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Sino-Global Announces Fiscal Year 2018 Third Quarter Financial Results

ROSLYN, N.Y., May 14, 2018 /PRNewswire/ -- Sino-Global Shipping America, Ltd. (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.

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. 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. 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. 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

 

 

Cision

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