China United Insurance Service Reports 2015 Second-Quarter Financial Results (PR Newswire)

JIANGSU, China and TAIPEI, Taiwan, Aug. 12, 2015 /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, reported financial results for the three-month and six-months ended June 30, 2015.

2015 Second Quarter Results

The geographical distribution of CUIS’ revenues for the three months ended June 30, 2015 and 2014 were as follows:

Three months ended June 30

Geographical Area

2015

2014

PRC

$        1,633,705

$           674,160

Taiwan

12,623,812

11,658,982

$      14,257,517

$      12,333,142

Revenues for the quarter ended June 30, 2015 increased 16% to $14.26 million from $12.33 million in the same period last year. The increase, in part, reflected higher sales in the newly designed medical care and more flexible life insurance product offerings by the company’s top underwriting insurance companies. Additionally, the company’ sales and customer base in China have improved significantly, after its headquarters relocated to Nanjing in 2014 and new branches were opened.

Cost of revenue for the second quarter of 2015, which mainly consists of commission payments to sales agents, rose 19% to $9.94 million from $8.33 million in the same period a year ago. The increase was largely due to the higher first-year commission (FYC) revenue for new product sales, as compared to the comparable period in 2014. With higher revenue, bonuses and awards to subagents also increased as compared to the 2014 second quarter.

Gross profit for the 2015 second quarter increased 8% to $4.32 million versus $4.00 million for the comparable quarter in 2014.

Operating expense for the 2015 second quarter was $3.17 million, compared with $3.34 million in the same quarter a year ago. The decline was primarily related to the decrease of advertisement expense in Taiwan’s operation.

Income before income taxes for the second quarter of 2015 was $1.44 million, compared with $722,000 for the same quarter of 2014. Income tax expense for the quarter was $490,000, versus $941,000 in the comparable quarter last year. The decrease was mainly due to the company paid an additional income tax of $619,000 or 10% on any undistributed earnings income tax from prior period for the second quarter of 2014.

Net income for the quarter ended June 30, 2015 was $954,000, compared with net loss of $219,000 in the same quarter last year. Net income attributable to CUIS’ shareholders for the quarter was $570,000, or $0.02 per diluted share, versus net loss of $376,000, or $0.01 per share, in the 2014 comparable quarter.

“Our strategy of building out additional branches and investing in our brand continue to gain traction. Our revenues in China increased 142% in the second quarter, compared to the previous year period, and more than doubled for the first six months of 2015,” said Yi Hsiao Mao, Chairman and Chief Executive Officer. “By continuing to focus on providing unparalleled customer service and offering a broad range of insurance products tailored to customer needs, we are confident in achieving further market share in China’s fast growing insurance market.”

Six Month 2015 Financial Results

The geographical distribution of CUIS’ revenues for the six months ended June 30, 2015 and 2014 were as follows:

Six months ended June 30

Geographical Area

2015

2014

PRC

$        2,879,280

$        1,389,357

Taiwan

21,234,352

19,805,508

$       24,113,632

$      21,194,865

Revenues for the first six months of 2015 increased 14% to $24.11 million from $21.19 million for the six months ended June 30, 2014.

Cost of the revenue for the first half of 2015 was $16.38 million, compared with $13.70 million for the same period a year ago.

Gross profit for first half of 2015 was $7.73 million versus $7.50 million for the comparable period in 2014.

Operating expenses for the first six months of 2015 were $6.59 million, compared with $6.06 million in the same period last year. The increase was primarily due to larger general and administrative expenses, caused by a higher business tax rate directly related to sales in Taiwan subsidiaries, which increased to 5% from 2% since July 2014. The rate of the subject business tax has returned to 2% from March 2015 due to the tax code reclassification for financial and insurance industries.

Income before income taxes for the six months ended June 30, 2015 was $1.48 million, compared with $1.62 million in the same period 2014. Income tax expense for the first half of 2015 was $619,000, versus $1.18 million in the comparable period last year.

Net income for the first six months of 2015 was $862,000, compared with $432,000 in the same period last year. Net income attributable to CUIS’ shareholders for the six months ended June 30, 2015 was $289,000, or $0.01 per diluted share, versus net loss of $121,000, or $0.004 per share, in the same period 2014.

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.

CUIS currently operates and offers innovative insurance products in China, Hong Kong and Taiwan through its subsidiary companies. The company plans to continue with its expansion into other territories and aspires to become one of the 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- AND SIX-MONTHS ENDED JUNE 30, 2015 AND 2014

(Unaudited)

Three-Months Ended

June 30,

Six-Months Ended

June 30,

2015

2014

2015

2014

Revenues

$  14,257,517

$  12,333,142

$  24,113,632

$  21,194,865

Cost of revenue

9,935,340

8,330,341

16,381,751

13,698,566

Gross profit

4,322,177

4,002,801

7,731,881

7,496,299

Operating expenses:

       Selling

245,301

437,677

614,560

740,666

       General and administrative

2,921,799

2,906,328

5,975,443

5,319,573

Total operating expenses

3,167,100

3,344,005

6,590,003

6,060,239

Income from operations

1,155,077

658,796

1,141,878

1,436,060

Other income:

       Interest income

59,198

50,369

96,913

93,953

       Other-net

229,418

12,957

242,433

85,901

Total other income

288,616

63,326

339,346

179,854

Income before income taxes

1,443,693

722,122

1,481,224

1,615,914

Income tax expense

489,530

940,755

619,159

1,184,355

Net income (loss)

954,163

(218,633)

862,065

431,559

Net income attributable to the non-controlling interests

384,620

157,602

573,188

552,396

Net income (loss) attributable to parent’s shareholders

569,543

(376,235)

288,877

(120,837)

Other comprehensive items

   Foreign currency translation gain (loss)

59,634

60,081

154,310

(36,929)

   Other comprehensive income (loss)

   Attributable to parent’s shareholders

59,634

60,081

154,310

(36,929)

   Other comprehensive items attributable to

  non-controlling interest

59,336

(113,873)

168,066

(33,471)

Comprehensive income (loss) attributable to parent’s shareholders

$    629,177

$     (316,154)

$       443,187

$   (157,766)

Comprehensive income (loss) attributable to

non-controlling interest

$    443,956

$     (271,475)

$       741,254

$   (585,867)

Weighted average shares outstanding:

29,452,669

29,100,503

29,277,559

29,100,503

    Basic

30,452,669

29,100,503

30,277,559

29,100,503

    Diluted

Weighted average shares outstanding:

        Basic

$      0.019

$         (0.013)

$           0.010

$     (0.004)

         Diluted

$      0.019

$         (0.013)

$           0.010

$     (0.004)

CHINA UNITED INSURANCE SERVICE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2015 (Unaudited) AND DECEMBER 31, 2014

June 30,

2015

December 31,

2014

(Unaudited)

ASSETS

Current assets

       Cash and cash equivalents

$   21,407,967

$   19,571,799

       Marketable securities

2,514,554

2,437,006

       Accounts receivable, net

4,674,710

7,706,273

       Other current assets

1,245,933

574,467

Total current assets

29,943,164

30,289,545

Property, plant and equipment, net

1,055,568

1,061,762

Intangible assets

249,297

270,956

Goodwill

2,071,491

31,651

Long –term investment

1,591,244

95,328

Other assets

800,073

587,522

Total Assets

$   35,610,837

$   32,336,764

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities

       Taxes payable

$      990,089

$      919,907

       Other current liabilities

8,140,967

9,534,371

       Deferred tax liability

11,803

37,662

       Dividend payable

161,213

   Due to related parties

288,089

531,447

Total current liabilities

9,592,161

11,023,387

       Long-term liabilities

7,699,791

7,500,645

TOTAL LIABILITIES

17,291,952

18,524,032

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, 29,452,669 and 29,100,503 issued and outstanding

295

291

      Additional paid-in capital

8,157,516

4,674,593

      Statutory Reserves

1,800,129

1,388,014

      Accumulated other comprehensive loss

(196,571)

(350,881)

       Retained earnings

1,594,037

1,717,278

      Stockholder’s equity attribute to parent’s shareholder

11,355,416

7,429,305

       Non-controlling interest

6,963,469

6,383,427

Total stockholders’ equity

18,318,885

13,812,732

Total Liabilities and Stockholders’ Equity

$   35,610,837

$   32,336,764

SOURCE China United Insurance Service, Inc.