Sino-Global Announces 2019 Year End Financial Results; Company Continues Transition to Shipping Agency Focus

ROSLYN, N.Y., Oct. 1, 2019 /PRNewswire/ -- Sino-Global Shipping America, Ltd. (NASDAQ: SINO) ("Sino-Global", the "Company", "we", "our", or "us"), a non-asset based global logistics service provider, announced its financial and operating results for the fiscal year ended June 30, 2019.

The Company has also provided more detailed information on its annual report on Form 10-K filed this morning with the U.S. Securities and Exchange Commission. Management encourages investors to review this filing for more details of the Company's financial results for the fiscal year 2019, background on Sino-Global's business and history, as well as the Company's strategies for the coming fiscal year.

Management Comments – Strategy Moving into Fiscal 2020

Mr. Lei Cao, Chairman and Chief Executive Officer of Sino-Global commented, "We continue to pay greater attention to expanding our ship services following a challenging year due to the intense U.S./China trade relations. Throughout the year, current trade dynamics increased the expense for shipping carrier clients to ship cargo into U.S. ports, resulting in lower shipping volumes and lower utilization of our online platform, which has caused us to shift our focus back to the global shipping agency business. The shipping agency industry in the world has improved in the past years and the number of shipping agencies overall has decreased due to the failure to provide a competitive price and to embrace technology as a resource in serving client needs. We already have a network that covers the U.S. east coast, west coast, Canada, Australia, Hong Kong, Beijing, and Ningbo, and we intend to utilize our previous investments in technology to provide a broader base of services to our customers. We maintain strong relationships with customers and market resources. The current shipping agency market is more competitive yet enable companies like us who have better resources in this market niche to expand."

Mr. Cao concluded, "While we were pleased with higher sales this year, we understand that the Company needs to collect revenues from larger shipping agencies to take advantage of our cash generating potential. In addition, in fiscal year 2020, we expect to provide shipping management service, which includes ship insurance arrangements and operations; ship maintenance and inspection; crew recruitment, training and supply and ship technical services. We will focus on expanding our business to increase sales revenue in the United States and get more customers who can settle in U.S. dollars. Overall, we believe that the Company has properly positioned itself to take advantage of another revenue growth opportunity. As we move forward into fiscal 2020, we will be focusing on leveraging our growing infrastructure to improve operating margins and the bottom line. We expect to provide a shareholder letter to outline our growth strategy for the coming year prior to our next annual meeting."

Fiscal Year 2019 Financial Review

• Total revenues increased by approximately 81.1% to approximately $41.8 million during the year, compared to approximately $23.1 million in the prior fiscal year. This increase was due to the Company's continuing efforts to diversify its business perspectives, resulting in the rise in revenues generated from its freight logistics services segment. Freight logistics services consist primarily of cargo forwarding, brokerage and other freight services in China.
• In the second quarter of 2019, the Company decided to transition back into the shipping agency business, because it now has an integrated online logistics platform that allows it to handle a wider base of customers in China and other ports of the world. For the years ended June 30, 2019 and 2018, shipping agency services generated revenues of $2,093,680 and $0, respectively, and gross profit of $199,348 and $0, respectively, representing a 100.0% increase in both revenues and gross profit.
• The increase of revenue in the shipping agency services segment was due to the increase in the total number of ships the Company served. For the year ended June 30, 2019, the Company served 57 ships.
• The Company's gross profit for the 2019 fiscal year was approximately $5.8 million, compared to approximately $7.5 million in the prior fiscal year. Gross profit margin during the year decreased to approximately 13.8% from approximately 32.4%, which was largely attributed to a greater portion of revenues coming from providing freight logistics services and shipping agency business with relative low gross profit margins. Gross profit margin decreased as a result of significiantly increased cost of revenues, mainly from the freight logistics services segment due to an increase in freight cost of carriers resulting from the increase in shipping volume.

The following tables present summary information by segments mainly regarding the top-line financial results for the years ended June 30, 2019 and 2018:

• Operating loss for the year ended June 30, 2019 was approximately $6.0 million, compared to an operating income of approximately $0.8 million in the prior year. The decrease was largely due to a provision for doubtful accounts of $3,978,893 for the year ended June 30, 2019 compared to the provision for doubtful accounts of $1,726,599 for the year ended June 30, 2018. The increase was due to slower collections from customers. As the Company continues its business relationships with several large customers, it continues to improve its collection efforts to improve its accounts receivable.
• For the fiscal year ended June 30, 2019, the Company reported net loss attributable to Sino-Global Shipping America, Ltd. of approximately $6.5 million, or loss of $0.45 per diluted share based on approximately 14.4 million weighted average shares outstanding, compared to net income attributable to Sino-Global Shipping America, Ltd. of $0.5 million, or earning of $0.04 per diluted share based on approximately 12.0 million weighted average shares outstanding, for the prior year.

Balance Sheet Information

• As of June 30, 2019, the Company had approximately $3.1 million in cash, working capital of approximately $10.7 million and stockholders' equity of approximately $20.5 million; compared to approximately $7.1 million, $15.8 million, and $24.3 million, respectively, as of June 30, 2018.
• The Company's allowance for doubtful accounts was approximately $5.7 million as of June 30,2019 compared with allowance of doubtful accounts of approximately $1.7 million as of June 30, 2018. As the Company continues to maintain long-standing relationships with its customers, it will work with these parties to monitor their payments closely and does not believe that there are any significant collection issues with respect to trade accounts receivable.
• The Company holds no long-term debt.

About Sino-Global Shipping America, Ltd.

Founded in the United States in 2001, Sino-Global Shipping America, Ltd. is a company engaged originally in shipping, chartering, logistics and related business services. Headquartered in New York, Sino-Global has offices in mainland China, Australia, Canada and Hong Kong. The Company's current service offerings consist of shipping agency, inland transportation management, freight logistics and container trucking services. Additional information about Sino-Global can be found on the Company's corporate website at www.sino-global.com. The Company routinely posts important information on its website.

Forward Looking Statements

No statement made in this press release should be interpreted as an offer to sell or a solicitation of an offer to purchase any security. Such an offer can only be made in accordance with the Securities Act of 1933, as amended, and applicable state securities laws. Any statements contained in this release that relate to future plans, events or performance are forward-looking statements that involve risks and uncertainties as identified in Sino-Global's filings with the U.S. Securities and Exchange Commission. Actual results, events or performance may differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Sino-Global undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect the events or circumstances after the date hereof or to reflect the occurrence of unanticipated events unless required by applicable law or regulations.

Contact Information

The Equity Group Inc.
Adam Prior
Senior Vice-President
(212)-836-9606 / aprior@equityny.com 

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