Press Release

Sino-Global Announces 2018 Year End Financial Results

Company Release - 9/28/2018 8:30 AM ET

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
Transportation
Management
Services



Freight
Logistics
Services



Container
Trucking
Services



Bulk Cargo
Container
Services



Total


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
Transportation
Management
Services



Freight
Logistics
Services



Container
Trucking
Services



Bulk Cargo
Container
Services



Total


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
June 30,



For the Year Ended

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
Ltd.


$

(960,187)



$

880,356



$

601,208



$

3,491,235



















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
    and  2017, respectively



8,428,853




2,569,141


Other receivables, less allowance for doubtful accounts of $145,176 and $145,244 as of June 30, 2018 and 2017,
    respectively



69,239




37,811


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
    30, 2018 and 2017, respectively; 13,095,535 and 10,105,535 outstanding as of June 30, 2018 and 2017,
    respectively



23,717,330




20,535,379


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


 

Cision View original content:http://www.prnewswire.com/news-releases/sino-global-announces-2018-year-end-financial-results-300720736.html

SOURCE Sino-Global Shipping America, Ltd.


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