China United Insurance Service Reports 2014 Second Quarter Financial Results

ZHENGZHOU, China and TAIPEI, Taiwan, Aug. 15, 2014 /PRNewswire/ -- China United Insurance Service, Inc. (CUIS) (OTCBB: CUII), a leading insurance intermediary company with operations in the People's Republic of China, Hong Kong and Taiwan, on August 11^th, 2014 reported financial results for the three-month and six-months ended June 30, 2014.

2014 Second Quarter Results

Revenues for the quarter ended June 30, 2014 increased 24.7% to $12.3 million, from $9.9 million in the same period last year. The increase was related, in part, to $1.2 million in persistency awards received from two principal insurance companies in which CUIS acts as an agent in Taiwan, as well as increased sales through the Company's strategic alliance with AIA International Limited Taiwan Branch ("AIATW"). Beginning in 2014, persistency award payments were instituted on a quarterly basis. There was no persistency awards received in the second quarter of 2013.

Revenues by geography were as follows:

		Three months ended June 30,
Geographical Area		2014		2013
PRC		$          674,160		$        627,855
Taiwan		11,658,982		9,262,806
		$     12,333,142		$     9,890,661

Cost of revenue for the second quarter of 2014 increased 33.0% to $8.3 million, compared with $6.3 million for the same period a year ago. The increase was primarily due to the grant of several kinds of bonuses and awards to sub-agents in Taiwan. In 2013, such bonuses and awards were granted in the quarter ended September 30, 2013.

Gross profit for the quarter was $4.0 million versus $3.6 million for the comparable quarter in 2013. Operating expenses for the 2014 second quarter were $3.3 million, compared with $2.8 million in the same quarter a year ago.

Income before income taxes for the second quarter of 2014 was $722,000, compared with $970,000 for the same quarter of 2013. Income tax expense for the quarter was $941,000, versus $240,000 in the comparable quarter last year. The increase was due to an income tax law in Taiwan which provides that a company is taxed at an additional 10% on any undistributed earnings to its shareholders. In June 2014, CUIS elected not to distribute its earnings accumulated as of December 31, 2013 in lieu of investing in future growth, which resulted in approximately $619,000 in additional income tax.

Net loss for the quarter ended June 30, 2014 was $219,000, compared with net income of $729,000 for the same quarter last year. Net loss attributable to CUIS' shareholders for the quarter was $316,000, or $0.01 per share, versus net income of $318,000, or $0.01 per diluted share, in the same period of 2013.

"Strategic alliances with AIATW, along with our sales and marketing efforts in Taiwan, propelled our top line growth in the quarter," said Yi Hsiao Mao, Chairman and Chief Executive Officer. "We are also optimistic about our opportunity to expand in China, and are pleased that that our former Chief Executive Officer, Chung-Mei Lo, will be now heading up our China operations.

"With a strong balance sheet, we are well capitalized to achieve our growth objectives, recruiting motivated insurance agents, improving service quality, investing in educating agents, and evaluating M&A opportunities," Mao added.

Six Month 2014 Financial Results

Revenues for the first six months of 2014 were $21.2 million, compared with $21.5 million a year ago. Persistency awards received for the first six months of 2014 were $1.8 million versus $2.4 million received in the first quarter of 2013.

Revenues by geography were as follows:

		Six months ended June 30,
Geographical Area		2014		2013
PRC		$     1,389,357		$    1,232,272
Taiwan		19,805,508		20,235,192
		$   21,194,865		$  21,467,464

Cost of the revenue for the first half of 2014 was $13.7 million, compared with $11.5 million for the same period a year ago.

Gross profit for first half of 2014 was $7.5 million versus $9.9 million for the comparable period in 2013. Operating expenses for the first six months of 2014 were $6.1 million, compared with $5.2 million in the same period last year. The increase was primarily due to larger general and administrative expenses, including relocation of the Company's headquarters, higher salary and benefits, and professional service fees.

Income before income taxes for the six months ended June 30, 2014 was $1.6 million, compared with $5.1 million in the same period 2013. Income tax expense for the first half of 2014 was $1.2 million, versus $788,000 in the comparable period last year.

Net income for the six months ended June 30, 2014 was $432,000, compared with $4.3 million in the same period last year. Net loss attributable to CUIS' shareholders for the six months was $121,000, or $0.004 per share, versus net income of $2.7 million, or $0.09 per diluted share, in the same period 2013.

About China United Insurance Service, Inc.
China United Insurance Service, Inc. was founded in 2010 with a vision to build one of the largest financial insurance service platforms in Asia and to become a multinational enterprise by leveraging the experience of its Taiwan operations and capitalizing on China's fast-growing insurance market. CUIS offers a broad range of products and services for individuals, families, and businesses, including: brokerage services for various types of life, health, personal accident, property and casualty insurance; insurance application assistance; claims advocacy; claims accounting preparation services; disaster and loss prevention; and risk assessment/risk management consulting services and the corresponding reinsurance brokerage services. In 2012, the company consolidated both Taiwan and China's operations. CUIS has assembled an experienced executive team, with more than 81 well-experienced managers in agency management to guide its more than 4,200 knowledgeable and professional agents. On April 23, 2014, CUIS invested Prime Financial Asia Ltd ("PFAL") which is a re-insurance company resided in Hong Kong. Upon the investment, CUIS would own 51% of PFAL's equity interest. The transaction was completed on April 30, 2014.

By offering innovative products, continuously improving the management system and selecting the best products to meet clients' needs, CUIS aspires to become one of Asia's leading financial insurance enterprises. For more information on CUIS, please visit: http://cuis.asia/

Forward Looking Statement
Statements in this press release may be "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward- looking statements can be identified by terminology such as "will," "expects," "believes," "anticipates," "intends," "estimates" and similar statements, and involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections of CUIS and the insurance industry.  Potential risks and uncertainties include, but are not limited to, those relating to CUIS' ability to attract and retain productive agents, its ability to maintain existing and develop new business relationships with insurance companies, its ability to execute its growth strategy, its ability to adapt to the evolving regulatory environment in the Chinese insurance industry, its ability to compete effectively against its competitors, and macroeconomic conditions in China and Taiwan and the potential impact on the sales of insurance products. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict.  Therefore, actual outcomes and results may, and probably will, differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including those described above and those risks discussed from time to time in the company's filings with the Securities and Exchange Commission.

(Financial statements follow)

CHINA UNITED INSURANCE SERVICE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME/(LOSS) FOR THE THREE-MONTHS AND SIX-MONTHS ENDED JUNE 30, 2014 AND 2013 (Unaudited)
	Three-Months Ended June 30,				Six-Months Ended June 30,
	2014		2013		2014		2013
Revenues	$  12,333,142		$   9,890,661		$  21,194,865		$  21,467,464
Cost of revenue	8,330,341		6,261,417		13,698,566		11,536,446
Gross profit	4,002,801		3,629,244		7,496,299		9,931,018
Operating expenses:
Selling	437,677		457,576		740,666		726,387
General and administrative	2,906,328		2,348,538		5,319,573		4,438,219
Total operating expenses	3,344,005		2,806,114		6,060,239		5,164,606
Other income:
Interest income	50,369		22,352		93,953		48,065
Other-net	12,957		124,409		85,901		266,516
Total other income	63,326		146,761		179,854		314,581
Income before income taxes	722,122		969,891		1,615,914		5,080,993
Income tax expense	940,755		240,444		1,184,355		788,259
Net income (loss)	(218,633)		729,447		431,559		4,292,734
Net income attributable to the noncontrolling interests	(157,602)		(380,109)		(552,396)		(1,597,208)
Net income (loss) attributable to parent's shareholders	(376,235)		349,338		(120,837)		2,695,526
Other comprehensive items
Foreign currency translation gain (loss)	60,081		(31,812)		(36,929)		(54,718)
Other comprehensive income (loss)	-		384		-		(175)
Attributable to parent's shareholders	60,081		(31,428)		(36,929)		(54,893)
Other comprehensive items attributable to    noncontrolling interest	(113,873)		(21,512)		(33,471)		1,432
Comprehensive income (loss) attributable to parent's shareholders	$     (316,154)		$      317,910		$     (157,766)		$    2,640,633
Comprehensive income (loss) attributable to noncontrolling interest	$     (271,475)		$    (401,621)		$     (585,867)		$  (1,595,776)
Weighted average shares outstanding:
Basic and diluted	29,100,503		29,100,503		29,100,503		29,100,503
Income (loss) per share:
Basic and diluted	$         (0.013)		$          0.012		$         (0.004)		$           0.093

 

CHINA UNITED INSURANCE SERVICE, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2014 AND DECEMBER 31, 2013
		June 30, 2014		December 31, 2013
		(Unaudited)
ASSETS
Current assets
Cash and cash equivalents		$   21,463,810		$   18,070,093
Marketable securities		2,580,407		2,563,685
Accounts receivable, net		4,714,723		7,282,183
Other current assets		718,486		2,329,677
Total current assets		29,477,426		30,245,638
Property, plant and equipment, net		1,138,052		1,041,189
Intangible assets		257,516		308,267
Goodwill		31,651		-
Long –term investment		102,784		102,295
Other assets		603,415		587,303
Total Assets		$   31,610,844		$   32,284,692
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Taxes payable		$      931,692		$      498,441
Unearned revenue		1,593,634		1,586,038
Other current liabilities		7,641,584		8,632,305
Due to related parties		164,065		154,798
Total current liabilities		10,330,975		10,871,582
Long-term liabilities		6,374,534		7,095,062
TOTAL LIABILITIES		16,705,509		17,966,644
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock, par value $0.00001, 10,000,000 authorized, 1,000,000            issued and outstanding		10		10
Common stock, par value $0.00001, 100,000,000 authorized, 29,100,503           issued and outstanding		291		291
Additional paid-in capital		4,674,593		4,674,593
Reserves		247,541		415,041
Accumulated other comprehensive loss		(122,817)		(75,888)
Retained earnings		3,645,046		3,598,383
Stockholder's equity attribute to parent's shareholder		8,454,664		8,612,430
Noncontrolling interest		6,450,671		5,705,618
Total stockholders' equity		14,905,335		14,318,048
Total Liabilities and Stockholders' Equity		$   31,610,844		$   32,284,692

 

SOURCE China United Insurance Service, Inc.

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