Attached files
| file | filename |
|---|---|
| 8-K - CURRENT REPORT - Sino-Global Shipping America, Ltd. | ea123807-8k_sinoglobal.htm |
Exhibit 99.1
Sino-Global Announces Fiscal 2020 Third Quarter Financial Results
Roslyn, New York, July 6, 2020 – 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 third quarter ended March 31, 2020. The Company has also provided more detailed information in its quarterly report on Form 10-Q filed today with the U.S. Securities and Exchange Commission.
Management Comments
Mr. Lei Cao, Chairman and Chief Executive Officer of Sino-Global commented, “Over the past several weeks, we have greatly expanded our ability to service the demand for exported products to China from the U.S., and have done so in a cost-effective manner with a focus on streamlined operations and free cash flow. We strengthened our management team through the appointment of Kelin Wu, secured shipping agency agreements, and chartered two vessels to meet this demand. Finally, we signed a significant MOU with a long-time partner of Sino-Global, which helps to secure potential purchases of material. We believe all of this will greatly increase the Company’s revenue with high-margins, and do so with long term customers in which we have successfully worked and collected cash from in the past. The quarter ended March 31, 2020 was largely impacted by the impact on trade from delays in a U.S. / China trade agreement and COVID-19. While this confluence of factors led to a slight delay in our reporting timing, we are pleased to again become current with our filings. Going forward, we feel very well positioned to increase sales and begin to deliver profitability for our shareholders.”
Recent Highlights
| June 29, 2020: | Signs Agreements to Charter Two Ships to Meet Export Product Demand to China from the U.S. |
| June 25, 2020: | Signs MOU with Yunnan Jingyifeng Supply Chain Management to Address Growing Need for Exported Fuel and Agricultural Products to China |
| June 8, 2020: | Signs Two Year General Agency Service Agreement; Expected to Add Approximately $12 Million in Revenue Annually |
| April 27, 2020: | Appoints Mr. Kelin Wu as Chief Marketing Officer |
Fiscal Third Quarter 2020 Financial Review
| ● | The Company reported total revenues of $1,353,979 for the quarter ended March 31, 2020, compared to $22,773,139 reported in the same period last year. The decrease was largely due to the fact that in certain freight logistics contracts that the Company entered into with customers starting from the first quarter of fiscal year 2020, only acted as an agent and did not control the services rendered to the customers, as Sino-Global was not the primary responsible party to fulfill the services. As such revenues on these contracts are accounted for on a net basis. The decrease was also due to the decrease in revenues from inland transportation management services as service contracts with customers have expired and there was no new business for this segment. |
| ● | The Company’s gross profit for the 2020 fiscal third quarter was $464,872, compared to $1,697,944 in the same period last year. Gross profit margin during the quarter was approximately 34.3%, compared to approximately 7.5% in the same period last year. The increase was largely due to the Company’s shifting of business focus towards 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 segment for the three months ended March 31, 2020 and March 31, 2019, respectively:
| For the Three Months Ended March 31, 2020 | ||||||||||||||||||||
| Shipping Agency and Management Services | Inland Transportation Management Services | Freight Logistics Services | Container Trucking Services | Total | ||||||||||||||||
| Revenues | ||||||||||||||||||||
| - Related party | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
| - Third parties | $ | 500,000 | $ | - | $ | 853,979 | * | $ | - | $ | 1,353,979 | |||||||||
| Total revenues | $ | 500,000 | $ | - | $ | 853,979 | $ | - | $ | 1,353,979 | ||||||||||
| Cost of revenues | $ | 67,841 | $ | - | $ | 821,266 | * | $ | - | $ | 889,107 | |||||||||
| Gross profit | $ | 432,159 | $ | - | $ | 32,713 | $ | - | $ | 464,872 | ||||||||||
| Depreciation and amortization | $ | 79,732 | $ | - | $ | 3,421 | $ | - | $ | 83,153 | ||||||||||
| Total capital expenditures | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
| Gross margin% | 86.4 | % | - | % | 3.8 | % | - | % | 34.3 | % | ||||||||||
| * | For certain freight logistics contracts that the Company entered into with customers starting from first quarter of fiscal year 2020, the Company (i) acts as an agent in arranging the relationship between the customer and the third-party service provider and (ii) does not control the services rendered to the customers, revenues related to these contracts are presented net of related costs. For the three months ended March 31, 2020, gross revenues and gross cost of revenues related to these contracts amounted to approximately $2.0 million and $2.0 million, respectively. |
| For the Three Months Ended March 31, 2019 | ||||||||||||||||||||
| Shipping Agency and Management Services | Inland Transportation Management Services | Freight Logistic Services | Container Trucking Services | Total | ||||||||||||||||
| Revenues | ||||||||||||||||||||
| - Related party | $ | - | $ | 36,380 | $ | - | $ | - | $ | 36,380 | ||||||||||
| - Third parties | $ | 956,583 | $ | 93,407 | $ | 21,599,675 | $ | 87,094 | $ | 22,736,759 | ||||||||||
| Total revenues | $ | 956,583 | $ | 129,787 | $ | 21,599,675 | $ | 87,094 | $ | 22,773,139 | ||||||||||
| Cost of revenues | $ | 862,970 | $ | 48,750 | $ | 20,098,417 | $ | 65,058 | $ | 21,075,195 | ||||||||||
| Gross profit | $ | 93,613 | $ | 81,037 | $ | 1,501,258 | $ | 22,036 | $ | 1,697,944 | ||||||||||
| Depreciation and amortization | $ | - | $ | 39,109 | $ | 476 | $ | 4,448 | $ | 44,033 | ||||||||||
| Total capital expenditures | $ | - | $ | - | $ | 125,806 | $ | 8,317 | $ | 134,123 | ||||||||||
| Gross margin% | 9.8 | % | 62.4 | % | 7.0 | % | 25.3 | % | 7.5 | % | ||||||||||
| ● | The Company had an operating loss of $4,034,743 for the three months ended March 31, 2020, compared to an operating loss of $1,229,233 for the same period in 2019. |
| ● | For the fiscal quarter ended March 31, 2020, the Company reported net loss attributable to Sino-Global Shipping America, Ltd. of $3,818,094, or a loss of approximately $0.22 per diluted share based on approximately 17.7 million weighted average shares outstanding, compared to net loss attributable to Sino-Global Shipping America, Ltd. of $1,388,790, or a loss of approximately $0.09 per diluted share based on approximately 15.2 million weighted average shares outstanding, for the same period last year. |
Balance Sheet Information
| ● | The Company holds no long-term debt. |
| ● | As of March 31, 2020, the Company’s working capital was $3,525,468 and the Company had cash of $143,112. |
| ● | The Company’s allowance for doubtful accounts was approximately $6.7 million as of March 31, 2020 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 it does not believe that there are any significant collection issues with respect to accounts receivables, net of allowance. |
2
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
3
SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES
CONSOLIDATED STATEMENTS OF OPERATION AND COMPREHENSIVE LOSS
(UNAUDITED)
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Net revenues - third parties | $ | 1,353,979 | $ | 22,736,759 | $ | 5,161,329 | $ | 39,354,579 | ||||||||
| Net revenues - related party | - | 36,380 | - | 433,380 | ||||||||||||
| Total revenues | 1,353,979 | 22,773,139 | 5,161,329 | 39,787,959 | ||||||||||||
| Cost of revenues | (889,107 | ) | (21,075,195 | ) | (2,328,156 | ) | (34,715,624 | ) | ||||||||
| Gross profit | 464,872 | 1,697,944 | 2,833,173 | 5,072,335 | ||||||||||||
| Selling expenses | (79,099 | ) | (140,601 | ) | (335,253 | ) | (507,199 | ) | ||||||||
| General and administrative expenses | (952,661 | ) | (1,053,903 | ) | (2,746,180 | ) | (3,442,695 | ) | ||||||||
| Impairment loss of fixed assets and intangible asset | - | - | (327,632 | ) | - | |||||||||||
| Provision for doubtful accounts | (3,121,416 | ) | (1,583,965 | ) | (4,289,170 | ) | (2,871,752 | ) | ||||||||
| Stock-based compensation | (346,439 | ) | (148,708 | ) | (1,252,756 | ) | (2,013,292 | ) | ||||||||
| Total operating expenses | (4,499,615 | ) | (2,927,177 | ) | (8,950,991 | ) | (8,834,938 | ) | ||||||||
| Operating loss | (4,034,743 | ) | (1,229,233 | ) | (6,117,818 | ) | (3,762,603 | ) | ||||||||
| Other income, net | 21,260 | 2,499 | 7,103 | 3,993 | ||||||||||||
| Net loss before provision for income taxes | (4,013,483 | ) | (1,226,734 | ) | (6,110,715 | ) | (3,758,610 | ) | ||||||||
| Income tax expense | (189,510 | ) | (248,820 | ) | (204,257 | ) | (427,333 | ) | ||||||||
| Net loss | (4,202,993 | ) | (1,475,554 | ) | (6,314,972 | ) | (4,185,943 | ) | ||||||||
| Net loss attributable to non-controlling interest | (384,899 | ) | (86,764 | ) | (462,192 | ) | (6,419 | ) | ||||||||
| Net loss attributable to Sino-Global Shipping America, Ltd. | $ | (3,818,094 | ) | $ | (1,388,790 | ) | $ | (5,852,780 | ) | $ | (4,179,524 | ) | ||||
| Comprehensive loss | ||||||||||||||||
| Net loss | $ | (4,202,993 | ) | $ | (1,475,554 | ) | $ | (6,314,972 | ) | $ | (4,185,943 | ) | ||||
| Other comprehensive income (loss) - foreign currency | (112,671 | ) | 262,467 | (360,132 | ) | (306,457 | ) | |||||||||
| Comprehensive loss | (4,315,664 | ) | (1,213,087 | ) | (6,675,104 | ) | (4,492,400 | ) | ||||||||
| Less: Comprehensive (loss) income attributable to non-controlling interest | (322,135 | ) | (96,210 | (350,693 | ) | 37,445 | ||||||||||
| Comprehensive loss attributable to Sino-Global Shipping America, Ltd. | $ | (3,993,529 | ) | $ | (1,116,877 | ) | $ | (6,324,411 | ) | $ | (4,529,845 | ) | ||||
| Loss per share | ||||||||||||||||
| Basic and diluted | $ | (0.22 | ) | $ | (0.09 | ) | $ | (0.35 | ) | $ | (0.30 | ) | ||||
| Weighted average number of common shares used in computation | ||||||||||||||||
| Basic and diluted | 17,738,157 | 15,245,703 | 16,875,173 | 14,045,018 | ||||||||||||
4
SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| March 31, | June 30, | |||||||
| 2020 | 2019 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash | $ | 143,112 | $ | 3,142,650 | ||||
| Notes receivable | - | 383,792 | ||||||
| Accounts receivable, net | 1,745,672 | 7,045,846 | ||||||
| Other receivables | 6,486,140 | 4,335,715 | ||||||
| Advances to suppliers - third parties | 112,037 | 124,140 | ||||||
| Prepaid expenses and other current assets | 239,830 | 105,054 | ||||||
| Due from related party, net | 435,898 | 807,965 | ||||||
| Total Current Assets | 9,162,689 | 15,945,162 | ||||||
| Property and equipment, net | 588,514 | 989,910 | ||||||
| Right-of-use assets | 337,899 | - | ||||||
| Intangible assets, net | 42,222 | 89,722 | ||||||
| Prepaid expenses | - | 519,503 | ||||||
| Other receivables - noncurrent | 3,549,958 | - | ||||||
| Other long-term assets - deposits | 2,956,802 | 3,054,706 | ||||||
| Total Assets | $ | 16,638,084 | $ | 20,599,003 | ||||
| Liabilities and Equity | ||||||||
| Current Liabilities | ||||||||
| Advances from customers | $ | 66,987 | $ | 68,590 | ||||
| Accounts payable | 637,489 | 567,619 | ||||||
| Lease liabilities - current | 156,190 | - | ||||||
| Taxes payable | 3,290,812 | 3,184,895 | ||||||
| Accrued expenses and other current liabilities | 1,485,743 | 1,418,129 | ||||||
| Total current liabilities | 5,637,221 | 5,239,233 | ||||||
| Lease liabilities - noncurrent | 177,495 | - | ||||||
| Total liabilities | 5,814,716 | 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; 18,139,037 and 16,054,534 shares issued as of March 31, 2020 and June 30, 2019, respectively; 18,139,037 and 15,879,037 shares outstanding as of March 31, 2020 and June 30, 2019, respectively | 28,090,992 | 26,523,830 | ||||||
| Additional paid-in capital | 2,334,962 | 2,066,906 | ||||||
| Subscription receivable | (114,054 | ) | - | |||||
| Treasury stock, at cost, 0 and 175,497 shares as of March 31, 2020 and June 30, 2019 | - | (417,538 | ) | |||||
| Accumulated deficit | (12,821,480 | ) | (6,968,700 | ) | ||||
| Accumulated other comprehensive loss | (1,142,737 | ) | (671,106 | ) | ||||
| Total Sino-Global Shipping America Ltd. Stockholders’ Equity | 16,347,683 | 20,533,392 | ||||||
| Non-controlling Interest | (5,524,315 | ) | (5,173,622 | ) | ||||
| Total Equity | 10,823,368 | 15,359,770 | ||||||
| Total Liabilities and Equity | $ | 16,638,084 | $ | 20,599,003 | ||||
5
SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| For the Nine Months Ended | ||||||||
| March 31, | ||||||||
| 2020 | 2019 | |||||||
| Operating Activities | ||||||||
| Net loss | $ | (6,314,972 | ) | $ | (4,185,943 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Stock-based compensation | 1,252,756 | 2,013,292 | ||||||
| Depreciation and amortization | 320,272 | 95,313 | ||||||
| Non-cash lease expense | 113,985 | - | ||||||
| Provision for doubtful accounts | 4,289,170 | 2,871,752 | ||||||
| Impairment loss of fixed assets and intangible asset | 327,632 | - | ||||||
| Deferred tax benefit | - | (208,047 | ) | |||||
| Changes in assets and liabilities | ||||||||
| Notes receivable | 386,233 | (732,826 | ) | |||||
| Accounts receivable | 1,051,299 | (8,341,650 | ) | |||||
| Other receivables | (5,882,569 | ) | 36,014 | |||||
| Advances to suppliers - third parties | 11,820 | (410,886 | ) | |||||
| Advances to suppliers - related party | - | 3,312,375 | ||||||
| Prepaid expenses and other current assets | 165,939 | 821,662 | ||||||
| Other long-term assets - deposits | 89,274 | (2,502,946 | ) | |||||
| Due from related parties | 413,408 | 1,552,918 | ||||||
| Advances from customers | (1,496 | ) | (353,696 | ) | ||||
| Accounts payable | 72,772 | 1,336,453 | ||||||
| Taxes payable | 116,520 | 837,641 | ||||||
| Lease liabilities | (118,256 | ) | - | |||||
| Accrued expenses and other current liabilities | 65,094 | 535,921 | ||||||
| Net cash used in operating activities | (3,641,119 | ) | (3,322,653 | ) | ||||
| Investing Activities | ||||||||
| Acquisition of property and equipment | (6,979 | ) | (143,480 | ) | ||||
| Net cash used in investing activities | (6,979 | ) | (143,480 | ) | ||||
| Financing Activities | ||||||||
| Proceeds from issuance of common stock | 885,946 | 500,000 | ||||||
| Net cash provided by financing activities | 885,946 | 500,000 | ||||||
| Effect of exchange rate fluctuations on cash | (237,386 | ) | (608,219 | ) | ||||
| Net decrease in cash | (2,999,538 | ) | (3,574,352 | ) | ||||
| Cash at beginning of period | 3,142,650 | 7,098,259 | ||||||
| Cash at end of period | $ | 143,112 | $ | 3,523,907 | ||||
| Supplemental information | ||||||||
| Income taxes paid | $ | 38,557 | $ | 144,018 | ||||
| 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 | $ | 452,119 | $ | - | ||||
6