Sino-Global Announces Fiscal 2020 First Quarter Financial Results

News provided by

Sino-Global Shipping America, Ltd.

Nov 19, 2019, 16:05 ET

ROSLYN, N.Y., Nov. 19, 2019 /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 first quarter ended September 30, 2019.

The Company has also provided more detailed information on its quarterly report on Form 10-Q filed this afternoon 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 September 30, 2019.

Management Comments

Mr. Lei Cao, Chairman and Chief Executive Officer of Sino-Global commented, "During the first quarter, our strategy continued to be negatively impacted by the ongoing difficult U.S./China trade relations. We were very pleased to have significantly improved gross margins despite a difficult sales environment, partly due to our shifting focus towards our shipping agency business. By utilizing our agency network and previous investments in technology, we have retained the ability to service a broader base of customers. Despite our ongoing efforts to rationalize costs and expenses, we remain cautious amidst a macro-economic stalemate with an indeterminant time frame. As the Company moves forward into fiscal 2020, we will be focusing on leveraging our growing infrastructure to improve operating margins and the bottom line while simultaneously seeking immediate international opportunities. We expect to provide a shareholder letter to outline our growth strategy for the coming year prior to our next annual meeting."

Fiscal First Quarter 2020 Financial Review

  • The Company reported total revenues of approximately $1.8 million for the quarter ended September 30, 2019, compared to approximately $6.5 million reported in the same period last year.  The decrease was largely due to a shift to shipping agency and management activities with certain freight logistics contracts in light of uncertainty surrounding current trade along with lower inland management revenues.
  • The Company's gross profit for the 2020 fiscal first quarter was approximately $1.1 million, compared to approximately $1.4 million in the same period last year. Gross profit margin during the quarter was approximately 61.7%, compared to approximately 21.8% in the same period last year. The increase was largely due to shifting toward 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 segments mainly regarding the top-line financial results for the quarters ended September 30, 2019 and 2018, respectively:

For the Three Months Ended September 30, 2019


Shipping
Agency and
Management
Services

Inland

Transportation
Management
Services

Freight
Logistics
Services

Container
Trucking
Services

Total

Revenues














- Related party

$

-

$

-

$

-

$

-

$

-

- Third parties

$

500,000

$

-

$

1,242,142

*

$

44,084

$

1,786,226

Total revenues

$

500,000

$

-

$

1,242,142

$

44,084

$

1,786,226

Cost of revenues

$

95,822

$

-

$

547,684

*

$

39,898

$

683,404

Gross profit

$

404,178

$

-

$

694,458

$

4,186

$

1,102,822

Depreciation and amortization

$

102,774

$

-

$

7,702

$

44,101

$

154,577

Total capital expenditures

$

4,538

$

-

$

-

$

-

$

4,538

Gross margin%

80.8

%

-

%

55.9

%

9.5

%

61.7

%




*

For certain freight logistics contracts that the Company entered into with certain customers in its fiscal 2020 first quarter, the Company (i) acts as an agent coordinating relationships between customers and third-party service providers and (ii) does not control the services rendered to its customers, revenues related to these contracts are presented net of related costs. For the three months ended September 30, 2019, gross revenues and gross cost of revenues related to these contracts amounted to approximately $9.1 million and $8.5 million, respectively.


For the Three Months Ended September 30, 2018


Shipping
Agency and
Management
Services

Inland

Transportation
Management
Services

Freight
Logistics
Services

Container
Trucking
Services

Total

Revenues














- Related party

$

-

$

322,000

$

-

$

-

$

322,000

- Third parties

$

-

$

598,000

$

5,487,553

$

91,980

$

6,177,533

Total revenues

$

-

$

920,000

$

5,487,553

$

91,980

$

6,499,533

Cost of revenues

$

-

$

59,874

$

4,965,992

$

57,966

$

5,083,832

Gross profit

$

-

$

860,126

$

521,561

$

34,014

$

1,415,701

Depreciation and amortization

$

-

$

20,488

$

476

$

4,751

$

25,715

Total capital expenditures

$

-

$

-

$

-

$

830

$

830

Gross margin%

-


93.5

%

9.5

%

37.0

%

21.8

%
  • The Company had an operating loss of approximately $1.8 million for the three months ended September 30, 2019, compared to an operating loss of approximately $1.4 million for the same period in 2018.
  • For the fiscal quarter ended September 30, 2019, the Company reported net loss attributable to Sino-Global Shipping America, Ltd. of approximately $1.6 million, or loss of approximately $0.10 per diluted share based on approximately 16.1 million weighted average shares outstanding, compared to net loss attributable to Sino-Global Shipping America, Ltd. of approximately $1.3 million, or loss of approximately $0.10 per diluted share based on approximately 13.1 million weighted average shares outstanding, for the same period last year.

Balance Sheet Information

  • As of September 30, 2019, the Company's working capital was approximately $9.4 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.
  • The Company's allowance for doubtful accounts was approximately $6.5 million as of September 30, 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 does not believe that there are any significant collection issues with respect to trade accounts receivable, net of allowance.
  • 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 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


September 30,


2019

2018







Net revenues - third parties

$

1,786,226

$

6,177,533

Net revenues - related party

-


322,000

Total revenues

1,786,226


6,499,533

Cost of revenues

(683,404)


(5,083,832)

Gross profit

1,102,822


1,415,701









Selling expenses

(130,029)


(108,369)

General and administrative expenses

(1,091,455)


(973,752)

Impairment loss of fixed assets and intangible asset

(327,632)


-

Provision for doubtful accounts

(889,078)


(871,081)

Stock-based compensation

(414,708)


(817,208)

Total operating expenses

(2,852,902)


(2,770,410)









Operating loss

(1,750,080)


(1,354,709)









Other income, net

1,456


712









Net loss before provision for income taxes

(1,748,624)


(1,353,997)









Income tax benefit

-


66,466









Net loss

(1,748,624)


(1,287,531)









Net (loss) income attributable to non-controlling interest

(121,271)


29,231









Net loss attributable to Sino-Global Shipping America, Ltd.

$

(1,627,353)

$

(1,316,762)









Comprehensive loss







Net loss

$

(1,748,624)

$

(1,287,531)

Other comprehensive loss - foreign currency

(503,667)


(462,162)

Comprehensive loss

(2,252,291)


(1,749,693)

Less: Comprehensive income attributable to non-controlling interest

21,273


106,725

Comprehensive loss attributable to Sino-Global Shipping America, Ltd.

$

(2,273,564)

$

(1,856,418)









Loss per share







Basic and diluted

$

(0.10)

$

(0.10)









Weighted average number of common shares used in computation







Basic and diluted

16,073,087


13,145,535

SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)




September 30,

June 30,


2019

2019







Assets





Current assets





Cash

$

141,438

$

3,142,650

Notes receivable

-


383,792

Accounts receivable, less allowance for doubtful accounts of $6,506,794 and $5,670,274 as of 
     September 30, 2019 and June 30, 2019, respectively

3,991,830


7,045,846

Other receivables, net

9,569,216


4,335,715

Advances to suppliers - third parties

55,953


124,140

Prepaid expenses and other current assets

92,126


105,054

Due from related party, net

472,715


807,965

Total Current Assets

14,323,278


15,945,162









Property and equipment, net

711,638


989,910

Right-of-use assets

427,291


-

Intangible assets, net

73,889


89,722

Prepaid expenses

225,619


519,503

Other long-term assets - deposits

2,928,533


3,054,706

Total Assets

$

18,690,248

$

20,599,003









Liabilities and Equity
















Current Liabilities







Advances from customers

$

66,474

$

68,590

Accounts payable

699,855


567,619

Lease liabilities - current

158,455


-

Taxes payable

2,710,011


3,184,895

Accrued expenses and other current liabilities

1,240,992


1,418,129

Total current liabilities

4,875,787


5,239,233









Lease liabilities - noncurrent

263,473


-









Total liabilities

5,139,260


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; 16,834,534 and 16,054,534 shares issued 
     as of September 30, 2019 and June 30, 2019, respectively; 16,659,037 and 15,879,037 shares 
     outstanding as of September 30, 2019 and June 30, 2019, respectively

27,111,130


26,523,830

Additional paid-in capital

1,923,115


2,066,906

Treasury stock, at cost, 175,497 shares as of September 30, 2019 and June 30, 2019

(417,538)


(417,538)

Accumulated deficit

(8,596,053)


(6,968,700)

Accumulated other comprehensive loss

(1,317,317)


(671,106)

Total Sino-Global Shipping America Ltd. Stockholders' Equity

18,703,337


20,533,392









Non-controlling Interest

(5,152,349)


(5,173,622)









Total Equity

13,550,988


15,359,770









Total Liabilities and Equity

$

18,690,248

$

20,599,003

SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(UNAUDITED)




Preferred Stock

Common Stock

Additional
paid-in

Treasury Stock

Accumulated

Accumulated
other
comprehensive

Noncontrolling





Shares

Amount

Shares

Amount

capital

Shares

Amount

deficit

loss

interest

Total

BALANCE, June 30, 2018

-

$

-


13,271,032

$

23,717,330

$

1,755,573


(175,497)

$

(417,538)

$

(434,856)

$

(272,407)

$

(4,812,828)

$

19,535,274

Stock based 
     compensation to
      employee

-


-


430,000


473,000


-


-


-


-


-


-


473,000

Stock based 
     compensation to 
     consultants

-


-


50,000


63,500


-


-


-


-


-


-


63,500

Amortization of 
     shares to 
     management and 
     employees

-


-


-


-


91,000


-


-


-


-


-


91,000

Amortization of 
     shares issued to 
     consultants

-


-


-


-


189,708


-


-


-


-


-


189,708

Foreign currency 
     translation

-


-


-


-


-


-


-


-


(539,656)


77,494


(462,162)

Net income (loss)

-


-


-


-


-


-


-


(1,316,762)


-


29,231


(1,287,531)

BALANCE, 
     September 30, 2018

-

$

-


13,751,032

$

24,253,830

$

2,036,281


(175,497)

$

(417,538)

$

(1,751,618)

$

(812,063)

$

(4,706,103)

$

18,602,789















































Preferred Stock

Common Stock

Additional
paid-in

Treasury Stock

Accumulated

Accumulated
other
comprehensive

Noncontrolling





Shares

Amount

Shares

Amount

capital

Shares

Amount

deficit

loss

interest

Total

BALANCE, June 30, 2019

-

$

-


16,054,534

$

26,523,830

$

2,066,906


(175,497)

$

(417,538)

$

(6,968,700)

$

(671,106)

$

(5,173,622)

$

15,359,770

Stock based 
     compensation to 
     employees

-


-


90,000


63,000


-


-


-


-


-


-


63,000

Stock based 
     compensation to 
     consultants

-


-


690,000


524,300


(324,000)


-


-


-


-


-


200,300

Amortization of 
     shares issued to 
     consultants

-


-


-


-


180,209


-


-


-


-


-


180,209

Foreign currency 
     translation

-


-


-


-


-


-


-


-


(646,211)


142,544


(503,667)

Net loss

-


-


-


-


-


-


-


(1,627,353)


-


(121,271)


(1,748,624)

BALANCE, 
     September 30, 2019

-

$

-


16,834,534

$

27,111,130

$

1,923,115


(175,497)

$

(417,538)

$

(8,596,053)

$

(1,317,317)

$

(5,152,349)

$

13,550,988

SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS




For the Three Months Ended


September 30,


2019

2018







Operating Activities





Net loss

$

(1,748,624)

$

(1,287,531)

Adjustments to reconcile net loss to net cash used in operating activities:







     Stock-based compensation

414,708


817,208

     Depreciation and amortization

154,577


25,715

     Non-cash lease expense

40,426


-

     Provision for doubtful accounts

889,078


871,081

     Impairment loss of fixed assets and intangible asset

327,632


-

     Deferred tax benefit

-


(194,500)

Changes in assets and liabilities







     Notes receivable

386,233


-

     Accounts receivable

2,159,346


(3,709,059)

     Other receivables

(5,389,083)


67,499

     Advances to suppliers - third parties

67,902


(789,150)

     Advances to suppliers - related party

-


3,322,210

     Prepaid expenses and other current assets

81,209


(290,651)

     Other long-term assets - deposits

90,016


(2,510,665)

     Due from related parties

372,500


807,405

     Advances from customers

(1,525)


(250,650)

     Accounts payable

141,114


(2,804,782)

     Taxes payable

(443,828)


(35,535)

     Lease liabilities

(39,201)


-

     Accrued expenses and other current liabilities

(172,838)


122,962

Net cash used in operating activities

(2,670,358)


(5,838,443)









Investing Activities







     Acquisition of property and equipment

(4,538)


(830)

Net cash used in investing activities

(4,538)


(830)









Effect of exchange rate fluctuations on cash

(326,316)


(271,955)









Net decrease in cash

(3,001,212)


(6,111,228)









Cash at beginning of period

3,142,650


7,098,259









Cash at end of period

$

141,438

$

987,031









Supplemental information







     Income taxes paid

$

35,191

$

9,108

     Interest paid

$

11,116

$

-









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

$

469,218

$

-

 

SOURCE Sino-Global Shipping America, Ltd.

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