IT Tech Packaging(US:ITP)2020-05-15 15:59Financial Data and Key Metrics Changes - In Q1 2020, total revenue decreased by 49.9% year-over-year to $8.7 million, primarily due to production suspension from mid-January to early March 2020 caused by the COVID-19 pandemic and the seasonal effect of the Chinese New Year [7][9] - Net loss for Q1 2020 was $2.4 million, resulting in a net loss of $0.11 per basic and diluted share, compared to a net loss of $2.7 million or $0.12 per share for the same period last year [12] - Earnings before interest, taxes, depreciation, and amortization (EBITDA) increased by $0.3 million to $1.1 million from $0.8 million for the same period last year [13] Business Line Data and Key Metrics Changes - The CMP segment generated revenue of $7.7 million, accounting for 88.5% of total revenue, with volumes decreasing by 44.6% to 18,677 tons [10] - The offset printing paper segment did not generate any revenue due to production suspension during the pandemic, with expectations to generate revenue in Q2 2020 [9][10] - Tissue paper products generated $1 million in revenue from sales of 1,185 tons at an average selling price (ASP) of $849 per ton [11] Market Data and Key Metrics Changes - The average selling price for regular CMP decreased by 10.8% to $415 per ton, while the ASP for lightweight CMP decreased by 9.1% to $412 per ton [10] - The company noted a growing demand for tissue paper products due to COVID-19 control measures, with production lines running at full capacity since April [7][8] Company Strategy and Development Direction - The company is launching a new tissue paper production line (PM10) and has also started a non-medical face masks production line to meet increased demand for protective gear [8] - Management expressed confidence in the underlying demand for products and aims to improve overall performance in the coming quarters [8] Management Comments on Operating Environment and Future Outlook - Management acknowledged the unprecedented challenges posed by the COVID-19 pandemic but remains optimistic about the recovery of CMP products in Q2 and Q3 2020 [18] - The company plans to consider stock buybacks or dividends if profitability improves, with expectations of solid cash positions in the latter half of the year [20] Other Important Information - As of March 31, 2020, the company had current assets of $21.6 million and current liabilities of $14 million, resulting in a working capital of $7.6 million [14] - Net cash provided by operating activities was $6.9 million for Q1 2020, compared to net cash used in operating activities of $3.1 million for the same period last year [15] Q&A Session Summary Question: Will the company’s regular cardboard business, lightweight cardboard business, and offset paper return to normal levels? - Management expects the CMP products business to be back on track in Q2 and Q3 of this year [18] Question: Will the company consider stock buybacks or dividends if profitability improves? - Currently, the company has no dividend plans but will consider this if profitability improves, with expectations of solid cash positions in the third and fourth quarters [20]