Sino-Global Announces Fiscal Year 2018 Third Quarter Financial Results
Sino-Global Announces Fiscal Year 2018 Third Quarter Financial Results
ROSLYN, N.Y., May 14, 2018 /PRNewswire/ -- Sino-Global Shipping America, Ltd. (NASDAQ: SINO) ("Sino-Global," the "Company" or "we"), a logistics integrated solution provider engaged in non-asset based global shipping, freight logistics, and inland transportation management and related services, today announced its financial results for the third quarter of the fiscal year 2018 ended March 31, 2018. The Company has also provided extensive information on its quarterly report on Form 10-Q filed this morning with the U.S. Securities and Exchange Commission. Management encourages investors to review this filing for more details of the Company's financial results for the third quarter of fiscal year 2018, background on Sino-Global's business and history, as well as Company strategy for the coming fiscal year.
Fiscal Year 2018 Third Quarter Operating and Financial Highlights
(as compared to the same period of the prior year)
-- Total revenues of this quarter increased 89.3% or $2.5 million to $5.2
million, compared to $2.7 million. The increase was primarily due to the
Company's efforts to diversify its business in freight logistics
services.
-- Gross margin decreased from 58.8% to 34.5% as a result of lower margin
fragmented freight logistics services have been provided to customers in
the current period in comparison with the corresponding period in 2017.
The Company strategically allocated its resources to develop new
businesses and markets in the U.S. as the focus for its growth.
-- Net income for the third quarter of fiscal year 2018 was $0.24 million,
as compared to a net income of $1.3 million for the same period of the
prior year. The decrease was due to higher cost of revenues associated
with our fragmented freight logistics services which reduced the gross
margin. In addition, our general and administrative expenses increased
as a result of increased bad debt reserve and increased professional fee
, and increased income tax expense of $0.26 million as compared to a tax
benefit of $0.30 million recognized during the prior year period.
-- On March 14, 2018, the Company closed a $3 million registered direct
offering of its common stock and concurrent private placement of its
Series A Warrants and Series B Warrants.
-- At March 31, 2018, the Company had cash and cash equivalents of $9.5
million, and holds no long-term debt.
Management Commentary
Mr. Lei Cao, Chairman and Chief Executive Officer of Sino-Global commented, "We continue to ramp up and expand our business with our focus on our inland transportation, freight logistics and container trucking services. We were pleased with our growth for the quarter. However, there were several factors that adversely affected our bottom line. These factors included a change in our product mix towards freight logistics services which generates higher revenues but has lower profit margins than our other services. We also recognized an income tax expense for the quarter of $0.26 million due to changes in deferred tax assets for the three-month period."
Mr. Cao continued. "Also during the quarter, we completed a capital raise that resulted in net proceeds of $2.6 million, after related costs. We intend to use the money raised towards the further development of our business. In the remaining period of fiscal year 2018, we will continue to focus on increasing revenue and cash flow in the U.S. We will continue to use our bulk cargo container business in partnership with COSCO to seek solutions for empty containers between container shipping lines from the U.S. to China and view this aspect of our operations as a major part of our growth."
In addition to the growth of Sino-Global's bulk cargo container business segment, management continues to focus on growth of the Company's container truck business in the United States and anticipates further positive developments of this segment of the Company's operations in the coming months.
Fiscal Year 2018, Third Quarter Financial Review
-- Revenues increased by $2.5 million, or 89.3%, to $5.2 million from $2.7
million for the three months ended March 31, 2017. This increase was
primarily attributable to the Company diversifying its business in
freight logistics services. Revenues generated from freight logistics
services increased by $2.7 million, or 332.1%, from the three months
ended March 31, 2017.
-- The Company's gross profit during the period was $1.8 million as
compared to the prior year period at $1.6 million.
-- Total operating costs and expenses increased to $4.9 million for the
three months ended March 31, 2018 from $1.8 million for the prior year
period. The increase was attributable to several factors primarily
focused on the diversification of the business which included a rise in
the cost of revenue attributable to different segments, general and
administrative expenses.
-- Operating income for the three months ended March 31, 2018 was
approximately $0.28 million, compared to an operating income of
approximately $0.96 million for the comparable period ended March 31,
2017. The decrease was due to the above-mentioned rise in operating
expenses relating to the ramp up of the Company's business.
-- Income tax expense for the three months ended March 31, 2018 was $0.22
million, compared to an income tax benefit of approximately $0.30
million for the same period of the prior year. Current income tax
incurred from operations in China and Hong Kong remained approximately
the same compared to the same period last year, while income tax benefit
decreased due to changes in in allowance for bad debts, net operating
loss carryover and the increase in the valuation allowance against the
deferred tax assets, based on the Company's latest projected taxable
income.
-- As a result of the factors discussed above, for the three months ended
March 31, 2018, the Company reported a net income of $0.24 million,
compared to net income of $1.3 million for the three months ended March
31, 2017.
Balance Sheet Information
-- As of March 31, 2018, the Company had $9.5 million in cash and cash
equivalents, working capital of $17.5 million and shareholder equity of
$24.3 million; compared to $8.7 million, $13.7 million, and $19.5
million, respectively, as of June 30, 2017.
-- The Company holds no long-term debt.
About Sino-Global Shipping America, Ltd.
Founded in the United States in 2001, Sino-Global Shipping America, Ltd. is a company engaged 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 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.
Terry Downs
Senior Associate
(212)-836-9615 / tdowns@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 Nine Months Ended
March 31,
March 31,
---------
2018 2017 2018 2017
---- ---- ---- ----
Net revenues - third parties $4,699,170 $1,984,834 $14,179,256 $4,591,381
Net revenues - related party 501,000 762,777 1,621,406 2,229,180
------- ------- --------- ---------
Total revenues 5,200,170 2,747,611 15,800,662 6,820,561
Cost of revenues (3,405,435) (1,132,213) (10,447,231) (1,789,348)
---------- ---------- ----------- ----------
Gross profit 1,794,735 1,615,398 5,353,431 5,031,213
--------- --------- --------- ---------
General and administrative expenses (1,477,514) (612,441) (4,067,885) (2,248,639)
Selling expenses (35,363) (41,245) (393,090) (153,429)
------- ------- -------- --------
Total operating expenses (1,512,877) (653,686) (4,460,975) (2,402,068)
---------- -------- ---------- ----------
Operating income 281,858 961,712 892,456 2,629,145
Other income (expense)
Financial income (expense), net 170,134 34,167 392,729 (57,737)
------- ------ ------- -------
Total other income (expense) 170,134 34,167 392,729 (57,737)
------- ------ ------- -------
Net income before provision for income taxes 451,992 995,879 1,285,185 2,571,408
Income tax benefit (expense) (216,095) 303,196 58,597 158,184
-------- ------- ------ -------
Net income 235,897 1,299,075 1,343,782 2,729,592
Net income (loss) attributable to non-controlling interest 150,943 4,021 343,936 (104,083)
------- ----- ------- --------
Net income attributable to Sino-Global Shipping America, Ltd. $84,954 $1,295,054 $999,846 $2,833,675
======= ========== ======== ==========
Comprehensive income (loss)
Net income $235,897 $1,299,075 $1,343,782 $2,729,592
Foreign currency translation income (loss) 164,446 4,871 309,763 (114,011)
------- ----- ------- --------
Comprehensive income 400,343 1,303,946 1,653,545 2,615,581
Less: Comprehensive income (loss) attributable to non-controlling interest 30,785 (19,419) 92,150 4,702
------ ------- ------ -----
Comprehensive income attributable to Sino-Global Shipping America Ltd. $369,558 $1,323,365 $1,561,395 $2,610,879
======== ========== ========== ==========
Earnings per share
-Basic $0.01 $0.14 $0.10 $0.33
===== ===== ===== =====
-Diluted $0.01 $0.14 $0.10 $0.33
===== ===== ===== =====
Weighted average number of common shares used in computation
-Basic 10,835,535 8,994,146 10,433,272 8,514,080
========== ========= ========== =========
-Diluted 10,870,221 9,028,928 10,479,555 8,534,701
========== ========= ========== =========
SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, June 30,
2018 2017
---- ----
(Unaudited)
Assets
Current assets
Cash and cash equivalents $9,549,942 $8,733,742
Accounts receivable, less allowance for doubtful accounts of $1,350,531 and $185,821 4,757,547 2,569,141
as of March 31, 2018 and June 30, 2017, respectively
Other receivables, less allowance for doubtful accounts of $145,244 and $145,244 as of 167,018 37,811
March 31, 2018 and June 30, 2017, respectively
Advances to suppliers-third parties 442,137 54,890
Advances to suppliers-related party 3,601,421 3,333,038
Prepaid expenses and other current assets 397,368 311,136
Due from related parties, net 2,249,544 1,715,130
--------- ---------
Total Current Assets 21,164,977 16,754,888
---------- ----------
Property and equipment, net 536,282 187,373
Intangible assets, net 168,889 -
Prepaid expenses - 6,882
Other long-term assets 137,850 117,478
Deferred tax assets 1,670,100 749,400
--------- -------
Total Assets $23,678,098 $17,816,021
=========== ===========
Liabilities and Equity
Current Liabilities
Advances from customers $373,172 $369,717
Accounts payable 472,085 206,211
Taxes payable 2,401,934 1,886,216
Due to related parties - 206,323
Accrued expenses and other current liabilities 423,877 418,029
------- -------
Total Current Liabilities 3,671,068 3,086,496
--------- ---------
Income tax payable - noncurrent portion 440,219 -
------- ---
Total Liabilities 4,111,287 3,086,496
--------- ---------
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; 12,611,032 and 22,046,330 20,535,379
10,281,032 shares issued as of March 31, 2018 and June 30, 2017, respectively;
12,435,535 and 10,105,535 outstanding as of March 31, 2018 and June 30, 2017,
respectively
Additional paid-in capital 2,386,864 688,934
Treasury stock, at cost, 175,497 shares as of March 31, 2018 and June 30, 2017 (417,538) (417,538)
Retained earnings (accumulated deficit) 105,939 (893,907)
Accumulated other comprehensive income (loss) 153,775 (414,564)
------- --------
Total Sino-Global Shipping America Ltd. Stockholders' Equity 24,275,370 19,498,304
Non-controlling Interest (4,708,559) (4,768,779)
---------- ----------
Total Equity 19,566,811 14,729,525
---------- ----------
Total Liabilities and Equity $23,678,098 $17,816,021
=========== ===========
SINO-GLOBAL SHIPPING AMERICA LTD. AND AFFILIATES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Nine Months Ended
March 31,
---------
2018 2017
---- ----
Operating Activities
Net income $1,343,782 $2,729,592
Adjustment to reconcile net income to net cash provided by (used in) operating activities:
Amortization of stock options 9,665 77,320
Amortization of stock - based compensation to consultants 432,125 547,138
Amortization of stock - based compensation to employees 182,000 -
Depreciation and amortization 63,402 36,432
Provision for (recovery of) doubtful accounts - accounts receivable 1,164,710 (107,608)
Provision for doubtful accounts - due from related parties 243,433 -
Deferred tax benefit (920,700) (387,900)
Changes in assets and liabilities
Accounts receivable (3,246,911) 517,463
Other receivables (80,145) 184,753
Advances to suppliers - third parties 50,465 816,715
Prepaid expense and other current assets (84,147) 65,279
Due from related parties (784,363) (2,843,131)
Other long-term assets - (14,185)
Advances from customers (23,218) 324,476
Accounts payable 243,380 312,883
Taxes payable 798,012 201,259
Due to related parties (206,323) 156,841
Accrued expenses and other current liabilities 889 514,445
--- -------
Net cash provided by (used in) operating activities (813,944) 3,131,772
-------- ---------
Investing Activities
Acquisition of property and equipment (379,917) (55,474)
Acquisition of intangible assets (190,000) -
Prepayment for intangible assets (437,357) -
-------- ---
Net cash used in investing activities (1,007,274) (55,474)
---------- -------
Financing Activities
Proceeds from issuance of common stock, net 2,585,091 4,319,988
Proceeds from exercise of stock options - 82,500
--- ------
Net cash provided by financing activities 2,585,091 4,402,488
--------- ---------
Effect of exchange rate fluctuations on cash and cash equivalents 52,327 (24,591)
------ -------
Net increase in cash and cash equivalents 816,200 7,454,195
Cash and cash equivalents at beginning of period 8,733,742 1,385,994
--------- ---------
Cash and cash equivalents at end of period $9,549,942 $8,840,189
========== ==========
Supplemental information
Income taxes paid $60,162 $89,324
======= =======
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SOURCE Sino-Global Shipping America, Ltd.
