Sino-Global Announces 2018 Year End Financial Results
Highlighted by Progress in New Business Initiatives and Reinvestment
ROSLYN, N.Y., Sept. 28, 2018 /PRNewswire/ -- Sino-Global Shipping America, Ltd. (NASDAQ: 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, announced its financial and operating results for the fourth quarter of the fiscal year 2018 and year ended June 30, 2018. The Company has also provided extensive information on its annual report on Form 10-K 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 fiscal year 2018, background on Sino-Global's business and history, as well as Company strategy for the coming fiscal year.
Management Comments - Highlights in Fiscal 2018
Mr. Lei Cao, Chairman and Chief Executive Officer of Sino-Global commented, "We made tremendous progress this year in our freight logistics, bulk cargo container and container trucking services while spending much of this year investing in our business. These highlights include:
-- Reinvesting in our Business: Since our change in business focus to a
asset-light online logistics platform we have made great strides towards
integrating our business relationships in China with opportunities in
the United States, with revenues increasing substantially since this
change in model. Going forward, we know that in order to maintain an
advantage we needed to expand our technical capabilities. We invested in
an upgraded IT facility in Shanghai that will help facilitate a larger
base of revenues.
-- Broadening our Global Base of Customers and Shipments: In fiscal 2018,
we coordinated the shipment of a vast array of materials from China to
ports in Australia and the United States by utilizing our long-term
relationships to connect shippers to our online platform. This included
an increase in sales to major customers shipping minerals and coals
between Australia and China.
-- New Joint Venture Agreement: In September 2018, we entered into a
co-operation agreement with Ningbo Far-East Universal Shipping Agency
Co., Ltd ("Ningbo Far-East") to set up a joint venture in Hong Kong to
engage in worldwide shipping agency and management business. The Company
shall have 51% ownership in the joint venture. Ningbo Far-East is one of
the top ranking shipping agencies for private enterprises in the Ningbo
and Zhoushan ports. We are very pleased with the potential of this joint
venture, as it provides further diversification in our customer base
without any significant overlap. We are one of the few shipping agents
specialized in providing a full range of general shipping agency
services in China and the only shipping agency company listed on a major
stock exchange in the U.S. compared to the other, much smaller, shipping
agencies in China. The setup of Sino Ningbo allows us to use our
resources such as our customer base, our IT infrastructure currently
under development and our business insight to build a global network of
shipping agencies.
-- Development of Online Platform: In fiscal 2018, we continued to further
the development of our online platform, which helps to bridge the gap
between global shippers from China and other countries such as Australia
and the United States. With the signing of a strategic cooperation
agreement with COSCO Beijing, we are able to take advantage of the low
container rate to jointly promote bulk cargo container transportation.
-- Seeking "Reverse" Logistics Opportunities from the U.S. to China: We
also are continuing to take advantage of export opportunities, as we
shipped 140 containers totaling 18 tons per container of sulfur from
Long Beach, CA in the U.S. to our customers in China. With these
shipments we coordinated with the customers to sign the purchase
contract with sulfur suppliers in the United States; organized the
container shipping, obtained customs clearance, and arranged for the
product to be shipped to the customer's designated port.
Overall, we feel that the Company has properly positioned itself to take advantage of a growing revenue opportunity. As we move forward into fiscal 2019, we are focused on leveraging our growing infrastructure to improve operating margins and the bottom line. We expect to provide an updated shareholder letter at the end of November to outline our growth strategy in calendar 2019."
Fiscal Year 2018 Fourth Quarter Financial Review
-- Total revenues increased by 57.1% to approximately $7.3 million for the
three month period ending June 30, 2018, which compared to $4.6 million
in the year ending June 30, 2017. This increase was due to the Company's
business development efforts in freight logistics, container trucking
and inland transportation management segments.
-- The Company's gross profit for the period was $2.1 million, compared to
$1.4 million in the prior year period. Gross profit margin during the
period was 29.2% which remain consistent compared to 31.0% for the same
period last year.
-- The operating loss for the three months ended June 30, 2018 was $0.7
million, compared to an operating income of $0.47 million for the year
ended June 30, 2017. The decrease in operating income was mainly due to
increases in selling, general and administrative expenses (SG&A),
largely due to stock compensation being awarded in the fourth quarter of
2018.
-- For the three months ended June 30, 2018, the Company reported a net
loss of $0.8 million, or $(0.06) per diluted share based on weighted
average shares outstanding of 12,864,913, compared to a net income of
$0.8 million, or $0.07 per diluted share based on weighted average
shares outstanding of 10,152,685, for the same period in prior year. The
decrease was largely due to a $1.1 million income tax expense during the
period compared to a $0.3 million income tax benefit in the prior year
period.
Fiscal Year 2018 Financial Review
-- Total revenues increased by approximately 101.5% to $23.1 million during
the year, compared to $11.4 million in the prior fiscal year. This
increase was due to the Company's efforts to diversify its business
resulting in a significant increase in revenues from the freight
logistic services.
-- The Company's gross profit for the 2018 fiscal year was $7.5 million,
compared to $6.5 million in the prior fiscal year. Gross profit margin
during the year decreased to 32.4% from 56.5%, which was largely
attributed to a greater portion of revenues coming from the rapidly
growing freight logistic services segment. For the fiscal year ended
June 30, 2018, the Company performed logistics services for one customer
on a fragmented scope, as compared to the full range of services (with a
corresponding higher margin) that it expects in the future.
The following tables present summary information by segment for the years ended June 30, 2018 and 2017:
For the year ended June 30, 2018
Inland Freight Container Bulk Cargo Total
Transportation Logistics Trucking Container
Management Services Services Services
Services
Revenues
- Related party $
2,059,406
$
$
$ $
2,059,406
- Third parties $
3,441,001 $
15,829,444 $
1,096,485 $
638,227 $
21,005,157
Total $
5,500,407 $
15,829,444 $
1,096,485 $
638,227 $
23,064,563
Cost of revenues $
874,760 $
13,519,486 $
696,998 $
494,449 $
15,585,693
Gross profit $
4,625,647 $
2,309,958 $
399,487 $
143,778 $
7,478,870
Depreciation and amortization $
72,954 $
1,902 $
20,063
$ $
94,919
Total capital expenditures
$ $
778,182 $
44,595
$ $
822,777
Gross profit margin 84.1% 14.6% 36.4% 22.5% 32.4%
For the year ended June 30, 2017
Inland Freight Container Bulk Cargo Total
Transportation Logistics Trucking Container
Management Services Services Services
Services
Revenues
- Related party $
2,746,423
$
$
$ $
2,746,423
- Third parties $
3,012,177 $
4,815,450 $
871,563
$ $
8,699,190
Total revenues $
5,758,600 $
4,815,450 $
871,563
$ $
11,445,613
Cost of revenues $
620,259 $
3,710,364 $
649,968
$ $
4,980,591
Gross profit $
5,138,341 $
1,105,086 $
221,595
$ $
6,465,022
Depreciation and amortization $
27,857 $
21,510
$
$ $
49,367
Total capital expenditures $
61,359 $
1,053
$
$ $
62,412
Gross profit margin 89.2% 22.9% 25.4% 56.5%
-- Operating income for the year ended June 30, 2018 was approximately $0.8
million, compared to an operating income of $3.1 million in the prior
year. As discussed above, the decrease was mainly due to increased costs
of revenue and selling, general and administrative expenses. General and
administrative expenses as a percentage of revenue remained consistent
at 26.9% and 27.5% for the years ended June 30, 2018 and 2017,
respectively.
-- For the fiscal year ended June 30, 2018, the Company reported a net
income of $0.5 million, or $0.04 per diluted share based on 12.0 million
weighted average shares outstanding, compared to net income of $3.6
million, or $0.41 per diluted share based on 8.9 million weighted
average shares outstanding, for the prior year.
Balance Sheet Information
-- As of June 30, 2018, the Company had $7.1 million in cash and cash
equivalents, working capital of $17.2 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's allowance for doubtful accounts was $1.7 million in 2018
compared with an allowance of doubtful accounts of $185,821 in 2017. As
we continue to maintain long-standing relationships with our customers,
we are continuing to monitor their payments closely and do not believe
there are any significant collection issues with respect to our trade
accounts receivable.
-- 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.
Adam Prior
Senior Vice-President
(212)-836-9606 / aprior@equityny.com
SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
For the Three Months Ended For the Year Ended
June 30,
June 30,
2018 2017 2018 2017
Net revenues - third parties $
6,825,901 $
4,107,809 $
21,005,157 $
8,699,190
Net revenues - related party 438,000 517,243 2,059,406 2,746,423
Total revenues 7,263,901 4,625,052 23,064,563 11,445,613
Cost of revenues (5,138,462) (3,191,243) (15,585,693) (4,980,591)
Gross profit 2,125,439 1,433,809 7,478,870 6,465,022
General and administrative expenses (2,134,670) (903,697) (6,202,555) (3,152,336)
Selling expenses (65,076) (58,075) (458,166) (211,504)
Total operating expenses (2,199,746) (961,772) (6,660,721) (3,363,840)
Operating income (74,307) 472,037 818,149 3,101,182
Financial income, net (313,227) 88,015 79,502 30,278
Other income, net 575,115 575,115
Total other income 261,888 88,015 654,617 30,278
Net income before provision for income taxes 187,581 560,052 1,472,766 3,131,460
Income tax benefit (expense) (1,008,256) 313,900 (949,659) 472,084
Net income (loss) (820,675) 873,952 523,107 3,603,544
Net income (loss) attributable to non-controlling interest (279,880) 82,735 64,056 (21,348)
Net income (loss) attributable to Sino-Global Shipping America, Ltd. $
(540,795) $
791,217 $
459,051 $
3,624,892
Comprehensive income (loss)
Net income $
(820,675) $
873,952 $
523,107 $
3,603,544
Foreign currency translation income (loss) (243,782) 40,270 65,981 (73,741)
Comprehensive income (1,064,457) 914,222 589,088 3,529,803
Less: Comprehensive income (loss) attributable to non-controlling interest (104,270) (33,866) (12,120) 38,568
Comprehensive income (loss) attributable to Sino-Global Shipping America $
(960,187) $
880,356 $
601,208 $
3,491,235
Ltd.
Earnings per share
-Basic $
(0.06) $
0.07 $
0.04 $
0.41
-Diluted $
(0.06) $
0.07 $
0.04 $
0.41
Weighted average number of common shares used in computation
-Basic 12,856,194 10,105,535 11,037,343 8,911,494
-Diluted 12,864,913 10,152,685 12,023,036 8,949,960
SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES
CONSOLIDATED BALANCE SHEETS
June 30, June 30,
2018 2017
Assets
Current assets
Cash and cash equivalents $
7,098,259 $
8,733,742
Accounts receivable, less allowance for doubtful accounts of $1,682,228 and $185,821 as of June 30, 2018 8,428,853 2,569,141
and 2017, respectively
Other receivables, less allowance for doubtful accounts of $145,176 and $145,244 as of June 30, 2018 and 2017, 69,239 37,811
respectively
Advances to suppliers-third parties 2,144,985 54,890
Advances to suppliers-related party 3,414,619 3,333,038
Prepaid expense and other current assets 588,439 311,136
Due from related party 2,087,994 1,715,130
Total Current Assets 23,832,388 16,754,888
Property and equipment, net 956,429 187,373
Intangible assets, net 153,056
Prepaid expenses 438,151 6,882
Other long-term assets - deposits 143,303 117,478
Deferred tax assets, net 634,500 749,400
Total Assets $
26,157,827 $
17,816,021
Liabilities and Equity
Current Liabilities
Advances from customers $
415,385 $
369,717
Accounts payable 3,225,661 206,211
Taxes payable 2,700,619 1,886,216
Due to related parties 206,323
Accrued expenses and other current liabilities 280,888 418,029
Total Current Liabilities 6,622,553 3,086,496
Total Liabilities 6,622,553 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; 13,271,032 and 10,281,032 shares issued as of June 23,717,330 20,535,379
30, 2018 and 2017, respectively; 13,095,535 and 10,105,535 outstanding as of June 30, 2018 and 2017,
respectively
Additional paid-in capital 1,755,573 688,934
Treasury stock, at cost, 175,497 shares as of June 30, 2018 and 2017 (417,538) (417,538)
Accumulated deficit (434,856) (893,907)
Accumulated other comprehensive loss (272,407) (414,564)
Total Sino-Global Shipping America Ltd. Stockholders' Equity 24,348,102 19,498,304
Non-controlling Interest (4,812,828) (4,768,779)
Total Equity 19,535,274 14,729,525
Total Liabilities and Equity $
26,157,827 $
17,816,021
SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended
June 30,
2018 2017
Operating Activities
Net income $
523,107 $
3,603,544
Adjustment to reconcile net income to net cash provided by (used in) operating activities:
Stock-based compensation - employees, management and directors 1,032,000
Amortization of stock-based compensation - consultants 621,834 599,846
Amortization of stock option expense 9,665 110,195
Depreciation and amortization 94,919 49,367
Provision for (recovery of) doubtful accounts 1,726,599 (18,912)
Deferred tax provision (benefit) 114,900 (749,400)
Changes in assets and liabilities
Increase in accounts receivable (7,421,179) (260,165)
Decrease (increase) in other receivables (31,328) 249,768
Decrease (increase) in advances to suppliers-third parties (662,144) 2,085,281
Increase in advances to suppliers-related party (3,317,382)
Decrease (increase) in prepaid expenses (280,627) 143,796
Increase in other long-term assets (470,319) (70,806)
Increase in due from related parties (604,863) (117,772)
Increase in advances from customers 38,174 343,790
Increase (decrease) in accounts payable 3,064,257 (272,474)
Increase in taxes payable 754,512 278,288
Increase (decrease) in due to related parties (206,323) 206,323
Increase (decrease)in accrued expenses and other current liabilities (110,836) 131,483
Net cash provided by (used in) operating activities (1,807,652) 2,994,770
Investing Activities
Acquisition of property and equipment (822,777) (62,412)
Acquisition of intangible assets (190,000)
Prepayment for acquisition of intangible assets (1,440,107)
Net cash used in investing activities (2,452,884) (62,412)
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 39,962 12,902
Net increase (decrease) in cash and cash equivalents (1,635,483) 7,347,748
Cash and cash equivalents at beginning of year 8,733,742 1,385,994
Cash and cash equivalents at end of year $
7,098,259 $
8,733,742
Supplemental information
Income taxes paid $
68,268 $
89,324
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SOURCE Sino-Global Shipping America, Ltd.
