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Sino-Global Announces Financial Results for Its Fiscal Year Ended June 30, 2020

·18 mins read

ROSLYN, N.Y., Oct. 13, 2020 /PRNewswire/ -- Sino-Global Shipping America, Ltd. (NASDAQ: SINO) ("Sino-Global", or the "Company"), a non-asset based global shipping and freight logistic service company, announced today its financial results for the fiscal year ended June 30, 2020.



For the Twelve Months Ended June 30,

($ millions, except per share data)


2020


2019


% Change

Total revenues


6.54


41.77


-84.4%

Shipping agency services


2.11


2.09


0.6%

Inland transportation management services


0.00


1.47


-100.0%

Freight logistics services


4.37


37.73


-88.4%

Container trucking services


0.06


0.48


-87.2%








Gross profit


2.86


5.76


-50.4%

Gross margin


43.7%


13.8%


29.9 pp

Shipping agency services


60.7%


9.5%


51.2 pp

Inland transportation management services


0.0%


91.2%


-91.2 pp

Freight logistics services


36.0%


11.1%


24.9 pp

Container trucking services


10.4%


11.4%


-1.0 pp








Operating loss


-17.74


-5.97


-197.1%

Net loss attributable to SINO


-16.45


-6.53


-151.8%

Basic and Diluted loss per share


-4.78


-2.27


-111.0%








* pp: percentage points







"Our fiscal year 2020 results reflect continued headwinds facing our business on the back of the COVID-19 pandemic, as well as the pending trade negotiations between the U.S. and China that remained a drag on the shipping and logistics industry. Total revenues decreased by 84.4% to $6.54 million for fiscal year 2020, primarily due to certain freight logistics services contracts being accounted for on a net basis starting from fiscal year 2020, the expiration of inland transportation management services contracts with a key customer, and the negative impact of the COVID-19 pandemic across our business segment. Looking ahead, we will continue to fine-tune our business and explore new opportunities to regain growth and profitability," said Mr. Lei Cao, Chairman and Chief Executive Officer of Sino-Global.

Fiscal Year 2020 Financial Results


For the Twelve Months Ended June 30,


2020


2019


Revenues ($'000)


Cost of Revenues ($'000)


Gross Margin (%)


Revenues ($'000)


Cost of Revenues ($'000)


Gross Margin

(%)

Shipping agency and management services

2,106


828


60.7%


2,094


1,894


9.5%

Inland transportation management services

-


-


0.0%


1,470


129


91.2%

Freight logistics services

4,369


2,796


36.0%


37,725


33,556


11.1%

Container trucking services

62


55


10.4%


482


428


11.4%

Total

6,537


3,679


43.7%


41,771


36,007


13.8%

Revenues

For fiscal year 2020, total revenues decreased by approximately $35.23 million, or 84.4%, to approximately $6.54 million from approximately $41.77 million for the prior fiscal year. The decrease was primarily due to certain freight logistics services contracts being accounted for on a net basis starting from fiscal year 2020, the negative impact of the COVID-19 pandemic across all segments, as well as the expiration of inland transportation management services contracts with a key customer.

Revenues from shipping agency and management services increased by approximately $0.02 million, or 0.6%, to approximately $2.11 million for fiscal year 2020 from approximately $2.09 million for the prior fiscal year. The increase was primarily due to the fact that we entered into a general shipping agency service agreement and a shipping management services agreement for fiscal year 2020.

We had no revenues from inland transportation management services for fiscal year 2020 as our service contract with our key customers expired, compared to approximately $1.47 million for the prior fiscal year.

Revenues from freight logistics services decreased by approximately $33.36 million, or 88.4%, to approximately $4.37 million for fiscal year 2020 from approximately $37.73 million for the prior fiscal year. The decrease was primarily due to certain freight logistics services contracts being accounted for on a net basis starting from fiscal year 2020.

Revenues from container trucking services decreased by approximately $0.42 million, or 87.2%, to approximately $0.06 million for fiscal year 2020 from approximately $0.48 million for the prior fiscal year. The decrease was primarily due to the pending trade negotiations between the U.S. and China that affected the overall container shipment market including our container trucking services.

Cost of Revenues

Total cost of revenues decreased by approximately $32.33 million, or 89.8%, to approximately $3.68 million for fiscal year 2020 from approximately $36.01 million for the prior fiscal year. On a segment basis, cost of revenues for shipping agency and management services, inland transportation management services, freight logistics services and container trucking services were approximately $0.83 million, $nil, $2.80 million, and $0.05 million, respectively, for fiscal year 2020, compared to approximately $1.89 million, $0.13 million, $33.56 million, and $0.43 million, respectively, for the prior fiscal year.

Gross Profit

Total gross profit decreased by approximately $2.90 million, or 50.4%, to approximately $2.86 million for fiscal year 2020 from approximately $5.76 million for the prior fiscal year. On a segment basis, gross profits for shipping agency and management services, inland transportation management services, freight logistics services and container trucking services were approximately $1.28 million, $nil, $1.57 million, and $0.01 million, respectively, for fiscal year 2020, compared to approximately $0.20 million, $1.34 million, $4.17 million, and $0.05 million, respectively, for the prior fiscal year.

Overall gross margin was 43.7% for fiscal year 2020, compared to 13.8% for the prior fiscal year. On a segment basis, gross margins for shipping agency and management services, inland transportation management services, freight logistics services and container trucking services were 60.7%, nil%, 36.0%, and 10.4%, respectively, for fiscal year 2020, compared to 9.5%, 91.2%, 11.1%, and 11.4%, respectively, for the prior fiscal year.

Operating Expenses

Selling expenses decreased by approximately $0.33 million, or 45.2%, to approximately $0.39 million for fiscal year 2020 from approximately $0.72 million for the prior fiscal year. The decrease was mainly due to decreased business development expenses of approximately $0.30 million as limited activities for our selling team during the COVID-19 pandemic.

General and administrative expenses decreased by approximately $0.95 million, or 22.0%, to approximately $3.39 million for fiscal year 2020 from approximately $4.34 million for the prior fiscal year. The decrease was mainly due to decreased IT expenses of approximately $0.60 million, decreased professional service fees of approximately $0.13 million and decreased travel and office expenses of approximately $0.50 million as we incurred less travel and office expenses due to our office closure and limited activity during the COVID-19 pandemic, and offset by increased depreciation and amortization expenses of $0.27 million.

Impairment loss of fixed assets and intangible asset was approximately $0.33 million, related to the inland transportation services business, for fiscal year 2020, compared to $nil for the prior fiscal year.

Impairment loss of deposit for leasehold improvement was $nil for fiscal year 2020, compared to approximately $0.43 million, related to deposit paid for leasehold improvement on our IT infrastructure facility including upgrading the server room of our Shanghai office, for the prior fiscal year. The design plan for the leasehold improvement was not approved by the building management due to power supply issues.

Provision for doubtful accounts, net of recovery, was approximately $14.91 million for fiscal year 2020, compared to approximately $3.98 million for the prior fiscal year. This increase of provision for doubtful accounts was mainly related to the COVID-19 pandemic that adversely affected our customers' business operations, which in turn adversely affected our ability to collect accounts receivable and other receivables from our customers.

Stock-based compensation decreased by approximately $0.69 million, or 30.5%, to approximately $1.58 million for fiscal year 2020 from $2.27 million for the prior fiscal year.

As a result, total operating expenses increased by approximately $3.84 million, or 32.7%, to approximately $15.57 million for fiscal year 2020 from $11.73 million for the prior fiscal year.

Operating Loss

Operating loss was approximately $17.74 million for fiscal year 2020, compared to approximately $5.97 million for the prior fiscal year. Operating loss margin was 197.1% for fiscal year 2020, compared to 14.3% for the prior fiscal year.

Net Loss and Loss per Share

Net loss was approximately $17.93 million for fiscal year 2020, compared to approximately $7.01 million for the prior fiscal year. After deduction for non-controlling interests, net loss attributable to Sino-Global was approximately $16.45 million, or loss per share of $4.78, for fiscal year 2020, compared to approximately $6.53 million, or loss per share of $2.27, for the prior fiscal year.

Liquidity and Capital Resources

As of June 30, 2020, the Company had cash of approximately $0.13 million, compared to approximately $3.14 million as of June 30, 2019. Accounts receivable was approximately $1.16 million as of June 30, 2020, compared to approximately $7.05 million as of June 30, 2019. Other receivable, net was approximately $0.05 million as of June 30, 2020, compared to approximately $4.34 million as of June 30, 2019. Working capital deficit was approximately $3.90 million as of June 30, 2020, compared to working capital surplus of approximately $10.71 million as of June 30, 2019.

Net cash used in operating activities was approximately $3.90 million for fiscal year 2020, compared to approximately $4.27 million for the prior fiscal year. Net cash used in investing activities was $1,358 for fiscal year 2020, compared to approximately $0.14 million for the prior fiscal year. Net cash provided by financing activities was approximately $1.22 million for fiscal year 2020, compared to approximately $0.85 million for the prior fiscal year.

Recent Developments

On September 29, 2020, the Company announced the signing of a memorandum of understanding (the "MOU") to establish a joint venture (the "JV") with Tianjin Anboweiye Technology Co., Ltd. ("EMB"). The JV aims to meet customers' more sophisticated demand for services. Founded in 2014, EMB is a high-tech company providing intelligent hardware, mobile GIS, business management, enterprise ERP, enterprise portal, and logistics platform to enterprise customers.

On July 23, 2020, the Company announced the receipt of a letter from the Nasdaq Hearing Panel ("Nasdaq"), indicating that the Company has regained compliance with the $1.00 per share minimum closing bid price requirement for continued listing on the Nasdaq Stock Market, pursuant to Rule 5550(a)(2), or the Minimum Bid Price Rule.

After the close of the stock market on July 7, 2020, the Company effected a l-for-5 reverse stock split of our common stock in order to satisfy continued listing requirements of our common stock on the NASDAQ Capital Market. The reverse stock split was approved by our board of directors and stockholders and was intended to allow the company to meet the minimum share price requirement of $1.00 per share for continued listing on the NASDAQ Capital Market. As a result all common stock share amounts included in our 10-K filing for fiscal year 2020 have been retroactively reduced by a factor of five, and all common stock per share amounts have been increased by a factor of five. Amounts affected include common stock outstanding, including those that have resulted from the stock options, and warrants that convert to common stock.

On June 29, 2020, the Company announced the signing of bareboat charter contracts with two "Handysize" vessels capable of carrying between 40,000 and 50,000 deadweight tons of dry-bulk. Both vessels were built in the 1990s and will serve the purpose of carrying dry-bulk products, such as fertilizer raw materials and sulfur, to and from ports in the United States and China.

On June 25, 2020, the Company announced the signing of a non-binding MOU with Yunnan Jingyifeng Supply Chain Management Co. Ltd. ("JYF") to jointly develop the business of exporting products to China. These products include sulfur, vegetable oil, soybean, barley, wheat, and dried grains with solubles, which are used for fuel production, feeding, and other agriculture needs. Under the MOU, JYF aims to use Sino-Global's customer relationships and experience as a procurement agent in purchasing approximately 1,000,000 metric tons of these products per year, which will then be marketed to JYF's customers in Southwest China, including Guangxi, Yunnan, Guizhou and Sichuan provinces.

On June 8, 2020, the Company signed a general agency service agreement (the "Agreement") to provide comprehensive shipping agency services with Mandarine Bulk Ltd., a ship owner and operator company registered in Marshall Islands. The Agreement commenced on June 1, 2020 and is valid for two years. Pursuance to the Agreement, Mandarine Bulk has appointed Sino-Global as the Sole General Shipping Agency for all its owned and operated ships with services including ship management services, shipping agency services, ship brokerage services and other services required for ship operation.

About Sino-Global Shipping America, Ltd.

Founded in the U.S. in 2001 and Headquartered in New York with offices in China, Australia, Canada and Hong Kong SAR, Sino-Global Shipping America, Ltd. is a global shipping and logistics services company offering shipping agency and management, inland transportation management, freight logistics and container trucking services. More information about the Company can be found at www.sino-global.com.

Forward-Looking Statement

This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. When the Company uses words such as "may," "will," "intend," "should," "believe," "expect," "anticipate," "project," "estimate" or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. Specifically, the Company's statements regarding the proposed acquisition of FENT are forward-looking statements. Forward-looking statements are not guarantee of future performance and involve risks and uncertainties that may cause the actual results to differ materially from the Company's expectations discussed in the forward-looking statements. These statements are subject to uncertainties and risks including, but not limited to, the following: the Company's goals and strategies; the Company's future business development; product and service demand and acceptance; changes in technology; economic conditions; the growth of the logistics services market China and other countries where Sino-Global conducts its business; reputation and brand; the impact of competition and pricing; government regulations; fluctuations in general economic and business conditions and assumptions underlying or related to any of the foregoing and other risks contained in reports filed by the Company with the Securities and Exchange Commission. For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Additional factors are discussed in the Company's filings with the U.S. Securities and Exchange Commission, which are available for review at www.sec.gov. The Company undertakes no obligation to publicly revise these forward–looking statements to reflect events or circumstances that arise after the date hereof.

For more information, please contact:

Tony Tian, CFA
Email: ttian@weitianco.com
Phone: +1-732-910-9692

SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS



For the Years Ended




June 30,




2020



2019


Net revenues - third parties


$

6,535,956



$

41,337,664


Net revenues - related party



-




433,383


Total revenues



6,535,956




41,771,047


Cost of revenues



(3,678,863)




(36,006,510)


Gross profit



2,857,093




5,764,537











Selling expenses



(393,617)




(718,754)


General and administrative expenses



(3,386,690)




(4,344,435)


Impairment loss of fixed assets and intangible asset



(327,632)




-


Impairment loss of deposit for leasehold improvement



-




(425,068)


Provision for doubtful accounts



(14,910,502)




(3,978,893)


Stock-based compensation



(1,576,756)




(2,267,833)


Total operating expenses



(20,595,197)




(11,734,983)











Operating loss



(17,738,104)




(5,970,446)











Other expense, net



(4,522)




(120,798)











Net loss before provision for income taxes



(17,742,626)




(6,091,244)











Income tax expense



(186,021)




(920,869)











Net loss



(17,928,647)




(7,012,113)











Net loss attributable to non-controlling interest



(1,475,753)




(478,269)











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


$

(16,452,894)



$

(6,533,844)











Comprehensive loss









Net loss


$

(17,928,647)



$

(7,012,113)


Other comprehensive loss - foreign currency



(383,203)




(281,224)


Comprehensive loss



(18,311,850)




(7,293,337)


Less: Comprehensive loss attributable to non-controlling interest



(1,368,739)




(360,794)


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


$

(16,943,111)



$

(6,932,543)











Loss per share









Basic and diluted*


$

(4.78)



$

(2.27)











Weighted average number of common shares used in computation









Basic and diluted*



3,442,448




2,883,887


*

Shares and per share data are presented on a retroactive basis to reflect the 1-for-5 reverse stock split on July 7, 2020.

SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES

CONSOLIDATED BALANCE SHEETS



June 30,



June 30,




2020



2019


Assets







Current assets







Cash


$

131,182



$

3,142,650


Notes receivable



-




383,792


Accounts receivable, net



1,155,948




7,045,846


Other receivables, net



51,034




4,335,715


Advances to suppliers - third parties



48,875




124,140


Prepaid expenses and other current assets



90,382




105,054


Due from related party, net



435,898




807,965


Total Current Assets



1,913,319




15,945,162











Property and equipment, net



523,290




989,910


Right-of-use assets



300,114




-


Intangible assets, net



26,389




89,722


Prepaid expenses



-




519,503


Other long-term assets - deposits



2,974,990




3,054,706


Total Assets


$

5,738,102



$

20,599,003











Liabilities and Equity (Deficiency)


















Current Liabilities









Deferred revenue


$

67,083



$

68,590


Accounts payable



487,692




567,619


Lease liabilities - current



204,391




-


Taxes payable



3,280,348




3,184,895


Accrued expenses and other current liabilities



1,643,319




1,418,129


Loan payable - current



126,032




-


Total current liabilities



5,808,865




5,239,233











Lease liabilities - noncurrent



132,699




-


Loans payable - noncurrent



154,438




-











Total liabilities



6,096,002




5,239,233











Commitments and Contingencies


















Equity (Deficiency)









Preferred stock, 2,000,000 shares authorized, no par value, none issued



-




-


Common stock, 50,000,000 shares authorized, no par value; 3,718,788 and 3,210,907 shares issued as of June 30, 2020 and 2019, respectively; 3,718,788 and 3,175,807 shares outstanding as of June 30, 2020 and 2019, respectively*



28,414,992




26,523,830


Additional paid-in capital



2,334,962




2,066,906


Subscription receivable



(59,869)




-


Treasury stock, at cost, 0 and 35,099 shares as of June 30, 2020 and 2019*



-




(417,538)


Accumulated deficit



(23,421,594)




(6,968,700)


Accumulated other comprehensive loss



(1,084,030)




(671,106)


Total Sino-Global Shipping America Ltd. Stockholders' Equity



6,184,461




20,533,392











Non-controlling Interest



(6,542,361)




(5,173,622)











Total Equity (Deficiency)



(357,900)




15,359,770











Total Liabilities and Equity (Deficiency)


$

5,738,102



$

20,599,003


*

Shares and per share data are presented on a retroactive basis to reflect the 1-for-5 reverse stock split on July 7, 2020.

SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES

CONSOLIDATED STATEMENTS OF CASH FLOWS



For the Years Ended




June 30,




2020



2019


Operating Activities







Net loss


$

(17,928,647)



$

(7,012,113)


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









Stock-based compensation



1,576,756




2,267,833


Depreciation and amortization



402,294




130,920


Non-cash lease expense



151,866




-


Provision for doubtful accounts, net of recovery



14,910,502




3,978,893


Impairment loss of fixed assets and intangible asset



327,632




-


Impairment loss of deposit for leasehold improvement



-




425,068


Deferred tax provision



-




634,500


Changes in assets and liabilities









Notes receivable



386,233




(386,233)


Accounts receivable



1,078,261




(2,553,973)


Other receivables



(5,806,997)




161,057


Advances to suppliers - third parties



75,815




(3,671,931)


Advances to suppliers - related party



-




3,312,666


Prepaid expenses and other current assets



315,398




1,407,599


Other long-term assets - deposits



84,713




(2,928,775)


Due from related parties



413,408




1,422,254


Deferred revenue



(1,601)




(353,432)


Accounts payable



(80,420)




(2,709,194)


Taxes payable



91,025




487,197


Lease liabilities



(114,840)




-


Accrued expenses and other current liabilities



222,068




1,114,597


Net cash used in operating activities



(3,896,534)




(4,273,067)











Investing Activities









Acquisition of property and equipment



(6,984)




(143,493)


Proceeds from disposal of property and equipment



5,626




-


Net cash used in investing activities



(1,358)




(143,493)











Financing Activities









Proceeds from issuance of common stock



940,131




850,000


Loan payable



280,470




-


Net cash provided by financing activities



1,220,601




850,000











Effect of exchange rate fluctuations on cash



(334,177)




(389,049)











Net decrease in cash



(3,011,468)




(3,955,609)











Cash at beginning of year



3,142,650




7,098,259











Cash at end of year


$

131,182



$

3,142,650











Supplemental information









Income taxes paid


$

38,602



$

166,960











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


$

452,042



$

-


Cision
Cision

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SOURCE Sino-Global Shipping America, Ltd.