SHENZHEN, China, Aug. 5 /PRNewswire-Asia/ -- Sino Assurance Inc. (OTC Bulletin Board: SNAS) today announced financial results for its fiscal 2010 second quarter ended June 30, 2010. For the second quarter, the Company posted a net income of $970,363, or $0.02 per diluted share. These results compare to a net income of $168,443, or $0.00 per diluted share, in the second quarter of 2009. Gross profit margin was 84%, up from 76% in the second quarter of 2009. Contributing to the increase in earnings was volume growth in sales both from the Company's commercial and personal services segment.
Sino Assurance Reports Strong Second Quarter Revenue and Earnings Growth
During the second quarter of 2010, the Company's total revenues totaled $2,415,032, up 160% versus $928,447 in the second quarter of 2009. Higher balances of performance guarantee services contributed the largest share of the growth in total revenue during the second quarter. Comparing to the second quarter in 2009, the revenues from performance guarantee service grows 268%. Gross profit margin for the quarter was 84% up from 76% in the second quarter of 2009. The SG&A expense of the second quarter of 2010 is $603,391 compared with $411,714 in the same period of 2009.
Income from operations reached $1,234,181 in the second quarter of 2010 compared with $180,487 in the same period in 2009. GAAP diluted earnings per share for the quarter was $0.02, compared with $0.00 for the second quarter in 2009. The solid growth in income and earnings per shares reflected strong results across all business segments, good execution on sustained growth in performance guarantees and cost initiatives.
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 in the fiscal year of 2010, the Company will produce between $0.08 to $0.09 earnings per share, with revenue projection of $14 to $15 million
Safe Harbor Statement
This press release may include certain statements that are not descriptions of historical facts, but are forward-looking statements. Forward-looking statements can be identified by the use of forward-looking terminology such as 'will,' 'believes,' 'expects' or similar expressions. Such information is based upon expectations of our management that were reasonable when made but may prove to be incorrect. All of such assumptions are inherently subject to uncertainties and contingencies beyond our control and based upon premises with respect to future business decisions, which are subject to change. We do not undertake to update the forward-looking statements contained in this press release. For a description of the risks and uncertainties that may cause actual results to differ from the forward-looking statements contained in this press release, see our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission ('SEC'), and our subsequent SEC filings. Copies of filings made with the SEC are available through the SEC's electronic data gathering analysis retrieval system at http://www.sec.gov .
SINO ASSURANCE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2010 AND DECEMBER 31, 2009
(Currency expressed in United States Dollars ("US$"),
except for number of shares)
December 31,
June 30, 2010 2009
(Unaudited) (Audited)
ASSETS
Current assets:
Cash and cash equivalents $ 1,041,275 $ 559,105
Restricted cash 8,623,828 5,817,191
Guarantee fee receivable 15,460 790
Prepayments and other receivable 266,933 197,984
Loans receivable 4,689,099 3,268,244
Amount due from a related party 13,953 --
Total current assets 14,650,548 9,843,314
Non-current assets:
Plant and equipment, net 348,660 275,232
TOTAL ASSETS $ 14,999,208 $ 10,118,546
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable, trade $ 15,361 $ 7,004
Customer collateral 6,251,253 3,729,734
Deferred revenue 554,821 364,636
Amount due to a related party 55,410 59,582
Income tax payable 172,137 29,113
Deferred tax liabilities 642,791 345,577
Accrued liabilities and other payable 745,243 576,768
Total current liabilities 8,437,016 5,112,414
Commitments and contingencies
Stockholders' equity:
Common stock, $0.001 par value; 200,000,000
shares authorized; 60,000,000 shares issued
and outstanding as of June 30, 2010 and
December 31, 2009 60,000 60,000
Additional paid-in capital 2,915,121 2,915,121
Accumulated other comprehensive income 198,966 172,065
Statutory reserve 158,314 158,314
Retained earnings 3,229,791 1,700,632
Total stockholders' equity 6,562,192 5,006,132
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 14,999,208 $ 10,118,546
SINO ASSURANCE INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2010 AND 2009
(Currency expressed in United States Dollars ("US$"))
(Unaudited)
Three months ended Six months ended
June 30, June 30,
2010 2009 2010 2009
REVENUES, NET
Guarantee fee income $2,376,826 $880,039 $4,248,505 $1,591,321
Interest income 38,206 48,408 60,797 64,542
Total revenues, net 2,415,032 928,447 4,309,302 1,655,863
COST OF REVENUE 421,903 260,901 767,804 450,430
GROSS PROFIT 1,993,129 667,546 3,541,498 1,205,433
Operating expenses:
Depreciation 26,015 20,520 55,539 41,102
Selling, general and
administrative 603,391 411,714 1,248,641 854,400
Reserve for guarantee
losses 129,542 54,825 237,196 109,597
Total operating expenses 758,948 487,059 1,541,376 1,005,099
INCOME FROM OPERATIONS 1,234,181 180,487 2,000,122 200,334
Other income (expense):
Other income -- 2,285 -- 2,288
Other expense -- (6,289) -- (13,504)
INCOME BEFORE INCOME
TAXES 1,234,181 176,483 2,000,122 189,118
Income tax expense (289,924) (8,331) (470,963) (9,784)
NET INCOME $ 944,257 $ 168,152 $1,529,159 $ 179,334
Other comprehensive
income:
- Foreign currency
translation gain 26,106 291 26,901 3,856
COMPREHENSIVE INCOME $ 970,363 $ 168,443 $1,556,060 $ 183,190
Net income per share -
basic and diluted $ 0.02 $ 0.00 $ 0.03 $ 0.00
Weighted average common
stock outstanding -
basic and diluted 60,000,000 60,000,000 60,000,000 60,000,000
SINO ASSURANCE INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2010 AND 2009
(Currency expressed in United States Dollars ("US$"))
(Unaudited)
Six months ended June 30,
2010 2009
Cash flows from operating activities:
Net income $ 1,529,159 $ 179,334
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:
Depreciation 55,539 41,102
Loss on disposal of plant and equipment 556 6,040
Reserve for guarantee losses 237,196 109,597
Unrealized interest income (48,365) --
Deferred tax expense 294,631 6,668
Changes in operating assets and
liabilities:
Guarantee fee receivable (14,611) (29,341)
Prepayments and other receivable (81,756) (85,682)
Accounts payable, trade 8,296 (23,929)
Deferred revenue 187,932 (197,254)
Income tax payable 142,356 4,214
Accrued liabilities and other payable (76,186) (97,218)
Net cash provided by (used in) operating
activities 2,234,747 (86,469)
Cash flows from investing activities:
Change in restricted cash, net of
customer collateral (275,293) 29,095
Payment on loans receivable (1,353,380) 293,020
Proceeds from disposal of plant and
equipment 44 674
Purchase of plant and equipment (128,135) (2,629)
Net cash (used in) provided by investing
activities (1,756,764) 320,160
Effect of exchange rate changes in cash and
cash equivalents 4,187 70
NET CHANGE IN CASH AND CASH
EQUIVALENTS 482,170 233,761
CASH AND CASH EQUIVALENT, BEGINNING OF
PERIOD 559,105 90,158
CASH AND CASH EQUIVALENT, END OF
PERIOD $ 1,041,275 $ 323,919
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes $ 32,281 $ 6,386
Cash paid for interest $ -- $ --
