IT Tech Packaging Inc T.ITP

Primary Symbol: ITP

Forest Products Paper & Paper Products

IT Tech Packaging, Inc., formerly Orient Paper, Inc. is a holding company for the Hebei Baoding Orient Paper Milling Company Limited (Orient Paper HB), a producer and distributor of paper products in China. The Company is engaged in production and distribution of four categories of paper products: corrugating medium paper (CMP), offset printing paper, digital photo paper and tissue paper products. The Company, through Baoding Shengde Paper Co., Ltd. (Orient Paper Shengde), is engaged in production and distribution of digital photo paper. The Company operates through two segments: Orient Paper HB, which produces printing paper and CMP, and Orient Paper Shengde, which produces digital photo paper. CMP is used in the manufacturing of cardboard. The Company has over two corrugating medium paper production lines, including PM6 and PM1. The Company also produces finished tissue paper products that are marketed and sold under the Orient Paper brand.

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IT Tech Packaging Inc > Final Results

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Post by retiredcfon Mar 11, 2022 12:17pm

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Post# 34506959

Final Results

I don't think that the dollar difference between our current SP and the offer price is either a surprise or any cause for concern. Given that the deal won't close until Q3, bankers know that they can pick shares up a bit cheaper from retail investors who don't want to wait that long for their money. GLTA

Intertape Polymer Group Inc.

(ITP-T) C$39.35

Q4/21 Financial Results; No Updates on Privatization Transaction Event

ITP reported adj. EBITDA of $58.2mm, slightly below TD's $59.2mm and 4.5% below consensus of $60.9mm, reflecting stronger-than-expected revenues offset by weaker EBITDA margins 14.1% (TD: 14.8%).
FY2021 adj. EBITDA of $247.2mm was in-line with guidance of $245mm- $255mm.

Impact: NEUTRAL

ITP reported its Q4/21 and full year 2021 results this morning. There were no additional updates related to the privatization transaction with Clearlake Capital which is expected to close in Q3/22 (break fee: US$81mm, reverse break fee: US$142mm). Given the transaction, ITP provided somewhat truncated disclosures compared with historical and will not be providing a 2022 outlook or hosting a conference call.

Q4/21 revenue increased 20.2% y/y (TD: 16.0%), primarily reflecting higher selling prices from inflationary pass throughs and relatively muted volume growth (we estimate ~2% y/y). Increases in pricing occurred across all product lines necessitated by higher raw material costs and freight. Volumes were driven by demand for certain tapes and dispensing machines; volumes were lapping a strong comparable period with Q4/20 volumes up 16% y/y on the back of robust E-commerce demand. The Neuvopak acquisition provided a $0.8mm contribution to Q4/21 revenue.
Gross Margins declined 605bps y/y to 19.7%, primarily due to the negative impact of maintaining dollar cost spreads on commodity pass throughs. Additionally, results were impacted by higher costs associated with supply chain disruptions and labour shortages, partially offset by a favourable product mix.
Supply chain: Management noted that production was impacted by supply chain challenges across Q4/21 and which have continued into 2022. We believe this dynamic may have led to lost sales, similar to Q3/21 as well as increased operating costs. ITP is focusing on ensuring supply to its key customers.
Balance sheet and FCF: FCF (net of interest) was $79.7mm ($55.0mm pre w/ c) versus TD's $68.4mm, reflecting positive working capital movements. Net debt declined 10% q/q to $528.9mm reflecting the strong FCF. Leverage: ~2.1x.
M&A: ITP acquired Syfan USA, a manufacturer of shrink film products, on January 13, 2022 for $18.0mm. Syfan operates a facility in Everetts, North Carolina which is expected to expand ITP’s existing shrink film production capacity.