Attached files
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| 8-K - CURRENT REPORT - Sino-Global Shipping America, Ltd. | f8k051418_sinoglobalship.htm |
Exhibit 99.1
Sino-Global Announces Fiscal Year 2018 Third Quarter Financial Results
Roslyn, New York, May 14, 2018 – Sino-Global Shipping America, Ltd. (NASDAQ: SINO) (“Sino-Global,” the “Company” or “we”), a logistics integrated solution provider engaged in non-asset based global shipping, freight logistics, and inland transportation management and related services, today announced its financial results for the third quarter of the fiscal year 2018 ended March 31, 2018. The Company has also provided extensive information on its quarterly report on Form 10-Q filed this morning with the U.S. Securities and Exchange Commission. Management encourages investors to review this filing for more details of the Company’s financial results for the third quarter of fiscal year 2018, background on Sino-Global’s business and history, as well as Company strategy for the coming fiscal year.
Fiscal Year 2018 Third Quarter Operating and Financial Highlights
(as compared to the same period of the prior year)
| ● | Total revenues of this quarter increased 89.3% or $2.5 million to $5.2 million, compared to $2.7 million. The increase was primarily due to the Company’s efforts to diversify its business in freight logistics services. |
| ● | Gross margin decreased from 58.8% to 34.5% as a result of lower margin fragmented freight logistics services have been provided to customers in the current period in comparison with the corresponding period in 2017. The Company strategically allocated its resources to develop new businesses and markets in the U.S. as the focus for its growth. |
| ● | Net income for the third quarter of fiscal year 2018 was $0.24 million, as compared to a net income of $1.3 million for the same period of the prior year. The decrease was due to higher cost of revenues associated with our fragmented freight logistics services which reduced the gross margin. In addition, our general and administrative expenses increased as a result of increased bad debt reserve and increased professional fee, and increased income tax expense of $0.26 million as compared to a tax benefit of $0.30 million recognized during the prior year period. |
| ● | On March 14, 2018, the Company closed a $3 million registered direct offering of its common stock and concurrent private placement of its Series A Warrants and Series B Warrants. |
| ● | At March 31, 2018, the Company had cash and cash equivalents of $9.5 million, and holds no long-term debt. |
Management Commentary
Mr. Lei Cao, Chairman and Chief Executive Officer of Sino-Global commented, “We continue to ramp up and expand our business with our focus on our inland transportation, freight logistics and container trucking services. We were pleased with our growth for the quarter. However, there were several factors that adversely affected our bottom line. These factors included a change in our product mix towards freight logistics services which generates higher revenues but has lower profit margins than our other services. We also recognized an income tax expense for the quarter of $0.26 million due to changes in deferred tax assets for the three-month period.”
Mr. Cao continued. “Also during the quarter, we completed a capital raise that resulted in net proceeds of $2.6 million, after related costs. We intend to use the money raised towards the further development of our business. In the remaining period of fiscal year 2018, we will continue to focus on increasing revenue and cash flow in the U.S. We will continue to use our bulk cargo container business in partnership with COSCO to seek solutions for empty containers between container shipping lines from the U.S. to China and view this aspect of our operations as a major part of our growth.”
In addition to the growth of Sino-Global’s bulk cargo container business segment, management continues to focus on growth of the Company’s container truck business in the United States and anticipates further positive developments of this segment of the Company’s operations in the coming months.
| Sino-Global Shipping America, Ltd. | Page 2 |
May 14, 2018
Fiscal Year 2018, Third Quarter Financial Review
| ● | Revenues increased by $2.5 million, or 89.3%, to $5.2 million from $2.7 million for the three months ended March 31, 2017. This increase was primarily attributable to the Company diversifying its business in freight logistics services. Revenues generated from freight logistics services increased by $2.7 million, or 332.1%, from the three months ended March 31, 2017. |
| ● | The Company’s gross profit during the period was $1.8 million as compared to the prior year period at $1.6 million. |
| ● | Total operating costs and expenses increased to $4.9 million for the three months ended March 31, 2018 from $1.8 million for the prior year period. The increase was attributable to several factors primarily focused on the diversification of the business which included a rise in the cost of revenue attributable to different segments, general and administrative expenses. |
| ● | Operating income for the three months ended March 31, 2018 was approximately $0.28 million, compared to an operating income of approximately $0.96 million for the comparable period ended March 31, 2017. The decrease was due to the above-mentioned rise in operating expenses relating to the ramp up of the Company’s business. |
| ● | Income tax expense for the three months ended March 31, 2018 was $0.22 million, compared to an income tax benefit of approximately $0.30 million for the same period of the prior year. Current income tax incurred from operations in China and Hong Kong remained approximately the same compared to the same period last year, while income tax benefit decreased due to changes in in allowance for bad debts, net operating loss carryover and the increase in the valuation allowance against the deferred tax assets, based on the Company’s latest projected taxable income. |
| ● | As a result of the factors discussed above, for the three months ended March 31, 2018, the Company reported a net income of $0.24 million, compared to net income of $1.3 million for the three months ended March 31, 2017. |
Balance Sheet Information
| ● | As of March 31, 2018, the Company had $9.5 million in cash and cash equivalents, working capital of $17.5 million and shareholder equity of $24.3 million; compared to $8.7 million, $13.7 million, and $19.5 million, respectively, as of June 30, 2017. |
| ● | The Company holds no long-term debt. |
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 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 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.
Terry Downs
Senior Associate
(212)-836-9615 / tdowns@equityny.com
| Sino-Global Shipping America, Ltd. | Page 3 |
May 14, 2018
SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
| ||||||||||||||||
| For the Three Months Ended March 31, | For the Nine Months Ended March 31, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Net revenues - third parties | $ | 4,699,170 | $ | 1,984,834 | $ | 14,179,256 | $ | 4,591,381 | ||||||||
| Net revenues - related party | 501,000 | 762,777 | 1,621,406 | 2,229,180 | ||||||||||||
| Total revenues | 5,200,170 | 2,747,611 | 15,800,662 | 6,820,561 | ||||||||||||
| Cost of revenues | (3,405,435 | ) | (1,132,213 | ) | (10,447,231 | ) | (1,789,348 | ) | ||||||||
| Gross profit | 1,794,735 | 1,615,398 | 5,353,431 | 5,031,213 | ||||||||||||
| General and administrative expenses | (1,477,514 | ) | (612,441 | ) | (4,067,885 | ) | (2,248,639 | ) | ||||||||
| Selling expenses | (35,363 | ) | (41,245 | ) | (393,090 | ) | (153,429 | ) | ||||||||
| Total operating expenses | (1,512,877 | ) | (653,686 | ) | (4,460,975 | ) | (2,402,068 | ) | ||||||||
| Operating income | 281,858 | 961,712 | 892,456 | 2,629,145 | ||||||||||||
| Other income (expense) | ||||||||||||||||
| Financial income (expense), net | 170,134 | 34,167 | 392,729 | (57,737 | ) | |||||||||||
| Total other income (expense) | 170,134 | 34,167 | 392,729 | (57,737 | ) | |||||||||||
| Net income before provision for income taxes | 451,992 | 995,879 | 1,285,185 | 2,571,408 | ||||||||||||
| Income tax benefit (expense) | (216,095 | ) | 303,196 | 58,597 | 158,184 | |||||||||||
| Net income | 235,897 | 1,299,075 | 1,343,782 | 2,729,592 | ||||||||||||
| Net income (loss) attributable to non-controlling interest | 150,943 | 4,021 | 343,936 | (104,083 | ) | |||||||||||
| Net income attributable to Sino-Global Shipping America, Ltd. | $ | 84,954 | $ | 1,295,054 | $ | 999,846 | $ | 2,833,675 | ||||||||
| Comprehensive income (loss) | ||||||||||||||||
| Net income | $ | 235,897 | $ | 1,299,075 | $ | 1,343,782 | $ | 2,729,592 | ||||||||
| Foreign currency translation income (loss) | 164,446 | 4,871 | 309,763 | (114,011 | ) | |||||||||||
| Comprehensive income | 400,343 | 1,303,946 | 1,653,545 | 2,615,581 | ||||||||||||
| Less: Comprehensive income (loss) attributable to non-controlling interest | 30,785 | (19,419 | ) | 92,150 | 4,702 | |||||||||||
| Comprehensive income attributable to Sino-Global Shipping America Ltd. | $ | 369,558 | $ | 1,323,365 | $ | 1,561,395 | $ | 2,610,879 | ||||||||
| Earnings per share | ||||||||||||||||
| -Basic | $ | 0.01 | $ | 0.14 | $ | 0.10 | $ | 0.33 | ||||||||
| -Diluted | $ | 0.01 | $ | 0.14 | $ | 0.10 | $ | 0.33 | ||||||||
| Weighted average number of common shares used in computation | ||||||||||||||||
| -Basic | 10,835,535 | 8,994,146 | 10,433,272 | 8,514,080 | ||||||||||||
| -Diluted | 10,870,221 | 9,028,928 | 10,479,555 | 8,534,701 | ||||||||||||
| Sino-Global Shipping America, Ltd. | Page 4 |
May 14, 2018
SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES
CONDENSED CONSOLIDATED BALANCE SHEETS
| March 31, | June 30, | |||||||
| 2018 | 2017 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 9,549,942 | $ | 8,733,742 | ||||
| Accounts receivable, less allowance for doubtful accounts of $1,350,531 and $185,821 as of March 31, 2018 and June 30, 2017, respectively | 4,757,547 | 2,569,141 | ||||||
| Other receivables, less allowance for doubtful accounts of $145,244 and $145,244 as of March 31, 2018 and June 30, 2017, respectively | 167,018 | 37,811 | ||||||
| Advances to suppliers-third parties | 442,137 | 54,890 | ||||||
| Advances to suppliers-related party | 3,601,421 | 3,333,038 | ||||||
| Prepaid expenses and other current assets | 397,368 | 311,136 | ||||||
| Due from related parties, net | 2,249,544 | 1,715,130 | ||||||
| Total Current Assets | 21,164,977 | 16,754,888 | ||||||
| Property and equipment, net | 536,282 | 187,373 | ||||||
| Intangible assets, net | 168,889 | - | ||||||
| Prepaid expenses | - | 6,882 | ||||||
| Other long-term assets | 137,850 | 117,478 | ||||||
| Deferred tax assets | 1,670,100 | 749,400 | ||||||
| Total Assets | $ | 23,678,098 | $ | 17,816,021 | ||||
| Liabilities and Equity | ||||||||
| Current Liabilities | ||||||||
| Advances from customers | $ | 373,172 | $ | 369,717 | ||||
| Accounts payable | 472,085 | 206,211 | ||||||
| Taxes payable | 2,401,934 | 1,886,216 | ||||||
| Due to related parties | - | 206,323 | ||||||
| Accrued expenses and other current liabilities | 423,877 | 418,029 | ||||||
| Total Current Liabilities | 3,671,068 | 3,086,496 | ||||||
| Income tax payable - noncurrent portion | 440,219 | - | ||||||
| Total Liabilities | 4,111,287 | 3,086,496 | ||||||
| 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; 12,611,032 and 10,281,032 shares issued as of March 31, 2018 and June 30, 2017, respectively; 12,435,535 and 10,105,535 outstanding as of March 31, 2018 and June 30, 2017, respectively | 22,046,330 | 20,535,379 | ||||||
| Additional paid-in capital | 2,386,864 | 688,934 | ||||||
| Treasury stock, at cost, 175,497 shares as of March 31, 2018 and June 30, 2017 | (417,538 | ) | (417,538 | ) | ||||
| Retained earnings (accumulated deficit) | 105,939 | (893,907 | ) | |||||
| Accumulated other comprehensive income (loss) | 153,775 | (414,564 | ) | |||||
| Total Sino-Global Shipping America Ltd. Stockholders’ Equity | 24,275,370 | 19,498,304 | ||||||
| Non-controlling Interest | (4,708,559 | ) | (4,768,779 | ) | ||||
| Total Equity | 19,566,811 | 14,729,525 | ||||||
| Total Liabilities and Equity | $ | 23,678,098 | $ | 17,816,021 | ||||
| Sino-Global Shipping America, Ltd. | Page 5 |
May 14, 2018
SINO-GLOBAL
SHIPPING AMERICA LTD. AND AFFILIATES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| For the Nine Months Ended March 31, | ||||||||
| 2018 | 2017 | |||||||
| Operating Activities | ||||||||
| Net income | $ | 1,343,782 | $ | 2,729,592 | ||||
| Adjustment to reconcile net income to net cash provided by (used in) operating activities: | ||||||||
| Amortization of stock options | 9,665 | 77,320 | ||||||
| Amortization of stock - based compensation to consultants | 432,125 | 547,138 | ||||||
| Amortization of stock - based compensation to employees | 182,000 | - | ||||||
| Depreciation and amortization | 63,402 | 36,432 | ||||||
| Provision for (recovery of) doubtful accounts - accounts receivable | 1,164,710 | (107,608 | ) | |||||
| Provision for doubtful accounts - due from related parties | 243,433 | - | ||||||
| Deferred tax benefit | (920,700 | ) | (387,900 | ) | ||||
| Changes in assets and liabilities | ||||||||
| Accounts receivable | (3,246,911 | ) | 517,463 | |||||
| Other receivables | (80,145 | ) | 184,753 | |||||
| Advances to suppliers - third parties | 50,465 | 816,715 | ||||||
| Prepaid expense and other current assets | (84,147 | ) | 65,279 | |||||
| Due from related parties | (784,363 | ) | (2,843,131 | ) | ||||
| Other long-term assets | - | (14,185 | ) | |||||
| Advances from customers | (23,218 | ) | 324,476 | |||||
| Accounts payable | 243,380 | 312,883 | ||||||
| Taxes payable | 798,012 | 201,259 | ||||||
| Due to related parties | (206,323 | ) | 156,841 | |||||
| Accrued expenses and other current liabilities | 889 | 514,445 | ||||||
| Net cash provided by (used in) operating activities | (813,944 | ) | 3,131,772 | |||||
| Investing Activities | ||||||||
| Acquisition of property and equipment | (379,917 | ) | (55,474 | ) | ||||
| Acquisition of intangible assets | (190,000 | ) | - | |||||
| Prepayment for intangible assets | (437,357 | ) | - | |||||
| Net cash used in investing activities | (1,007,274 | ) | (55,474 | ) | ||||
| Financing Activities | ||||||||
| Proceeds from issuance of common stock, net | 2,585,091 | 4,319,988 | ||||||
| Proceeds from exercise of stock options | - | 82,500 | ||||||
| Net cash provided by financing activities | 2,585,091 | 4,402,488 | ||||||
| Effect of exchange rate fluctuations on cash and cash equivalents | 52,327 | (24,591 | ) | |||||
| Net increase in cash and cash equivalents | 816,200 | 7,454,195 | ||||||
| Cash and cash equivalents at beginning of period | 8,733,742 | 1,385,994 | ||||||
| Cash and cash equivalents at end of period | $ | 9,549,942 | $ | 8,840,189 | ||||
| Supplemental information | ||||||||
| Income taxes paid | $ | 60,162 | $ | 89,324 | ||||