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Sino-Global Announces Fiscal 2020 First Quarter Financial Results

ROSLYN, N.Y., Nov. 19, 2019 /PRNewswire/ -- Sino-Global Shipping America, Ltd. (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 / aprior@equityny.com

 

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



$

-


 



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