-- 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