SANTA CLARA, Calif. and SHENZHEN, China, March 17 /PRNewswire-Asia/ -- SinoHub, Inc. (OTC Bulletin Board: SIHI), which conducts substantially all of its operations through its wholly-owned subsidiary SinoHub Electronics Shenzhen Limited in the People's Republic of China, today reported strong financial results for the fourth quarter and full year ended December 31, 2008, with fourth quarter revenues, gross profit and net income up 154%, 201% and 242%, respectively, over the prior-year period.
Net income for the 2008 fourth quarter more than tripled to $2.9 million, or $0.12 per fully diluted share, from $858,000, or $0.05 per fully diluted share, for the 2007 fourth quarter. Total revenues for the 2008 fourth quarter increased more than two and a half times to $26.5 million from $10.4 million in the prior-year quarter.
The company's electronic component procurement and sales business generated growth of nearly 150%, with revenues of $23.9 million for the fourth quarter of 2008, versus $9.6 million in the same period last year. Revenues from the company's supply chain management services business increased more than three-fold to $2.6 million for the 2008 fourth quarter from $781,000 in the fourth quarter of 2007.
Total operating expenses for the 2008 fourth quarter amounted to $2.6 million, or approximately 10% of total revenues, compared with $1.1 million, or approximately 11% of total revenues, a year earlier. The increase in total operating expenses reflects higher selling, general and administrative costs in support of the company's substantial revenue growth.
At December 31, 2008, SinoHub had $5.9 million in non-restricted cash and cash equivalents, up from $4.3 million at December 31, 2007. Working capital was $22.8 million at year-end 2008 compared with $6.6 million at the close of 2007, and total stockholders' equity was to $23.5 million at year-end 2008, up from $7.5 million at December 31, 2007.
"The strength of SinoHub's 2008 performance reflects the successful execution of our strategic initiatives," said Harry Cochran, chief executive officer. "Our strong revenue growth and results demonstrate the power of our supply chain management platform, which we believe is the critical framework supporting our rapid growth. Increased access to financial resources during the year helped to fuel heightened levels of business activity in our procurement-fulfillment and component sales businesses. In addition, we are benefiting from a significantly deepened bench of corporate advisors, including four new board members in 2009. We believe we are poised to continue our growth in 2009."
"As quickly as the company has been growing, we believe the opportunity ahead of us is even larger, particularly with the rollout of 3G technology-enabled mobile devices, since roughly 70% of our business is in the mobile phone arena," said Lei Xia, president of SinoHub. "We are leveraging our comprehensive platform as we pursue new business opportunities, and we believe we are fortifying SinoHub's ability to sustain profitable, long-term growth. With 90 percent of our manufacturer customers selling their products into China we believe our prospects remain robust in 2009."
Full Year Financial Results
Net income grew substantially for 2008 to $8.5 million, or $0.40 per fully diluted share, from $3.5 million, or $0.22 per fully diluted share, for 2007. Total revenues grew to $79.5 million for 2008 from $28.8 million for 2007. The company's electronic component procurement-fulfilment and component sales businesses generated revenues of $74.5 million for 2008, an almost three-fold increase from $26.7 million last year. Revenues from the company's supply chain management services business increased 137% to $5.0 million for 2008 from $2.1 million for 2007. Total operating expenses for 2008 were $5.4 million, or 7% of total revenues, compared with $2.7 million, or 9% of total revenues, in 2007.
Conference Call
SinoHub has scheduled a conference call for 7:30 am. (PDT) March 17, 2009 to discuss the company's fourth quarter and year-end financial performance. Interested parties may participate in the call by dialing 1-866-356-4441 from the U.S. or Canada, or +1-617-597-5396 from international locations, and entering passcode 5632083. This call also is being webcast and can be accessed from SinoHub's web site at http://www.sinohub.com where it will be archived for a period of one year. An audio replay of the conference call will be available through midnight (PDT) March 24, 2009 by dialing 1-888-286-8010 from the U.S. or Canada, or +1-617-801-688 from international locations, and entering passcode 34815044.
About SinoHub
SinoHub's business was founded in 2000 by veteran entrepreneur Harry Cochran and electronic component industry veteran Lei Xia to participate in the rapid growth of the electronics business in China. The company is engaged in electronic component sales and 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
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:
-- our views on the potential growth of the mobile telephone and network
equipment markets in China;
-- our ability to overcome competition from other suppliers;
-- any increase in the cost of component parts that we supply or increases
in operating costs which cannot be passed on to our customers;
-- the availability of financing on attractive terms or at all, which may
adversely impact our growth plans or increase our future interest
expense;
-- changes in interest rate levels and volatility in securities markets;
-- the retention of import/export licenses and SinoHub SCM SZ's Client
Coordinator Enterprise Coordinator status with the Huanggang Customs
authority;
-- economic, political, regulatory, legal and foreign exchange risks
associated with our operations;
-- changes in governmental regulation, tax rates and similar matters;
-- retention of key members of our senior management; and
-- the abatement of the current global economic crisis over time.
Except as required by law, we assume 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 us and the statements contained herein, see the "Risk Factors" included in Item 1A of our Annual Report on Form 10-K. We assume no obligation to update and supplement forward-looking statements that become untrue because of subsequent events, new information or otherwise.
SINOHUB, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
Three months ended Years ended
December 31, December 31,
2008 2007 2008 2007
NET SALES
Supply chain management
services $ 2,612,000 $ 781,000 $ 4,973,000 $ 2,096,000
Electronic components 23,861,000 9,623,000 74,511,000 26,698,000
Total net sales 26,473,000 10,404,000 79,484,000 28,794,000
COST OF SALES
Supply chain
management services 491,000 385,000 1,444,000 995,000
Electronic components 19,688,000 7,931,000 61,830,000 21,130,000
Total cost of sales 20,179,000 8,316,000 63,274,000 22,125,000
GROSS PROFIT 6,294,000 2,088,000 16,210,000 6,669,000
OPERATING EXPENSES
Selling, general and
administrative 1,244,000 1,020,000 3,787,000 2,297,000
Depreciation 101,000 113,000 389,000 383,000
Allowance for doubtful
debts 1,237,000 -- 1,237,000 --
Loss on disposal of
property and equipment -- -- 5,000 --
Total operating expenses 2,582,000 1,133,000 5,418,000 2,680,000
INCOME FROM OPERATIONS 3,712,000 955,000 10,792,000 3,989,000
OTHER INCOME (EXPENSE)
Interest expense (69,000) (37,000) (251,000) (146,000)
Interest income 26,000 38,000 66,000 124,000
Other, net 7,000 43,000 27,000 43,000
Total other income
(expense) (36,000) 44,000 (158,000) 21,000
INCOME BEFORE INCOME
TAXES 3,676,000 999,000 10,634,000 4,010,000
Income tax expense 741,000 141,000 2,151,000 509,000
NET INCOME 2,935,000 858,000 8,483,000 3,501,000
OTHER COMPREHENSIVE
INCOME
Foreign currency
translation gain (138,000) 164,000 541,000 285,000
COMPREHENSIVE INCOME $ 2,797,000 $ 1,022,000 $ 9,024,000 $ 3,786,000
SHARE AND PER SHARE DATA
Net income per share-
basic $ 0.12 $ 0.05 $ 0.41 $ 0.22
Weighted average number
of shares-basic 24,486,000 16,829,000 20,925,000 15,797,000
Net income per share-
diluted $ 0.12 $ 0.05 $ 0.40 $ 0.22
Weighted average number
of shares-diluted 25,132,000 16,962,000 21,460,000 15,929,000
SINOHUB, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, December 31,
ASSETS 2008 2007
CURRENT ASSETS
Cash and cash equivalents $ 5,860,000 $ 4,282,000
Restricted cash 374,000 5,509,000
Accounts receivable, net of allowance 22,282,000 9,748,000
Inventories, net 435,000 853,000
Prepaid expenses and other 370,000 426,000
Due from related company -- 1,493,000
Total current assets 29,321,000 22,311,000
PROPERTY AND EQUIPMENT, NET 703,000 846,000
TOTAL ASSETS $30,024,000 $23,157,000
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 764,000 $ 6,777,000
Accrued expenses and other 234,000 307,000
Bank borrowings 2,123,000 6,904,000
Notes payable to third parties -- 251,000
Income and other taxes payable 3,391,000 1,457,000
Total current liabilities 6,512,000 15,696,000
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;
24,501,989 shares and 18,290,000
shares issued and outstanding as
of December 31, 2008 and December 31,
2007, respectively 25,000 18,000
Additional paid-in capital 11,529,000 4,509,000
Retained earnings
Unappropriated 10,424,000 2,309,000
Appropriated 724,000 356,000
Accumulated other comprehensive
income 810,000 269,000
Total stockholders' equity 23,512,000 7,461,000
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $30,024,000 $23,157,000
For further information, please contact:
SinoHub, Inc.
Falicia Cheng
Tel: +86-755-2661-1080
Email: falicia@sinohub.com
In the U.S.:
PondelWilkinson Inc.
Laurie Berman/Angie Yang
Tel: +1-310-279-5980
Email: investor@pondel.com
