Sino-Global Announces Fiscal 2020 Second Quarter Financial Results
ROSLYN, New York, Feb. 19, 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 second quarter ended December 31, 2019.
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 encourages investors to review the Company's 10-Q for a detailed discussion of the Company's financial results for the quarter ended December 31, 2019.
Management Comments
Mr. Lei Cao, Chairman and Chief Executive Officer of Sino-Global commented, "We continued to maintain a steamlined operating strategy during a time when we were impacted by an uncertain trade climate. We shifted our focus towards higher margin and greater cash generating business while cultivating our business relationships to position Sino-Global for the future. We recently signed a joint-venture agreement to serve as a full logistics services provider for a leading agricultural company where Sino-Global will provide comprehensive supply chain logistic services for agricultural products shiped from the U.S. to China. In addition, we are now focused on pursuing additional ship management contracts as part of our agency services expansion efforts. The Company has a significant advantage of being able to leverage our relationships in both the U.S. and China while cost-effectively expanding the business prospects for our customers in ports throughout China."
Chairman Cao concluded, "While calendar 2019 was a challenging period due to the trade climate, we believe that the Company is well-positioned to grow sales now as phase one of the trade negotiations have been completed. While the fiscal third quarter was seasonally slow due to the Chinese New Year holiday and an impact from the Coronavirus outbreak, we believe it is only temporary and we will continue to operate our business as steadily and safely as we can."
Fiscal Second Quarter 2020 Financial Review
- The Company reported total revenues of approximately $2.0 million for the quarter ended December 31, 2019, compared to approximately $10.5 million 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 second quarter was approximately $1.3 million, compared to approximately $2.0 million in the same period last year. Gross profit margin during the quarter was approximately 62.6%, compared to approximately 18.6% 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 December 31, 2019 and 2018, respectively:
For the Three Months Ended December 31, 2019 | ||||||||||||||||||||
Shipping | Inland Transportation | Freight | Container | Total | ||||||||||||||||
Revenues | ||||||||||||||||||||
- Related party | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
- Third parties | $ | 500,000 | $ | - | $ | 1,503,500 | * | $ | 17,624 | $ | 2,021,124 | |||||||||
Total revenues | $ | 500,000 | $ | - | $ | 1,503,500 | $ | 17,624 | $ | 2,021,124 | ||||||||||
Cost of revenues | $ | 66,584 | $ | - | $ | 673,646 | * | $ | 15,415 | $ | 755,645 | |||||||||
Gross profit | $ | 433,416 | $ | - | $ | 829,854 | $ | 2,209 | $ | 1,265,479 | ||||||||||
Depreciation and amortization | $ | 79,144 | $ | - | $ | - | $ | 3,389 | $ | 82,533 | ||||||||||
Total capital expenditures | $ | 2,482 | $ | - | $ | - | $ | - | $ | 2,482 | ||||||||||
Gross margin% | 86.7 | % | - | % | 55.2 | % | 12.5 | % | 62.6 | % | ||||||||||
* | For certain freight logistics contracts that the Company entered into with customers starting from the first quarter of fiscal year 2020, the Company (i) acted as an agent in arranging the relationship between the customer and the third-party service provider and (ii) did not control the services rendered to the customers, revenues related to these contracts are presented net of related costs. For the three months ended December 31, 2019, gross revenues and gross cost of revenues related to these contracts amounted to approximately $12.9 million and $12.0 million, respectively. |
For the Three Months Ended December 31, 2018 | ||||||||||||||||||||
Shipping | Inland Transportation | Freight | Container | Total | ||||||||||||||||
Revenues | ||||||||||||||||||||
- Related party | $ | - | $ | 75,000 | $ | - | $ | - | $ | 75,000 | ||||||||||
- Third parties | $ | 889,070 | $ | 345,000 | $ | 8,978,923 | $ | 227,294 | $ | 10,440,287 | ||||||||||
Total revenues | $ | 889,070 | $ | 420,000 | $ | 8,978,923 | $ | 227,294 | $ | 10,515,287 | ||||||||||
Cost of revenues | $ | 809,040 | $ | 20,000 | $ | 7,497,666 | $ | 229,891 | $ | 8,556,597 | ||||||||||
Gross profit | $ | 80,030 | $ | 400,000 | $ | 1,481,257 | $ | (2,597) | $ | 1,958,690 | ||||||||||
Depreciation and amortization | $ | - | $ | 20,339 | $ | 475 | $ | 4,751 | $ | 25,565 | ||||||||||
Total capital expenditures | $ | - | $ | - | $ | - | $ | 8,534 | $ | 8,534 | ||||||||||
Gross margin% | 9.0 | % | 95.2 | % | 16.5 | % | (1.1) | % | 18.6 | % | ||||||||||
- The Company had an operating loss of $332,995 for the three months ended December 31, 2019, compared to an operating loss of $1,178,661 for the same period in 2018.
For the fiscal quarter ended December 31, 2019, the Company reported net loss attributable to Sino-Global Shipping America, Ltd. of approximately $407,333, or a loss of approximately $0.02 per diluted share based on approximately 16.8 million weighted average shares outstanding, compared to net loss attributable to Sino-Global Shipping America, Ltd. of approximately $1.5 million, or loss of approximately $0.11 per diluted share based on approximately 13.8 million weighted average shares outstanding, for the same period last year.
Balance Sheet Information
- The Company holds no long-term debt.
- As of December 31, 2019, the Company's working capital was approximately $10.4 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. However, there is no assurance the Company will be successful in its plans.
The Company's allowance for doubtful accounts was approximately $6.9 million as of December 31, 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 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 / [email protected]
SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES | ||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATION AND COMPREHENSIVE LOSS | ||||||||||||||||
(UNAUDITED) | ||||||||||||||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Net revenues - third parties | $ | 2,021,124 | $ | 10,440,287 | $ | 3,807,350 | $ | 16,617,820 | ||||||||
Net revenues - related party | - | 75,000 | - | 397,000 | ||||||||||||
Total revenues | 2,021,124 | 10,515,287 | 3,807,350 | 17,014,820 | ||||||||||||
Cost of revenues | (755,645) | (8,556,597) | (1,439,049) | (13,640,429) | ||||||||||||
Gross profit | 1,265,479 | 1,958,690 | 2,368,301 | 3,374,391 | ||||||||||||
Selling expenses | (126,125) | (258,229) | (256,154) | (366,598) | ||||||||||||
General and administrative expenses | (702,064) | (1,415,040) | (1,793,519) | (2,388,792) | ||||||||||||
Impairment loss of fixed assets and intangible asset | - | - | (327,632) | - | ||||||||||||
Provision for doubtful accounts | (278,676) | (416,706) | (1,167,754) | (1,287,787) | ||||||||||||
Stock-based compensation | (491,609) | (1,047,376) | (906,317) | (1,864,584) | ||||||||||||
Total operating expenses | (1,598,474) | (3,137,351) | (4,451,376) | (5,907,761) | ||||||||||||
Operating loss | (332,995) | (1,178,661) | (2,083,075) | (2,533,370) | ||||||||||||
Other (expenses) income, net | (15,613) | 782 | (14,157) | 1,494 | ||||||||||||
Net loss before provision for income taxes | (348,608) | (1,177,879) | (2,097,232) | (2,531,876) | ||||||||||||
Income tax expense | (14,747) | (244,979) | (14,747) | (178,513) | ||||||||||||
Net loss | (363,355) | (1,422,858) | (2,111,979) | (2,710,389) | ||||||||||||
Net income (loss) attributable to non-controlling interest | 43,978 | 51,114 | (77,293) | 80,345 | ||||||||||||
Net loss attributable to Sino-Global Shipping America, Ltd. | $ | (407,333) | $ | (1,473,972) | $ | (2,034,686) | $ | (2,790,734) | ||||||||
Comprehensive income (loss) | ||||||||||||||||
Net loss | $ | (363,355) | $ | (1,422,858) | $ | (2,111,979) | $ | (2,710,389) | ||||||||
Other comprehensive income (loss) - foreign currency | 256,206 | (106,762) | (247,461) | (568,924) | ||||||||||||
Comprehensive loss | (107,149) | (1,529,620) | (2,359,440) | (3,279,313) | ||||||||||||
Less: Comprehensive (loss) income attributable to non-controlling | (49,831) | 26,930 | (28,558) | 133,655 | ||||||||||||
Comprehensive loss attributable to Sino-Global Shipping America, | $ | (57,318) | $ | (1,556,550) | $ | (2,330,882) | $ | (3,412,968) | ||||||||
Loss per share | ||||||||||||||||
Basic and diluted | $ | (0.02) | $ | (0.11) | $ | (0.12) | $ | (0.21) | ||||||||
Weighted average number of common shares used in computation | ||||||||||||||||
Basic and diluted | 16,819,010 | 13,769,918 | 16,448,371 | 13,457,726 | ||||||||||||
SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
(UNAUDITED) | ||||||||
December 31, | June 30, | |||||||
2019 | 2019 | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash | $ | 119,667 | $ | 3,142,650 | ||||
Notes receivable | - | 383,792 | ||||||
Accounts receivable, net | 4,330,551 | 7,045,846 | ||||||
Other receivables | 10,316,228 | 4,335,715 | ||||||
Advances to suppliers - third parties | 193,450 | 124,140 | ||||||
Prepaid expenses and other current assets | 94,912 | 105,054 | ||||||
Due from related party, net | 435,898 | 807,965 | ||||||
Total Current Assets | 15,490,706 | 15,945,162 | ||||||
Property and equipment, net | 666,280 | 989,910 | ||||||
Right-of-use assets | 384,794 | - | ||||||
Intangible assets, net | 58,056 | 89,722 | ||||||
Prepaid expenses | 150,412 | 519,503 | ||||||
Other long-term assets - deposits | 3,005,589 | 3,054,706 | ||||||
Total Assets | $ | 19,755,837 | $ | 20,599,003 | ||||
Liabilities and Equity | ||||||||
Current Liabilities | ||||||||
Advances from customers | $ | 74,912 | $ | 68,590 | ||||
Accounts payable | 510,667 | 567,619 | ||||||
Lease liabilities - current | 155,820 | - | ||||||
Taxes payable | 3,157,711 | 3,184,895 | ||||||
Accrued expenses and other current liabilities | 1,190,518 | 1,418,129 | ||||||
Total current liabilities | 5,089,628 | 5,239,233 | ||||||
Lease liabilities - noncurrent | 230,262 | - | ||||||
Total liabilities | 5,319,890 | 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; 17,289,537 and 16,054,534 shares issued | 27,308,992 | 26,523,830 | ||||||
Additional paid-in capital | 2,299,823 | 2,066,906 | ||||||
Treasury stock, at cost, 0 and 175,497 shares as of December 31, 2019 and June 30, 2019, respectively | - | (417,538) | ||||||
Accumulated deficit | (9,003,386) | (6,968,700) | ||||||
Accumulated other comprehensive loss | (967,302) | (671,106) | ||||||
Total Sino-Global Shipping America Ltd. Stockholders' Equity | 19,638,127 | 20,533,392 | ||||||
Non-controlling Interest | (5,202,180) | (5,173,622) | ||||||
Total Equity | 14,435,947 | 15,359,770 | ||||||
Total Liabilities and Equity | $ | 19,755,837 | $ | 20,599,003 | ||||
SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(UNAUDITED) | ||||||||
For the Six Months Ended | ||||||||
December 31, | ||||||||
2019 | 2018 | |||||||
Operating Activities | ||||||||
Net loss | $ | (2,111,979) | $ | (2,710,389) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Stock-based compensation | 906,317 | 1,864,584 | ||||||
Depreciation and amortization | 237,011 | 51,280 | ||||||
Non-cash lease expense | 78,405 | - | ||||||
Provision for doubtful accounts | 1,167,754 | 1,287,787 | ||||||
Impairment loss of fixed assets and intangible asset | 327,632 | - | ||||||
Deferred tax benefit | - | (120,500) | ||||||
Changes in assets and liabilities | ||||||||
Notes receivable | 386,233 | - | ||||||
Accounts receivable | 1,629,174 | (5,044,123) | ||||||
Other receivables | (5,855,492) | 79,773 | ||||||
Advances to suppliers - third parties | (66,691) | (220,166) | ||||||
Advances to suppliers - related party | - | 3,294,701 | ||||||
Prepaid expenses and other current assets | 160,497 | 408,642 | ||||||
Other long-term assets - deposits | 96,281 | (2,489,067) | ||||||
Due from related parties | 413,408 | 1,091,355 | ||||||
Advances from customers | 5,580 | (295,619) | ||||||
Accounts payable | (63,131) | (2,508,225) | ||||||
Taxes payable | (76,110) | 305,603 | ||||||
Lease liabilities | (77,118) | - | ||||||
Accrued expenses and other current liabilities | (233,414) | 286,613 | ||||||
Net cash used in operating activities | (3,075,643) | (4,717,751) | ||||||
Investing Activities | ||||||||
Acquisition of property and equipment | (7,020) | (9,357) | ||||||
Net cash used in investing activities | (7,020) | (9,357) | ||||||
Financing Activities | ||||||||
Proceeds from issuance of common stock | 500,500 | 500,000 | ||||||
Net cash provided by financing activities | 500,500 | 500,000 | ||||||
Effect of exchange rate fluctuations on cash | (440,820) | (416,925) | ||||||
Net decrease in cash | (3,022,983) | (4,644,033) | ||||||
Cash at beginning of period | 3,142,650 | 7,098,259 | ||||||
Cash at end of period | $ | 119,667 | $ | 2,454,226 | ||||
Supplemental information | ||||||||
Income taxes paid | $ | 38,498 | $ | 16,536 | ||||
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 | $ | 462,361 | $ | - | ||||
SOURCE Sino-Global Shipping America, Ltd.
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