IT Tech Packaging, Inc. Announces Fourth Quarter and Fiscal Year 2022 Financial Results.

BAODING, China: 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 fourth quarter and audited financial results for the fiscal year ended December 31, 2022.

Mr. Zhenyong Liu, Chairman and Chief Executive Officer of the Company, commented, "In fiscal year 2022, our business execution was reflected as we generated approximately $100.35 million in revenue and approximately $4.75 million in gross profit. With the domestic business and markets resumption in an orderly manner as the pandemic is gradually under control in China, we expect that the market demand for our products will recover gradually. "

Fourth Quarter 2022 Financial Results

For the Three Months Ended December 31,

($ millions)

2021

2022

% Change

Revenues

45.05

21.37

-52.6 %

Regular Corrugating Medium Paper ("CMP")*

32.66

17.28

47.1 %

Light-Weight CMP**

7.00

3.77

46.1 %

Offset Printing Paper

2.97

-

-100.0 %

Tissue Paper Products

2.28

0.25

-88.9 %

Face Masks

0.15

0.06

-60.7 %

Gross profit

4.34

1.03

-76.3 %

Gross profit (loss) margin

9.6 %

4.8 %

-4.8pp****

Regular Corrugating Medium Paper ("CMP")*

9.6 %

8.3 %

-1.3 pp****

Light-Weight CMP**

12.2 %

10.3 %

-1.9 pp****

Offset Printing Paper

21.5 %

-

-

Tissue Paper Products***

-13.9 %

-315.2 %

-301.3 pp****

Face Masks

25.2 %

27.5 %

2.3 pp****

Operating income (loss)

1.95

-0.49

-125.2 %

Net income (loss)

4.16

-11.91

-386.6 %

EBITDA

8.66

3.77

-56.5 %

Basic and Diluted earnings (loss) per share

0.45

-1.19

-364.4 %

* Products from PM6

** Products from PM1

*** Products from PM8 and PM9

**** pp represents percentage points

Revenue decreased by 52.6% to approximately $21.37 million, primarily attributable to an decrease in sales volume of all categories of products and decrease in ASP of CMP.

Gross profit decreased by 76.3% to approximately $1.03 million. Total gross margin decreased by 4.8 percentage point to 4.8%.

Loss from operations was approximately $0.49 million, compared to operation income of approximately $1.95 million for the same period of last year.

Net loss was approximately $11.91 million, or loss of $1.19 per basic and diluted share, compared to net income of approximately $4.16 million, or earnings of $0.45 per basic and diluted share, for the same period of last year.

Earnings before interest, taxes, depreciation and amortization ("EBITDA") decreased by 56.5% to approximately $3.77million.

Revenue

For the fourth quarter of 2022, total revenue decreased by approximately $23.7 million, or 52.6%, to approximately $21.4 million from approximately $45.0 million for the same period of last year. The decrease in total revenue was mainly due to the decrease in sales volume of CMP, offset printing paper and tissue paper products and the decrease in ASP of CMP and offset printing paper.

The following table summarizes revenue, volume and ASP by product for the fourth quarter of 2022 and 2021, respectively:

For the Three Months Ended December 31,

2021

2022

Revenue

($'000)

Volume

(tonne)

ASP

($/tonne)

Revenue

($'000)

Volume

(tonne)

ASP

($/tonne)

Regular CMP

32,662

57,410

569

17,281

41,941

412

Light-Weight CMP

6,996

12,543

558

3,768

9,365

402

Offset Printing Paper

2,967

3,911

759

-

-

-

Tissue Paper Products

2,278

2,292

994

253

234

1,083

Total

44,903

76,156

590

21,302

51,540

413

Revenue

($'000)

Volume

(thousand

pieces)

ASP

($/thousand

pieces)

Revenue

($'000)

Volume

($/thousand

pieces)

ASP

($/thousand

pieces)

Face Masks

146

3,014

49

57

1,330

43

Revenue from CMP, including both regular CMP and light-Weight CMP, decreased by $18.6 million, or 46.9%, to approximately $21.1 million and accounted for 98.5 % of total revenue for the fourth quarter of 2022, compared to approximately $39.7 million, or 88.0% of total revenue, for the same period of last year. The Company sold 51,306 tonnes of CMP at an ASP of $410/tonne in the fourth quarter of 2022, compared to 69,953 tonnes at an ASP of $567/tonne in the same period of last year.

Of the total CMP sales, revenue from regular CMP decreased by approximately $15.4 million, or 47.1%, to approximately $17.3 million, resulting from sales of 41,941 tonnes at an ASP of $412/tonne, during the fourth quarter of 2022, compared to revenue of approximately$32.7 million, resulting from sales of 57,410 tonnes at an ASP of $569/tonne, for the same period of last year. Revenue from light-weight CMP decreased by approximately $3.2 million, or 46.1%, to approximately $3.8 million, resulting from sales of 9,365 tonnes at an ASP of $402/tonne for the fourth quarter of 2022, compared to revenue of approximately $7.0 million, resulting from sales of 12,543 tonnes at an ASP of $558/tonne for the same period of last year.

Revenue from offset printing paper was $nil for the three months ended December 31, 2022, due to COVID-19, offset printing paper was suspended in 2022. Revenue from offset printing paper was approximately $3.0 million for the fourth quarter of 2021, with 3,911 tonnes sold at an ASP of $759/tonne.

Revenue from tissue paper products decreased by $2.0 million, or 88.9%, to approximately $0.3 million, resulting from sales of 234 tonnes at an ASP of $1,083/tonne, for the fourth quarter of 2022, compared to revenue of approximately$2.3million, resulting from sales of 2,292...