omniture

SinoHub Reports Strong 2009 First Quarter Financial Results

2009-05-15 14:52 907

-- Net Income Increases 83% on 56% Rise in Revenues --

SANTA CLARA, Calif. and SHENZHEN, China, May 15 /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 another quarter of strong performance for the three months ended March 31, 2009, with revenues and net income up 56% and 83%, respectively, over the three months ended March 31, 2008.

Net income for the 2009 first quarter advanced to $2.0 million, or $0.08 per fully diluted share, from $1.1 million, or $0.06 per fully diluted share, in the year earlier period. Fully diluted weighted average shares increased between March 31, 2008 and March 31, 2009 by approximately 6.7 million shares, from approximately 18.4 million shares to approximately 25.2 million shares, primarily as a result of a private placement of shares effected in September of 2008.

Total revenues for the 2009 first quarter rose to $18.1 million from $11.6 million in the first quarter of 2008. Electronic component revenues, including procurement-fulfillment and spot component sales, increased 47% to $16.3 million in the first three months of 2009 from $11.1 million in the same period last year. Revenues from the company’s supply chain management services business more than tripled to $1.8 million in the 2009 first quarter, from $522,000 in the same period a year ago.

Selling, general and administrative expenses for the 2009 first quarter were $923,000, or approximately 5.1% of total revenues. In the prior-year period, the company recorded total selling, general and administrative expenses of $497,000, equal to approximately 4.3% of total revenues. SinoHub attributed the higher expense levels to investments made to support the company’s anticipated growth and expansion.

As of March 31, 2009, SinoHub had $4.9 million in non-restricted cash and cash equivalents, compared with $5.9 million at December 31, 2008. Working capital totaled $25.0 million at the end of the 2009 first quarter, compared with $22.8 million at the close of 2008. Stockholders’ equity advanced to $25.6 million at the end of the 2009 first quarter from $23.5 million at December 31, 2008.

"SinoHub continues to benefit from a number of important achievements, with each step contributing to stronger prospects for long-term, sustainable profitability," said Harry Cochran, chief executive officer. "In addition to building a strong group of corporate advisors helping us guide the company’s steady progression, we are benefiting from selling to customers within China, which, thus far, has somewhat insulated us from the economic challenges being experienced in most global markets. With our accomplishments over the past year, SinoHub is a much more powerful organization and, we believe, better equipped to continue delivering strong growth."

"While the global economic crisis has moderated the rapid growth of

‘tier-one’ branded mobile phone providers in China, it is important to remember that SinoHub primarily serves the second-tier market for non-branded mobile phones, which we believe is still a huge market where we think there is room for greater penetration by SinoHub," said Lei Xia, president of SinoHub. "We believe our recently announced AA Customs High Credit Enterprise status distinguishes SinoHub as the only SCM enterprise focused exclusively on electronics in Shenzhen to have achieved this highly sought after position and should provide us with a significant competitive advantage. Being able to deliver priority, expedited clearance facilitation and exemption from customs examinations in all of China’s customs ports further strengthens our position in the second-tier mobile phone vertical, which currently accounts for approximately 70% of our total revenues."

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. Forward-looking statements are identified 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 SinoHub, significant uncertainties, and other factors, many of which the company cannot predict with accuracy and some of which the company might not even anticipate, which may cause SinoHub’s 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 SinoHub has made assumptions are:

-- the company’s ability achieve long-term, sustainable profitability; the

relative benefits, during the current global economic downturn, of

selling products (in particular, non-branded mobile phone components)

to be consumed within China

-- the company’s ability to continue to deliver strong growth and

overcome competition from other suppliers;

-- the retention of import/export licenses and SinoHub SCM SZ’s Client

Coordinator Enterprise Coordinator status with the Huanggang Customs

authority and AA Customs High Credit Enterprise; and

-- the abatement of the current global economic crisis over time.

Except as required by law, SinoHub 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 the company and the statements contained herein, see the "Risk Factors" included in Item 1A of our 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 March 31,

2009 2008

NET SALES

Supply chain management services $ 1,778,000 $ 522,000

Electronic components 16,314,000 11,096,000

Total net sales 18,092,000 11,619,000

COST OF SALES

Supply chain management services 82,000 148,000

Electronic components 14,175,000 9,632,000

Total cost of sales 14,257,000 9,780,000

GROSS PROFIT 3,835,000 1,838,000

OPERATING EXPENSES

Selling, general and administrative 923,000 497,000

Professional services 229,000 --

Depreciation 104,000 98,000

Amortization of stock

option compensation 13,000 --

Total operating expenses 1,269,000 595,000

INCOME FROM OPERATIONS 2,566,000 1,243,000

OTHER INCOME (EXPENSE)

Interest expense (25,000) (77,000)

Interest income 7,000 5,000

Other, net 3,000 7,000

Total other income (expense) (14,000) (65,000)

INCOME BEFORE INCOME TAXES 2,552,000 1,178,000

Income tax expense 562,000 90,000

NET INCOME 1,990,000 1,088,000

OTHER COMPREHENSIVE INCOME

Foreign currency translation gain 30,000 285,000

COMPREHENSIVE INCOME $ 2,020,000 $ 1,373,000

SHARE AND PER SHARE DATA

Net income per share-basic $ 0.08 $ 0.06

Weighted average number of

shares-basic 24,580,798 18,290,000

Net income per

share-diluted $ 0.08 $ 0.06

Weighted average number of

shares-diluted 25,155,977 18,422,380

SINOHUB, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

March 31, December 31,

ASSETS 2009 2008

(Unaudited) (Audited)

CURRENT ASSETS

Cash and cash equivalents $ 4,866,000 $ 5,860,000

Restricted cash 633,000 374,000

Accounts receivable, net of allowance 29,620,000 22,282,000

Inventories, net 1,574,000 435,000

Prepaid expenses and other 623,000 370,000

Total current assets 37,316,000 29,321,000

PROPERTY AND EQUIPMENT, NET 608,000 703,000

TOTAL ASSETS $ 37,924,000 $ 30,024,000

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES

Accounts payable $ 4,705,000 $ 764,000

Accrued expenses and other 310,000 234,000

Bank borrowings 5,760,000 2,123,000

Income and other taxes payable 1,590,000 3,391,000

Total current liabilities 12,365,000 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;

24,580,798 shares and 24,501,989

shares issued and outstanding

as of March 31, 2009 and December

31, 2008, respectively 25,000 25,000

Additional paid-in capital 11,555,000 11,529,000

Retained earnings

Unappropriated 12,415,000 10,424,000

Appropriated 724,000 724,000

Accumulated other comprehensive income 840,000 810,000

Total stockholders’ equity 25,559,000 23,512,000

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 37,924,000 $ 30,024,000

For more 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

Source: SinoHub, Inc.
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