper products was suspended during the second quarter of 2024.
Revenue generated from selling face mask were $nil and $0.04 million for the three months ended June 30, 2024 and 2023, respectively.
Gross Profit (Loss) and Gross Margin
Total cost of sales decreased by 20.30%, to approximately $22.98 million for the second quarter of 2024 from approximately $28.84 million for the same period of last year. due to the decrease in sales quantity of offset printing paper and tissue paper products and the decrease of the unit material cost of CMP products.
Total gross profit was approximately $3.27 million for the second quarter of 2024, compared to the gross profit of approximately $1.18 million for the same period of last year as a result of factors described above. Overall gross profit margin was 12.44% for the second quarter of 2024, compared to gross profit margin of 3.93% 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 12.22%, 12.82%, nil%, nil% and nil%, respectively, for the second quarter of 2024, compared to 6.81%, 7.14%, 2.42%, -206.06% and -8.06%, respectively, for the same period of last year.
Selling, General and Administrative Expenses
Selling, general and administrative expenses ("SG&A") increased by 105.35%, to approximately $2.72 million for the second quarter of 2024 from approximately $1.32 million for the same period of last year. The increase was mainly due to the increase in depreciation of idle fixed assets during production suspension.
Income (Loss) from Operations
Income from operations was approximately $0.55 million for the second quarter of 2024, an increase of 205.60%, from loss from operations of $0.52 million for the same period of last year. Operating margin was 2.09% for the second quarter of 2024, compared to operating loss margin was 1.73% for the same period of last year.
Net Loss
Net loss was approximately $0.08 million, or loss per share of $0.01 for the second quarter of 2024, compared to net loss of $1.25 million, or loss per share of $0.12 for the same period of last year.
EBITDA
EBITDA was approximately $3.93 million for the second quarter of 2024, compared to $2.83 million for the same period of last year.
Note 1: Non-GAAP Financial Measures
In addition to our U.S. GAAP results, this press release includes a discussion of EBITDA, a non-GAAP financial measure as defined by the Securities and Exchange Commission ("SEC"). The Company defines EBITDA as net income before interest, income taxes, depreciation and amortization. EBITDA is a key measure used by management to evaluate our results and make strategic decisions. Management believes this measure is useful to investors because it is an indicator of operational performance. Because not all companies use identical calculations, the Company's presentation of EBITDA may not be comparable to similarly titled measures of other companies, and should not be viewed as an alternative to measures of financial performance or changes in cash flows calculated in accordance with the U.S. GAAP.
| Reconciliation of Net Income to EBITDA (Amounts expressed in US$) | |||||
| For the Three Months Ended June 30, | |||||
| ($ millions) | 2024 | 2023 | |||
| Net income (loss) | -0.08 | -1.25 | |||
| Add: Income tax | 0.42 | 0.35 | |||
| Net interest expense | 0.21 | 0.27 | |||
| Depreciation and amortization | 3.38 | 3.46 | |||
| EBITDA | 3.93 | 2.83 | |||
| First Half of 2024 Unaudited Financial Results | ||||||
| For the Six Months Ended June 30, | ||||||
| ($ millions) | 2024 | 2023 | % Change | |||
| Revenues | 33.11 | 49.81 | -33.52 % | |||
| Regular Corrugating Medium Paper ("CMP")* | 27.73 | 38.40 | -27.77 % | |||
| Light-Weight CMP** | 5.31 | 7.60 | -30.23 % | |||
| Offset Printing Paper | - | 3.16 | n/a | |||
| Tissue Paper Products | - | 0.57 | n/a | |||
| Face Masks | - | 0.08 | n/a | |||
| Gross profit (loss) | 3.66 | 0.90 | 305.87 % | |||
| Gross profit (loss) margin | 11.07 % | 1.81 % | 9.26pp**** | |||
| Regular Corrugating Medium Paper ("CMP")* | 10.86 % | 4.71 % | 6.15 pp**** | |||
| Light-Weight CMP** | 10.90 | 5.86 % | 5.04 pp**** | |||
| Offset Printing Paper | - | 2.42 % | n/a | |||
| Tissue Paper Products*** | - | -249.58 % | n/a | |||
| Face Masks | - | -8.02 % | n/a | |||
| Operating income (loss) | -2.95 | -3.29 | -10.24 % | |||
| Net income (loss) | -3.82 | -3.99 | -4.07 % | |||
| EBITDA | 3.91 | 4.03 | -2.98 | |||
| Basic and Diluted loss per share | -0.38 | -0.40 | -5.00 % | |||
| * Products from PM6 | ||||||
| ** Products from PM1 | ||||||
| *** Products from PM8 and PM9 | ||||||
| **** pp represents percentage points | ||||||
Revenue
For the first half of 2024, total revenue decreased by 33.52%, to approximately $33.11 million from approximately $49.81 million for the same period of last year. The increase in total revenue was mainly due to the production suspension of CMP in January and February of 2024, and production suspension of offset printing paper and tissue paper products in the first half of 2024.
The following table summarizes revenue, volume and ASP by product for the first half of 2024 and 2023, respectively:
| For the Six Months Ended June 30, | |||||||||||
| 2024 | 2023 | ||||||||||
| Revenue ($'000) | Volume (tonne) | ASP ($/tonne) | Revenue ($'000) | Volume (tonne) | ASP ($/tonne) | ||||||
| Regular CMP | 27,734 | 78,452 | 354 | 38,399 | 101,726 | 377 | |||||
| Light-Weight CMP | 5,305 | 15,582 | 340 | 7,604 | 20,896 | 364 | |||||
| Offset Printing Paper | - | - | - | 3,156 | 5,403 | 584 | |||||
| Tissue Paper Products | - | - | - | 567 | 484 | 1,172 | |||||
| Total | 33,040 | 94,034 | 351 | 49,726 | 128,509 | 387 | |||||
| Revenue ($'000) | Volume (thousand pieces) | ASP ($/thousand pieces) | Revenue ($'000) | Volume (thousand pieces) | ASP ($/thousand pieces) | ||||||
| Face Masks | - | - | - | 79 | 2,516 | 32 | |||||
Revenue from CMP, including both regular CMP and light-Weight CMP, decreased by 28.18%, to approximately $33.04 million and accounted for 99.78% of total revenue for first half of 2024, compared to approximately $46.00million, or 92.36% of total revenue for the same period of last year. The Company sold 94,034tonnes of CMP at an ASP of $351/tonne in first half of 2024, compared to 122,622 tonnes at an ASP of $375/tonne in the same period of last year.
Of the total CMP sales, revenue from regular CMP decreased by 27.77%, to approximately $27.73 million for first half of 2024, compared to revenue of approximately $38.40 million for the same period of last year. The Company sold 78,452 tonnes of regular CMP at an ASP of $354/tonne during the first half of 2024, compared to 101,726 tonnes at an ASP of $377/tonne for the same period of last year. Revenue from light-weight CMP decreased by 30.23%, to approximately $5.31 million for the first half of 2024, compared to revenue of approximately $7.60 million for the same period of last year. The Company sold 15,582 tonnesof light-weight CMP at an ASP of $340/tonne for the first half of 2024, compared to 20,896 tonnes at an ASP of $364/tonne for the same period of last year.
Revenue from offset printing paper was $nil for the first half of 2024.
Revenue from tissue paper products was $nil for the first half of 2024,from approximately $0.57 million for the same period of last year. The Company sold nil tonnes of tissue paper products for the first half of 2024, compared to 484 tonnes at an ASP of $1,172/tonne for the same period of last year.
Revenue from face masks was $nil for the first half of 2024, from $0.08 million for the same period of last year. The Company sold nil thousand pieces of face masks for the first half of 2024, compared to 2,516 thousand pieces of face masks for the same period of last year.
Gross Profit and Gross Margin
Total cost of sales decreased by 39.79%, to approximately $29.45 million for the first half of 2024 from approximately $48.91million for the same period of last year. The increase was mainly a result of the decrease in sales quantity and the decrease in the unit material costs of CMP. Costs of sales per tonne for regular CMP, light-weight CMP, offset printing paper, and tissue paper products were $315, $303,$nil and $nil, respectively, for the first half of 2024, compared to $360, $343, $570 and $4,097, respectively, for the same period of last year.
Total gross profit was approximately $3.66 million for the first half of 2024, compared to the gross profit of approximately $0.90 million for the same period of last year as a result of factors described above. Overall gross margin was 11.07% for the first half of 2024, compared to 1.81% 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 10.86%, 10.90%, nil%, nil% and nil%, respectively, for the first half of 2024, compared to 4.71%, 5.86%, 2.42%, -249.58% and -8.02%, respectively, for the same period of last year.
Selling, General and Administrative Expenses
Selling, general and administrative expenses ("SG&A") increased by 73.31%, to approximately $6.62 million for the first half of 2024 from approximately $3.82 million for the same period of last year.
Income (Loss) from Operations
Loss from operations was approximately $2.95 million for the first half of 2024, representing a decrease of 10.24%, from loss from operations of approximately $3.29 million for the same period of last year. Operating loss marg