Sino-Global Announces Fiscal Year 2015 Third Quarter Financial Results

NEW YORK, May 13, 2015 /PRNewswire/ -- Sino-Global Shipping America, Ltd. (NasdaqCM: SINO) ("Sino-Global" or the "Company"), a shipping agency, logistics and ship management services company, today announced its financial results for the third quarter of fiscal year 2015 ended March 31, 2015.

• Total revenues for the three months ended March 31, 2015 increased 20.8% to $2,526,762 with revenues from Inland Transportation Management Services grew 49.5% to a record level of $1,295,580.
• Operating margin increased to 9.4% for the three months ended March 31, 2015 from 3.4% for the same period of 2014.
• Basic and diluted EPS of $0.05 for the three months ended March 31, 2015 marked the seventh consecutive quarter of net profit for the Company.
• To explore growth opportunities and further diversify Sino-Global's revenue streams, the Company entered into an asset purchase agreement in April 2015 to acquire, subject to certain closing conditions, a small oil/chemical tanker for $10.5 million.

Mr. Lei Cao, Chairman and Chief Executive Officer of Sino-Global commented: "Our restructuring initiatives that began in fiscal year 2013, together with our strong business development efforts, have helped generate seven consecutive quarters of net profit. For the three months ended March 31, 2015, our revenues grew 20.8% and our operating margin increased significantly to 9.4% from 3.4% for the same period of 2014." 

Mr. Cao continued: "The asset purchase agreement that we executed in April 2015 marks the next step of our turnaround story as we expand our business from being a service provider to an asset owner with an integrated, scalable service platform. We believe the acquisition will strengthen our operating cash flows and enhance our ability to deliver sustainable earning growth.

Financial Results for Three Months Ended March 31, 2015

Total revenues increased by 20.8% to $2,526,762 for the three months ended March 31, 2015 from $2,092,525 for the same period of 2014. The increase in total revenues was due mainly to the increase in revenues from Inland Transportation Management Services. Revenues from Shipping Agency Services increased by 0.4% to $1,231,182 for the three months ended March 31, 2015 from $1,226,015 for the same period of 2014. Even with a decrease in the total number of ships we served to 20 for the three months ended March 31, 2015 from 78 for the same period of last year, we saw a slight increase in Shipping Agency Services revenue. Revenues from Inland Transportation Management Services grew 49.5% to $1,295,580 for the three months ended March 31, 2015 from $866,510 for the same period of 2014. We did not provide any Shipping and Chartering Services for the three months ended March 31, 2015 and the same period of 2014.

Cost of revenues increased to $1,220,577 for the three months ended March 31, 2015 from $948,514 for the same period of 2014. The increase was due mainly to higher revenues from Inland Transportation Management Services that led to more costs to be allocated. Overall gross margin of 51.7% for the three months ended March 31, 2015 compared to 54.7% for the same period of 2014. Cost of revenues for Shipping Agency and Inland Transportation Management Services were $980,136 and $240,441, leading to gross margin of 20.4% and 81.4%, respectively, for the three months ended March 31, 2015.

General and administrative expenses increased by 7.4% to $1,069,623 for the three months ended March 31, 2015 from $996,355 for the same period of 2014. The increase was mainly due to higher office expenses of $211,611, legal fees of $187,178, and recognition of stock-based compensation for common stock issued to consultants of $120,067.

Selling expenses decreased by 99.8% to $156 for the three months ended March 31, 2015 from $77,346 for the same period of 2014, mainly due to a decline in the number of ships we served.

Operating income of $236,406 for the three months ended March 31, 2015 compared to $70,310 for the same period of 2014. This marked our sixth consecutive quarter of operating profit and seventh consecutive quarter of net profit, attributed mainly to our efforts to diversify our revenue streams. Operating profit margin of 9.4% for the three months ended March 31, 2015 compared to 3.4% for the same period of 2014.

As a result of the foregoing, we reported net income of $331,913 for the three months ended March 31, 2015, compared to $86,399 for the same period of 2014. After deduction of non-controlling interest, net income attributable to Sino-Global was $350,983, or $0.05 per diluted share, for the three months ended March 31, 2015, compared to $326,121, or $0.07 per diluted share, for the same period of 2014.

Financial Results for Nine Months Ended March 31, 2015

Total revenues increased by 4.4% to $8,225,267 for the nine months ended March 31, 2015 from $7,882,374 for the same period of 2014. The increase in total revenues was due mainly to the increase in revenues from Inland Transportation Management Services. Revenues from Shipping Agency Services decreased by 2.8% to $4,500,897 for the nine months ended March 31, 2015 from $4,628,578 for the same period of 2014. The decrease was due mainly to the decline in the total number of ships we served to 117 for the nine months ended March 31, 2015 from 238 for the same period of last year. Revenues from Ship Management Services were $190,075 from the closing date to March 31, 2015. Revenues from Inland Transportation Management Services grew 168.4% to $3,534,295 for the nine months ended March 31, 2015 from $1,316,600 for the same period of last year. We did not provide any Shipping and Chartering Services for the nine months ended March 31, 2015, as compared to revenues of $1,937,196 during the same period of 2014.

Cost of revenues decreased by 15.2% to $4,304,591 for the nine months ended March 31, 2015 from $5,077,085 for the same period of 2014. The decrease was due mainly to a more favorable service mix in the 2015 period. For the nine months ended March 31, 2015, our revenues came mainly from Shipping Agency Services and Inland Transportation Management Services. However, for the same period in 2014, our revenues came mainly from Shipping Agency Services and Shipping and Chartering Services. The decline in our overall cost of revenues was due mainly to the nature of our Inland Transportation Management Services, which feature lower overhead than our Shipping and Chartering services. Overall gross margin of 47.7% for the nine months ended March 31, 2015 compared to 35.6% for the same period of last year. Cost of revenues for Shipping Agency and Inland Transportation Management Services were $3,660,488 and $547,665, leading to gross margin of 18.7% and 84.5%, respectively, for the nine months ended March 31, 2015.

General and administrative expenses increased by 33.5% to $3,326,769 for the nine months ended March 31, 2015 from $2,492,197 for the same period of 2014. This increase was due mainly to higher business development expenses of $227,863, office expense of $318,938, legal fees of $304,604 and recognition of stock-based compensation for common stock issued to consultants of $314,622.

Selling expenses decreased by $138,994 or 67.5% from $205,871 for the nine months ended March 31, 2014 to $66,877 for the nine months ended March 31, 2015. The decrease was attributed to the decline in the total number of ships we served as discussed above. As revenue from the shipping agency services segment decline, our sales commission expenses decreased accordingly.

Operating income of $527,030 for the nine months ended March 31, 2015 compared to $107,221 for the same period of 2014. Operating profit margin of 6.4% for the nine months ended March 31, 2015 compared to 1.4% for the same period of 2014.

As a result of the foregoing, we reported net income of $573,154 for the nine months ended March 31, 2015, compared to $198,137 for the same period of 2014. After deduction of non-controlling interest, net income attributable to Sino-Global was $819,864, or $0.13 per diluted share, for the nine months ended March 31, 2015, compared to $1,100,636, or $0.23 per diluted share, for the same period of 2014.

Financial Condition

As at March 31, 2015, the Company had cash and cash equivalents of $1,107,197 and working capital of $5,962,679, compared to $902,531 and $3,727,003, respectively, at the end of the fiscal year 2014 ended June 30, 2014. Net cash used in operating activities was $1,870,004 for the nine months ended March 31, 2015, as compared to $627,753 for the same period of last year. Net cash provided by investing activities was $1,030,342 for the nine months ended March 31, 2015 mainly as a result of the collection of a short-term loan from a related party, as compared to net cash used in investing activities of $203,702 for the same period of last year. Net cash provided by financing activities was $967,820 for the nine months ended March 31, 2015 due to the net proceeds from the issuance of common stock of 647,000 shares in July 2014.

Recent Development

On April 10, 2015, the Company entered into an Asset Purchase Agreement with Rong Yao International Shipping Limited, a Hong Kong company (the "Vessel Seller"), pursuant to which the Company agreed to acquire, subject to a number of closing conditions, the "Rong Zhou," an 8,818 gross tonnage oil/chemical transportation tanker (the "Vessel") from the Vessel Seller; in connection therewith, the Company issued to the Vessel Seller 1.2 million shares of its restricted common stock representing $2.22 million of the $10.5 million purchase price for the Vessel. The Company and the Vessel Seller agreed that each of the 1.2 million shares issued to the Vessel Seller was valued at $1.85. In connection therewith, the Company filed a registration statement on April 15, 2015 covering the offer of the 1.2 million shares issued to the Vessel Seller. Although the Company believes the acquisition of the Vessel will close on or about June 30, 2015, no assurances can be given when such closing will occur.

About Sino-Global Shipping America, Ltd.

Founded in the United States in 2001, Sino-Global Shipping America, Ltd. is a shipping agency, logistics and ship management services company. The Company is headquartered in New York with offices in China, Australia, Canada and Hong Kong. Its current service offerings consist of shipping agency services, shipping and chartering services, inland transportation management services and ship management services. For more information, please visit: www.sino-global.com .

Forward Looking Statements

No statement made in this press release should be interpreted as 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 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 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.

For more information, please contact:

Mr. Anthony S. Chan, CPA EVP & Acting CFO +1 718-888-1814

  

  

 

 

  

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SOURCE Sino-Global Shipping America, Ltd.