Sino-Global Announces Fiscal Year 2016 Second Quarter Financial Results

Feb 12, 2016, 16:30 ET from Sino-Global Shipping America, Ltd.

ROSLYN, N.Y., Feb. 12, 2016 /PRNewswire/ -- Sino-Global Shipping America, Ltd. (NASDAQ: SINO) ("Sino-Global" or the "Company"), a company engaged in shipping, chartering, logistics and related services, today announced its financial results for the fiscal year 2016 second quarter ended December 31, 2015.

Fiscal Year 2016 Second Quarter Operating and Financial Highlights (all comparisons to the prior year period)

  • Total revenues were $1.6 million, compared to $3.1 million, largely due to a general economic slow-down in China and driven by additional competition within the industry, with established and new competitors offering rates that in many cases are much lower than the Company was willing to offer.
  • Gross margin for the period increased to 55.7% from 45.8%, largely due to revenue from the Company's inland transportation business which provided higher margin, coupled with cost of shipping agency and ship management services.
  • The Company underwent a thorough review of its receivables and after reassessing the collectability of certain past due accounts receivable, accrued approximately of $0.6 million additional bad debt reserve on accounts receivables. This contributed to an increase in general and administrative expenses during the period.
  • In December 2015, the Company announced the termination of the previously announced asset purchase agreement to acquire a vessel from Rong Yao International Shipping Limited ("Rong Yao"). Under the terms of the termination agreement, 1.2 million shares of common stock that were issued in the original transaction have been returned to the Company by Rong Yao.
  • Sino-Global reported an income tax expense of $0.3 million during the period compared to an income tax benefit of $0.02 million in the prior year period, largely due to a reassessment of the possibility of utilizing deferred tax assets in conjunction with the termination of the proposed vessel acquisition.
  • Net loss for the second quarter of fiscal year 2016 was $1.6 million, largely as the result of a decrease in total revenue, receivables reassessment, and a rise in income tax expense.
  • As of December 31, 2015, the Company had cash and cash equivalents of $1.1 million, working capital of $8.7 million and shareholder equity of $9.2 million (or $1.10 per share); compared to $0.7 million, $6.2 million, and $9.9 million, respectively, as of December 31, 2014.
  • The Company holds no long-term debt.

Fiscal Year 2016, Second Quarter Financial Review

For the Three Months Ended December 31, 2015

Shipping Agency & Ship Management   Services

Shipping & Chartering Services

Inland Transportation Management Services

Total

Revenues

$

489,871

$

16,000

$

1,091,080

$

1,596,951

Cost of revenues

$

395,988

$

8,000

$

303,139

$

707,127

Gross profit

$

93,883

$

8,000

$

787,941

$

889,824

Depreciation and amortization

$

7,030

$

1,782

$

4,911

$

13,723

Total capital expenditures

$

2,375

$

-

$

-

$

2,375

Total assets

$

4,024,625

$

414,710

$

6,608,391

$

11,047,726

 

For the Three Months Ended December 31, 2014

Shipping Agency & Ship Management   Services

Shipping & Chartering Services

Inland Transportation Management Services

Total

Revenues 

$

1,800,499

$

-

$

1,292,081

$

3,092,580

Cost of revenues

$

1,493,285

$

-

$

181,576

$

1,674,861

Gross profit

$

307,214

$

-

$

1,110,505

$

1,417,719

Depreciation and amortization

$

49,948

$

-

$

2,856

$

52,804

Total capital expenditures

$

11,769

$

-

$

-

$

11,769

Total assets

$

3,510,977

$

-

$

4,011,947

$

7,522,924

  • Total revenues were $1.6 million during the period, compared to $3.1 million in the prior year period. The decrease was due mainly to a decline in revenues generated from shipping agency services and ship management services and an environment with competitive rates.
  • The Company's gross profit during the period was $0.9 million, compared to $1.4 million in the prior year period. Gross profit margin during the period improved to 55.7%, compared to 45.8%, largely as a favorable shift in service mix.
  • Operating loss for the three months ended December 31, 2015 was $1.1 million, compared to operating income of $0.09 million for the comparable period ended December 31, 2014. The decrease was primarily attributable to a decline in revenue for the period and a rise in general and administrative expenses as a result of the aforementioned $0.6 million of additional bad debt reserve on accounts receivables.
  • Income tax expense for the three months ended December 31, 2015 was $0.3 million, compared to income tax benefit of $0.02 million for the same period of the prior year. The increase in income tax expense was the result of a larger taxable base attributable to the increase in income from the inland transportation management segment of the Company and the payment of a previously deferred tax asset of $0.3 million connected with the termination of the asset purchase agreement with Rong Yao.
  • For the three months ended December 31, 2015, the Company reported a net loss of $1.6 million, compared to net income of $0.07 million for the three months ended December 31, 2014.

Balance Sheet Information

As of December 31, 2015, the Company had $1.1 million in cash and cash equivalents, compared to cash and cash equivalents of $0.7 million as of June 30, 2015. Working capital and shareholder's equity at December 31, 2015 was $9.0 million and $13.9 million, compared to $6.2 million and $14.6 million, respectively, as of June 30, 2015.

Stock Repurchase Plan Update

On October 11, 2015, Sino-Global's Board of Directors approved a stock repurchase program, in accordance with the retirement method, authorizing the repurchase of up to $100,000 of its common stock during the quarter ending December 31, 2015. Thereafter the Company may repurchase an aggregate value of shares per quarter equal to 10% to 15% of Sino-Global's quarterly net income for which the most recent quarterly or annual report has been filed. The plan is set to expire on October 11, 2016.

The Company has since repurchased 44,706 common shares at an average stock price of $0.9231 per share, as of the date of this release.

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 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 services, shipping and chartering services, inland transportation management services and ship management services. Additional information about Sino-Global can be found on the Company's corporate website at www.sino-global.net. 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 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 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 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.

Contact Information

The Equity Group Inc. Adam Prior Senior Vice-President (212)-836-9606 / aprior@equityny.com

Sino-Global Shipping America, Ltd. and Affiliates

For the six months Ended December 31,

For the three months Ended December 31,

2015

2014

2015

2014

Net revenues

$

4,296,169

$

5,698,505

$

1,596,951

$

3,092,580

Cost of revenues

(1,947,803)

(3,084,014)

(707,127)

(1,674,861)

Gross profit

2,348,366

2,614,491

889,824

1,417,719

General and administrative expenses

(2,894,244)

(2,257,146)

(1,963,402)

(1,317,341)

Selling expenses

(44,125)

(66,721)

(29,502)

(10,382)

(2,938,369)

(2,323,867)

(1,992,904)

(1,327,723)

Operating income (loss)

(590,003)

290,624

(1,103,080)

89,996

Financial expense, net

(312,983)

(121,334)

(195,776)

(58,952)

Other income (loss), net

(4,621)

20,488

(4,621)

20,488

(317,604)

(100,846)

(200,397)

(38,464)

Net income (loss) before provision for income taxes

(907,607)

189,778

(1,303,477)

51,532

Income tax (expense) benefit

(573,355)

51,463

(332,533)

24,208

Net income (loss)

(1,480,962)

241,241

(1,636,010)

75,740

Net loss attributable to non-controlling interest

(166,021)

(227,640)

(136,911)

(60,682)

Net income (loss) attributable to Sino-Global Shipping America, Ltd.

$

(1,314,941)

$

468,881

$

(1,499,099)

$

136,422

Comprehensive income (loss)

Net income (loss)

$

(1,480,962)

$

241,241

$

(1,636,010)

$

75,740

Foreign currency translation (loss) gain

(38,318)

88,796

82,318

22,262

Comprehensive income (loss)

(1,519,280)

330,037

(1,553,692)

98,002

Less: Comprehensive income (loss) attributable to non-controlling interest

(869)

(164,696)

57,663

(29,472)

Comprehensive income (loss) attributable to Sino-Global Shipping America Ltd.

$

(1,518,411)

$

494,733

$

(1,611,355)

$

127,474

Earnings (deficit) per share

   -Basic and diluted

$

(0.16)

$

0.08

$

(0.18)

$

0.02

Weighted average number of common shares used in computation

   -Basic and diluted

8,377,634

6,054,933

8,433,341

6,200,841

 

 

Sino-Global Shipping America, Ltd. and Affiliates

 Condensed Consolidated Balance Sheets

(UNAUDITED) 

December 31,

June 30,

2015

2015

Assets

Current assets

Cash and cash equivalents

$

1,094,576

$

730,322

Advances to suppliers

1,874

50,975

Accounts receivable, less allowance for doubtful accounts of $703,498 and $477,240 as of December 31, 2015 and June 30, 2015, respectively

2,554,660

3,082,219

Other receivables, less allowance for doubtful accounts of $125,149 and $241,604 as of December 31, 2015 and June 30, 2015, respectively

513,788

191,972

Prepaid expense and other current assets

3,904,181

1,265,609

Due from related parties, less allowance for doubtful accounts of $174,759 and nil as of December 31, 2015 and June 30, 2015, respectively

2,720,246

2,784,591

Total Current Assets

10,789,325

8,105,688

Property and equipment, net

180,853

214,003

Prepaid expenses - noncurrent

43,109

436,351

Other long-term assets

34,439

2,773,908

Deferred tax assets

-

280,600

Total Assets

$

11,047,726

$

11,810,550

Liabilities and Equity

Advances from customers

$

25,831

$

126,201

Accounts payable

294,890

691,588

Taxes payable

1,410,157

996,648

Accrued expenses and other current liabilities

93,628

99,607

Total Current Liabilities

1,824,506

1,914,044

Total Liabilities

1,824,506

1,914,044

Commitments and Contingency

Equity

Preferred stock, 2,000,000 shares authorized, no par value, none issued.

-

-

Common stock, 50,000,000 shares authorized, no par value; 8,790,738 and 7,996,032 shares issued as of December 31, 2015 and June 30, 2015; 8,620,841 and 7,870,841 outstanding as of December 31, 2015 and June 30, 2015

17,190,591

16,303,327

Additional paid-in capital

1,144,842

1,144,842

Treasury stock, at cost - 169,897 and 125,191 shares as of December 31, 2015 and June 30, 2015

(413,797)

(372,527)

Accumulated deficit

(3,867,811)

(2,552,870)

Accumulated other comprehensive income

(112,038)

91,432

Unearned stock-based compensation

(7,760)

(7,760)

Total Sino-Global Shipping America Ltd. Stockholders' Equity

13,934,027

14,606,444

Non-controlling Interest

(4,710,807)

(4,709,938)

Total Equity

9,223,220

9,896,506

Total Liabilities and Equity

$

11,047,726

$

11,810,550

 

 

SINO-GLOBAL SHIPPING AMERICA LTD. AND AFFILIATE  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) 

For the Six Months Ended December 31,

2015

2014

Operating Activities

Net income (loss)

$

(1,480,962)

241,241

Adjustment to reconcile net income (loss) to net cash used in operating activities

Amortization of stock-based compensation to consultants

548,917

193,156

Depreciation and amortization

29,076

108,364

Provision (recovery) of doubtful accounts on third party receivables

622,556

(17,013)

Provision of doubtful accounts on related party receivable

174,759

-

Deferred tax provision (benefit)

280,600

(57,300)

Loss on disposition of property and equipment

-

1,483

Changes in assets and liabilities

Decrease (increase) in advances to suppliers

49,101

(584,071)

Increase in accounts receivable

(269,756)

(905,468)

Increase in other receivables

(654,229)

(399,514)

Decrease (increase) in prepaid expense

58,728

(195,831)

Increase in other current assets

(28,613)

-

Decrease in other long-term assets

3,240

8

Decrease in due from related parties

64,345

806,243

(Decrease) increase in advances from customers

(100,370)

24,638

Decrease in accounts payable

(396,698)

(185,385)

Increase (decrease) in accrued expenses

13,420

(145,449)

Increase in taxes payable

413,510

67,985

(Decrease) increase in other current liabilities

(19,400)

77,323

Net cash used in operating activities

(691,776)

(969,590)

Investing Activities

Acquisitions of property and equipment

(3,302)

(27,108)

Cash collected from the termination of vessel acquisition

332,413

-

Collection of short-term loan from related party

-

1,119,241

Net cash provided by investing activities

329,111

1,092,133

Financing Activities

Proceeds from issuance of common stock, net

691,600

967,820

Purchase of common stock

(41,270)

-

Net cash provided by financing activities

650,330

967,820

Effect of exchange rate fluctuations on cash and cash equivalents

76,589

38,853

Net increase in cash and cash equivalents

364,254

1,129,216

Cash and cash equivalents at beginning of period

730,322

902,531

Cash and cash equivalents at end of period

$

1,094,576

$

2,031,747

Supplemental information

Income taxes paid

$

-

$

8,104

Non-cash transactions of operating activities:

Common stock issued for vessel acquisition

$

2,220,000

$

-

Issuance of common stock to pay for professional services

$

255,000

$

672,000

Common stock issued for LSM acquisition

$

-

$

83,500

SOURCE Sino-Global Shipping America, Ltd.