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.