Attached files

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EX-31.1 - EXHIBIT 31.1 - Sino-Global Shipping America, Ltd.v419797_ex31-1.htm
10-K - FORM 10-K - Sino-Global Shipping America, Ltd.v419797_10k.htm
EX-31.2 - EXHIBIT 31.2 - Sino-Global Shipping America, Ltd.v419797_ex31-2.htm
EX-32.2 - EXHIBIT 32.2 - Sino-Global Shipping America, Ltd.v419797_ex32-2.htm
EX-32.1 - EXHIBIT 32.1 - Sino-Global Shipping America, Ltd.v419797_ex32-1.htm
EX-21.1 - EXHIBIT 21.1 - Sino-Global Shipping America, Ltd.v419797_ex21-1.htm

Exhibit 99.1

 

 SINO-GLOBAL REPORTS SECOND CONSECUTIVE YEAR OF PROFITABILITY

 

Continued Margin Improvement Driven by Favorable Service Mix

 

 

 

NEW YORK, NY – September 18, 2015 - Sino-Global Shipping America, Ltd. (NASDAQ CM: SINO) ("Sino-Global" or the "Company"), a Virginia company engaged in shipping, chartering, logistics and related services, today announced its financial results for the quarter and year ended June 30, 2015.

 

FINANCIAL HIGHLIGHTS

 

   For the Year Ended June 30, 
   2015   2014   % Change 
Revenues  $11,320,628   $11,644,392    -2.8%
  Shipping Agency & Ship Management Services  $6,185,653   $7,523,983    -17.8%
  Shipping and Chartering Services  $349,125   $1,937,196    -82.0%
  Inland Transportation Management Services  $4,785,850   $2,183,213    119.2%
Gross margin   47.6%   34.6%   37.4%
Operating margin   9.0%   2.6%   248.5%
Net income  $643,922   $434,486    48.2%
Diluted earnings per share  $0.11   $0.34    NM 

 

  Two consecutive years of net income despite difficult macroeconomic conditions and decline in revenues from our shipping agency and shipping and chartering services.
     
  Gross and operating margin increased from 34.6% and 2.6%, respectively, for the year ended June 30, 2014 to 47.6% and 9.0%, respectively for the same period of 2015. The margin improvement is attributable largely to our diversified service platform and favorable service mix in fiscal year 2015.
     
  Net income increased 48.2% from $434,486 for the year ended June 30, 2014 to $643,922 for the same period in 2015 due mainly to solid contribution from our higher margin inland transportation management services.
     
  Year-over-year margin improvement and growth in net income due primarily to our restructuring efforts that began approximately 2 years ago and our decision to incorporate inland transportation management services into our integrated service platform.
     
  Inland transportation management services grew strongly, with revenues rising to almost $4.8 million and gross profit topping $4.0 million in the year ended June 30, 2015, which sharply contrasts to revenues of approximately $2.2 million and gross profit of approximately $1.9 million for the preceding year.

 

Mr. Lei Cao, Chief Executive Officer of Sino-Global, said, “We considered fiscal year 2015 a success, particularly given the overall challenges presented by the global economic environment and the softening of the Chinese economy. We believe that our restructuring efforts that began approximately two years ago have and continue to pay off; our integrated service platform has not only reduced our dependency on the shipping agency business but also enabled us to expand into other complementary service areas within the shipping and logistics business segments – offering us a solid and diverse service base to boost shareholder value.

 

“We expect the difficult macroeconomic conditions in fiscal year 2015 to continue in to fiscal year 2016; and we believe competition and rising labor costs in the PRC will continue to pressure our operating model. While fiscal year 2015 marks the second consecutive year of net income in the history of Sino-Global, we believe we must continue to diversify and are focused on diversifying our service platform; reduce our dependency on businesses and cash flows that are generated from China; and develop complementary shipping and/or logistics services based in the US. We have developed, and will continue to foster, strong strategic relationships with vessel owners to identify other business development and service opportunities in the shipping and/or logistics industry. For the coming months, we are heavily committed to expanding our freight forwarding and logistics services network in the United States and closing the vessel acquisition.”

 

 

 

 

Q4 Fiscal Year 2015 Financial Results

 

   For the Three Months Ended June 30, 
   2015   2014 
   Revenues   Cost of revenues   Gross profit   Revenues   Cost of revenues   Gross profit 
Shipping Agency and Ship Management Services  $1,494,681   $1,241,104   $253,577   $2,895,405   $2,411,417   $483,988 
Shipping and Chartering Services   349,125    182,650    166,475    -    -    - 
Inland Transportation Management Services   1,251,555    207,938    1.043,617    866,613    124,957    741,656 
Total  $3,095,361   $1,631,692   $1,463,669   $3,762,018   $2,536,374   $1,225,644 

 

Total net revenues for the quarter ended June 30, 2015 decreased by 17.7% to $3,095,361 from $3,762,018 for the same period in 2014. The decrease was due mainly to lower revenues from our shipping agency services partially offset by higher revenues from our inland transportation management services.

 

Cost of revenues for the quarter ended June 30, 2015 decreased by 35.7% to $1,631,692 from $2,536,374 for the same period in 2014. The decline was due mainly to favorable service mix as we reported higher revenues from the shipping and chartering as well as the inland transportation management services, which feature lower overhead than our shipping and chartering services.

 

General and administrative expenses decreased slightly from $978,472 for the quarter ended June 30, 2014 to $977,560 for the same period in 2015, attributed mainly to strict cost control despite higher consulting fees in fiscal year 2015 as a result of the proposed vessel acquisition.

 

Operating income for the quarter ended June 30, 2015 increased by $296,858 to $489,767 from $192,909 for the same period in 2014. The increase was due mainly to favorable service mix with strong margin contribution from the shipping and chartering and inland transportation management services.

 

Income tax expense for the quarter ended June 30, 2015 increased by $427,009 to $512,751 from $85,742 for the same period in 2014. The increase was due mainly to net profit generated by the inland transportation management services.

 

As a result of the foregoing, Sino-Global had net income of $70,768 for the quarter ended June 30, 2015, compared to net income of $236,349 for same period in 2014. After deduction of non-controlling interest, net loss attributable to Sino-Global was $102,474 for the quarter ended June 30, 2015, compared to net income attributable to Sino-Global of $485,717 for same period in 2014.

 

Full Fiscal Year 2015 Financial Results

 

   For the Year Ended June 30, 
   2015   2014 
   Revenues   Cost of revenues   Gross profit   Revenues   Cast of revenues   Gross profit 
Shipping Agency and Ship Management Services  $6,185,653   $4,998,030   $1,187,623   $7,523,983   $6,010,058   $1,513,925 
Shipping and Chartering Services   349,125    182,650    166,475    1,937,196    1,291,048    646,148 
Inland Transportation Management Services   4,785,850    755,603    4,030,247    2,183,213    312,353    1.870,860 
Total  $11,320,628   $5,936,283   $5,384,345   $11,644,392   $7,613,459   $4,030,933 

  

Total net revenues decreased by $323,764 or 2.8% from $11,644,392 for the year ended June 30, 2014 to $11,320,628 for the comparable period in 2015. The decrease was due mainly to lower revenues from our shipping agency business and shipping and chartering services, partially offset by higher revenues from our inland transportation management services.

 

 

 

 

Cost of revenues decreased by $1,677,176 or 22.0% from $7,613,459 for the year ended June 30, 2014 to $5,936,283 for the year ended June 30, 2015. The decline in our cost of revenues was due mainly to lower revenues from our shipping agency and shipping and chartering services; and the nature of our inland transportation management services, which feature lower overhead than our shipping and chartering services.

 

General and administrative expenses increased by $833,660 or 24.0% from $3,470,669 for the year ended June 30, 2014 to $4,304,329 for the year ended June 30, 2015. This increase was mainly due to increased business development expenses of $341,776; increased legal, accounting and professional fees of $334,515; recognition of stock-based compensation for common stock issued to consultants of $512,269, partially offset by a decrease in salaries and benefits of $139,241, and trued up of certain old accounts receivable and payable of $245,058.

 

Sino-Global had an operating income of $1,016,797 for the year ended June 30, 2015, compared to an operating income of $300,130 for the comparable year ended June 30, 2014. The increase was due mainly to favorable service mix with strong margin contribution from the shipping and chartering and inland transportation management services.

 

As a result of the foregoing, Sino-Global had net income of $643,922 for the year ended June 30, 2015, compared to net income of $434,486 for the year ended June 30, 2014. After deduction of non-controlling interest, net income attributable to Sino-Global was $717,390 for the year ended June 30, 2015, compared to net income of $1,586,353 for the year ended June 30, 2014. With comprehensive income from foreign currency translation, comprehensive income attributable to Sino-Global was $784,204 ($0.11 per fully diluted share) for the year ended June 30, 2015, compared to comprehensive income of $1,556,180 ($0.34 per fully diluted share) for the year ended June 30, 2014.

 

Financial Condition

 

Total working capital amounted to $6,191,644 as at June 30, 2015 compared to $3,727,003 as at June 30, 2014. Total current assets increased by $3,147,890 or 63.5% from $4,957,798 as at June 30, 2014 to $8,105,688 as at June 30, 2015. Increase in total current assets is due mainly to an increase in accounts receivable of $2,600,334 and an increase in prepaid expense and other current assets of $1,048,880, offset by a decrease in due from related parties of $389,174 and a decrease in cash and cash equivalents of $172,209.

 

Current liabilities amounted to $1,914,044 as at June 30, 2015, in comparison to $1,230,795 as at June 30, 2014. Total current liabilities increased by $683,249 or 55.5% primarily because of an increase in taxes payable of $789,191 and an increase in accounts payable of $292,832, offset by a decrease in other current liabilities of $282,032 and accrued expenses of $154,466.

 

As a result of the overall increase in our current assets, the current ratio increased from 4.03 at June 30, 2014 to 4.23 at June 30, 2015.

 

Recent Events

 

Pending the acquisition of the Vessel (Rong Zhou), in May 2015, our Board of Directors, approved the entry into chartering arrangements to facilitate the transition of the management and operation of the Vessel. The Vessel Seller (Rong Yao International Shipping Limited, a Hong Kong company), time-chartered the Vessel to Sino-Global for a two-year period, and the Company has time-chartered the Vessel to a third-party charterer also for a two-year period (the “TCA”), both commencing on May 20, 2015. Under the terms of these chartering agreements, the third-party charterer will pay the Company $7,500 per day, and Sino-Global will, in turn, pay the Vessel Seller $3,500 per day. From May 2015 to the date of this press release, the TCA generated revenues and gross profit of approximately $675,000 and $360,000, respectively for the Company. The TCA is expected to generate revenues and net profit during the 2-year term of TCA of approximately $5 million and $1.8 million, respectively.

 

On June 30, 2015, the Company secured a first priority ship lien on the Vessel from the Vessel Seller, pursuant to its previously announced Asset Purchase Agreement.

 

 

 

 

To attempt to increase our service revenues, we are fostering our relationship with vessel owners, such as with Mr. Weixiong Yang, a vessel owner and a shareholder of Sino-Global as a result of his recent purchase of 500,000 shares of our restricted common stock in July 2015, to identify areas Sino-Global could provide its shipping services to them. The aggregate offering price of the shares was $691,600, which was paid in cash. There were no commissions paid in connection with such sale. The sale of stock was completed pursuant to an exemption from securities registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506 of Regulation D. The shares were issued on July 13, 2015. 

 

On September 9, 2015, the Company announced the formation of its U.S.-based freight forwarding and logistics services network, SGS Logistics (the “Network”). The Network is a part of Sino-Global's new strategic plan to grow its business in the U.S. and is intended to extend the Company's integrated service platform into the freight forwarding business. We believe that the Network and the resulting service platform would aid in the establishment of a U.S.-based door-to-door freight forwarding service platform for clients with containerized cargoes leaving the U.S. for China, or from China to the U.S. Through SGS Logistics, we believe this can be the ideal platform to grow our operating cash flows in the U.S., while remaining firmly committed towards continued profitability and increasing shareholder value.

 

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 and related services. We are headquartered in New York with offices in Mainland China, Australia, Canada and Hong Kong. Our current service offerings consist of shipping agency services, shipping and chartering services, inland transportation management services and ship management services.  For more information, please visit: www.sino-global.com.

 

Forward Looking Statements and Certain Related Items.

 

Any statements and/or other information contained in this release that relate, directly and/or indirectly, to future plans, events or performance of the Company are forward-looking statements that involve risks, and uncertainties some of which are identified in Sino-Global's filings with the Securities and Exchange Commission.  Actual results, events or performance of the Company and such other about mentioned events 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 or otherwise disclose the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. This Press Release should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended June 30, 2015, including, but not limited to, the Sections entitled “Management’s Discussion and Analysis or Plan of Operation,” “Risk Factors,” and the financial statements attached to the 10-K.

 

 

 

 

For more information, please contact:

 

Mr. Michael Porter, President
Porter, LeVay & Rose
212-564-4700
mike@plrinvest.com

 

 

 

 

SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES

 

CONSOLIDATED BALANCE SHEETS

 

   June 30, 
   2015   2014 
         
Assets          
Current assets          
Cash and cash equivalents  $730,322   $902,531 
Advances to suppliers   50,975    8,482 
Accounts receivable, less allowance for doubtful accounts of $477,240 and $443,858 as of June 30, 2015 and 2014, respectively   3,082,219    481,885 
Other receivables, less allowance for doubtful accounts of $241,604 and $250,100 as of June 30, 2015 and June 30,2014, respectively   191,972    174,406 
Prepaid expense and other current assets   1,265,609    216,729 
Due from related parties   2,784,591    3,173,765 
           
Total Current Assets   8,105,688    4,957,798 
           
Property and equipment, net   214,003    294,722 
Prepaid expenses - noncurrent   436,351    280,800 
Other long-term assets   2,773,908    16,734 
Deferred tax assets   280,600    163,900 
           
Total Assets  $11,810,550   $5,713,954 
           
Liabilities and Equity          
Current liabilities          
Advances from customers  $126,201   $88,477 
Accounts payable   691,588    398,756 
Accrued expenses   23,411    177,877 
Taxes payable   996,648    207,457 
Other current liabilities   76,196    358,228 
           
Total Current Liabilities   1,914,044    1,230,795 
           
Total Liabilities   1,914,044    1,230,795 
           
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; 7,996,032 and 5,229,032 shares issued as of June 30, 2015 and 2014; 7,870,841 and 5,103,841 outstanding as of June 30, 2015 and 2014   16,303,327    11,662,157 
Additional paid-in capital   1,144,842    1,144,842 
Treasury stock, at cost - 125,191 shares   (372,527)   (372,527)
Accumulated deficit   (2,552,870)   (3,270,260)
Accumulated other comprehensive income   91,432    24,618 
Unearned stock-based compensation   (7,760)   (11,640)
           
Total Sino-Global Shipping America Ltd. Stockholders' equity   14,606,444    9,177,190 
           
Non-controlling Interest   (4,709,938)   (4,694,031)
           
Total Equity   9,896,506    4,483,159 
           
Total Liabilities and  Equity  $11,810,550   $5,713,954 

   

 

 

  

SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES

 

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

 

    For the years ended June 30,  
    2015     2014  
             
Net revenues   $ 11,320,628     $ 11,644,392  
                 
Cost of revenues     (5,936,283 )     (7,613,459 )
Gross profit     5,384,345       4,030,933  
                 
General and administrative expenses     (4,304,329 )     (3,470,669 )
Selling expenses     (63,219 )     (260,134 )
      (4,367,548 )     (3,730,803 )
                 
Operating income     1,016,797       300,130  
                 
Financial income (expense), net     14,200       (50,170 )
Other income, net     40,146       264,349  
      54,346       214,179  
                 
Net income before provision for income taxes     1,071,143       514,309  
                 
Income tax expense     (427,221 )     (79,823 )
                 
Net income     643,922       434,486  
                 
Net loss attributable to non-controlling interest     (73,468 )     (1,151,867 )
                 
Net income attributable to Sino-Global Shipping America, Ltd.   $ 717,390     $ 1,586,353  
                 
Comprehensive income                
Net income   $ 643,922     $ 434,486  
Foreign currency translation gain     124,375       1,493  
Comprehensive income     768,297       435,979  
Less: Comprehensive loss attributable to non-controlling interest     (15,907 )     (1,120,201 )
                 
Comprehensive income attributable to Sino-Global Shipping America, Ltd.   $ 784,204     $ 1,556,180  
                 
Earnings per share                
-Basic and diluted   $ 0.11     $ 0.34  
                 
Weighted average number of common shares used in computation                
-Basic and diluted     6,443,096       4,721,923  

    

 

 

 

 

SINO-GLOBAL SHIPPING AMERICA LTD. AND AFFILIATES

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

  

   For the years ended June 30, 
   2015   2014 
         
Operating Activities          
           
Net income  $643,922   $434,486 
Adjustment to reconcile net income to net cash used in operating activities          
Amortization of stock-based compensation to consultants   512,269    - 
Amortization of stock option expense   3,880    3,880 
Depreciation and amortization   165,088    155,657 
Provision for (recovery of) doubtful accounts   33,382    (246,206)
Deferred tax benefit   (116,700)   (50,445)
Gain on disposition of property and equipment   (20,693)   (385)
Changes in assets and liabilities          
(Increase) decrease in advances to suppliers   (42,493)   223,290 
(Increase) decrease in accounts receivable   (2,633,716)   201,155 
(Increase) decrease in other receivables   (17,566)   16,154 
Increase in other current assets   -    (17,041)
(Increase) decrease in prepaid expense   (296,750)   26,288 
(Increase) decrease in other long-term assets   (20,943)   1,544 
Increase in due from related parties   (724,425)   (1,473,752)
Increase (decrease) in advances from customers   37,724    (506,066)
Increase (decrease) in accounts payable   292,832    (230,745)
Decrease (increase) in accrued expenses   (154,466)   126,525 
Increase in taxes payable   789,188    201,375 
Decrease in other current liabilities   (248,631)   (108,185)
           
Net cash used in operating activities   (1,798,098)   (1,242,471)
           
Investing Activities          
Acquisitions of property and equipment   (84,102)   (203,252)
Proceeds from sale of fixed assets   80,661    854 
Received from (Payment to) related party   1,113,599    (1,158,636)
Installment payment related to vessel acquisition   (516,229)   - 
           
Net cash provided by ( used in) investing activities   593,929    (1,361,034)
           
Financing Activities          
Proceeds from issuance of common stock   967,820    444,000 
           
Net cash provided by financing activities   967,820    444,000 
           
Effect of exchange rate fluctuations on cash and cash equivalents   64,140    13,205 
           
Net decrease in cash and cash equivalents   (172,209)   (2,146,300)
           
Cash and cash equivalents at beginning of year   902,531    3,048,831 
           
Cash and cash equivalents at end of year  $730,322   $902,531 
           
Supplemental information:          
Income taxes paid  $8,104   $24,841 
Non-cash transactions of operating activities:          
Settlement of related accounts receivable and payable  $-   $2,589,739 
Common stock issued for unearned stock-based compensation  $1,419,950   $468,000 
Shares issued for LSM acquisition  $33,400   $- 
Share issued for Vessel acquisition  $2,220,000   $- 

 

 

 

 

  

SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES

 

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

 

   Common stock   Additional
paid-in
capital
   Treasury
stock
   Accumulated
deficit
   Accumulated
other
comprehensive
income
   Unearned
stock-based
compensation
   Total
stockholders'
Equity
   Non-controlling
interest
   Total
Equity
 
   Shares   Amount                                 
                                         
Balance as of June 30, 2013   4,829,032   $10,750,157   $1,144,842   $(372,527)  $(4,856,613)  $54,791   $(15,520)  $6,705,130   $(3,573,830)  $3,131,300 
                                                   
Issuance of common stock   400,000    912,000                             912,000         912,000 
Amortization of stock options                                 3,880    3,880         3,880 
Foreign currency translation                            (30,173)        (30,173)   31,666    1,493 
Net income                       1,586,353              1,586,353    (1,151,867)   434,486 
Balance as of June 30, 2014   5,229,032   $11,662,157   $1,144,842   $(372,527)  $(3,270,260)  $24,618   $(11,640)  $9,177,190   $(4,694,031)  $4,483,159 
Issuance of common stock   2,767,000    4,641,170                             4,641,170         4,641,170 
Amortization of stock options                                 3,880    3,880         3,880 
Foreign currency translation                            66,814         66,814    57,561    124,375 
Net income                       717,390              717,390    (73,468)   643,922 
Balance as of June 30, 2015   7,996,032   $16,303,327   $1,144,842   $(372,527)  $(2,552,870)  $91,432   $(7,760)  $14,606,444   $(4,709,938)  $9,896,506