Sino-Global Announces Fiscal 2020 Third Quarter Financial Results
ROSLYN, N.Y., July 6, 2020 /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 third quarter ended March 31, 2020. The Company has also provided more detailed information in its quarterly report on Form 10-Q filed today with the U.S. Securities and Exchange Commission.
Management Comments
Mr. Lei Cao, Chairman and Chief Executive Officer of Sino-Global commented, "Over the past several weeks, we have greatly expanded our ability to service the demand for exported products to China from the U.S., and have done so in a cost-effective manner with a focus on streamlined operations and free cash flow. We strengthened our management team through the appointment of Kelin Wu, secured shipping agency agreements, and chartered two vessels to meet this demand. Finally, we signed a significant MOU with a long-time partner of Sino-Global, which helps to secure potential purchases of material. We believe all of this will greatly increase the Company's revenue with high-margins, and do so with long term customers in which we have successfully worked and collected cash from in the past. The quarter ended March 31, 2020 was largely impacted by the impact on trade from delays in a U.S. / China trade agreement and COVID-19. While this confluence of factors led to a slight delay in our reporting timing, we are pleased to again become current with our filings. Going forward, we feel very well positioned to increase sales and begin to deliver profitability for our shareholders."
Recent Highlights
June 29, 2020: Signs Agreements to Charter Two
Ships to Meet Export Product
Demand to China from the U.S.
June 25, 2020: Signs MOU with Yunnan Jingyifeng
Supply Chain Management to Address
Growing Need for Exported Fuel and
Agricultural Products to China
June 8, 2020: Signs Two Year General Agency
Service Agreement; Expected to Add
Approximately $12 Million in
Revenue Annually
April 27, 2020: Appoints Mr. Kelin Wu as Chief
Marketing Officer
Fiscal Third Quarter 2020 Financial Review
-- The Company reported total revenues of $1,353,979 for the quarter ended
March 31, 2020, compared to $22,773,139 reported in the same period last
year. The decrease was largely due to the fact that in certain freight
logistics contracts that the Company entered into with customers
starting from the first quarter of fiscal year 2020, only acted as an
agent and did not control the services rendered to the customers, as
Sino-Global was not the primary responsible party to fulfill the
services. As such revenues on these contracts are accounted for on a net
basis. The decrease was also due to the decrease in revenues from inland
transportation management services as service contracts with customers
have expired and there was no new business for this segment.
-- The Company's gross profit for the 2020 fiscal third quarter was
$464,872, compared to $1,697,944 in the same period last year. Gross
profit margin during the quarter was approximately 34.3%, compared to
approximately 7.5% in the same period last year. The increase was
largely due to the Company's shifting of business focus towards 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 segment for the three months ended March 31, 2020 and March 31, 2019, respectively:
For the Three Months Ended March 31, 2020
Shipping Inland Freight Container
Trucking
Services Total
Agency and
Management
Services Logistics
Transportation
Management
Services Services
Revenues
- Related party
$
$
$
$
$
- Third parties $
500,000
$ $
853,979 *
$ $
1,353,979
Total revenues $
500,000
$ $
853,979
$ $
1,353,979
Cost of revenues $
67,841
$ $
821,266 *
$ $
889,107
Gross profit $
432,159
$ $
32,713
$ $
464,872
Depreciation and
amortization $
79,732
$ $
3,421
$ $
83,153
Total capital expenditures
$
$
$
$
$
Gross margin% 86.4 % 3.8 % 34.3
% % %
* For certain freight logistics
contracts that the Company entered
into with customers starting from
first quarter of fiscal year 2020,
the Company (i) acts as an agent
in arranging the relationship
between the customer and the
third-party service provider and
(ii) does not control the services
rendered to the customers,
revenues related to these
contracts are presented net of
related costs. For the three
months ended March 31, 2020, gross
revenues and gross cost of
revenues related to these
contracts amounted to
approximately $2.0 million and
$2.0 million, respectively.
For the Three Months Ended March 31, 2019
Shipping Inland Freight Container
Trucking
Services Total
Agency and
Management
Services Logistic
Transportation
Management
Services Services
Revenues
- Related party
$ $
36,380
$
$ $
36,380
- Third parties $
956,583 $
93,407 $
21,599,675 $
87,094 $
22,736,759
Total revenues $
956,583 $
129,787 $
21,599,675 $
87,094 $
22,773,139
Cost of revenues $
862,970 $
48,750 $
20,098,417 $
65,058 $
21,075,195
Gross profit $
93,613 $
81,037 $
1,501,258 $
22,036 $
1,697,944
Depreciation and
amortization
$ $
39,109 $
476 $
4,448 $
44,033
Total capital expenditures
$
$ $
125,806 $
8,317 $
134,123
Gross margin% 9.8 62.4 7.0 25.3 7.5
% % % % %
-- The Company had an operating loss of $4,034,743 for the three months
ended March 31, 2020, compared to an operating loss of $1,229,233 for
the same period in 2019.
-- For the fiscal quarter ended March 31, 2020, the Company reported net
loss attributable to Sino-Global Shipping America, Ltd. of $3,818,094,
or a loss of approximately $0.22 per diluted share based on
approximately 17.7 million weighted average shares outstanding, compared
to net loss attributable to Sino-Global Shipping America, Ltd. of
$1,388,790, or a loss of approximately $0.09 per diluted share based on
approximately 15.2 million weighted average shares outstanding, for the
same period last year.
Balance Sheet Information
-- The Company holds no long-term debt.
-- As of March 31, 2020, the Company's working capital was $3,525,468 and
the Company had cash of $143,112.
-- The Company's allowance for doubtful accounts was approximately $6.7
million as of March 31, 2020 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 it does not believe that there are any significant
collection issues with respect to accounts receivables, net of
allowance.
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 For the Nine Months Ended
March 31,
March 31,
---
2020 2019 2020 2019
Net revenues - third parties $
1,353,979 $
22,736,759 $
5,161,329 $
39,354,579
Net revenues - related party 36,380 433,380
Total revenues 1,353,979 22,773,139 5,161,329 39,787,959
Cost of revenues (889,107) (21,075,195) (2,328,156) (34,715,624)
Gross profit 464,872 1,697,944 2,833,173 5,072,335
Selling expenses (79,099) (140,601) (335,253) (507,199)
General and administrative expenses (952,661) (1,053,903) (2,746,180) (3,442,695)
Impairment loss of fixed assets and intangible asset (327,632)
Provision for doubtful accounts (3,121,416) (1,583,965) (4,289,170) (2,871,752)
Stock-based compensation (346,439) (148,708) (1,252,756) (2,013,292)
Total operating expenses (4,499,615) (2,927,177) (8,950,991) (8,834,938)
Operating loss (4,034,743) (1,229,233) (6,117,818) (3,762,603)
Other income, net 21,260 2,499 7,103 3,993
Net loss before provision for income taxes (4,013,483) (1,226,734) (6,110,715) (3,758,610)
Income tax expense (189,510) (248,820) (204,257) (427,333)
Net loss (4,202,993) (1,475,554) (6,314,972) (4,185,943)
Net loss attributable to non-controlling interest (384,899) (86,764) (462,192) (6,419)
Net loss attributable to Sino-Global Shipping
America, Ltd. $
(3,818,094) $
(1,388,790) $
(5,852,780) $
(4,179,524)
===
Comprehensive loss
Net loss $
(4,202,993) $
(1,475,554) $
(6,314,972) $
(4,185,943)
Other comprehensive income (loss) -foreign currency (112,671) 262,467 (360,132) (306,457)
Comprehensive loss (4,315,664) (1,213,087) (6,675,104) (4,492,400)
Less: Comprehensive (loss) income attributable to non-
controlling interest (322,135) (96,210 (350,693) 37,445
Comprehensive loss attributable to Sino-Global
Shipping America, Ltd. $
(3,993,529) $
(1,116,877) $
(6,324,411) $
(4,529,845)
===
Loss per share
Basic and diluted $
(0.22) $
(0.09) $
(0.35) $
(0.30)
===
Weighted average number of common shares used in computation
Basic and diluted 17,738,157 15,245,703 16,875,173 14,045,018
SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
March 31, June 30,
2020 2019
---
Assets
Current assets
Cash $
143,112 $
3,142,650
Notes receivable 383,792
Accounts receivable, net 1,745,672 7,045,846
Other receivables 6,486,140 4,335,715
Advances to suppliers -third
parties 112,037 124,140
Prepaid expenses and other
current assets 239,830 105,054
Due from related party, net 435,898 807,965
Total Current Assets 9,162,689 15,945,162
Property and equipment, net 588,514 989,910
Right-of-use assets 337,899
Intangible assets, net 42,222 89,722
Prepaid expenses 519,503
Other receivables -noncurrent 3,549,958
Other long-term assets -
deposits 2,956,802 3,054,706
Total Assets $
16,638,084 $
20,599,003
===
Liabilities and Equity
Current Liabilities
Advances from customers $
66,987 $
68,590
Accounts payable 637,489 567,619
Lease liabilities -current 156,190
Taxes payable 3,290,812 3,184,895
Accrued expenses and other
current liabilities 1,485,743 1,418,129
Total current liabilities 5,637,221 5,239,233
Lease liabilities -noncurrent 177,495
Total liabilities 5,814,716 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;
18,139,037 and 16,054,534 shares
issued as of March 31, 2020 and
June 30, 2019, respectively;
18,139,037 and 15,879,037 shares
outstanding as of March 31, 2020
and June 30, 2019, respectively 28,090,992 26,523,830
Additional paid-in capital 2,334,962 2,066,906
Subscription receivable (114,054)
Treasury stock, at cost, 0 and
175,497 shares as of March 31,
2020 and June 30, 2019 (417,538)
Accumulated deficit (12,821,480) (6,968,700)
Accumulated other comprehensive
loss (1,142,737) (671,106)
Total Sino-Global Shipping
America Ltd. Stockholders'
Equity 16,347,683 20,533,392
Non-controlling Interest (5,524,315) (5,173,622)
Total Equity 10,823,368 15,359,770
Total Liabilities and
Equity $
16,638,084 $
20,599,003
===
SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Nine Months Ended
March 31,
2020 2019
---
Operating Activities
Net loss $
(6,314,972) $
(4,185,943)
Adjustments to reconcile net
loss to net cash used in
operating activities:
Stock-based compensation 1,252,756 2,013,292
Depreciation and amortization 320,272 95,313
Non-cash lease expense 113,985
Provision for doubtful accounts 4,289,170 2,871,752
Impairment loss of fixed assets
and intangible asset 327,632
Deferred tax benefit (208,047)
Changes in assets and
liabilities
Notes receivable 386,233 (732,826)
Accounts receivable 1,051,299 (8,341,650)
Other receivables (5,882,569) 36,014
Advances to suppliers -third
parties 11,820 (410,886)
Advances to suppliers -related
party 3,312,375
Prepaid expenses and other
current assets 165,939 821,662
Other long-term assets -
deposits 89,274 (2,502,946)
Due from related parties 413,408 1,552,918
Advances from customers (1,496) (353,696)
Accounts payable 72,772 1,336,453
Taxes payable 116,520 837,641
Lease liabilities (118,256)
Accrued expenses and other
current liabilities 65,094 535,921
Net cash used in operating
activities (3,641,119) (3,322,653)
Investing Activities
Acquisition of property and
equipment (6,979) (143,480)
Net cash used in investing
activities (6,979) (143,480)
Financing Activities
Proceeds from issuance of common
stock 885,946 500,000
Net cash provided by financing
activities 885,946 500,000
Effect of exchange rate
fluctuations on cash (237,386) (608,219)
Net decrease in cash (2,999,538) (3,574,352)
Cash at beginning of period 3,142,650 7,098,259
Cash at end of period $
143,112 $
3,523,907
===
Supplemental information
Income taxes paid $
38,557 $
144,018
===
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 $
452,119
$
===
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SOURCE Sino-Global Shipping America, Ltd.
