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

Mar 18, 2011, 09:48 ET from Sino Assurance, Inc.

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

wei_wei@snas.cc

Investor Contact

Eric Tong, Chief Finance Officer

+86-755-82525568

mengyou_tong@snas.cc

SOURCE Sino Assurance, Inc.