Growth Driven by New SCM Customer Wins and Ability to Increase Supply Chain Efficiencies
SANTA CLARA, Calif. and SHENZHEN, China, Nov. 16 /PRNewswire-Asia/ -- SinoHub, Inc. (NYSE Amex: SIHI) today reported continued revenue growth for the three months ended September 30, 2009.
Total revenues for the 2009 third quarter advanced more than 28% to $36.2 million from $28.2 million for the 2008 third quarter. Revenues from electronic component sales, including procurement-fulfillment and spot component sales, increased more than 27% to $34.3 million for the 2009 third quarter from $26.9 million for the same period last year. Revenues from the company's supply chain management services business rose more than 50% to $1.9 million for the 2009 third quarter from $1.3 million last year.
"SinoHub's continued growth and new client wins validate our strategy of providing world-class electronic component supply chain management capabilities to the growing Chinese marketplace," said Harry Cochran, chief executive officer of SinoHub. "During the quarter, we added several large mobile phone design house customers who are utilizing our services to optimize their supply chains. We believe their overwhelmingly positive responses are a clear testament to the significant value of SinoHub SCM, our proprietary online supply chain management software system."
Selling, general and administrative expenses for the 2009 third quarter equaled $1.1 million, or approximately 3.0% of total revenues, versus $954,000, or approximately 3.4% of total revenues, in the prior-year period. Total operating expenses amounted to $1.8 million for the three months ended September 30, 2009 and included $272,000 in stock compensation expense. For the prior-year period, total operating expenses were $1.1 million and included no stock compensation expense.
Net income for the 2009 third quarter was $3.5 million, compared with $3.9 million in the year-ago quarter. Compared with the immediately preceding second quarter, net income increased in excess of 11%. On a per share basis, net income totaled $0.13 per fully diluted share based on 26.3 million weighted average shares outstanding for the 2009 third quarter, versus $0.18 per fully diluted share based on 21.4 million weighted average shares outstanding in the year earlier quarter. The increase in fully diluted weighted average shares outstanding resulted primarily from a private placement of SinoHub common stock completed in September 2008.
"By making it easier and more efficient for customers to operate their supply chains, we have become a vital link in the vibrant electronics component industry in China," said Cochran. "Our ongoing efforts to demonstrate the importance of SinoHub's services have allowed us to identify new opportunities to drive top and bottom line results, while building our position as one of the industry's most valued providers of comprehensive electronic component supply chain management services."
"SinoHub's strengthening position in the electronic component supply chain industry in China, particularly in mobile phones, has allowed us to expand our business operations into sourcing mobile phones to emerging markets such as Vietnam, Malaysia, Indonesia and India," said Lei Xia, president of SinoHub. "Our propriety SinoHub SCM platform provides a wealth of information that gives us a significant competitive advantage and serves as an almost insurmountable barrier to entry. By leveraging our considerable strengths and knowledge of some of the fastest growing markets in China, we are successfully opening additional avenues for increased growth and profitability."
Nine-Month Results
Total revenues for the nine months ended September 30, 2009 increased approximately 62% to $85.6 million from $53.0 million for the corresponding period last year. Electronic component revenues, including procurement-fulfillment and spot component sales, grew more than 57% to $79.7 million for the 2009 year-to-date period, from $50.6 million a year ago. Revenues from the company's supply chain management services business rose significantly to $5.9 million for the 2009 nine-month period from $2.4 million for the same period a year ago.
Selling, general and administrative expenses for the first nine months of 2009 totaled $3.3 million, or approximately 3.8% of total revenues, compared with $2.0 million, or approximately 3.8% of total revenues for the first nine months of 2008. Total operating expenses year-to-date equaled $4.6 million and included $298,000 in stock compensation expense. For the 2008 nine-month period, total operating expenses were $2.8 million and included $6,000 in stock compensation expense.
Net income year-to-date increased more than 57% to $8.7 million, or $0.34 per fully diluted share based on 25.5 million weighted average shares outstanding. This compares with net income of $5.5 million, or $0.28 per fully diluted share, based on 19.9 million weighted average shares outstanding, for the 2008 nine-month period.
SinoHub's cash and cash equivalents balance grew to $6.7 million at September 30, 2009 from $5.9 million at December 31, 2008. Working capital grew to $32.1 million at the end of the 2009 third quarter from $22.8 million at the end of 2008. Stockholders' equity increased to $34.0 million at September 30, 2009 from $23.5 million at December 31, 2008.
Conference Call and Webcast
SinoHub will hold a conference call on Monday, November 16, 2009 at 7:30 a.m. Pacific (10:30 a.m. Eastern) to discuss the company's 2009 third quarter financial results. The investment community is invited to participate in the live conference call by dialing +1-866-761-0749 (U.S. and Canada) or +1-617-614-2707 (international), and entering pass code 60560028. The conference call also will be available to interested parties through a live audio Internet broadcast at http://www.sinohub.com . The call will be archived and available on the SinoHub Web site for one year. A telephonic replay will be available for approximately one week following the conclusion of the call by dialing +1-888-286-8010 (U.S. and Canada) or +1-617-801-6888 (international), and entering pass code 92882177.
About SinoHub
SinoHub, Inc. provides world-class supply chain management services with transparent information access for participants in the electronic components supply chain in China. The company was founded in 2000 by veteran entrepreneur Harry Cochran and electronic component industry veteran Lei Xia to facilitate the electronics revolution in China. SinoHub conducts substantially all of its operations through its wholly-owned subsidiary SinoHub Electronics Shenzhen Limited in the People's Republic of China. For more information, visit the company's Web site at http://www.sinohub.com .
Cautionary Statement Regarding Forward-looking Information
Some of the statements contained in this press release that are not historical facts constitute forward-looking statements under the federal securities laws. You can identify forward-looking statements by the use of the words "may," "will," "should," "could," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "intends," "potential," "proposed," or "continue" or the negative of those terms. These statements involve risks known to us, significant uncertainties, and other factors, many of which we cannot predict with accuracy and some of which we might not even anticipate, which may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by those forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements.
Among the factors about which we have made assumptions are:
-- Validation of the company's strategy of providing world-class
electronic component supply chain management capabilities;
-- Positive market dynamics providing SinoHub with a strong platform for
increasing revenue and profits;
-- Building a position as one of the industry's leading electronic
component supply chain management services providers.
Except as required by law, the company assumes no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future. For further information on factors which could impact SinoHub and the statements contained herein, see the "Risk Factors" included in Item 1A of the company's Annual Report on Form 10-K. SinoHub assumes no obligation to update and supplement forward-looking statements that become untrue because of subsequent events, new information or otherwise.
(Financial Tables Follow)
SINOHUB, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (UNAUDITED)
Three months ended September 30,
2009 2008
NET SALES
Supply chain management
services $ 1,910,000 $ 1,270,000
Electronic components 34,270,000 26,913,000
Total net sales 36,180,000 28,183,000
COST OF SALES
Supply chain management
services 198,000 671,000
Electronic components 29,544,000 21,434,000
Total cost of sales 29,742,000 22,105,000
GROSS PROFIT 6,438,000 6,078,000
OPERATING EXPENSES
Selling, general and
administrative 1,074,000 954,000
Professional services 253,000 18,000
Depreciation 151,000 90,000
Stock compensation
expense 272,000 --
Total operating
expenses 1,750,000 1,062,000
INCOME FROM OPERATIONS 4,688,000 5,016,000
OTHER INCOME (EXPENSE)
Interest expense (20,000) (53,000)
Interest income 4,000 21,000
Other, net 2,000 3,000
Total other
expense, net (14,000) (29,000)
INCOME BEFORE INCOME TAXES 4,674,000 4,987,000
Income tax expense 1,134,000 1,068,000
NET INCOME 3,540,000 3,919,000
OTHER COMPREHENSIVE INCOME
Foreign currency
translation gain 31,000 216,000
COMPREHENSIVE INCOME $ 3,571,000 $ 4,135,000
SHARE AND PER SHARE DATA
Net income per share-
basic $ 0.14 $ 0.19
Weighted average number
of shares-basic 24,883,000 21,021,000
Net income per share-
diluted $ 0.13 $ 0.18
Weighted average number
of shares-diluted 26,260,000 21,389,000
Nine months ended September 30,
2009 2008
NET SALES
Supply chain management
services $ 5,943,000 $ 2,361,000
Electronic components 79,689,000 50,649,000
Total net sales 85,632,000 53,010,000
COST OF SALES
Supply chain management
services 408,000 953,000
Electronic components 69,250,000 42,141,000
Total cost of sales 69,658,000 43,094,000
GROSS PROFIT 15,974,000 9,916,000
OPERATING EXPENSES
Selling, general and
administrative 3,287,000 2,031,000
Professional services 614,000 511,000
Depreciation 387,000 288,000
Stock compensation
expense 298,000 6,000
Total operating
expenses 4,586,000 2,836,000
INCOME FROM OPERATIONS 11,388,000 7,080,000
OTHER INCOME (EXPENSE)
Interest expense (83,000) (181,000)
Interest income 15,000 40,000
Other, net 7,000 19,000
Total other
expense, net (61,000) (122,000)
INCOME BEFORE INCOME TAXES 11,327,000 6,958,000
Income tax expense 2,616,000 1,410,000
NET INCOME 8,711,000 5,548,000
OTHER COMPREHENSIVE INCOME
Foreign currency
translation gain 63,000 680,000
COMPREHENSIVE INCOME $ 8,774,000 $ 6,228,000
SHARE AND PER SHARE DATA
Net income per share-
basic $ 0.35 $ 0.28
Weighted average number
of shares-basic 24,682,000 19,503,000
Net income per share-
diluted $0.34 $0.28
Weighted average number
of shares-diluted 25,463,000 19,871,000
SINOHUB, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS September December
30, 2009 31, 2008
(Unaudited) (Audited)
CURRENT ASSETS
Cash and cash equivalents $ 6,699,000 $ 5,860,000
Restricted cash 2,962,000 374,000
Accounts receivable, net of
allowance 33,564,000 22,282,000
Inventories, net 3,505,000 435,000
Prepaid expenses and other 565,000 370,000
Total current assets 47,295,000 29,321,000
PROPERTY AND EQUIPMENT, NET 1,918,000 703,000
TOTAL ASSETS $ 49,213,000 $ 30,024,000
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES
Accounts payable $ 3,577,000 $ 764,000
Accrued expenses and other
liabilities 671,000 234,000
Bank borrowings 9,068,000 2,123,000
Income and other taxes payable 1,852,000 3,391,000
Total current liabilities 15,168,000 6,512,000
STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par
value, 5,000,000 shares authorized;
no shares issued -- --
Common stock, $0.001 par value,
100,000,000 shares authorized;
25,056,671 shares and
24,501,989 shares issued and
outstanding as of September 30,
2009 and December 31, 2008,
respectively 25,000 25,000
Additional paid-in capital 13,287,000 11,529,000
Retained earnings
Unappropriated 19,135,000 10,424,000
Appropriated 724,000 724,000
Accumulated other comprehensive
income 874,000 810,000
Total stockholders' equity 34,045,000 23,512,000
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 49,213,000 $ 30,024,000
For more information, please contact:
Investors:
PondelWilkinson Inc.
Laurie Berman/Angie Yang
Tel: +1-310-279-5980
Email: investor@pondel.com
In China:
Falicia Cheng
Tel: +86-755-2661-1080
Email: falicia@sinohub.com
