Q1 2020 Earnings Call
[music].
Hello, ladies and gentlemen, and welcome to participate in I T. Chek Packagings first quarter Twentytwenty 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 are Mr., Daniel you I T Tech Packagings, Chairman and Chief Executive Officer en masse Jing Hao, the company's Chief Financial Officer remarks from both Mr., Liu and Mr. Gao will be delivered in English by interpreters.
[noise] I detect packaging and now its first quarter Twentytwenty financial results by your press release yesterday, which can be found on the company's website at www Dot I T packaging dots yen.
First mustard, Oh will brief you on the company's key operational highlights over to first quarter Twentytwenty.
And Mr. Gao will review the Companys financial results.
[noise] before we start.
I would like to draw your attention to our safe Harbor statement.
[noise] 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 in its announcement are forward looking statements, including but not limited to anticipate revenues from degree gating medium paper you should be for an offset printing paper business segments.
The actions and initiatives of current and potential competitors, the company's ability to introduce your products.
The company's ability to implement capacity expansion.
Hi, good acceptance of new products General economic 10 business conditions, the ability to attract a retrain qualified senior management personnel and research and development staff and other risks detailed in the Companys filings with the Securities and Exchange Commission.
These forward looking statements involve.
[noise] known and unknown risks and uncertainties and are based on current expectations assumptions estimates and projections about the company and they industry.
The company undertakes no obligations to update forward looking statements to reflect subsequent or current events or circumstances or to changes in its expectation, except as may be required by law.
Although the company's believes that the expectations expressed in these forward 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.
[noise] there is a presentation documents featuring management's prepared remarks, and it's now available for download from the company's website at www <unk> packaging dots yen.
We know that there will be discussions on non JP financial measure or.
EBITDA or earnings before interest.
Texas depreciation and amortization.
Please refer to our press release for it competes reconciliation of EBITDA to net income.
As a kind reminder, all numbers in our presentation, our coated in us dollars and all comparisons refer to a year over year comparisons unless otherwise stated.
I would like now to turn to come over to Mr. Li Yu.
Comments will be delivered in English quite melody, she from evergreen Investor Relations.
Mrs. She please go ahead.
[noise]. Thank you operator, and good morning, everyone.
Well, it's only I will first quarter tended to <unk> earnings conference call.
As we had expected although first quarter 20 times. He recalled it wasn't like on Tonight consistent year over year decreased we'd rather than you know its 0.7, meaning you X dollars, maybe as a production was suspended from mid January 20 times. He too early much twentytwenty due to though.
I'll call. These Nike pandemic outbreak as well as the seasonally soft all the Chinese new year.
While we're supposed to limiting how these that'd be up since much although production fields in the first of culture, well, all impacted a resulting field decline and the cool seats boot.
[noise] despite the I'm crazy been paid a challenge it's created by the coli lighting pandemic our tissue paper products are in the growing demand due to control Cobiz My team and the the production line has been running at full production.
Capacity to fulfill alter your the since April.
[noise] given the market demands, we all scheduling a new tissue paper production line P. M 10, which we expect to to be launched Salt Lake.
In addition to I'd be a tissue paper production line, it's cool we love.
We launched a known might be coal fits monks production line to meet the huge the mouse, we'll probably talk to your needed for the public and Walker in different industry.
As such we all completed the underlying demand for all of her dog do remain strong and we look to improve the overall performance in becoming altered.
Now I will turn the call over to all those yes, Oh Man Jing Hao, who will review and the common to all the first quarter financial results. My comments will be delivered English by my colleague John is while Danny. Please go ahead.
[noise] functionality is then salary long fulfilling all the call now I'll be happy with the management team I'll summarize some kid financial results for the first clock so she's done today.
Oh, so I want to attend the meat was for kids. They should they production lies associate either way do Harris products, I wouldn't make clear, which products I'm, referring to let's say the numbering system for our production lives provided on slide number seven eight.
Now, let's look out all financial performance for the first quarter of two so on the 20 placed 10 kids slide number seven.
For the first quarter all the kitchen, so I Wouldnt total revenue decreased 49.1 night Christian to 8.7 million due to the decrease in those jokes brought in and out willing to sell them quite itself LP and the tissue paper products turning to slide eight for the first o'clock.
She was on the 20 within each segment include it was though it's true that don't know 70 enlightened extent they can relate to the wobbly all done quite a jump many.
Representing 88.5 since all the total I mean.
Why appointments doesn't really I would rather watch gum, our lack of less than a good products and the two midale whats gone light weight CMP.
He stepped mens bottoms significantly decreased by 44.6% to 8006 handed and the Saudi 70 pounds of wage certainly it's out and then again, good and 88000 for lack of less young team and a 4810 do it and 89 pounds what.
Like a week 70.
I'd like to centralize I'll ask people, regardless and equally by 10.87 to 415 Patel and as people like away 17 decreased by 9.1 question Q4 hundred 20 put down.
Oh, sorry, 400, and the child Patel carrying too like not for the first to cooperate with the truth on the 20.
Well I'll say the printing paper segment, they now generates annual revenue.
Actually I'll also add the printing paper it where it says anything but generally Tucson, that's why didn't you already much to send it to I mean do choose a totally Nike.
I mean outbreak we expect the revenue from this segment will be taken away keep it in the seven o'clock therapy. She was on the 20.
Turning to slide parent well they recognize the revenue over 1 million from tissue paper products for the fourth quarter. Two is and that's why he was asking themselves all 1000 away into it and aided by towns and nasty all I can give and a 49 third town.
Slide number 11 satellites days that changes in our revenue mix.
To close the clock or all the kids only attending.
No Taco shells equally by eight wireless data related to 8.9 million leading to tell you to go out lots all one.
Yeah I'll call you kill me OLED equally to walk through all of their along that still live for the shouldn't you need to have not yet and although a golf Dallas margin of 1.9%.
Well, let's clock or attitude on the 20, I <unk> expenses decreased by 9.5% of two to 407 million and the losses. The from operations were 2.9 million compared to loss from operations. All the stream quanta Jumbolair full instead of theory, though he left yes.
Operating margin was 32.8%.
They had to operating model all.
It's important to of course and for the same period of last year.
Well good quarter of two of them into I mean, not locked were 2.4 million.
Okay, <unk> net loss of 11 cents code.
Basic and diluted this year this compared to two and that allows us to.
To corn is definitely alone on that loss of 12 cents, but it's kinda lived through the sheer well it didn't hear it last year.
Oh of course clock or the to fill in the plane earnings before interest taxes.
Depreciation and amortization increased it by the claims related to a 1.1 Miller from their 0.8 Linco since your last year.
Moving to slide two out Nike under 20, that's Lopez, our balance sheet and liquidity.
That's a much 31st the tools on the 20, Comping had cash and bank balances shut some bad and building backlog current apart shells long term Lonesome Creek, the really it and.
Related violence.
And the mountain Dad, Intuity elite good bottoms out.
11.7 million.
Well its limiting and.
Standpoint, as Jay Leno, respectively, compared to 5.8 Miller.
Acorns limited and assembling the formula it effectively at the end of touches on the Nike.
Net accounts receivable was a 1.8 million as of March 31st you've done the 20 compared to 3.1 million adds up at December 31st She was on the Nike.
No. The inventory was 2 million as much study of course, it just under 20 compared to a one point assists in there at the end of two sounded Nike.
As of March 31st is to zone, the planning to calculate how to current assets of 21.6 million any current liabilities of floating in the Delta AOL walking top two oh.
I'm going to 6 million.
This was compared to current assets all to 24 million Anaconda, not the least Oh 16 point.
8 million is out Hey, I'll walk in cap two of them going live children I feel endocutters on the Nike.
[noise] noncash so a lot either by operating activities was 6.9 million for the board of Squatter Oaktree is on the 20 compared to net cash used in.
Operating activities O.J., Paul in the 1 million fourth assume Kid of love to hear that cash used in investing activities was.
No point Eightmillion book afford us quite the other two then the plenty compared to one point the formula for the same period last year.
Not catch for almost by let's say as if it. He said was zero for the third quarter of the two of them its Wendy compared to net cash used in financing activities all by pulling the formula for the same period last year.
If you will have any questions. Please contact us through email at <unk> IR at IP, Pat Kane, God, C.N., Magid, mentally which bought two little questions.
It was as soon as possible.
Operator, Please go ahead.
Ladies and gentlemen, we will know became the question answer session and if you wish to ask a question.
Please press Star then the number one on your telephone and wait for your name to be announced and if you wish to cancer of the request. Please press the pound or hash key.
Once again, if you wish to ask a question. Please press star one on your telephone.
For your name and now abrasive, it's Chris May away, Alaska into how the two I lived session.
Yes, Ma'am you have one question over to phone comes from the line of two Mophie Clarkson from investments.
You must be please ask your question.
Sure just a freshman comment I just.
Yes, I just want to make a comment to congratulate the company on opening up its new facility, which maybe some people aren't familiar with a company they've spent over $100 million and it's been over five years to dissolve the sets like $5 a share. So just want to congratulate the company most of that the money.
As internally generated from profits and cash flow. My first question is do you expect your regular cardboard business, you're lightweight cardboard business. Your opposite paper to go back to the normal levels that you're seeing in the third and fourth quarter.
[noise] [noise] [noise] heightened interest.
No question.
Then if you lose faster than <unk>.
They show were expecting our C.
I'm good business, a products business well they are well be.
Well they back on where they buy back on track and Oh that started in the end of third quarter and as you.
Good and just one one last question or would the company consider a stock buybacks or dividends. Later this year next year, if the company becomes more profitable.
[noise] [noise] [noise] currently the company has no direct.
And that's been a video consider that you the comps names because more profitable in the near future.
We expected a much or sought it.
Liquid like secret.
The cash positions in the.
So well trends are called her sit here and for tomorrow, because we launched a new well actually another new tissue paper production and we like to.
<unk> positions, but there's real along as it comes down a notch more profitable.
Business. So when we think we will consider that maybe it or when the company got her or a solid.
Hi, Nashville financial conditions and there's.
No yeah.
Thank you.
Hi, Tim do you will have an although culture.
There are no further questions over the phone presenters. Please continue.
Okay.
No more questions Robert investors, maybe because we're gonna got any that covers call.
Yes, we can come closer to Conklin school other either.
Give me that deal first questions from the participants.
Thank you for sensors.
Ladies and gentlemen, this concludes our conference for today. Thank you all for participating Stacy for every one you may now disconnect.
[noise] [noise] [noise].
[music].
[noise] [noise].
[music].
And.
[music].
And.
And.
And.
And Oh and.
[music].
[noise] App.
[noise].
[music].
[music].
Hello, ladies and gentlemen, and welcome to participate in I T. Chek Packagings first quarter Twentytwenty earnings conference call. At this time I would like to inform you that that's kind of French is being recorded and that's all participants are in listen only Mel.
Joining us today are Mr., Daniel you I T Tech Packagings, Chairman and Chief Executive Officer en masse Jing Hao, the company's Chief Financial Officer remarks from both Mr., Liu and Mr. Gao will be delivered in English by interpreters.
[noise] I detect packaging and now its first Orchard Twentytwenty financial results by your press release yesterday, which can be found on the company's website at www Dot I T packaging Dr yen.
First the sort of a will brief you on the company's key operational highlights over to first quarter Twentytwenty.
And that's how we'll review the Companys financial results.
[noise] before we start.
I would like to draw your attention to our safe Harbor statements.
Management for Faired remarks contain forward looking statements.
Within the meaning of the Safe Harbor provisions of the private Securities Litigation Reform Act up 1995.
All statements other than statements of historical facts and its announcement are forward looking statements, including but not limited to anticipate revenues from degree gating maybe on paper he should be for an offset printing paper 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.
Hi, good acceptance of new products General economic 10 business conditions, the ability to attract all the train qualified senior management personnel and research and development staff and other risks detailed in the Companys filings with the Securities and Exchange Commission.
These forward looking statements involve.
[noise] known and unknown risks and uncertainties and are based on current expectations assumptions estimates and projections about the company and they industry.
[noise] the company undertakes no obligations to update forward looking statements to reflect that subsequent or current events or circumstances or to changes in its expectation, except as may be required by law.
Although the company's believes that the expectations expressed in these forward 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 have disappeared results.
[noise] there was a presentation document featuring management's prepared remarks, and it's now available for download from the company's website at Www Dot I T packaging dots yen.
We know that there will be discussion on non JP financial measure or.
EBITDA or earnings before interest.
Texas depreciation and amortization.
Please refer to our press release for it competes reconciliation of EBITDA the net income.
As a kind reminder, all numbers in our presentation, our coated in U.S. dollars and all comparisons refer to a year over year comparisons unless otherwise stated.
[noise] I would like now to turn to come over to Mr. Li Yu. His comments will be delivered in English quite melody, she from evergreen Investor Relations.
Yes. She please go ahead.
[noise]. Thank you operator, and good morning, everyone.
Well, Johnny I was closed the quarter can be funded earnings conference call.
We had expected although first quarter times. He tries he recalled it wasn't I want to 9% year over year decreased revenue all 8.7, leading the older.
Oh production was suspended from mid January time dependent it's too early must twentytwenty due to though all cobiz liking that make outbreak as well as does not lease up all the Chinese new year [noise].
While I was supposed to limit to how these backing up this much although production fields in the first quarter well all impacted our results you feel decline on the proceeds boot.
Despite the twice the bins Pete a challenge it created by the so called <unk> lighting pandemic, our tissue paper products are in the growing the mom due to control called with my team and a the production line has been running at full production.
Capacity to hope you all there you said April.
[noise] given the market the malls, we all got doing a new tissue paper production line P. M 10, which we expected to be long Salt Lake.
In addition to I'd be a tissue paper production line, it's cool we love.
We launched a known might be coal based mop production line to me the huge the mall well probably talk to you do you need date for the public and Walker in different industries.
As such we all collagen the underlying the long for all products to remain strong and we look to improve overall performance in becoming altered.
Now I'll turn the call over to almost the Oh Gee, how well we already do you and the common although first quarter financial results. My comments will be delivered English by my colleague John is wall. Dennis. Please go ahead.
[noise] functionality in Sally while walking all the cool NASA I'll be Hawkins management team I'll summarize some kids financial results for the first Cuattro she's done today.
Also on what's going to let me refer to exhibit production lives associates, either way do Harris products I wouldn't make video which products on the they fight you referenced and numbering system for our production I provided on slide number seven eight.
Now, let's look at all financial performance for the first quarter of kids on the 20 place 10 Kids slide number seven.
[noise] goes up let's walk or all the tools are driving total revenue equates to 49.1 night Christian to 8.7 mellow due to a decrease in those trials for him and I like the Shannon quite itself LP and the tissue paper products turning to slide eight for the first the clock.
She was on the 25th Gen pitch that light inco deals, though it's true that there were a 70 unlikely they extend we'll be getting away to wrap it all down 27 million, representing 88 quite like sense out of the total I mean.
Lifepoint has done a mini I will watch from our rather less general get products and the children and whats gone light weight CMP Sandy definitely the boiler significantly decreased by 44.6% to 80600 and the Saudi sounds house of wage 30000.
Then I had good and 88 towers Watson, that's any team and a 4810 do it and 89 pounds was like a week 70.
I want to seven twice as people I go to San <unk> decreased by 10.8, So Q4 hundred 15 Patel and ask people like weights down could be quick by 9.1 question Q4 hundred 20 put down.
Oh, sorry, 400, and their child now turning to slide not for the tries to cooperate with interest on the 20 I'll also the printing paper segment. They now generates annual revenue.
Production outside the printing paper work so any from May begin I'd like to sound. That's why didn't you already much too is on the 20 did she is a totally Nike.
Outbreak weights that the revenue from this adjustment well taken away keep it in the seven o'clock zoro tools on the 20.
Turning to slide parent well they recognize the revenue over 1 million Islam tissue paper products for the supposed to cooperate to send a plenty for example, some sales also was falling away and good and 85 pounds dipole nasty all I can do it and the 49 pay Pal.
Slide number 11 satellites days that changes in our revenue mix.
Well as opposed to clock or all the kids only pleasant.
Callisto itself equally by eight well Miss out on nature like quite a lot little little to tell you to go out lots all one.
Yeah I'll call you kill me OLED equally to walk through all of the so called a chilling sort it shouldn't you could last a year and all all golf Dallas margin of 1.5 kitchen.
Well, that's clock or other two of them, it's Brad Hey, I've <unk> expenses decreased by 9.5 could finish to 2.7 million and the losses from operations for 2.9 million compared to loss from operations I'll take one that Joe millionaire full instead of here, we'd all love to get.
Operating loss Markel was 32.8%.
I had to all the Lake Lodge at all.
On the two questions for the same carried out last year.
Well its blood clots are all to them and branding not lost work to coins well know is out there and all that lost all 11 cents Kurt.
Basic and that they're looking for this year this compared to two on that loud Oh.
On a standalone on that lots of 12 cents, but it's kinda lippi, the sheer well it didnt left here.
Oh of course clock or that you're selling the company earnings before interest taxes.
Depreciation and amortization increased it by the while you're doing middle tier 1.1 minute, Guam, though point 8 million called the since your last year.
Moving to slide so I'll lighting and the 20, that's you know pad our balance sheet and liquidated [noise].
That's a much thirtyth birthday today on the 20 topping had cash and the bank balances shut them that they go do back low current taposh out long term notes, so clearly the neely and.
Related violence.
Long term debt, including elicit bottoms out.
11.7 below.
I wanted to anyway and so.
Oh Boy yesterday, Malone, respectively, compared to 5.8 million.
Hey, Paul is limited and itself on the Formula that they like the end of two is on the Nike.
Not to accomplish chemical wasn't walk on the I didn't know as much though they sort of just under 20 compared to 8.1 million as Doug December 31st she was on the Nike.
Net inventory was too many I just love to study participants on the 20 compared to a 1.61 there at the end of two so the Nike.
As of March 31st it shows on the 20 to calculate how to contract. That's all for 21.6 million and current liabilities of voting and there is other AOL walking top two oh.
Well, it's 6 million.
This was compared to current assets, all 24 minutes and the car will not the least Oh 16 point [noise].
Hi, My name is out Hey, I'll walk in Catco, obviously, I'm going live children I to Endocutters on the Nike.
[noise] not cash so a lot either by operating activities was 6.9 Miller for the fourth quarter Oaktree is only plugging compared to net cash used in.
Hopefully activities O.J. Paul in the one may 4th assume Kid of love to hear that Kashi is investing activities was.
No point 8 million bought that first quarter of appears on the plenty compared to one point formula for the same period last year.
Not catch dealt with by let's say activities to was very well for the third quarter two of them. It's one day compared to kill that cash used by.
I never say activities all by pulling the formula for the city period Lucky you.
If you will have any questions. Please contact.
The email at <unk> IR at IP packing, Dod C.N. magid mental illness ball two little questions.
It was as well as possible.
Operator, Please go ahead.
Ladies and gentlemen, we will know became the question answer session and if you wish to ask a question.
Please press Star then that number one on your telephone and wait for your name to be announced and if you wish to cancel your request. Please press the pound or hash key.
Once again, if you wish to ask a question. Please press star one on your telephone.
And for your name and now abrasive, it's Chris May away allow screen. So how's the too I know session.
Yes, Ma'am you have one question over to phone comes from the line of two Mophie Clarkson from investments.
She mophie. Please ask your question.
Sure just a freshman comment I just.
Yes, I just want to make a comment to congratulate the company on opening up its new facility, which maybe some people aren't familiar with the company they've spent over $100 million and it's been over five years to dissolve the sets like $5 a share. So just want to congratulate the company most of that the money.
As internally generated from profits and cash flow. My first question is do you expect your regular cardboard business, you're lightweight cardboard business and Rob said paper to go back to the normal levels that you're seeing in the third and fourth quarter.
[noise] [noise] [noise] hi to theirs.
Oil Clarkson.
Then if you will.
After the <unk>.
They show were expecting I would say I'm good business, a product business, while they are well be.
Well they back on where they buy back on track and Oh, So starting on the third quarter it as to you.
Good and just one one last question a with a company consider a stock buyback or dividends later this year next year.
The company becomes more profitable.
[noise] [noise] Hi, currently the company has no do adds into that.
That's been a video consider that you the comp how small brossart smoke in the near future.
We expected a much salted.
Liquid but it could.
The cash conditions in the.
Well kind of a quarter that year and both tomorrow, because we launched a new really like to another new tissue paper production and we launched a.
Sure Mark positions, but this will allow the company and much more profitable.
Business. So we think we will consider that maybe it.
Learned a company got to saw it.
Hi, Nashville.
So conditions and that's you know that yeah.
Thank you.
[noise] attempt deal how am I love culture.
There are no further questions over the phone for sensors. Please continue.
Okay, if no more questions Robert and roster.
Maybe because we're going to got any that copper call.
Yes, what kind of come close at the conference call although either.
Give me that deal first questions from the participants.
Thank you for centers.
Ladies and gentlemen, this concludes our conference for today. Thank you all for participating Stacy for every one you may now disconnect.