Sino-Global Announces Fiscal 2020 First Quarter Financial Results
ROSLYN, N.Y., Nov. 19, 2019 /PRNewswire/ -- Sino-Global Shipping America, Ltd. (NASDAQ: SINO) ("Sino-Global", the "Company", "we", "our", or "us"), a global logistics service provider, announced its financial and operating results for its fiscal 2020 first quarter ended September 30, 2019.
The Company has also provided more detailed information on its quarterly report on Form 10-Q filed this afternoon with the U.S. Securities and Exchange Commission. Management encourages investors to review the Company's 10-Q for a detailed discussion of the Company's financial results for the quarter ended September 30, 2019.
Management Comments
Mr. Lei Cao, Chairman and Chief Executive Officer of Sino-Global commented, "During the first quarter, our strategy continued to be negatively impacted by the ongoing difficult U.S./China trade relations. We were very pleased to have significantly improved gross margins despite a difficult sales environment, partly due to our shifting focus towards our shipping agency business. By utilizing our agency network and previous investments in technology, we have retained the ability to service a broader base of customers. Despite our ongoing efforts to rationalize costs and expenses, we remain cautious amidst a macro-economic stalemate with an indeterminant time frame. As the Company moves forward into fiscal 2020, we will be focusing on leveraging our growing infrastructure to improve operating margins and the bottom line while simultaneously seeking immediate international opportunities. We expect to provide a shareholder letter to outline our growth strategy for the coming year prior to our next annual meeting."
Fiscal First Quarter 2020 Financial Review
-- The Company reported total revenues of approximately $1.8 million for
the quarter ended September 30, 2019, compared to approximately $6.5
million reported in the same period last year. The decrease was largely
due to a shift to shipping agency and management activities with certain
freight logistics contracts in light of uncertainty surrounding current
trade along with lower inland management revenues.
-- The Company's gross profit for the 2020 fiscal first quarter was
approximately $1.1 million, compared to approximately $1.4 million in
the same period last year. Gross profit margin during the quarter was
approximately 61.7%, compared to approximately 21.8% in the same period
last year. The increase was largely due to shifting toward its agency
business for providing freight logistics services where the Company
acted solely as an agent and did not control the services rendered to
its customers.
The following tables present summary information by segments mainly regarding the top-line financial results for the quarters ended September 30, 2019 and 2018, respectively:
For the Three Months Ended September 30, 2019
Shipping Inland Freight Container Total
Agency and Logistics Trucking
Management Transportation Services Services
Services Management
Services
Revenues
- Related party
$
$
$
$
$
- Third parties $
500,000
$ $
1,242,142
* $
44,084 $
1,786,226
Total revenues $
500,000
$ $
1,242,142 $
44,084 $
1,786,226
Cost of revenues $
95,822
$ $
547,684
* $
39,898 $
683,404
Gross profit $
404,178
$ $
694,458 $
4,186 $
1,102,822
Depreciation and amortization $
102,774
$ $
7,702 $
44,101 $
154,577
Total capital expenditures $
4,538
$
$
$ $
4,538
Gross margin% 80.8
% 55.9 9.5 61.7
% % % %
* For certain freight logistics
contracts that the Company entered
into with certain customers in its
fiscal 2020 first quarter, the
Company (i) acts as an agent
coordinating relationships between
customers and third-party service
providers and (ii) does not
control the services rendered to
its customers, revenues related to
these contracts are presented net
of related costs. For the three
months ended September 30, 2019,
gross revenues and gross cost of
revenues related to these
contracts amounted to
approximately $9.1 million and
$8.5 million, respectively.
For the Three Months Ended September 30, 2018
Shipping Inland Freight Container Total
Agency and Logistics Trucking
Management Transportation Services Services
Services Management
Services
Revenues
- Related party
$ $
322,000
$
$ $
322,000
- Third parties
$ $
598,000 $
5,487,553 $
91,980 $
6,177,533
Total revenues
$ $
920,000 $
5,487,553 $
91,980 $
6,499,533
Cost of revenues
$ $
59,874 $
4,965,992 $
57,966 $
5,083,832
Gross profit
$ $
860,126 $
521,561 $
34,014 $
1,415,701
Depreciation and amortization
$ $
20,488 $
476 $
4,751 $
25,715
Total capital expenditures
$
$
$ $
830 $
830
Gross margin% 93.5 9.5 37.0 21.8
% % % %
-- The Company had an operating loss of approximately $1.8 million for the
three months ended September 30, 2019, compared to an operating loss of
approximately $1.4 million for the same period in 2018.
-- For the fiscal quarter ended September 30, 2019, the Company reported
net loss attributable to Sino-Global Shipping America, Ltd. of
approximately $1.6 million, or loss of approximately $0.10 per diluted
share based on approximately 16.1 million weighted average shares
outstanding, compared to net loss attributable to Sino-Global Shipping
America, Ltd. of approximately $1.3 million, or loss of approximately
$0.10 per diluted share based on approximately 13.1 million weighted
average shares outstanding, for the same period last year.
Balance Sheet Information
-- As of September 30, 2019, the Company's working capital was
approximately $9.4 million and the Company had cash of approximately
$0.1 million. The Company plans to fund continuing operations through
identifying new prospective joint venture partners and strategic
alliance opportunities for new revenue sources, and by reducing costs to
improve profitability and replenish working capital.
-- The Company's allowance for doubtful accounts was approximately $6.5
million as of September 30, 2019 compared with allowance of doubtful
accounts of approximately $5.7 million as of June 30, 2019. As the
Company continues to maintain long-standing relationships with its
customers, it will work with these parties to monitor their payments
closely and does not believe that there are any significant collection
issues with respect to trade accounts receivable, net of allowance.
-- 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 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 and management, 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 OPERATION AND COMPREHENSIVE LOSS
(UNAUDITED)
For the Three Months Ended
September 30,
2019 2018
Net revenues - third parties $
1,786,226 $
6,177,533
Net revenues - related party 322,000
Total revenues 1,786,226 6,499,533
Cost of revenues (683,404) (5,083,832)
Gross profit 1,102,822 1,415,701
Selling expenses (130,029) (108,369)
General and administrative expenses (1,091,455) (973,752)
Impairment loss of fixed assets and intangible asset (327,632)
Provision for doubtful accounts (889,078) (871,081)
Stock-based compensation (414,708) (817,208)
Total operating expenses (2,852,902) (2,770,410)
Operating loss (1,750,080) (1,354,709)
Other income, net 1,456 712
Net loss before provision for income taxes (1,748,624) (1,353,997)
Income tax benefit 66,466
Net loss (1,748,624) (1,287,531)
Net (loss) income attributable to non-controlling interest (121,271) 29,231
Net loss attributable to Sino-Global Shipping America, Ltd. $
(1,627,353) $
(1,316,762)
Comprehensive loss
Net loss $
(1,748,624) $
(1,287,531)
Other comprehensive loss - foreign currency (503,667) (462,162)
Comprehensive loss (2,252,291) (1,749,693)
Less: Comprehensive income attributable to non-controlling interest 21,273 106,725
Comprehensive loss attributable to Sino-Global Shipping America, Ltd. $
(2,273,564) $
(1,856,418)
Loss per share
Basic and diluted $
(0.10) $
(0.10)
Weighted average number of common shares used in computation
Basic and diluted 16,073,087 13,145,535
SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
September 30, June 30,
2019 2019
Assets
Current assets
Cash $
141,438 $
3,142,650
Notes receivable 383,792
Accounts receivable, less allowance for doubtful accounts of $6,506,794 and $5,670,274 as of 3,991,830 7,045,846
September 30, 2019 and June 30, 2019, respectively
Other receivables, net 9,569,216 4,335,715
Advances to suppliers - third parties 55,953 124,140
Prepaid expenses and other current assets 92,126 105,054
Due from related party, net 472,715 807,965
Total Current Assets 14,323,278 15,945,162
Property and equipment, net 711,638 989,910
Right-of-use assets 427,291
Intangible assets, net 73,889 89,722
Prepaid expenses 225,619 519,503
Other long-term assets - deposits 2,928,533 3,054,706
Total Assets $
18,690,248 $
20,599,003
Liabilities and Equity
Current Liabilities
Advances from customers $
66,474 $
68,590
Accounts payable 699,855 567,619
Lease liabilities - current 158,455
Taxes payable 2,710,011 3,184,895
Accrued expenses and other current liabilities 1,240,992 1,418,129
Total current liabilities 4,875,787 5,239,233
Lease liabilities - noncurrent 263,473
Total liabilities 5,139,260 5,239,233
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; 16,834,534 and 16,054,534 shares issued 27,111,130 26,523,830
as of September 30, 2019 and June 30, 2019, respectively; 16,659,037 and 15,879,037 shares
outstanding as of September 30, 2019 and June 30, 2019, respectively
Additional paid-in capital 1,923,115 2,066,906
Treasury stock, at cost, 175,497 shares as of September 30, 2019 and June 30, 2019 (417,538) (417,538)
Accumulated deficit (8,596,053) (6,968,700)
Accumulated other comprehensive loss (1,317,317) (671,106)
Total Sino-Global Shipping America Ltd. Stockholders' Equity 18,703,337 20,533,392
Non-controlling Interest (5,152,349) (5,173,622)
Total Equity 13,550,988 15,359,770
Total Liabilities and Equity $
18,690,248 $
20,599,003
SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(UNAUDITED)
Preferred Stock Common Stock Additional Treasury Stock Accumulated Accumulated Noncontrolling
paid-in other
comprehensive
Shares Amount Shares Amount capital Shares Amount deficit loss interest Total
BALANCE, June 30, 2018
$ 13,271,032 $
23,717,330 $
1,755,573 (175,497) $
(417,538) $
(434,856) $
(272,407) $
(4,812,828) $
19,535,274
Stock based 430,000 473,000 473,000
compensation to
employee
Stock based 50,000 63,500 63,500
compensation to
consultants
Amortization of 91,000 91,000
shares to
management and
employees
Amortization of 189,708 189,708
shares issued to
consultants
Foreign currency (539,656) 77,494 (462,162)
translation
Net income (loss) (1,316,762) 29,231 (1,287,531)
BALANCE,
$ 13,751,032 $
24,253,830 $
2,036,281 (175,497) $
(417,538) $
(1,751,618) $
(812,063) $
(4,706,103) $
18,602,789
September 30, 2018
Preferred Stock Common Stock Additional Treasury Stock Accumulated Accumulated Noncontrolling
paid-in other
comprehensive
Shares Amount Shares Amount capital Shares Amount deficit loss interest Total
BALANCE, June 30, 2019
$ 16,054,534 $
26,523,830 $
2,066,906 (175,497) $
(417,538) $
(6,968,700) $
(671,106) $
(5,173,622) $
15,359,770
Stock based 90,000 63,000 63,000
compensation to
employees
Stock based 690,000 524,300 (324,000) 200,300
compensation to
consultants
Amortization of 180,209 180,209
shares issued to
consultants
Foreign currency (646,211) 142,544 (503,667)
translation
Net loss (1,627,353) (121,271) (1,748,624)
BALANCE,
$ 16,834,534 $
27,111,130 $
1,923,115 (175,497) $
(417,538) $
(8,596,053) $
(1,317,317) $
(5,152,349) $
13,550,988
September 30, 2019
SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended
September 30,
2019 2018
Operating Activities
Net loss $
(1,748,624) $
(1,287,531)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation 414,708 817,208
Depreciation and amortization 154,577 25,715
Non-cash lease expense 40,426
Provision for doubtful accounts 889,078 871,081
Impairment loss of fixed assets and intangible asset 327,632
Deferred tax benefit (194,500)
Changes in assets and liabilities
Notes receivable 386,233
Accounts receivable 2,159,346 (3,709,059)
Other receivables (5,389,083) 67,499
Advances to suppliers - third parties 67,902 (789,150)
Advances to suppliers - related party 3,322,210
Prepaid expenses and other current assets 81,209 (290,651)
Other long-term assets - deposits 90,016 (2,510,665)
Due from related parties 372,500 807,405
Advances from customers (1,525) (250,650)
Accounts payable 141,114 (2,804,782)
Taxes payable (443,828) (35,535)
Lease liabilities (39,201)
Accrued expenses and other current liabilities (172,838) 122,962
Net cash used in operating activities (2,670,358) (5,838,443)
Investing Activities
Acquisition of property and equipment (4,538) (830)
Net cash used in investing activities (4,538) (830)
Effect of exchange rate fluctuations on cash (326,316) (271,955)
Net decrease in cash (3,001,212) (6,111,228)
Cash at beginning of period 3,142,650 7,098,259
Cash at end of period $
141,438 $
987,031
Supplemental information
Income taxes paid $
35,191 $
9,108
Interest paid $
11,116
$
Non-cash transactions of operating and investing activities
Transfer of prepayment to intangible asset $
218,678
$
Initial recognition of right-of-use assets and lease liabilities $
469,218
$
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SOURCE Sino-Global Shipping America, Ltd.
