omniture

Shineco, Inc. Reports Fiscal Year 2018 Financial Results

2018-10-16 04:30 482

BEIJING, Oct. 16, 2018 /PRNewswire/ -- Shineco, Inc. ("Shineco" or the "Company"; NASDAQ: TYHT), a producer and distributor of Chinese herbal medicines, organic agricultural produce, specialized textiles, and other health and well-being focused plant-based products in China, announced today its financial results for the fiscal year ended June 30, 2018.

Mr. Yuying Zhang, Chairman and Chief Executive Officer of Shineco, commented, "We are proud of our achievements for fiscal year 2018 with total revenue increased by 30.7% to $43.90 million. Our revenue from Luobuma products increased 200.3% to $10.88 million as our investment in our Apocynum Industrial Park in Xinjiang began to realize its potential. We expect to see more revenue momentum as we continue to invest in key projects to position ourselves for long term growth and success. We are pleased with the reception our Luobuma product line has received over the past fiscal year and we are excited to continue to optimize our operations and improve our gross margins as we enter the new fiscal year."

Fiscal Year 2018 Financial Highlights 


For the Fiscal Years Ended June 30

($ millions, except per share data)

2018


2017


% Change

Revenue

43.90


33.59


30.7%

Luobuma products

10.88


3.62


200.3%

Chinese medicinal herbal products

14.18


13.25


7.1%

Other agricultural products

18.83


16.72


12.6%

Gross profit

14.79


10.74


37.7%

Gross margin

33.7%


32.0%


1.7 pp*

Operating income

9.27


7.45


24.5%

Operating margin

21.1%


22.2%


-1.0 pp*

Net income attributable to Shineco

7.59


8.47


-10.4%

EPS

0.36


0.41


-12.5%

*Notes: pp represents percentage points


  • Revenue: $43.90 million (at 33.7% gross margin), up 30.7% from $33.59 million (at 32.0% gross margin) in fiscal year 2017, reflecting the increase in sales across all products.
  • Luobuma Products Revenue: $10.88 million, growing 200.3% year-over-year from $3.62 million in fiscal year 2017.
  • Gross Profit: $14.79 million, up from $10.74 million in fiscal year 2017.
  • Operating Income: $9.27 million, growing 24.5% year-over-year from $7.45 million in fiscal year 2017.
  • Net income attributable to Shineco: $7.59 million, compared to $8.47 million in fiscal year 2017.
  • EPS: Net income per share of 0.36, compared to a net income per share of $0.41 in fiscal year 2017.

Fiscal Year 2018 Financial Results 

Revenue

Revenue for the year ended June 30, 2018 increased by $10.31 million, or 30.7%, to $43.90 million from $33.59 million for the same period of last year, mainly due to the increase in sales across all products. 


For the Fiscal Years Ended June 30


2018


2017

($ millions)

Revenue


COGS


Gross
Margin


Revenue


COGS


Gross
Margin

Luobuma products

10.88


4.89


55.1%


3.62


1.71


52.8%

Chinese medicinal herbal products

14.18


10.76


24.1%


13.25


10.18


23.1%

Other agricultural products

18.83


13.46


28.5%


16.72


10.96


34.5%

Total

43.90


29.11


33.7%


33.59


22.85


32.0%

Revenue from Luobuma products increased by $7.26 million, or 200.3%, to $10.88 million for the year ended June 30, 2018 from $3.62 million for the same period of last year, mainly due to revenue generated by a new subsidiary, Xinjiang Taihe, of $8.21 million for the year ended June 30, 2018. Moreover, the increase of revenue from this segment was due to increased sales volume of health awareness related products. The Company also enhanced online sales promotions during the year ended June 30, 2018, which contributed to more sales revenue overall. The increase was partially offset by the decrease in revenue from Tenet-Jove Xuzhou branch of $1.59 million, as the business operation of this branch ceased in November 2017.

Revenue from Chinese medicinal herbal products increased by $0.93 million, or 7.1%, to $14.18 million for the year ended June 30, 2018 from $13.25 million for the same period of last year. The increase was primarily due to the increased unit sales price in the herbal market during the period from October to December 2017, as well as more fulfilled sales orders from customers for the year ended June 30, 2018 than the same period in 2017.

Revenue from other agricultural products increased by $2.11 million, or 12.6%, to $18.83 million for the year ended June 30, 2018 from $16.72 million for the same period of last year. The increase was mainly attributable to the increase in sales volume of yew trees since the public realized the air purification function of the yew trees for year ended June 30, 2018 as compared to the same period in 2017.

Gross profit and Gross Margin

Total cost of revenue increased by $6.26 million, or 27.4%, to $29.11 million for the year ended June 30, 2018 from $22.85 million for the same period of last year. Gross profit increased by $4.05 million, or 37.7%, to $14.79 million for the year ended June 30, 2018 from $10.74 million for the same period of last year. Overall gross margin increased by 1.7 percentage points to 33.7% for the year ended June 30, 2018, compared to 32.0% for the same period of last year.

Gross margins for Luobuma products, Chinese medicinal herbal products, and other agricultural products were 55.1%, 24.1%, and 28.5%, respectively, for the year ended June 30, 2018. This compared to gross margins for Luobuma products, Chinese medicinal herbal products, and other agricultural products of 52.8%, 23.1%, and 34.5%, respectively, for the same period of last year.

Operating income

Selling expenses increased by $0.05 million, or 3.3%, to $1.53 million for the year ended June 30, 2018 from $1.48 million for the same period of last year, primarily due to the acquisition of a new subsidiary, Tianjin Tajite, in October 2017. The increase in selling and distribution expenses was also a result of increased promotion expenses as the Company enhanced its online sales promotions, partially offset by decreased rent expense of warehouse and salary expenses due to more effective cost control during the years ended June 30, 2018 compared to the same period of 2017.

General and administrative expenses increased by $2.17 million, or 119.8%, to $3.99 million for the year ended June 30, 2018 from $1.81 million for the same period of last year. The increase in general and administrative expenses was primarily attributable to the incorporation and acquisition of new subsidiaries, Tiankunrunze in second quarter of fiscal year 2017, and Xinjiang Taihe, Runze and Tianjin Tajite in fiscal year 2018. The increase in general and administrative expenses was also a result of increased bad debt expense, salary expenses as well as entertainment expense.

Operating income increased by $1.83 million, or 24.5%, to $9.27 million for the year ended June 30, 2018 from $7.45 million for the same period of last year. Operating margin was 21.1% for the year ended June 30, 2018, compared to 22.2% for the same period of last year.

Impairment loss on goodwill

Impairment loss on goodwill was $2.15 million for the year ended June 30, 2018, representing an increase of 100.00%, as compared to the same period of last year. In conjunction with the preparation of consolidated financial statement for year ended June 30, 2018, the management performed evaluation on the impairment of goodwill. Due to the lower than expected revenue and profit, and unfavorable business environment, the management fully recorded impairment loss on goodwill of Tianjin Tajite.

Net income

Net income decreased by $1.09 million, or 12.7%, to $7.53 million for the year ended June 30, 2018 from $8.62 million for the same period of last year. After the deduction of non-controlling interests, net income attributable to common shareholders for the year ended June 30, 2018 was $7.59 million, or $0.36 per basic and diluted share. This compared to net income attributable to common shareholders of $8.47 million, $0.41 per basic and diluted share, for the same period of last year.

Financial Condition

As of June 30, 2018, the Company had cash and cash equivalents of $31.49 million, compared to $23.15 million as of June 30, 2017. Net cash provided by operating activities was $9.85 million for the year ended June 30, 2018, compared to net cash used in operating activities of $2.74 million for the same period of last year. Net cash used in investing activities was $0.75 million for the year ended June 30, 2018, compared to $0.73 million for the same period of last year. Net cash used in financing activities was $0.49 million for the year ended June 30, 2018, compared to net cash provided by financing activities of $5.38 million for the same period of last year.

About Shineco, Inc.

Incorporated in August 1997 and headquartered in Beijing, China, Shineco, Inc. ("Shineco" or the "Company") is a Delaware holding company that uses its subsidiaries' and variable interest entities' vertically- and horizontally-integrated production, distribution and sales channels to provide health and well-being focused plant-based products in China. Utilizing modern engineering technologies and biotechnologies, Shineco produces, among other products, Chinese herbal medicines, organic agricultural produce and specialized textiles. For more information about the Company, please visit  www.tianyiluobuma.com.

Forward-Looking Statements

This press release contains information about Shineco's view of its future expectations, plans and prospects that constitute forward-looking statements. Actual results may differ materially from historical results or those indicated by these forward-looking statements as a result of a variety of factors including, but not limited to, risks and uncertainties associated with its ability to raise additional funding, its ability to maintain and grow its business, variability of operating results, its ability to maintain and enhance its brand, its development and introduction of new products and services, the successful integration of acquired companies, technologies and assets into its portfolio of products and services, marketing and other business development initiatives, competition in the industry, general government regulation, economic conditions, dependence on key personnel, the ability to attract, hire and retain personnel who possess the technical skills and experience necessary to meet the requirements of its clients, and its ability to protect its intellectual property. Shineco encourages you to review other factors that may affect its future results in Shineco's registration statement and in its other filings with the Securities and Exchange Commission.

For more information, please contact:

Tina Xiao
Ascent Investor Relations LLC
Phone: +1-917-609-0333
Email: tina.xiao@ascent-ir.com


 

SHINECO, INC.

CONSOLIDATED BALANCE SHEETS








ASSETS







June 30,


June 30,


2018


2017







CURRENT ASSETS:






    Cash

$

31,487,053


$

23,154,551

    Accounts receivable, net


15,478,336



14,480,004

    Due from related parties


388,261



448,833

    Inventories


2,364,558



2,346,273

    Advances to suppliers, net


4,977,407



2,396,123

    Deferred issuance cost


434,000



-

    Other current assets


1,034,780



1,900,143

TOTAL CURRENT ASSETS


56,164,395



44,725,927







    Property and equipment, net


11,697,304



10,320,396

    Land use right, net of accumulated amortization


1,345,088



1,346,631

    Investments


6,567,090



5,695,080

    Deposit for business acquisition


-



2,065,686

    Distribution rights


1,114,837



-

    Long-term deposit and other noncurrent assets


113,764



112,883

    Long-term accounts receivable, net


2,700,367



-

    Prepaid leases


3,397,572



3,784,533

    Deferred tax assets


-



233,834

TOTAL  ASSETS

$

83,100,417


$

68,284,970













LIABILITIES AND EQUITY












CURRENT LIABILITIES:






    Short-term loans

$

2,316,283


$

2,663,628

    Accounts payable


2,270,140



158,068

    Advances from customers


17,500



5,439

    Due to related parties


197,617



257,880

    Other payables and accrued expenses


1,736,735



337,107

    Taxes payable


2,991,624



1,608,926

TOTAL CURRENT LIABILITIES


9,529,899



5,031,048







    Income tax payable - noncurrent portion


685,185



-

    Deferred tax liability


11,652



-

TOTAL LIABILITIES


10,226,736



5,031,048







Commitments and contingencies


-



-







EQUITY:






    Common stock; par value $0.001, 100,000,000 shares authorized;






21,234,072 and 21,034,072 shares issued and outstanding at June 30, 2018 and  June 30, 2017


21,234



21,034

    Additional paid-in capital


23,171,102



22,737,302

    Statutory reserve


4,085,819



3,484,449

    Retained earnings


46,051,289



39,064,743

    Accumulated other comprehensive loss


(1,509,212)



(3,140,982)

    Total Stockholders' equity of Shineco, Inc.


71,820,232



62,166,546

    Non-controlling interest


1,053,449



1,087,376

TOTAL EQUITY


72,873,681



63,253,922







TOTAL LIABILITIES AND EQUITY

$

83,100,417


$

68,284,970

                                                                  


 

SHINECO, INC.

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME









For the Years Ended June 30,


2018


2017





REVENUE

$

43,897,618


$

33,592,337







COST OF REVENUE






    Cost of product and services


29,005,659



22,776,035

    Business and sales related tax


104,667



75,974

              Total cost of revenue


29,110,326



22,852,009







GROSS PROFIT


14,787,292



10,740,328







OPERATING EXPENSES






    General and administrative expenses


3,985,604



1,813,402

    Selling expenses


1,530,005



1,480,855

              Total operating expenses


5,515,609



3,294,257







INCOME FROM OPERATIONS


9,271,683



7,446,071







OTHER INCOME






    Impairment loss on goodwill


(2,153,298)



-

    Income from equity method investments


907,794



927,697

    Purchase rebate income


1,377,108



1,136,162

    Other income 


307,637



348,181

    Interest income (expense), net


(58,775)



14,171

              Total other income


380,466



2,426,211







INCOME BEFORE PROVISION FOR INCOME TAXES


9,652,149



9,872,282







PROVISION FOR INCOME TAXES


2,123,587



1,252,637







NET INCOME


7,528,562



8,619,645







    Net (loss) income attributable to non-controlling interest


(59,354)



149,991







NET INCOME ATTRIBUTABLE TO SHINECO, INC.

$

7,587,916


$

8,469,654







COMPREHENSIVE INCOME






    Net income

$

7,528,562


$

8,619,645

    Other comprehensive income (loss): foreign currency translation gain (loss)


1,658,658



(1,271,036)

    Total comprehensive income 


9,187,220



7,348,609

    Less: comprehensive (loss) income attributable to non-controlling interest


(32,466)



132,008







COMPREHENSIVE INCOME ATTRIBUTABLE TO SHINECO, INC.

$

9,219,686


$

7,216,601







    Weighted average number of shares basic and diluted


21,119,004



20,616,335







    Earnings per common share

$

0.36


$

0.41

 


 

SHINECO, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS









For the Years Ended June 30,


2018


2017







CASH FLOWS FROM OPERATING ACTIVITIES:






Net income

$

7,528,562


$

8,619,645

Adjustments to reconcile net income to net cash provided by (used in) operating activities:






Depreciation and amortization


698,232



575,196

Loss (gain) from disposal of property and equipment


5,557



(8,063)

Provision (recovery of) for doubtful accounts


262,013



(342,041)

Increase in inventory reserve


124,601



37,292

Deferred tax (benefit) provision


(28,138)



86,780

Income from equity method investments


(907,794)



(927,697)

Interest income from loans to related parties


-



(86,355)

Impairment loss on goodwill


2,153,298



-







Changes in operating assets and liabilities:






Accounts receivable


(3,569,821)



(8,136,668)

Advances to suppliers


(2,563,943)



(2,339,757)

Inventories


(25,031)



2,122,982

Other receivables


170,125



(72,891)

Prepaid expense and other assets


4,442



(401,755)

Due from related parties


126,293



(976,937)

Prepaid leases


485,382



466,759

Accounts payable


2,145,058



(96,137)

Advances from customers


(70,459)



(3,950)

Other payables


1,272,263



(1,614,992)

Taxes payable


2,036,079



354,453

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES


9,846,719



(2,744,136)







CASH FLOWS FROM INVESTING ACTIVITIES:






Acquisitions of property and equipment


(1,763,160)



(49,863)

Proceeds from disposal of property and equipment


607



17,688

Payment for construction in progress


58,671



-

Repayments of loans from third parties


831,716



4,839

Loan advances to related party


(53,793)



-

Repayments of loans from related parties


-



565,739

Income received from investments in unconsolidated entities


153,695



990,839

Deposit for business acquisition


-



(2,055,074)

Deposit for potential investment


-



(200,000)

Cash of subsidiary acquired


23,304



-

NET CASH USED IN INVESTING ACTIVITIES


(748,960)



(725,832)







CASH FLOWS FROM FINANCING ACTIVITIES:






Proceeds from short-term loans


2,459,122



2,673,064

Repayment of short-term loans


(2,877,044)



(2,701,321)

Proceeds from initial public offering, net of offering costs


-



5,394,549

Repayments of advances from related parties


(67,561)



17,683

NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES


(485,483)



5,383,975







EFFECT OF EXCHANGE RATE CHANGE ON CASH


(279,774)



(768,830)







NET INCREASE IN CASH


8,332,502



1,145,177







CASH - Beginning of the Period


23,154,551



22,009,374







CASH - End of the Period

$

31,487,053


$

23,154,551







SUPPLEMENTAL CASH FLOW DISCLOSURES:






Cash paid for income taxes

$

857,201


$

845,792

Cash paid for interest

$

133,930


$

150,175







SUPPLEMENTAL NON-CASH INVESTING ACTIVITY:






Issued 200,000 shares of deferred issuance cost

$

434,000


$

-

 

Cision View original content:http://www.prnewswire.com/news-releases/shineco-inc-reports-fiscal-year-2018-financial-results-300731196.html

Source: Shineco, Inc
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