Strong Customer Demand and World Class Supply Chain Management Capabilities Propel Quarterly Results
LOS ANGELES and SHENZHEN, China, Nov. 13 /Xinhua-PRNewswire/ -- SinoHub, Inc. (OTC Bulletin Board: SIHI), a Los Angeles-based holding company whose primary asset is SinoHub Electronics Shenzhen Limited in the People's Republic of China, today announced sharply higher net income and revenues for the third quarter ended September 30, 2008.
Net income for the 2008 third quarter quadrupled to $3.9 million, or $0.18 per fully diluted share, from $980,000, or $0.06 per fully diluted share, for the prior-year period.
Total revenues for the 2008 third quarter increased nearly four-fold to $28.2 million from $7.1 million in the prior-year quarter. Revenues from the company's supply chain management services business nearly tripled to $1.3 million for the third quarter of 2008 from $441,000 in the third quarter of 2007. The company's electronic component procurement and sales business generated revenues of $26.9 million in the third quarter of 2008, rising four-fold from $6.7 million in the same period last year.
Total operating expenses for the 2008 third quarter amounted to $1.1 million, or approximately 4% of total revenues, compared with $542,000, or approximately 8% of total revenues, a year earlier. The increase in total operating expenses reflects higher selling, general and administrative costs to support the company's substantial revenue growth, as well as incremental costs related to SinoHub's May 2008 reverse merger.
At September 30, 2008, SinoHub had $8.1 million in non-restricted cash and cash equivalents, up from $4.3 million at December 31, 2007. On September 10, 2008, the company successfully completed a PIPE (private investment in public equity) offering, raising net proceeds of $6.5 million, to help fund its strategic growth initiatives.
"Our strong performance this quarter validates the progress we're making in demonstrating the competitive advantages provided by SinoHub's world class supply chain management capabilities for the large and growing Chinese electronic components market," Lei Xia, president of SinoHub, said. "With more than 120 leading enterprises currently utilizing SinoHub's SCM platform, we are gaining scale and building recognition for our powerful solution, which is tailored precisely to the needs of the electronic components market in China."
"SinoHub's outstanding performance in the third quarter is proof positive of the organic growth potential of our business," said Harry Cochran, CEO of SinoHub. "We firmly believe that with a strong cash position and a unique business model, SinoHub is well positioned to become the standard electronic component supply chain management platform for China's electronics industry, which, in turn, should result in increasing value for our shareholders."
Net income for the first nine months of 2008 more than doubled to $5.5 million, or $0.28 per fully diluted share, from $2.6 million, or $0.17 per fully diluted share, for the 2007 year-to-date period. For the first nine months of 2008, total revenues grew almost three-fold to $53.0 million, from $18.4 million in the same period last year. Total operating expenses in the 2008 year-to-date period were $2.8 million, including $0.5 million in merger-related expenses, or 5% of total revenues, compared with $1.5 million, or 8% of total revenues, in the 2007 period.
About SinoHub
SinoHub, Inc., founded in 2000 by veteran entrepreneur Harry Cochran and electronic component industry veteran Lei Xia to facilitate the electronics revolution in China, provides world-class supply chain management services with transparent information access for participants in the electronic components supply chain in China. For more information, visit the company's Web site at http://www.sinohub.com .
Cautionary Statement Regarding Forward-looking Information
The statements contained in this press release that are not historical facts are forward-looking statements under the federal securities laws. Such statements include, but are not limited to the company's ability to demonstrate the value of its SCM platform, take advantage of current marketplace opportunities, the growth potential of SinoHub's business, the ability to become the standard electronic component supply chain management platform for China's electronics industry and related effects on shareholder value, and other statements made from time to time in filings.
Forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, including competition from other companies, the fluctuation of component prices, demand for the company's products, the availability of supplies, changes in governmental regulations and/or economic policies, civil unrest and general economic conditions. Actual outcomes and results may differ materially from what is expressed in, or implied by, such forward-looking statements. Undue reliance should not be placed on these forward-looking statements, which speak only as of the date of this press release. SinoHub undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
(Financial Tables Follow)
SINOHUB, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Unaudited)
(US$ in thousands, except per share data)
Three months ended Nine months ended
September 30 September 30
2008 2007 2008 2007
NET SALES
Supply chain management services $1,270 $441 $2,361 $1,314
Electronic components 26,913 6,696 50,649 17,076
Total net sales 28,183 7,137 53,010 18,390
COST OF SALES
Supply chain management services 671 162 953 610
Electronic components 21,434 5,326 42,141 13,199
Total cost of sales 22,105 5,488 43,094 13,809
GROSS PROFIT 6,078 1,649 9,916 4,581
OPERATING EXPENSES
Selling, general and administrative 954 451 2,037 1,277
Merger related expenses 18 -- 511 --
Depreciation 90 91 288 270
Total operating expenses 1,062 542 2,836 1,547
INCOME FROM OPERATIONS 5,016 1,107 7,080 3,034
OTHER (INCOME) EXPENSE
Interest expense 53 42 181 109
Other, net (24) (55) (59) (87)
Total other (income) expense 29 (13) 122 22
INCOME BEFORE TAXES 4,987 1,120 6,958 3,012
Income tax expense 1,068 140 1,410 368
NET INCOME 3,919 980 5,548 2,644
OTHER COMPREHENSIVE INCOME
Foreign currency translation gain 216 64 680 121
COMPREHENSIVE INCOME $4,135 $1,044 $6,228 $2,765
SHARE AND PER SHARE DATA
Net income per share-basic $0.19 $0.06 $0.28 $0.17
Weighted average number of shares-
basic 21,021 16,046 19,503 15,453
Net income per share- diluted $0.18 $0.06 $0.28 $0.17
Weighted average number of shares-
diluted 21,389 16,178 19,871 15,585
SINOHUB, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(US$ in thousands, except per share data)
September 30, December 31,
2008 2007
ASSETS
Current assets
Cash $8,115 $4,282
Restricted cash 452 5,509
Accounts receivable, net 18,971 9,748
Inventories 1,057 853
Prepaid expenses and other 744 426
Due from related company -- 1,493
Total current assets 29,339 22,311
Property and equipment, net 583 846
Total assets $29,922 $23,157
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $3,372 $6,777
Accrued expenses and other 357 307
Bank borrowings 2,780 6,904
Notes payable to third parties -- 251
Due to related company 687 --
Income and other taxes payable 2,097 1,457
Total current liabilities 9,293 15,696
Commitments and contingencies -- --
Stockholders' equity
Preferred stock, $0.001 par value,
5,000,000 shares authorized;
no shares issued and outstanding
Common stock, $0.001 par value,
100,000,000 shares authorized;
24,478,000 shares issued and
18,290,000 shares outstanding 24 18
Additional paid in capital 11,443 4,509
Retained earnings
Upappropriated 7,857 2,309
Appropriated 356 356
Accumulated other comprehensive
income 949 269
Total stockholders' equity 20,629 7,461
Total liabilities and stockholders'
equity $29,922 $23,157
For more information, please contact:
SinoHub, Inc.
Nicole Cheung
Tel: +86-755-2661-1080
Email: nicole@sinohub.com
In the U.S.:
PondelWilkinson Inc.
Laurie Berman/Angie Yang
Tel: +1-310-279-5980
Email: investor@pondel.com
