Sino Assurance, Inc. Reports Fourth-Quarter and Full-Year 2010 Earnings

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Mar 18, 2011, 09:48 ET

SHENZHEN, China, March 18, 2011 /PRNewswire-Asia-FirstCall/ -- Sino Assurance Inc. (OTC Bulletin Board: SNAS) today announced its financial results for the fourth quarter and fiscal year ended December 31, 2010.

Net income attributable to the Company for the full-year ended December 31, 2010 was $4,954,434 ($0.08 per share) compared to $2,158,915 ($0.04 per share) for the full-year of 2009. Net income attributable to the Company for the fourth quarter of 2010 was $2,189,035 compared with $1,464,513 for the fourth quarter of 2009.

Fourth-Quarter 2010 Financial Results

For Q4, our revenue was $4.81 million, compared to $2.81 million in the same period of 2009, an increase of $2.00 million, or 71.04%. Higher balances of cash advance guarantee services contributed the largest share of the growth in total revenue during the fourth quarter. Gross profit margin for the fourth quarter was 87% up from 80% in the same period of 2009. The increase reflected the growing demand for credit services, the success of bank facility arrangement and our effective cost control measures

Income from operations reached $2.90 million in the fourth quarter of 2010 compared to $1.74 million in the same period of 2009, which was mainly due to the growth in net revenue and lower levels of insurance claims. GAAP diluted EPS for the fourth quarter was $0.04, compared to $0.02 for the fourth quarter of 2009.

Full-Year 2010 Financial Results

For the year ended December 31, 2010, our revenue was $12.15 million up 96.0% from $6.20 million for the year ended December 2009. Net income was $4.95 million ($0.08 per share), compared to $2.16 million ($0.02 per share) for 2009. Gross profit was $10.23 million, up 114% from $4.79 million in 2009. Gross margin was 85%, up 7% from 78% last year. Operating income increased to $6.51 million, operating margin was 54%, as a result of higher gross margin.

Working capital increased to $9.90 million, compared to $7.58 million at the end of the third quarter 2010. Total debt increase to $13.35 million, compared to $10.40 million at the end of the third quarter of 2010.

Financial Outlook

The company 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.

For fiscal year 2011, the company updates its guidance with projected revenue in the range of $23 million to $24 million, and the EPS in the range of $0.16 to $0.17.

SINO ASSURANCE INC. CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2010 AND 2009 (Currency expressed in United States Dollars ("US$"), except for number of shares)
	As of December 31,
	2010 (unaudited)		2009
ASSETS
Current assets:
Cash and cash equivalents	$	7,074,893	$	559,105
Restricted cash		13,050,117		5,817,191
Guarantee fee receivables		18,003		790
Loans receivable		2,842,001		3,268,244
Prepayments and other receivables		262,127		197,984

Total current assets		23,247,141		9,843,314

Non-current assets:
Plant and equipment, net		410,807		275,232
TOTAL ASSETS	$	23,657,948	$	10,118,546

LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable, trade	$	130,209	$	7,004
Customer collateral		8,830,517		3,729,734
Deferred revenue		915,847		364,636
Amount due to a related party		61,614		59,582
Income tax payable		529,447		29,113
Deferred tax liabilities		1,422,843		345,577
Accrued liabilities and other payables		1,455,009		576,768

Total current liabilities		13,345,486		5,112,414

Commitments and contingencies

Stockholders' equity:
Common stock, $0.001 par value; 200,000,000 shares authorized; 60,200,000 and 60,000,000 shares issued and outstanding, respectively		60,200		60,000
Additional paid-in capital		2,970,045		2,915,121
Accumulated other comprehensive income		468,837		172,065
Statutory reserve		332,153		158,314
Retained earnings		6,481,227		1,700,632

Total stockholders' equity		10,312,462		5,006,132

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	23,657,948	$	10,118,546

SINO ASSURANCE INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 (Currency expressed in United States Dollars ("US$"), except for number of shares)
	Years ended December 31,
	2010 (unaudited)		2009

REVENUES, NET
Guarantee fee income	$	12,036,998	$	6,132,725
Interest income		115,743		68,562

Total revenues, net		12,152,741		6,201,287

COST OF REVENUE		(1,923,926)		(1,411,503)

GROSS PROFIT		10,228,815		4,789,784

Operating expenses:
Depreciation		111,138		83,507
Selling, general and administrative		2,922,816		2,002,551
Provision for guarantee losses		679,883		104,273

Total operating expenses		3,713,837		2,190,331

INCOME FROM OPERATIONS		6,514,978		2,599,453

Other income:
Other income		-		3,297

INCOME BEFORE INCOME TAXES		6,514,978		2,602,750

Income tax expense		(1,560,544)		(443,835)

NET INCOME	$	4,954,434	$	2,158,915

Other comprehensive income:
- Foreign currency translation gain		296,772		8,226

COMPREHENSIVE INCOME	$	5,251,206	$	2,167,141

Net income per share – Basic and diluted	$	0.08	$	0.04

Weighted average common shares outstanding – Basic and diluted		60,192,222		60,000,000

SINO ASSURANCE INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME FOR THE Three Months Ended December 31, 2010 And 2009 (Currency expressed in United States Dollars ("US$"), except for number of shares)
		Three months
		For the period ended December 31,
		2010 (unaudited)		2009

REVENUES, NET
Guarantee fee income	$	4,806,630	$	2,832,900
Interest income		1,905		(21,608)

Total revenues, net		4,808,535		2,811,292

COST OF REVENUE		(631,445)		(540,802)

GROSS PROFIT		4,177,090		2,270,490

Operating expenses:
Depreciation		29,095		22,121
Selling, general and administrative		967,363		571,853
Provision for guarantee losses		279,000		-61,683

Total operating expenses		1,275,458		532,291

INCOME FROM OPERATIONS		2,901,632		1,738,199

Other income:
Other income		-		16,102

INCOME BEFORE INCOME TAXES		2,901,632		1,754,301

Income tax expense		(712,597)		(289,788)

NET INCOME	$	2,189,035	$	1,464,513

Other comprehensive income:
- Foreign currency translation gain		143,970		838

COMPREHENSIVE INCOME	$	2,333,005	$	1,465,351

Net income per share – Basic and diluted	$	0.04	$	0.02

Weighted average common shares outstanding – Basic and diluted		60,192,222		60,000,000

SINO ASSURANCE INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 (Currency expressed in United States Dollars ("US$"))
	Years ended December 31,
	2010 (unaudited)		2009
Cash flows from operating activities:
Net income	$	4,954,434	$	2,158,915
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		111,138		83,507
Stock based compensation		40,000		-
Loss on disposal of plant and equipment		1,995		7,492
Provision for guarantee losses		679,883		104,273
Deferred tax expense		1,039,244		345,390
Changes in operating assets and liabilities:
Guarantee fee receivable		(16,763)		16,797
Prepayments and other receivable		(55,980)		(71,455)
Accounts payable, trade		119,938		(63,890)
Deferred revenue		525,511		(37,599)
Income tax payable		487,044		84,309
Accrued liabilities and other payable		157,549		30,460

Net cash provided by operating activities		8,043,993		2,658,199

Cash flows from investing activities:
Change in restricted cash, net of customer collateral		(2,010,222)		(819,503)
Receipts from loans receivable		5,719,344		-
Advances for loans receivable		(5,194,926)		(3,266,476)
Receipts from notes receivable		-		1,900,335
Proceeds from disposal of plant and equipment		1,020		835
Purchase of plant and equipment		(237,238)		(4,922)

Net cash used in investing activities		(1,722,022)		(2,189,731)

Cash flows from financing activities:
Proceeds from capital contribution		15,124		-

Net cash used in financing activities		15,124		-

Effect of exchange rate changes in cash and cash equivalents		178,693		479

NET CHANGE IN CASH AND CASH EQUIVALENTS		6,515,788		468,947

CASH AND CASH EQUIVALENT, BEGINNING OF YEAR		559,105		90,158

CASH AND CASH EQUIVALENT, END OF YEAR	$	7,074,893	$	559,105

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes	$	34,256	$	15,235
Cash paid for interest	$	-	$	-

Company Contact:
Wei Wei, Assistant to CFO
Sino Assurance, Inc.
+86-755-82523518
[email protected]

Investor Contact
Eric Tong, Chief Finance Officer
+86-755-82525568
[email protected]