ROSLYN, N.Y., Feb. 13, 2019 /PRNewswire/ -- Sino-Global Shipping America, Ltd. SINO ("Sino-Global", the "Company", "our", "we" or "us"), a logistics integrated solutions provider engaged in non-asset based global shipping, freight logistics, and inland transportation management and related services, today announced its financial and operating results for the second quarter and six months ended December 31, 2018 ("Fiscal 2019").
The Company has also provided an update on its Quarterly report on Form 10-Q filed with the U.S. Securities and Exchange Commission the same day. Management encourages investors to review this filing for more details of the Company's financial results for the period.
Management Comments – Highlights in Second Quarter of Fiscal 2019
Mr. Lei Cao, Chairman and Chief Executive Officer of Sino-Global commented, "We delivered multiple shipments totaling approximately $0.89 million in revenue for the Company for November and December 2018 as part of our expanded shipping agency business and our freight logistics business generated revenue of approximately $8.98 million during the second quarter of 2019. The second quarter reflected the full impact of our costs associated with the transition to a shipping agency and logistics focus without the corresponding revenue, which we believe will be expressed in the second half of Fiscal 2019. The Company has signed multiple contracts over the past year with large import / export agencies throughout China and anticipates an increase in revenues in this business segment."
Mr. Cao continued, "Our plan is to develop a shipping agency network in China and South East Asia for the next three years and to expand our shipping agency network worldwide. We plan to build the network through acquisitions or strategic partnership with other shipping agencies. Our shipping agency business will be mostly conducted through our subsidiaries in China, Hong Kong and Australia, where we have over 20 years of experience. Our initial strategy was to expand our partnerships gradually during 2018 with agencies that have a strong track-record throughout 2018 and then to increase sales and cash generation throughout 2019. We began seeing a considerable shift in sales in the fiscal 2019 second quarter and expect this to continue throughout the remainder of 2019."
Fiscal 2019 Second Quarter and Subsequent Operating Highlights
- On November 1, 2018, the Company signed a five-year strategic cooperation agreement with a Hong Kong listed Company, Sinco Pharmaceuticals Holdings Ltd ("Sinco"), pursuant to which both companies will contribute resources and expertise to develop cold chain logistics in China.
- On January 1, 2019, the Company signed a shipment service agreement with Chongqing Iron and Steel Company ("Chongqing Iron and Steel") which appointed the Company to ship 1 million tons of iron ore and coal to their designated port with service period from January 1, 2019 to December 31, 2019. The business relationship Sino-Global has with Chongqing Iron and Steel will further enhance and develop its freight logistics business.
- During the three months ended December 31, 2018, the Company signed a shipping agency agreement with Y&D Marine Limited Co.. On January 30, 2019, Sino-Global signed an agency agreement with Zhejiang Baoming International Shipping Agency Co., Ltd. and assigned them as the port agent, due to the aforementioned shipping agency agreement with Y&D Marine Limited Co. We will cooperate with more port agents in the near future to further expand our shipping agency business.
Fiscal Year 2019 Second Quarter Financial Review
- Total revenues increased by 101.4% to approximately $10.5 million for the three month period ended December 31, 2018, compared to approximately $5.2 million in the period ended December 31, 2017. This increase was due to the Company's business development efforts in freight logistics. In addition, as the Company decided to transit back to the shipping agency business, we had generated approximately $0.9 million of revenue from providing shipping agency services in the second quarter of fiscal year 2019.
- The Company's gross profit for the three month period ended December 31, 2018 was approximately $1.96 million, compared to approximately $1.84 million for the same period in the prior year. Gross profit margin during the period was 18.6% compared to 35.3% for the same period last year.
- Sino-Global's selling, general and administrative expenses (SG&A expenses) were approximately $2.1 million for the three month period ended December 31, 2018, compared to approximately $1.9 million in the same period of the prior year. As a percentage of revenue, SG&A expenses decreased to 19.8% from 36.0% in the prior year period, largely due to greater efficiency on higher revenues.
- The Company's provision for doubtful accounts was $416,706 for the three months ended December 31, 2018, compared with a provision for doubtful accounts of $861,967 for the same period in 2017. The decrease was due to faster collections from customers. As the Company continues its business relationship with several large customers, it will continue to monitor the collection closely with respect to trade accounts receivable.
- For the three months ended December 31, 2018, the Company reported a net loss attributable to the Company of approximately $1.5 million, or $(0.11) per diluted share based on weighted average diluted shares outstanding of 13,769,918, compared to a net income attributable to the Company of approximately $0.3 million, or $0.03 per diluted share based on weighted average diluted shares outstanding of 10,415,503, for the same period in the prior year.
The following tables present summary information by segments for the three months ended December 31, 2018 and 2017:
For the three months ended December 31, 2018 | ||||||||||||||||
Shipping | Inland | Freight | Container | Total | ||||||||||||
Revenues | ||||||||||||||||
- Related party | $ | - | $ | 75,000 | $ | - | $ | - | $ | 75,000 | ||||||
- Third parties | $ | 889,070 | $ | 345,000 | $ | 8,978,923 | $ | 227,294 | $ | 10,440,287 | ||||||
Total revenues | $ | 889,070 | $ | 420,000 | $ | 8,978,923 | $ | 227,294 | $ | 10,515,287 | ||||||
Cost of revenues | $ | 809,040 | $ | 20,000 | $ | 7,497,666 | $ | 229,891 | $ | 8,556,597 | ||||||
Gross profit | $ | 80,030 | $ | 400,000 | $ | 1,481,256 | $ | (2,596) | $ | 1,958,690 | ||||||
Depreciation and amortization | $ | - | $ | 20,339 | $ | 475 | $ | 4,751 | $ | 25,565 | ||||||
Total capital expenditures | $ | - | $ | - | $ | - | $ | 8,534 | $ | 8,534 | ||||||
Gross margin% | 9.0 | % | 95.2 | % | 16.5 | % | (1.1%) | 18.6 | % | |||||||
For the three months ended December 31, 2017 | ||||||||||||||||
Shipping | Inland | Freight | Container | Total | ||||||||||||
Revenues | ||||||||||||||||
- Related party | $ | - | $ | 555,246 | $ | - | $ | - | $ | 555,246 | ||||||
- Third parties | $ | - | $ | 838,595 | $ | 3,699,775 | $ | 126,865 | $ | 4,665,235 | ||||||
Total revenues | $ | - | $ | 1,393,841 | $ | 3,699,775 | $ | 126,865 | $ | 5,220,481 | ||||||
Cost of revenues | $ | - | $ | 174,025 | $ | 3,152,005 | $ | 49,848 | $ | 3,375,878 | ||||||
Gross profit | $ | - | $ | 1,219,816 | $ | 547,770 | $ | 77,017 | $ | 1,844,603 | ||||||
Depreciation and amortization | $ | - | $ | 12,736 | $ | 476 | $ | 5,327 | $ | 18,539 | ||||||
Total capital expenditures | $ | - | $ | - | $ | 2,721 | $ | 42,480 | $ | 45,201 | ||||||
Gross margin% | - | 87.5 | % | 14.8 | % | 60.7 | % | 35.3 | % | |||||||
Balance Sheet Information
- As of December 31, 2018, the Company had approximately $2.5 million in cash, working capital of apporximately $12.5 million and stockholders' equity of approximately $18.6 million.
- The Company had no long-term debt as of December 31, 2018.
About Sino-Global Shipping America, Ltd.
Founded in the United States in 2001, Sino-Global Shipping America, Ltd. is a company engaged originally in shipping, chartering, logistics and related business services. Headquartered in New York, Sino-Global has offices in mainland China, Australia, Canada and Hong Kong. The Company's current service offerings consist of shipping agency, inland transportation management, freight logistics and container trucking services. Additional information about Sino-Global can be found on the Company's corporate website at www.sino-global.com. The Company routinely posts important information on its website.
Forward Looking Statements
No statement made in this press release should be interpreted as an offer to sell or a solicitation of an offer to purchase any security. Such an offer can only be made in accordance with the Securities Act of 1933, as amended, and applicable state securities laws. Any statements contained in this release that relate to future plans, events or performance are forward-looking statements that involve risks and uncertainties as identified in Sino-Global's filings with the U.S. Securities and Exchange Commission. Actual results, events or performance may differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Sino-Global undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect the events or circumstances after the date hereof or to reflect the occurrence of unanticipated events unless required by applicable law or regulations.
Contact Information
The Equity Group Inc.
Adam Prior
Senior Vice-President
(212)-836-9606 / aprior@equityny.com
SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED) | |||||||||||
For the Three Months Ended | For the Six Months Ended | ||||||||||
December 31, | December 31, | ||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||
Net revenues - third parties | $ | 10,440,287 | $ | 4,665,235 | $ | 16,617,820 | $ | 9,480,086 | |||
Net revenues - related party | 75,000 | 555,246 | 397,000 | 1,120,406 | |||||||
Total revenues | 10,515,287 | 5,220,481 | 17,014,820 | 10,600,492 | |||||||
Cost of revenues | (8,556,597) | (3,375,878) | (13,640,429) | (7,041,796) | |||||||
Gross profit | 1,958,690 | 1,844,603 | 3,374,391 | 3,558,696 | |||||||
Selling expenses | (258,229) | (335,261) | (366,598) | (357,727) | |||||||
General and administrative expenses | (1,831,746) | (1,546,305) | (3,676,579) | (2,247,289) | |||||||
Stock-based compensation | (1,047,376) | (280,709) | (1,864,584) | (343,082) | |||||||
Total operating expenses | (3,137,351) | (2,162,275) | (5,907,761) | (2,948,098) | |||||||
Operating income (loss) | (1,178,661) | (317,672) | (2,533,370) | 610,598 | |||||||
Financial income, net | 782 | 137,799 | 1,494 | 222,595 | |||||||
Net income (loss) before provision for income taxes | (1,177,879) | (179,873) | (2,531,876) | 833,193 | |||||||
Income tax benefit (expense) | (244,979) | 571,121 | (178,513) | 274,692 | |||||||
Net income (loss) | (1,422,858) | 391,248 | (2,710,389) | 1,107,885 | |||||||
Net income attributable to non-controlling interest | 51,114 | 93,545 | 80,345 | 192,993 | |||||||
Net income (loss) attributable to Sino-Global Shipping America, Ltd. | $ | (1,473,972) | $ | 297,703 | $ | (2,790,734) | $ | 914,892 | |||
Comprehensive income (loss) | |||||||||||
Net income (loss) | $ | (1,422,858) | $ | 391,248 | $ | (2,710,389) | $ | 1,107,885 | |||
Other comprehensive income (loss) - foreign currency | (106,762) | 97,600 | (568,924) | 145,317 | |||||||
Comprehensive income (loss) | (1,529,620) | 488,848 | (3,279,313) | 1,253,202 | |||||||
Less: Comprehensive income attributable to non-controlling interest | 26,930 | 20,618 | 133,655 | 61,365 | |||||||
Comprehensive income (loss) attributable to Sino-Global Shipping America Ltd. | $ | (1,556,550) | $ | 468,230 | $ | (3,412,968) | $ | 1,191,837 | |||
Earnings (loss) per share | |||||||||||
Basic | $ | (0.11) | $ | 0.03 | $ | (0.21) | $ | 0.09 | |||
Diluted | $ | (0.11) | $ | 0.03 | $ | (0.21) | $ | 0.09 | |||
Weighted average number of common shares used in computation | |||||||||||
Basic | 13,769,918 | 10,367,492 | 13,457,726 | 10,236,513 | |||||||
Diluted | 13,769,918 | 10,415,503 | 13,457,726 | 10,286,683 | |||||||
SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) | ||||||
December 31, | June 30, | |||||
2018 | 2018 | |||||
Assets | ||||||
Current assets | ||||||
Cash | $ | 2,454,226 | $ | 7,098,259 | ||
Accounts receivable, less allowance for doubtful accounts of $3,080,328 and $1,682,228 as of December 31, 2018 and June 30, 2018, respectively | 12,148,934 | 8,428,853 | ||||
Other receivables, less allowance for doubtful accounts of $145,186 and $145,176 as of December 31, 2018 and June 30, 2018, respectively | 35,040 | 69,239 | ||||
Advances to suppliers-third parties | 934,824 | 704,878 | ||||
Advances to suppliers-related party | - | 3,414,619 | ||||
Prepaid expense and other current assets | 354,969 | 588,439 | ||||
Due from related party | 1,105,775 | 2,087,994 | ||||
Total Current Assets | 17,033,768 | 22,392,281 | ||||
Property and equipment, net | 900,455 | 956,429 | ||||
Intangible assets, net | 121,389 | 153,056 | ||||
Prepaid expenses | 1,267,005 | 1,878,258 | ||||
Other long-term assets - deposits | 3,048,586 | 143,303 | ||||
Deferred tax assets, net | 755,000 | 634,500 | ||||
Total Assets | $ | 23,126,203 | $ | 26,157,827 | ||
Liabilities and Equity | ||||||
Current Liabilities | ||||||
Advances from customers | $ | 126,395 | $ | 415,385 | ||
Accounts payable | 770,077 | 3,225,661 | ||||
Taxes payable | 3,015,104 | 2,700,619 | ||||
Accrued expenses and other current liabilities | 594,082 | 280,888 | ||||
Total current liabilities | 4,505,658 | 6,622,553 | ||||
Total liabilities | 4,505,658 | 6,622,553 | ||||
Commitments and Contingencies | ||||||
Equity | ||||||
Preferred stock, 2,000,000 shares authorized, no par value, none issued | - | - | ||||
Common stock, 50,000,000 shares authorized, no par value; 15,421,200 and 13,271,032 shares issued as of December 31, 2018 and June 30, 2018, respectively; 15,245,703 and 13,095,535 outstanding as of December 31, 2018 and June 30, 2018, respectively | 25,791,830 | 23,717,330 | ||||
Additional paid-in capital | 2,045,657 | 1,755,573 | ||||
Treasury stock, at cost, 175,497 shares as of December 31, 2018 and June 30, 2018 | (417,538) | (417,538) | ||||
Accumulated deficit | (3,225,590) | (434,856) | ||||
Accumulated other comprehensive loss | (894,641) | (272,407) | ||||
Total Sino-Global Shipping America Ltd. Stockholders' Equity | 23,299,718 | 24,348,102 | ||||
Non-controlling Interest | (4,679,173) | (4,812,828) | ||||
Total Equity | 18,620,545 | 19,535,274 | ||||
Total Liabilities and Equity | $ | 23,126,203 | $ | 26,157,827 | ||
SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | ||||||
For the Six Months Ended | ||||||
December 31, | ||||||
2018 | 2017 | |||||
Operating Activities | ||||||
Net income (loss) | $ | (2,710,389) | $ | 1,107,885 | ||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||
Stock-based compensation | 1,864,584 | 343,082 | ||||
Depreciation and amortization | 51,280 | 31,742 | ||||
Provision for doubtful accounts | 1,287,787 | 837,431 | ||||
Deferred tax benefit | (120,500) | (1,073,700) | ||||
Changes in assets and liabilities | ||||||
Accounts receivable | (5,044,123) | (2,210,485) | ||||
Other receivables | 79,773 | (234,751) | ||||
Advances to suppliers-third parties | (220,166) | 50,465 | ||||
Advances to suppliers-related party | 3,294,701 | - | ||||
Prepaid expenses and other current assets | 408,642 | 80,952 | ||||
Other long-term assets - deposits | (2,489,067) | - | ||||
Due from related parties | 1,091,355 | (921,532) | ||||
Advances from customers | (295,619) | (23,001) | ||||
Accounts payable | (2,508,225) | 288,283 | ||||
Taxes payable | 305,603 | 731,456 | ||||
Due to related parties | - | (206,323) | ||||
Accrued expenses and other current liabilities | 286,613 | (61,218) | ||||
Net cash used in operating activities | (4,717,751) | (1,259,714) | ||||
Investing Activities | ||||||
Acquisition of property and equipment | (9,357) | (50,278) | ||||
Acquisition of intangible assets | - | (190,000) | ||||
Prepayment for acquisition of intangible assets | - | (10,000) | ||||
Net cash used in investing activities | (9,357) | (250,278) | ||||
Financing Activities | ||||||
Proceeds from issuance of common stock | 500,000 | - | ||||
Net cash provided financing activities | 500,000 | - | ||||
Effect of exchange rate fluctuations on cash | (416,925) | (3,902) | ||||
Net decrease in cash | (4,644,033) | (1,513,894) | ||||
Cash at beginning of period | 7,098,259 | 8,733,742 | ||||
Cash at end of period | $ | 2,454,226 | $ | 7,219,848 | ||
Supplemental information | ||||||
Income taxes paid | $ | 16,536 | $ | 60,162 | ||
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SOURCE Sino-Global Shipping America, Ltd.
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