- Positive Performance Reflects Successful Integration of Acquisition -
ZHENGZHOU, China and TAIPEI, June 3, 2013 /PRNewswire/ -- China United Insurance Service, Inc. ("CUIS") (OTCBB: CUII), a leading insurance intermediary company with operations in mainland China and Taiwan, today announced sharply improved pro-forma financial results for its fiscal nine-months ended March 31, 2013.
Financial Highlights for Year-To-Date Fiscal 2013 (Pro Forma):
In August 2012, CUIS acquired Action Holding Financial Limited ("AHFL"), the holding company of Taiwan-based Law Insurance Broker Company. AHFL, which owns 69.95% of Taiwan-based Law Insurance Broker Company, is a dominant brokerage and insurance agency service business with 21 branches, three training centers and nearly 2,000 brokers in Taiwan.
Pro-forma results were derived from the combined income statements for the nine months ended March 31, 2013 and 2012 of AHFL and CUIS. Pro-forma consolidated statements of operations and other comprehensive income results are attached to this release.
For the fiscal third quarter from January 1 to March 31, 2013, the company reported revenues of $11.9 million; gross profit of $9.9 million; operating income of $1.3 million; and net income attributable to CUIS's shareholders was $668,000, or $0.02 per diluted share. Comparative results for the prior year period are not meaningful because of the acquisition of AHFL.
"Our positive results reflect the successful integration of our newly acquired Taiwan business into China United Insurance Service, representing an important milestone that is paving the way for continued growth," said Chung-Mei Lo, Chief Executive Officer. "This achievement is a direct result of the superior team work of our employees.
"We are focused on becoming one of the top financial insurance enterprises in Asia, and we are well on our way to accomplishing that goal," added Mr. Lo. "Given our current visibility, we expect to continue our strong growth trajectory, with revenue growth in the range of $17 to $18 million, or roughly 50 percent, in the fiscal fourth quarter."
CUIS' strategic growth objectives include continuing its M&A activities, leveraging Taiwan's operational strength and enhancing efficiencies in mainland China, along with recruiting motivated insurance agents, improving service quality, seeking good insurance products in the market, and investing in educating its agents to help customers make well-informed decisions and retentions.
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 mainland 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 mainland 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. 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 mainland 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 NINE-MONTHS ENDED MARCH 31, 2013 (Unaudited) |
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| Three Months Ended | Nine Months Ended | |||||||
| March 31, 2013 | March 31, 2013 | |||||||
| Revenues | $ | 11,945,506 | $ | 27,951,585 | ||||
| Cost of revenue | 7,957,959 | 18,055,254 | ||||||
| Gross profit | 3,987,547 | 9,896,331 | ||||||
| Operating expenses: | ||||||||
| General and administrative | 2,686,193 | 7,212,718 | ||||||
| Income (loss) from operations | 1,301,354 | 2,683,613 | ||||||
| Other income: | ||||||||
| Interest income | 25,186 | 61,330 | ||||||
| Bargain gain on purchase of subsidiaries | - | 5,280,042 | ||||||
| Other - net | 142,093 | 307,655 | ||||||
| Total other income | 167,279 | 5,649,027 | ||||||
| Income (loss) before income taxes | 1,468,633 | 8,332,640 | ||||||
| Income tax expense | 302,594 | 458,064 | ||||||
| Net income (loss) | 1,166,039 | 7,874,576 | ||||||
| Net income attributable to non-controlling interest | (474,234) | (1,006,447) | ||||||
| Net income (loss) attributable to parent's shareholders | 691,805 | 6,868,129 | ||||||
| Other comprehensive items | ||||||||
| Foreign currency translation gain (loss) attributable to parent's shareholders |
(24,258) | 45,007 | ||||||
| Foreign currency translation gain (loss) attributable to non-controlling interest |
40,797 | 19,882 | ||||||
| Comprehensive income (loss) attributable to parent's shareholders | $ | 667,547 | $ | 6,913,136 | ||||
| Comprehensive income (loss) attributable to non-controlling interest | $ | (433,437) | $ | (986,565) | ||||
| Weighted average shares outstanding: | ||||||||
| Basic and diluted | 29,100,503 | 27,093,204 | ||||||
| Income (loss) per share: | ||||||||
| Basic and diluted | $ | 0.02 | $ | 0.26 | ||||
| CHINA UNITED INSURANCE SERVICE, INC. AND SUBSIDIARIES | |||||
| CONSOLIDATED BALANCE SHEETS | |||||
| AS OF MARCH 31, 2013 AND JUNE 30, 2012 | |||||
| (Unaudited) | |||||
| March 31, 2013 | June 30, 2012 | ||||
| ASSETS | |||||
| Current assets | |||||
| Cash and equivalents | $ | 10,469,817 | $ | 1,258,211 | |
| Marketable securities | 3,361,534 | - | |||
| Accounts receivable, net | 4,388,504 | 184,767 | |||
| Other current assets | 461,825 | 48,640 | |||
| Total current assets | 18,681,680 | 1,491,618 | |||
| Property, plant and equipment, net | 1,192,569 | 114,945 | |||
| Goodwill | 119,945 | 118,855 | |||
| Other assets | 535,835 | 113,217 | |||
| TOTAL ASSETS | $ | 20,530,029 | $ | 1,838,635 | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
| Current liabilities | |||||
| Taxes payable | $ | 1,101,099 | $ | 405,723 | |
| Other current liabilities | 4,194,242 | 286,909 | |||
| Due to related parties | 420,587 | 445,332 | |||
| TOTAL CURRENT LIABILITIES | 5,715,928 | 1,137,964 | |||
| COMMITMENTS AND CONTINGENCIES | |||||
| STOCKHOLDERS' EQUITY | |||||
| Preferred stock, par value $0.00001, 10,000,000 authorized, 1,000,000 | |||||
| issued and outstanding as of March 31, 2013, none issued and | |||||
| outstanding as of June 30, 2012 | 10 | - | |||
| Common stock, par value $0.00001, 100,000,000 authorized, 29,100,503 | |||||
| issued and outstanding as of March 31, 2013, 20,100,503 issued and | |||||
| outstanding as of June 30, 2012 | 291 | 201 | |||
| Additional paid-in capital | 4,674,593 | 2,674,692 | |||
| Accumulated other comprehensive loss | (10,243) | (55,250) | |||
| Retained earnings (accumulated deficit) | 4,951,335 | (1,918,972) | |||
| Stockholders' equity attributable to parent's shareholders | 9,615,986 | 700,671 | |||
| Non-controlling interest | 5,198,115 | - | |||
| TOTAL STOCKHOLDERS' EQUITY | 14,814,101 | 700,671 | |||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 20,530,029 | $ | 1,838,635 | |
| CHINA UNITED INSURANCE SERVICE, INC. AND SUBSIDIARIES PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME FOR THE NINE-MONTHS ENDED MARCH 31, 2013 (Unaudited) |
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| The basis of pro forma consolidated statements of income of the Company is as if the Acquisition Agreement were signed on July 1, 2010 and 2011, and AHFL's acquisition of Law Enterprise happened on the same date. The pro forma consolidated statements of income were derived from the statement of income for the nine months ended March 31, 2013 and 2012 of AHFL and CUIS. The Company recorded the excess of purchase price over the fair value of assets and liabilities acquired as bargain gain on purchase in the pro forma consolidated statements of income. | |||||||||||||||
| Nine Months Ended March 31, 2013 | |||||||||||||||
| CUIS | AHFL | Sub Total | Pro Forma Adjustment |
Pro Forma | |||||||||||
| Revenues | $ | 2,147,576 | $ | 25,804,009 | $ | 27,951,585 | $ | 6,272,921 | $ | 34,224,506 | |||||
| Cost of revenue | 1,213,613 | 16,841,641 | 18,055,254 | 4,220,507 | 22,275,761 | ||||||||||
| Gross profit | 933,963 | 8,962,368 | 9,896,331 | 2,052,414 | 11,948,745 | ||||||||||
| Operating expenses: | |||||||||||||||
| General and administrative | 1,255,009 | 5,757,709 | 7,012,718 | 1,105,880 | 8,118,598 | ||||||||||
| Income (loss) from operations | (321,046) | 3,204,659 | 2,883,613 | 946,534 | 3,830,147 | ||||||||||
| Other income (expenses) | |||||||||||||||
| Interest income | 2,339 | 58,991 | 61,330 | (505) | 60,825 | ||||||||||
| Gain on acquisition of subsidiary | - | - | - | 5,280,042 | 5,280,042 | ||||||||||
| Other - net | (578) | 308,233 | 307,655 | 79,728 | 387,383 | ||||||||||
| Total other income | 1,761 | 367,224 | 368,985 | 5,359,265 | 5,728,250 | ||||||||||
| Income before income taxes | (319,285) | 3,571,883 | 3,252,598 | 6,305,799 | 9,558,397 | ||||||||||
| Income tax expense (benefit) | (157,875) | 615,938 | 458,063 | 175,672 | 633,735 | ||||||||||
| Net income | (161,410) | 2,955,945 | 2,794,535 | 6,130,127 | 8,924,662 | ||||||||||
| Net income attributable to the non-controlling interests | - | 1,006,447 | 1,006,447 | 283,185 | 1,289,632 | ||||||||||
| Net income attributable to CUIS's shareholders | (161,410) | 1,949,498 | 1,788,088 | 5,846,942 | 7,635,030 | ||||||||||
| Other comprehensive income (loss) | 13,972 | - | 13,972 | - | 13,972 | ||||||||||
| Comprehensive income (loss) | $ | (147,438) | $ | 1,949,498 | $ | 1,802,060 | $ | 5,846,942 | $ | 7,649,002 | |||||
| Weighted average shares outstanding: | |||||||||||||||
| Basic and diluted | 27,093,204 | ||||||||||||||
| Earnings per share: | |||||||||||||||
| Basic and diluted | $ | 0.29 | |||||||||||||
| CHINA UNITED INSURANCE SERVICE, INC. AND SUBSIDIARIES PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME FOR THE NINE-MONTHS ENDED MARCH 31, 2012 (Unaudited) |
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| The basis of pro forma consolidated statements of income of the Company is as if the Acquisition Agreement were signed on July 1, 2010 and 2011, and AHFL's acquisition of Law Enterprise happened on the same date. The pro forma consolidated statements of income were derived from the statement of income for the nine months ended March 31, 2013 and 2012 of AHFL and CUIS. The Company recorded the excess of purchase price over the fair value of assets and liabilities acquired as bargain gain on purchase in the pro forma consolidated statements of income. | ||||||||||||
| Nine Months Ended March 31, 2012 | ||||||||||||
| CUIS | AHFL | Pro Forma | ||||||||||
| Revenues | $ | 2,396,066 | $ | 21,951,392 | $ | 24,347,458 | ||||||
| Cost of revenue | 1,692,384 | 15,835,178 | 17,527,562 | |||||||||
| Gross profit | 703,682 | 6,116,214 | 6,819,896 | |||||||||
| Operating expenses: | ||||||||||||
| General and administrative | 904,827 | 4,295,302 | 5,200,129 | |||||||||
| Income (loss) from operations | (201,145) | 1,820,912 | 1,619,767 | |||||||||
| Other income | ||||||||||||
| Interest income | 3,570 | 401,851 | 405,421 | |||||||||
| Other - net | 614 | 1,218,216 | 1,218,830 | |||||||||
| Total other income | 4,184 | 1,620,067 | 1,624,251 | |||||||||
| Income (loss) before income taxes | (196,961) | 3,440,979 | 3,244,018 | |||||||||
| Income tax expense | 261,334 | 485,519 | 746,853 | |||||||||
| Net income (loss) | (458,295) | 2,955,460 | 2,497,165 | |||||||||
| Net income (loss) attributable to CUIS's shareholders | (458,295) | 2,955,460 | 2,497,165 | |||||||||
| Other comprehensive income | 13,702 | - | 13,702 | |||||||||
| Comprehensive income (loss) | $ | (444,593) | $ | 2,955,460 | $ | 2,510,867 | ||||||
| Weighted average shares outstanding: | ||||||||||||
| Basic and diluted | 27,093,204 | |||||||||||
| Earnings per share: | ||||||||||||
| Basic and diluted | $ | 0.09 | ||||||||||
