SHENZHEN, China, Nov. 8, 2010 /PRNewswire-Asia/ -- Sino Assurance Inc. (OTC Bulletin Board: SNAS) today reported solid third quarter 2010 financial results highlighted by strong earnings growth, an increase of 75% in revenues and 162.7% in net income attributable with 83% gross profit margin.
Sino assurance Reports Strong Third Quarter Revenue and Earnings Growth
Third quarter of 2010, company recorded a revenue increase of 75% to $3,034,904 versus the same quarter last year. The net income attributable to the Company this quarter increased 162.7% to $1,362,141 compared to the third quarter of 2009 which was $518,601, and diluted earnings per share totaled $0.02 versus $0.01 last year. Gross profit margin was 83%, increased from 76% in the third quarter of 2009. In the third quarter of 2010, the Company's total revenue was $3,034,904, increased 75% as compared with $1,734,132 in the third quarter of 2009. The results were driven by significant year-over-year growth of our customer base in the tender and surety guarantee business and market share in China. Gross profit margin expand 695 basis points to 83% in this quarter compared with 76% in the third quarter of last year which was led by the growing demand for credit services, success of bank facility arrangement and effective cost control measures. The selling, general and administrative expense of the third quarter of 2010 is $706,813 compared with $576,298 in the same period of 2009 due to the increase in depreciation, staff costs, provision for guarantee losses, rent and rate, audit fee and other professional fees.
Income from operations reached $1,613,223 in the third quarter of 2010 compared with $660,920 in the same period in 2009 driven by growth in net revenue and lower level of insurance claims. GAAP diluted earnings per share for the third quarter of 2010 was $0.02, compared with $0.01 for the third quarter in 2009 which reflected good execution on margin improvement and company-wide cost initiatives.
As at September 30, 2010, Sino Assurance's cash balance was $1,565,431, up from $1,041,275 as at June 30, 2010.
Financial Outlook
Management believes that the opportunities for sustained growth in revenue and earnings will be largely associated with the customer demand for the financial services provided by the Company, which primarily take the form of credit guaranty. Other elements expected to drive the growth in revenue include the potential impact of the regulatory governance of the credit guaranty market and development of the company's new personal credit products and services.
Management believes that the fiscal year of 2010, company will produce between $0.08 to $0.09 earnings per share, with revenue projection of $11 to $13 million.
Safe Harbor Statement
This press release may include certain statements that are not descriptions of historical facts, but are forward-looking statements. Forward-looking statements can be identified by the use of forward-looking terminology such as 'will,' 'believes,' 'expects' or similar expressions. Such information is based upon expectations of our management that were reasonable when made but may prove to be incorrect. All of such assumptions are inherently subject to uncertainties and contingencies beyond our control and based upon premises with respect to future business decisions, which are subject to change. We do not undertake to update the forward-looking statements contained in this press release. For a description of the risks and uncertainties that may cause actual results to differ from the forward-looking statements contained in this press release, see our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission ('SEC'), and our subsequent SEC filings. Copies of filings made with the SEC are available through the SEC's electronic data gathering analysis retrieval system at http://www.sec.gov.
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SINO ASSURANCE INC. CONDENSED CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2010 AND DECEMBER 31, 2009 (Currency expressed in United States Dollars ("US$"), except for number of shares) |
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September 30, 2010 |
December 31, 2009 |
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(Unaudited) |
(Audited) |
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ASSETS |
||||||
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Current assets: |
||||||
|
Cash and cash equivalents |
$ |
1,565,431 |
$ |
559,105 |
||
|
Restricted cash |
10,596,419 |
5,817,191 |
||||
|
Guarantee fee receivable |
27,331 |
790 |
||||
|
Prepayments and other receivable |
438,996 |
203,196 |
||||
|
Loans receivable |
5,355,250 |
3,263,032 |
||||
Total current assets |
17,983,427 |
9,843,314 |
||||
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Non-current assets: |
||||||
|
Plant and equipment, net |
344,480 |
275,232 |
||||
TOTAL ASSETS |
$ |
18,327,907 |
$ |
10,118,546 |
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LIABILITIES AND STOCKHOLDER'S EQUITY |
||||||
|
Current liabilities: |
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|
Accounts payable, trade |
$ |
22,603 |
$ |
7,004 |
||
|
Customer collateral |
7,499,549 |
3,729,734 |
||||
|
Deferred revenue |
637,631 |
364,636 |
||||
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Amount due to a related party |
75,749 |
59,582 |
||||
|
Income tax payable |
293,296 |
29,113 |
||||
|
Deferred tax liabilities |
917,430 |
345,577 |
||||
|
Accrued liabilities and other payable |
957,316 |
576,768 |
||||
Total current liabilities |
10,403,574 |
5,112,414 |
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Commitments and contingencies |
||||||
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Stockholders' equity: |
||||||
|
Common stock, $0.001 par value; 200,000,000 shares authorized; |
60,000 |
60,000 |
||||
|
Additional paid-in capital |
2,915,121 |
2,915,121 |
||||
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Accumulated other comprehensive income |
324,868 |
172,065 |
||||
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Statutory reserve |
158,314 |
158,314 |
||||
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Retained earnings |
4,466,030 |
1,700,632 |
||||
Total stockholders' equity |
7,924,333 |
5,006,132 |
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
18,327,907 |
$ |
10,118,546 |
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SINO ASSURANCE INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009 (Currency expressed in United States Dollars ("US$"), except for number of shares) (Unaudited) |
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Three months ended September 30, |
Nine months ended September 30, |
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|
2010 |
2009 |
2010 |
2009 |
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REVENUES, NET |
|||||||||||||
|
Guarantee fee income |
$ |
2,981,863 |
$ |
1,708,504 |
$ |
7,230,368 |
$ |
3,299,825 |
|||||
|
Interest income |
53,041 |
25,628 |
113,838 |
90,170 |
|||||||||
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Total revenues, net |
3,034,904 |
1,734,132 |
7,344,206 |
3,389,995 |
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COST OF REVENUE |
524,677 |
420,271 |
1,292,481 |
870,701 |
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GROSS PROFIT |
2,510,227 |
1,313,861 |
6,051,725 |
2,519,294 |
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Operating expenses: |
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Depreciation |
26,504 |
20,284 |
82,043 |
61,386 |
|||||||||
|
Selling, general and administrative |
706,813 |
576,298 |
1,955,454 |
1,430,698 |
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Provision for guarantee losses |
163,687 |
56,359 |
400,883 |
165,956 |
|||||||||
|
|
897,004 |
652,941 |
2,438,380 |
1,658,040 |
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INCOME FROM OPERATIONS |
1,613,223 |
660,920 |
3,613,345 |
861,254 |
|||||||||
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Other income (expense): |
|||||||||||||
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Other income |
- |
- |
- |
2,288 |
|||||||||
|
Other expense |
- |
(1,589) |
- |
(15,093) |
|||||||||
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INCOME BEFORE INCOME TAXES |
1,613,223 |
659,331 |
3,613,345 |
848,449 |
|||||||||
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Income tax expense |
(376,984) |
(144,262) |
(847,947) |
(154,047) |
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NET INCOME |
$ |
1,236,239 |
$ |
515,069 |
$ |
2,765,398 |
$ |
694,402 |
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Other comprehensive income: |
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- Foreign currency translation gain |
125,902 |
3,532 |
152,803 |
7,388 |
|||||||||
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COMPREHENSIVE INCOME |
$ |
1,362,141 |
$ |
518,601 |
$ |
2,918,201 |
$ |
701,790 |
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Net income per share – basic and diluted |
$ |
0.02 |
$ |
0.01 |
$ |
0.05 |
$ |
0.01 |
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Weighted average common stock outstanding – basic and diluted |
60,000,000 |
60,000,000 |
60,000,000 |
60,000,000 |
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SINO ASSURANCE INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009 (Currency expressed in United States Dollars ("US$")) (Unaudited) |
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Nine months ended September 30, |
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2010 |
2009 |
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Cash flows from operating activities: |
|||||||
|
Net income |
$ |
2,765,395 |
$ |
694,402 |
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Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation |
82,043 |
61,386 |
|||||
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Loss on disposal of plant and equipment |
1,183 |
7,490 |
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Provision for guarantee losses |
400,883 |
165,956 |
|||||
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Deferred tax expense |
554,876 |
6,669 |
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Changes in operating assets and liabilities: |
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|
Guarantee fee receivable |
(26,064) |
(301,037) |
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Prepayments and other receivable |
(232,788) |
(36,472) |
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Accounts payable, trade |
15,185 |
(52,304) |
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|
Advances from customers |
- |
23,035 |
|||||
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Deferred revenue |
260,816 |
(137,342) |
|||||
|
Income tax payable |
259,004 |
146,747 |
|||||
|
Accrued liabilities and other payable |
(38,711) |
(54,833) |
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|
Net cash provided by operating activities |
4,041,822 |
523,697 |
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Cash flows from investing activities: |
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Change in restricted cash, net of customer collateral |
(949,296) |
(421,022) |
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|
(Payment on) repayment from loans receivable |
(1,984,092) |
847,233 |
|||||
|
Proceeds from disposal of plant and equipment |
290 |
835 |
|||||
|
Purchase of plant and equipment |
(145,947) |
(2,929) |
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|
Net cash (used in) provided by investing activities |
(3,079,045) |
424,117 |
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Cash flows from financing activities: |
|||||||
|
Advance from a related party |
14,930 |
- |
|||||
|
Net cash provided by financing activities |
14,930 |
- |
|||||
|
Effect of exchange rate changes in cash and cash equivalents |
28,619 |
898 |
|||||
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NET CHANGE IN CASH AND CASH EQUIVALENTS |
1,006,326 |
948,712 |
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CASH AND CASH EQUIVALENT, BEGINNING OF PERIOD |
559,105 |
90,158 |
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CASH AND CASH EQUIVALENT, END OF PERIOD |
$ |
1,565,431 |
$ |
1,038,870 |
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SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |
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|
Cash paid for income taxes |
$ |
32,368 |
$ |
3,116 |
|||
|
Cash paid for interest |
$ |
- |
$ |
- |
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