Q4 2019 Earnings Call

He tech packages fourth quarter and fiscal year 2018 earnings conference call. At this time I would like to inform you that this conference is being recorded and that all participants are in listen only mode. Joining us today and our mysteries then you.

He said packages, chairman and Chief Executive Officer, and Mismatching, how the company's Chief Financial Officer remarks from both Mr., Liu and Mr. Mittal will be delivered in English by interpreters.

I detect packaging and now its sports wider in fiscal year 2018.

Actual results by your press release yesterday, which can be found the company's website at www <unk> packaging that C. N first Mr. Lee will brief you on the company's ski operational highlights over the fourth quarter in fiscal year 2018, and then just how will review the Companys financial results before.

Why do we start I would 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, Oh statements other than statements of historical fact in its announcement are forward looking statement.

Wins, including but not limited to anticipated revenues for the Corrugating medium paper tissue paper and offset printing paper I missed the segments the actions and initiatives some current and potential competitors the company's ability to introduce new products, the company's ability to implement capacity expansion market access.

And new products general economic business conditions, the ability to attract retain qualified senior management personnel and research and development stuff and other risks detailed in the Companys filings with the Securities and Exchange Commission.

These forward looking statements involve known and unknown risks uncertainties and are based on current expectations assumptions estimates and projections, but the company in the industry.

Company undertakes no obligation to update forward looking statements to reflect subsequent or current events or circumstances or to changes in its expectation, except as may be required fellow although the company believes the expectations expressed in these forward looking statements are reasonable it's getting it there.

Sure you that this expectation will turn out to be correct and investors are cautioned that actual results may differ materially from that dissipated 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 Dot IP packaging Dod C. N. Please note that there will be discussion a 98 be financial Ministry.

Dan or earnings before interest taxes, depreciation and amortization leased refereed to our press release for a complete reconciliation of a bit that's enough net income educate reminder, all numbers in her presentation or coded and U.S. toddlers and all comparisons referee to year over year comparisons unless.

Otherwise stated I would now like to turn to call over to Mr., Liu East comments will be delivered an English by melodies. She from Evergreen Investor Relations Mushy. Please go ahead.

Thank you operator, and good morning, everyone. Thanks for joining our fourth quarter and this call. Your 2019 earnings conference call.

During the year 2019, we continued to solid growth in revenues and Oh, six really team as we shoot all the facts from the production suspension is resolved by temporary reconciliation to air pollution control and equipment upgrades in 2000.

HM we.

We grew our topline <unk> 35.6 person to $117.6 million.

This was the cheap you to go from.

15 my point.

15, I 0.5 person group of overall feels floating most all products.

With 135.1 person and 121.1 person's Ruth eat overall gross.

Sulfate and net income respectively, although margins and the profitability.

This year they improved in fiscal year 2019, thanks to.

I want to beauty the increase in seals voting for all products combined with decreases in operating expenses, our tissue paper recall did total fields, Oh 6.4, meaning U.S. donors following completion of trial operational P.M. aid and Pete.

Nine production line in November 2018 under the fourth quarter of 2019, respectively. We also delivered 200 and a 97.8 person Ruth you offset printing paper recognizing.

And he pulling for me the U.S. dollar is all fields in 2019.

Despite all social to daily oil production resulted from prevention all grow no virus in early 2020 does.

The stability of the step in additional orders of paper and packaging in recent months give us reasons to be.

Optimistic two of the bulk roof in 2020.

As a leading pay per market into price see to 18 18 Jose probing reach surrounds 18, changing the lucky is to Metropolitan area No China, we have a large market for our products and easy access to low recalls of raw material.

Our mills and logistics.

We will continue take such other bumpy juice to improve our work capabilities to de lever.

To be worth sustainable growth and that creates long term value to our shareholders in 2020.

Now I will turn the call over two hours CFO Ms. gene, how who will review uncommon all default called her financial result, her covenants will be labored English by my colleague Denny's won't Denny's. Please go ahead.

John Smith, Barney and thanks to our while building all the cool that's all good hospice management team all was done right. Okay financial results for the fourth quarter just on the Nike.

Also our okay, not able to grow too specific production lives.

So shaky the waste virus products I would make clear, which got us on the way spring to reference the number. It's just trying to follow production life, providing a slide number 22 now let's look at our financial performance for the fourth quarter of 2019 glazed 10 kids like number seven.

For the fourth quarter of 2019 total revenue increased to 34.5 Christian to 33.6 million go to come to people show up so I'll start the printing paper and the tissue label products and it due to increasing cells have already outstanding peak, partially offset by.

I would decrease in S.P.O. steadily products total shells water most shadows here.

Printing paper and the tissue paper products increased by 36, calling the one question to 72006 end to end up 54 times.

Karen just like eight Oh, the fourth quarter of 29, King with JMP adjustment, including those record of JMP and light weight CMP generating the revenue of 24 27 million representing 73.5 Christian tell the total gravity.

I think point Sixmillion, all Grammy Awards from our regular CMP products.

And I point to 1 million was lighter weight 70, CEB segment volume increased by 11.7 Christian to 59000 extended and a 46 house of wage 47000.

Let's take a straight houseware rapida shanty under 12580 shootouts, what lightweight 70 average selling price to ask people that the 17th decreased by 11.7% Q4 hundred 17, Qatar and asked before lightweight 70.

Crazed, 12% to 400 and the folks town.

Turning to slide nine well in the fourth quarter of playing 19 [laughter] outside the printing papers that led to generate T. The revenue all so I was going to kill merely because I'm talking 21, one mystery push into of total revenue was so 10000 beforehand, good and 15.

How's the offset printing paper and then nasty I'll.

And do it and 85 bed count in the fourth quarter also trending 19, turning to slide 10, we recognize the revenue for 1.8 minutes tissue paper products for the fourth quarter of 2019, resulting from Showself 2500, and the 58 pounds.

And then nasty I'll take 10, good and 84 pit town, but expect to generate continues showself tissue paper a year.

Slide number 11, otherwise they said 10 days and our revenue mix.

Fourth quarter of 2019 total cost of sales increased by five point a straight amounted to 28 admitted they didn't your total gross copies of 5.6 merely significantly increased the from the gross profit Oh 2.2 million well the same period last year and although gross margin.

Oh, 16.7%, reaching a high level things suppose cuattro to sell in the 17.

Well, it's quite her altitude soda 19, I see a expenses decreased by 30.9 pushed into two two point to streamline and income from operations were 3.2 million compared to loss from operations.

Hi, Paul in the 1 million Air Force. The same period last year operating margin was 9.5 per cent compared to operating loss margin Oh.

20.3 person to for the same period last year.

Well, it's both a clock or other children and Nike not incur more so 2.2, mainly resulting 10 cents per basic and their ability to share they compare that to a net loss of 5.2 million Oh 24 cents loss per basic and diluted share for the same period the outlet.

Yep.

Well its fourth quarter over 2019.

Earnings before interest taxes, depreciation and amortization increased by 8.7 million you gentlemen.

The team 1.7 million for the same period last year.

Now shifting gear to year to date financial results.

For fiscal year 2019, total revenue increased to 35.6% 217.6 million ads are without merit increases in sales of all of them close to our products catch grades they source, partially offset by decreases and ask pace then he.

[noise] offset printing paper Bose so fiscal year, two so the 19th the seventies segment, including those radical <unk> and the lighter weight 17 generate either revenue.

90.9.

90.8 million.

Representing 77.2% <unk> of total revenue.

I think just one the one minute a revenue, whereas some our lack of less young people products and 80.8 Amelia was from light weight CMP bottom for so 17 segment increased the bye.

42 point to one question as to 214100, and the 47 couch awful wage wed.

Oh Boy H, one N. Good and 68800 and a 37 counts were regular CMP and 45300 and attend Houseware light weight CMP, yes people lack luster N P decreased by 21.7% into.

All ended at 27 per child, while as people are likely to San <unk> decreased by 22 to 400 and voting could account for the fiscal year 2019, Oh offset printing paper segment generated revenue of 20.4 million repairs.

One thing 17.4 percentage of total revenue we shipped.

29200, and the seven councils offset printing paper for the fiscal year 2019, an inquiry, so sweet and or the end is 71.8% to browse the same period last year as people all set the printing paper decreased by 15 point.

I haven't Christian to Shanahan during the potential for fiscal year 2019, we recognize the revenue of six point up only live from tissue paper products, resulting from the sale. So.

6719, cows and nasty I'll now hand, good and the survey flight Patel towards fiscal year, two Saudi liking total cost of sales to increase the 23 million to weigh handed and the formula in leading to total gross profit.

Setting, calling the 6 million and then increase.

Well I enjoyed and a 35.1 crescendo throughout last year overall gross margin of 11.6%.

Flags and increased 4.9 Christian.

<unk> percentage points Grom nice to hear.

Physically into selling the 19 I stand a expenses were 9.8 million compared to 13.1 may live for the same here last year as it present each of the total revenue as Jan <unk> expenses was 8.9 straight vision for the year Andy The December.

30 acres continues on a 19 for fiscal year 2019.

Income from operations were 3.9 million and operating margin worse shape, only 3% compared to operating loss of.

1.2 million and operating loss margin all stores, one denying it took all 12.9% for the same period last year.

For the fiscal year two was on a 19 net income was 2.2 million all 10 cents per basic ended their low teen this year compared to net loss of 10.5 million a net loss.

Okay, and I per basic and the data later this year.

For the same here last year, so the physical year 2019, it increased the from the standpoint, a ball mill it to 19.5 million for the same period of loves to year moving to slide 17, 24, and a 25 nudge look has a balance.

She to end the liquidity.

As of December so, Dave, whereas the 2000 and I can the company had a cash and about assays short term debt, including shot bank loans current abortion, all long term loans from Uncarded, a unique and they relate either party laws and the long term debt, including those who grad any unique.

And the loans from a related party of 5.8 million acorns, Raymond and and.

I'm going to fall midale, respectively, compared to eight quantifying it in 14.7 day, and a 6.9 million respectively at the end of 2018.

Net accounts receivable, whereas the straight coin a 1 million as of December 31st two so on the Nike compared to 2.9 million as of December 31st Tucson to 18, net evidentiary, whereas the 1.6 million as of December 31st tools on the 19 compared.

To jump on a nightmare and at the end of 2018 as of December should pay for it to selling the Nike The company had a current.

That's all for 24 million in a current liabilities of 16.8 emitting bizarre. They are working cap two of them, one or 2 million. This compared it to turn the I shot show 24 bonded children in current liabilities also 29.6 million and.

Walking cap to devastate job for five point of buying it and at the end of tools on the 18.

Now to cash provided by operating activities to worst standpoint to finalize goes at year end aimed at December 31st Tucson and 19.

They are two net cash provided by operating activities.

9.2 million for 2018, net cash used the investing activities to work.

I'm going to 9 million for this year, both a year end they the December 31st Tucson, and Nike compare to 2.2 million School Tucson 18, net cash used in financing activities was 5.9 million for the year ended December 31st Tucson, and 19 compared to now.

Cash used any financing activities of 3.2 million thought she was on the 18.

[noise] away saving several questions about our first quarter results from.

The investors now the management is also raises questions as well.

Hello.

This strong demand for toilet paper and the tissue paper or do you expect to good demand for outside of paper for books, how much is a car park pay per use the in China Burris asphalt.

I wish stocks to use this class chains imagine meant to advise you use that says they they didn't manifold teach okay very stable base to all the others will secure to do raise a there's couple of months, where I expect a stable the mouse.

Will also take or as a lot of junk of media and the table is always continue their penetration to the market in a way also is that strong day mounds from packaging paper as rapid development of ecommerce and logistics in China.

In terms of the cardboard of paper used in China versus export according to user.

She was on the 19 paper industry Yearbook, 25.6, mailings house of Kingsport, including 2.1 million aim part 823.2 million households.

[laughter] corrugated sheet of paper, including a 1.1 million important and the two I was going to try me lighthouse whiteboard to either sold in Chinese market, taking she was on the 18.

70000 in town Suffocate sport surveys Donna Townsell, Corrugating medium paper and the 1.7 million Midtown South of White Board of paper well. That's 40 that thing she was on the 18.

If you have any questions. Please contact us to Emil and IR at <unk> packaging dog see in management away response to your questions through email socialize possible. Operator. Please go ahead.

Thank you for attending <unk> packaging fourth quarter T cells or anything in fiscal 2018 earnings Conference call. This concludes our call today and we thank you all for listening in good bye.

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