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.
| BEIJING, 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
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.
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
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Company Codes: NASDAQ-SMALL:TYHT | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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