Sino-Global Announces Fiscal 2020 Third Quarter Financial Results

Rhea-AI Summary

Sino-Global Shipping America (NASDAQ: SINO) reported a significant decline in total revenues for the fiscal 2020 third quarter, totaling $1.35 million, down from $22.77 million the previous year. The company experienced an operating loss of $4.03 million, worsening from $1.23 million in the prior year. Despite challenges from U.S.-China trade tensions and COVID-19, Sino-Global has expanded its agency services, signed agreements to charter two ships, and established a significant MOU aimed at increasing revenue. The gross profit margin improved to 34.3%.

Positive

• Signed agreements to charter two ships, enhancing logistics capabilities.
• Established MOU with Yunnan Jingyifeng Supply Chain Management for potential high-margin purchases.
• Improved gross profit margin to 34.3% from 7.5% year-on-year.

Negative

• Total revenues decreased to $1.35 million from $22.77 million year-on-year.
• Operating loss widened to $4.03 million from $1.23 million in the same quarter last year.
• Net loss attributable to shareholders increased to $3.82 million, marking a loss of $0.22 per diluted share.

ROSLYN, N.Y., July 6, 2020 /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 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.

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		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	$

FAQ

What were Sino-Global Shipping's total revenues for the fiscal 2020 third quarter?

Sino-Global Shipping reported total revenues of $1.35 million for the fiscal 2020 third quarter.

How did the operating loss for Sino-Global compare year-on-year?

The operating loss for Sino-Global increased to $4.03 million in the third quarter of 2020 from $1.23 million in the same quarter of 2019.

What is the significance of the MOU signed by Sino-Global Shipping?

The MOU with Yunnan Jingyifeng Supply Chain Management aims to address the growing need for exported fuel and agricultural products to China.

How much did Sino-Global's gross profit margin improve in the latest quarter?

Sino-Global's gross profit margin improved to 34.3% in the third quarter of 2020, compared to 7.5% in the same period last year.