–	Total net sales declined year-over-year to US$40.9 million in the second quarter of 2011 versus US$43.9 million in the second quarter of 2010.

–	Gross profit was US$4.4 million compared to US$7.6 million in the same quarter in 2010. Gross margin was 10.8% compared to 17.3% in the second quarter of 2010.

–	Cash used in operations was US$12.3 million, compared with US$2.0 million in the second quarter of 2010.

–	Net income was US$1.0 million, down from US$3.4 million in the second quarter of 2010.

–	Net income per basic and diluted shares were both US$0.03, down from US$0.12 per basic and diluted share, in the second quarter of 2010.

 
 

 

 

 

 

 

 

 

 

 

 

 

Except as required by law, the company assumes no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future.  For further information on factors which could impact SinoHub and the statements contained herein, see the "Risk Factors" included in Item 1A of the Company’s Annual Report on Form 10-K filed with the Securities Exchange Commission on March 14, 2011.  The company assumes no obligation to update and supplement forward-looking statements that become untrue because of subsequent events, new information or otherwise.

SinoHub，Inc. Grace Wang Tel: + 86-755-2661-1080 Email: grace.wang@sinohub.com	Investor Relations (Hong Kong) Mahmoud Siddig Taylor Rafferty Tel: +852-3196-3712 Email: sinohub@taylor-rafferty.com
	Investor Relations (US) Bryan Degnan Taylor Rafferty Tel: +1-212-889-4350 Email: sinohub@taylor-rafferty.com

 

 

		June 30, 2011				December 31, 2010
		(Unaudited)				(As Restated)
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	7,164,000			$	4,524,000
Restricted cash			91,690,000				32,059,000
Accounts receivable, net			51,251,000				45,686,000
Inventories, net			31,517,000				14,631,000
Prepaid expenses and other current assets			938,000				704,000
Deposit with suppliers			750,000				1,308,000
Total current assets			183,309,000				98,913,000
PROPERTY AND EQUIPMENT, NET			12,877,000				11,190,000
TOTAL ASSETS		$	196,186,000			$	110,103,000
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable		$	4,280,000			$	865,000
Customer deposits			300,000				107,000
Accrued expenses and other current liabilities			939,000				709,000
Bank borrowings			94,738,000				37,299,000
Collateralized bank advances			10,124,000				-
Capital lease obligations – current portion			616,000				756,000
Income and other taxes payable			644,000				1,712,000
Total current liabilities			111,642,000				41,449,000
LONG-TERM LIABILITIES
Capital lease obligations, net of current portion			709,000				845,000
Warrant Derivatives			894,000				1,692,000
Total long-term liabilities			1,603,000				2,537,000
TOTAL LIABILITIES			113,245,000				43,987,000
STOCKHOLDERS’ EQUITY

Preferred stock, $0.001 par value, 5,000,000 shares authorized;
no shares issued			-				-
Common stock, $0.001 par value, 100,000,000 shares authorized;
33,454,903 shares and 28,570,859 shares issued and outstanding
as of June 30, 2011 and December 31, 2010, respectively			33,000				29,000
Additional paid-in capital			30,715,000				20,122,000
Retained earnings
Unappropriated			46,882,000				42,303,000
Appropriated			934,000				934,000
Accumulated other comprehensive income			4,377,000				2,730,000
Total stockholders’ equity			82,941,000				66,116,000
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	196,186,000			$	110,103,000

 

 

 SINOHUB, INC. AND SUBSIDIARIES

		Three months ended June 30,								Six months ended June 30,
		2011				2010				2011				2010
						(As Restated)								(As Restated)
NET SALES
ECSS		$	31,688,000			$	30,566,000			$	53,215,000			$	62,785,000
ICM			9,235,000				13,314,000				25,677,000				19,699,000
Total net sales			40,923,000				43,880,000				78,891,000				82,484,000
COST OF SALES
ECSS			27,798,000				25,285,000				45,109,000				51,723,000
ICM			8,688,000				11,018,000				21,660,000				16,088,000
Total cost of sales			36,486,000				36,303,000				66,768,000				67,812,000
GROSS PROFIT			4,437,000				7,577,000				12,123,000				14,672,000
OPERATING EXPENSES
Selling, general and administrative			2,144,000				2,243,000				4,466,000				4,138,000
Professional services			213,000				256,000				494,000				501,000
Depreciation			542,000				349,000				1,009,000				571,000
Stock compensation expense			-				95,000				-				151,000
Stock option compensation amortization			79,000				125,000				188,000				218,000
Provision for bad debts			43,000				158,000				96,000				191,000
Total operating expenses			3,022,000				3,226,000				6,253,000				5,770,000
INCOME FROM OPERATIONS			1,415,000				4,351,000				5,870,000				8,902,000
OTHER INCOME (EXPENSE)
Interest expense			(615,000	)			(212,000	)			(1,105,000	)			(243,000	)
Interest income			442,000				98,000				784,000				105,000
Changes in fair values of warrant derivatives			287,000				516,000				798,000				472,000
Other, net			514,000				2,000				741,000				7,000
Total other income, net			628,000				403,000				1,218,000				341,000
INCOME BEFORE INCOME TAXES			2,043,000				4,754,000				7,088,000				9,243,000
Income tax expense			1,007,000				1,352,000				2,509,000				2,390,000
NET INCOME			1,036,000				3,402,000				4,579,000				6,853,000
OTHER COMPREHENSIVE INCOME
Foreign currency translation gain			1,047,000				81,000				1,648,000				109,000
COMPREHENSIVE INCOME		$	2,083,000			$	3,483,000			$	6,227,000			$	6,961,000
SHARE AND PER SHARE DATA
Net income per share-basic		$	0.03			$	0.12			$	0.14			$	0.25
Weighted average number of shares-basic			33,454,000				28,536,000				31,818,000				27,909,000
Net income per share-diluted		$	0.03			$	0.12			$	0.14			$	0.24
Weighted average number of shares-diluted			33,546,000				28,780,000				31,854,000				28,277,000

 

 

 

		Six months ended June 30,
		2011				2010
						(As Restated)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income		$	4,579,000			$	6,853,000
Adjustments to reconcile net income to cash used in operations:
Depreciation - operating expenses			1,009,000				571,000
Depreciation - cost of sales			434,000				-
Stock compensation expense			-				151,000
Stock option compensation amortization			188,000				218,000
Provision for bad debts			96,000				191,000
Changes in fair values of warrant derivatives			(798,000	)			(472,000	)
Changes in operating assets and liabilities:
Accounts receivable			(4,557,000	)			(12,097,000	)
Inventories			(16,338,000	)			3,448,000
Prepaid expenses and other current assets			(215,000	)			(103,000	)
Deposit with suppliers			580,000				(1,941,000	)
Accounts payable			3,352,000				1,219,000
Customer deposits			188,000				(57,000	)
Accrued expenses and other current liabilities			211,000				(116,000	)
Income and other taxes payable			(1,093,000	)			126,000
Net cash used in operating activities			(12,365,000	)			(2,009,000	)
CASH FLOWS FROM INVESTING ACTIVITIES
Increase of restricted cash			(59,631,000	)			(4,851,000	)
Purchase of property and equipment			(3,158,000	)			(2,749,000	)
Net cash used in investing activities			(62,789,000	)			(7,600,000	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock, net of cost			10,440,000				4,470,000
Proceeds from exercise of options, net of costs			15,000				22,000
Bank borrowings -  proceeds			88,356,000				20,999,000
Bank borrowings -  repayments			(32,498,000	)			(14,746,000	)
Collateralized bank advances			9,994,000				-
Repayments of capital lease obligations			(309,000	)			-
Net cash provided by financing activities			75,999,000				10,745,000
EFFECT OF EXCHANGE RATE CHANGES			1,795,000				(20,000	)
NET INCREASE IN CASH AND CASH EQUIVALENTS			2,639,000				1,116,000
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD			4,524,000				8,347,000
CASH AND CASH EQUIVALENTS AT END OF PERIOD		$	7,164,000			$	9,463,000
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest		$	1,105,000			$	243,000
Cash paid for income tax		$	2,524,000			$	2,438,000