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spk01: Hello, ladies and gentlemen, and welcome to IT Tech Packaging's fourth quarter of 2021 earnings conference call. At this time, I'd like to inform you that this conference is being recorded and that all participants are in the listen-only mode. Joining us today are the company's chairman and chief executive officer, Mr. Chung-Yong Liu, and the company's chief financial officer, Ms. Jing Hao. Remarks from both Mr. Liu and Ms. Hao will be delivered in English by interpreters. IT Tech Packaging announced its fourth quarter of 2021 financial results via press release on March 15, 2022, which can be found on the company's website at www.itpackaging.cn. Mr. Liu will start today's presentation with an overview for the fourth quarter of 2021 performance. Then Ms. Howe will share more details about the company's financial results. Before we start, I'd like to draw your attention to our Safe Harbor Statement. Management's prepared remarks contain forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact and announcement are forward-looking statements including but not limited to anticipated revenues from the corrugating medium paper, issue paper, offset printing paper, and face mask business segments. The actions and initiatives of current and potential competitors, the company's ability to introduce new products, the company's ability to implement capacity expansion, market acceptance of new products, general economic and business conditions, the ability to attract or retain qualified senior management personnel and research and development staff, and other risks detailed in the company's filings with the Securities and Exchange Commission. These four looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates, and projections about the company and the industry. The company undertakes no obligation to update for looking statements to reflect subsequent or current events or circumstances or to changes in expectation, except as may be required by law. Although the company believes that the expectations expressed in this for looking statements are reasonable, it cannot assure you that this expectation will turn out to be correct and investors are cautioned that actual results may differ materially from the anticipated results. There is a presentation document featuring management's prepared remarks, and it is now available for download from the company's website at www.itpackaging.cn. Please note that there will be discussions on non-GAAP financial measures or EBITDA or earnings before interest, taxes, depreciation, and amortization. Please refer to our press release for a complete reconciliation of EBITDA to net income. As a kind reminder, all numbers in our presentation are quoted in US dollars, and all comparisons refer to year-over-year comparisons, unless otherwise stated. At this time, I would like to turn the call over to Mr. Jin Yong Liu, Chairman and Chief Executive Officer of IT Tech Packaging. His overview will be delivered in English by Connie Kang. Connie, please go ahead.
spk02: Thank you, operator, and good morning, everyone. Thanks for joining IT Packaging Fourth Quarter 2021 Earnings Conference Call today. I will provide an overview of the company's performance for the fourth quarter and fiscal year of 2021. 2021 was a remarkable year for IT tech packaging, kept off by record performance. Our business execution was reflected as we achieved $160.9 million in revenue with an increase of 59% year-over-year and $11 million in gross profit with an increase of 93% year-over-year. Once again, We demonstrated excellent revenue growth and improved business efficiency in 2021. In fiscal year 2021, we launched a series of initiatives to optimize our revenue structure and diversify our business. We significantly improved our operating and cost efficiency, reducing ourselves General and administrative expense by 14.3%, while maintaining the solid growth of overall sales volume and average selling prices of CNT products and offset printing paper products. We exceeded our objective for 2021, and we could not be more excited about the momentum we are carrying into the first quarter and the year ahead. Through continuing expanding our business scale, we are confident in our ability to execute against our long-term strategy, capitalizing on our investments in demand generation and customer loyalty to accelerate our profit growth. We firmly believe that our business fundamentals will continue to support our leading position in the industry and grow in the foreseeable future. Thank you again for all your support and attention. Now I will turn the call over to Mrs. Jean Howe, our CFO, who will review our financials for the fourth quarter of 2021. Her review will be delivered in English by comment. Thanks everyone for being on the call. Next, on behalf of the management team, I will summarize some key financial results for the fourth quarter and fiscal year 2021. Also, I will occasionally refer to specific production lines associated with their products. I will make clear which products I'm referring to. For reference, The numbering system for our production lines is provided on slide number 18. Now let's look at our financial performance for the fourth quarter of 2021. Please turn to slide number seven. For the fourth quarter of 2021, total revenue increased by 38.7% to $45.1 million. due to the increase in revenue volume, in sales volume, of regular cross-dating medium paper, then turning to slide eight, for the fourth quarter of 2021. The CMP segment, including both regular CMP and lightweight CMP, generated revenue of 39.7 million, representing 88% of the total revenue. 32.7 million of revenue was from our regular CMP product, and 7 million was from live seed CMP. CMP segment volume increased by 21.4% to 69,953 tons, of which 57,410 tons were regular CMP, and 12,000 543 towns were light with CMP. Average selling price or ASP for regular CMP increased by 30.8% to 569 per town. And ASP for light with CMP increased by 32.2% to 558 per town. Then moving on to slide 9. For first quarter of 2021, the offset printing paper generated revenue of $3 million, decreased by $1.9 million, or $39.2 million, 2% from the same period of last year. The offset printing paper volume decreased by 13.5%, to $3,950. 11 tons, ASP for offset printing paper increased by 22.8% to 759 per ton. Then turn into slide 10. For the fourth quarter of 2021, tissue paper products generated revenue of 2.3 million, decreased by 0.4 million, or 14%. This resulted from sales of 2,292 count tissue paper products with a 27.6% decrease and an ASP of 994 per count with an increase of 18.8%. Turn into slide 11. We sold 3 million pieces of face masks and generated revenue of $0.1 million from selling business for the fourth quarter of 2021. Slide number 12 summarizes the changes in our revenue mix for the fourth quarter of 2021. Total cost of sales increased by $9 million to $40.7 million, leading to total gross profit of $4.3 481.8% increase from the gross profit of $0.7 million for the same period of last year. The overall gross margin was for the fourth quarter of 2021. For the fourth quarter of 2021, SG&A expense decreased by 12% to $2.4 million and operating income was compared to loss from operations of $2 million for the same period of last year. Operating margin was 4.3% compared to operation loss margin of 6.1% for the same period of last year. For the fourth quarter of 2021, net income was $4.2 million, resulting in a net income of $0.07 per basic and dilutive share. This compared to a net loss of $1.6 million or net loss of $0.06 per basic and diluted share for the same period of last year. For the fourth quarter of 2021, EBITDA increased by $6.1 million to $8.7 million from $2.6 million for the same period of last year. now shifting gear to year-to-date financial results. For fiscal year 2021, total revenue increased by 39.4% to $160.9 million as a result of increase in sales volume of ZMP and offset printing paper and increase in ASP of ZMP, offset printing paper, and tissue paper products, partially offset by the decrease in cell volume of tissue paper products. For fiscal year 2021, the CMP segment, including both regular and lightweight CMP, generated revenue of $134.5 million, representing 83.6% of total revenue. $111.1 million in revenue was from our regular CMP products, and $23.4 million was from lightweight CMP. Volume for the CMP segment increased by 31.9% to 259,591 tons, of which 213,000 490 towns were regular CMT, and 46,201 towns were lightweight CMT. ASP for regular CMT increased by 28.7% to 520 per town, while ASP for lightweight CMT increased by 29% to 507 per town. For fiscal year 2021, our offset printing paper segment generated revenue of $17.1 million. We shipped 24,513 pounds of offset printing paper for fiscal year 2021, an increase of 20.4% from the same period of last year. ASP for offset printing paper increased by 15.4% to 696 per ton. For fiscal year 2021, tissue paper products generated revenue of $8.8 million, increased by $0.4 million, or 4.2%, which shipped 8,255 tons of tissue paper products with an 18.2% decrease and an AFP of $1,052 per town with an increase of 27.3%. For fiscal year 2021, face masks generated revenue of $0.5 million with self-volume of 12.7 million pieces of face masks for fiscal year 2021. Total cost of sales increased by $54.6 million to $149.9 million, leading to total gross profit of $11 million and an increase of 93.2% from last year. Overall gross margin of 6.9% reflects an increase of 1.2 percentage points from last year. For fiscal year 2021. as GMA expenses were $9.6 million compared to $11.2 million for the same period the last year. For fiscal year 2021, operating income increased from last round operations of $5.5 million to $1.5 million. Operating margin was 0.9% compared to operating loss margin of 5.4% for the same period the last year. For fiscal year 2021, net income was $0.9 million or $0.02 earnings per basic and diluted share compared to net loss of $5.6 million or $0.02 loss per basic and diluted share for the same period of last year. for fiscal year 2021. EBITDA increased from 10.2 million to 22.9 million for the same period of last year. Now moving to slide 20 and 21. Let's look at the balance sheet and liquidity. As of December 31, 2021, the company has cash and bank balances, short-term debt, including bank loans, current portion of long-term loans from credit unions and related party loans, and long-term debt including loans from credit unions of $11.2 million, $13.5 million, and $3 million, respectively, compared to $4.1 million, $12.2 million, and $4.6 million, respectively, at the end of 2020. Net accounts receivable was $4.9 million as of December 31, 2021, compared to $2.4 million as of December 31, 2020. Net inventory was $5.8 million as of December 31, 2021, compared to $1.2 million at the end of 2020. As of December 31, 2021, The company has current assets of $35.5 million and the current liabilities of $20.4 million, resulting in a working capital of $35.1 million. This was compared to current assets of $14.9 million and current liabilities of $18.3 million, resulting in a working capital deficit of $3.4 million at the end of 2020. NAS cash used in operating activities was $2.4 million for the year ended December 31, 2021, compared to NAS cash provided by operating activities of $16.1 million for 2020. NAS cash used in investing activities was $25.1 million for the year ended December 31, 2021. compared to $20.5 million for 2020. Net cash provided by financing activities was $34.2 million for the year ended December 31, 2021, compared to net cash provided by financing activities of $2.1 million for 2020. That's all for IT Tech Packaging fourth quarter of 2021 earnings conference call. I would like to thank everyone for joining us today. If you have any other questions, please contact us through email at irsitpackaging.vn. We appreciate your interest and support in IT Tech Packaging and look forward to speaking with you again next time. Thank you. Operator, please go ahead.
spk01: Thank you again for attending IT Tech Packaging's fourth quarter of 2021 earnings conference call. This concludes our call today, and we thank you all for listening in. Goodbye.
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