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China United Insurance Service Reports Financial Results For Three- And Six-Months Ended December 31, 2013

-- Company Transitions to Calendar Year Reporting Cycle --

ZHENGZHOU, China and TAIPEI, Taiwan, April 21, 2014 /PRNewswire/ -- China United Insurance Service, Inc. (CUIS) (OTCBB: CUII), a leading insurance intermediary company with operations in the People's Republic of China and Taiwan, today reported financial results for the three and six months ended December 31, 2013.

Results for the Three Months ended December 31, 2013

Revenues for the quarter ended December 31, 2013 increased 24% to $15.9 million, from $12.8 million in the same period last year. Gross profit for the quarter increased to $6.1 million versus $4.9 million for the comparable quarter in 2012. Operating expenses for the quarter were $4.9 million, which included $1.2 million of selling expenses for marketing promotion in Taiwan and $122,000 of impairment of goodwill, compared with $3.4 million in the same quarter a year ago.

Net other expenses for the quarter ended December 31, 2013 was $693,000, primarily due to $303,000 of loss from disposal of fixed assets and $370,000 of estimated tax penalties for late filings of income tax return in the United States. For the same quarter in 2012, the company had net other income of $280,000.

Net income for quarter ended December 31, 2013 was $291,000, compared with $1.6 million in the 2012 comparable quarter. Net loss attributable to CUIS' shareholders for the quarter was $123,000, or $0.01 per share, versus net income of $1.1 million in the same quarter last year.

"We continue to expand our market share in Taiwan and China, accelerating through strategic partnerships with top reputable insurance companies and their product offerings, in particular, the strategic alliance with AIATW in June 2013. At the same time, we focus on providing excellent service through highly trained professionals, which has helped separate us from the competition," said Chung-Mei Lo, Chief Executive Officer. "We are proud to have been recognized by the industry for our excellent insurance products, receiving the 2013 Taiwan Insurance Excellence Award, one of the most prestigious insurance industry awards granted in the country, as well the Most Desirable Insurance Brokerage Company of Finance Insurance Graduates.

"Since 2012, the China Insurance Regulatory Commission has been issuing tighter regulations for insurance agencies.  One of the policies requires all insurance agencies to obtain a nationwide license to operate a business, a license that we have obtained.  We expect a better regulated market in China to further accentuate our competitive advantage," added Lo.

Results for the Six Months ended December 31, 2013

The company reported revenues of $23.7 million; gross profit of $7.6 million; and operating expenses of $8.1 million for the six months ended December 31, 2013. Net loss attributable to CUIS' shareholders was $1.2 million, or $0.04 per share. Comparative results for the prior-year period are not meaningful because of the acquisition of Action Holding Financial Limited (AHFL) on August 24, 2012.

AHFL is the holding company of Taiwan-based Law Insurance Broker Company, a dominant brokerage and insurance agency service business with 24 branches, three training centers and over 2,000 brokers in Taiwan. Results of the operations for the six months ended December 31, 2012 included AHFL's results from the acquisition date, which also included a bargain gain of $5.3 million.

Change in Reporting Cycle

On January 1, 2014 the company began reporting quarterly results on a calendar year basis, changing to a calendar year-end from a fiscal year-end to better align the company's financial reporting cycle with its business activities and budgeting. The results reported today reflect the reporting cycle transitional period from July 1 to December 31, 2013.

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 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 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 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 SIX MONTHS ENDED DECEMBER 31 AND YEAR ENDED JUNE 30, 2013 AND 2012

(Unaudited)









Six Months Ended
December 31,



Year Ended June 30,



2013



2013



2012










Revenues


$

23,689,110



$

37,842,246



$

3,153,776

Cost of revenue



16,040,303




24,309,716




2,363,581













Gross profit



7,648,807




13,532,530




790,195













Operating expenses:












Selling



2,010,744




962,958




1,166,841

General and administrative



5,948,516




9,062,828





Impairment of goodwill



122,250




-




-













Income (loss) from operations



(432,703)




3,506,744




(376,646)













Other income (expenses):












Interest income



108,654




83,682




4,756

Bargain gain on purchase of subsidiaries



-




5,280,042




-

Other - net



(652,079)




432,064




(18)

Total other income (expenses)



(543,425)




5,795,788




4,738













Income (loss) before income taxes



(976,128)




9,302,532




(371,908)

Income tax expense



143,660




698,508




(268,440)













Net income (loss)



(1,119,788)




8,604,024




(103,468)

Net income attributable to the noncontrolling interests



(32,190)




(1,386,556)




-

Net income (loss) attributable to parent's shareholders



(1,151,978)




7,217,468




(103,468)













Other comprehensive items












Foreign currency translation gain (loss)



(38,218)




13,195




13,972

Other comprehensive income(loss)



4,001




384




-

Attributable to parent's shareholders



(34,217)




13,579




13,972

Other comprehensive items attributable to noncontrolling interest



16,557




(1,630)




-













Comprehensive income (loss) attributable to parent's shareholders


$

(1,186,195)



$

7,231,047



$

(89,496)













Comprehensive income (loss) attributable to noncontrolling interest


$

(15,633)



$

(1,388,186)



$

-













Weighted average shares outstanding:












Basic and diluted



29,100,503




27,593,654




20,100,503













Income (loss) per share:












Basic and diluted


$

(0.04)



$

0.26



$

0.00

 

CHINA UNITED INSURANCE SERVICE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2013, JUNE 30, 2013 AND DECEMBER 31, 2012

(Unaudited)












December 31, 2013



June 30, 2013



June 30, 2012










ASSETS












Current assets












Cash and equivalents 


$

18,070,093



$

16,705,327



$

1,258,211

Marketable securities



2,563,685




26,968




-

Accounts receivable, net



7,282,183




4,138,340




184,767

Other current assets



2,329,677




435,043




48,640

Total current assets



30,245,638




21,305,678




1,491,618













Property, plant and equipment, net



1,041,189




959,688




114,945

Intangible assets



308,267




202,115




-

Goodwill



-




121,667




118,855

Long-term Investment



102,295




103,419




-

Other assets



587,303




519,878




113,217

TOTAL ASSETS  


$

32,284,692



$

23,212,445



$

1,838,635













LIABILITIES AND STOCKHOLDERS' EQUITY












Current liabilities












Taxes payable  


$

498,441



$

893,713



$

405,723

Unearned revenue



1,586,038




-




-

Other current liabilities



8,632,305




5,092,826




286,909

Due to related parties



154,798




1,737,296




445,332

TOTAL CURRENT LIABILITIES



10,871,582




7,723,835




1,137,964













Long-term liabilities



7,095,062




-




-

TOTAL LIABILITIES



17,966,644




7,723,835




1,137,964













COMMITMENTS AND CONTINGENCIES
























STOCKHOLDERS' EQUITY












Preferred stock, par value $0.00001, 10,000,000 authorized, 1,000,000 issued and outstanding



10




10




-

Common stock, par value $0.00001, 100,000,000 authorized, 29,100,503 issued and outstanding



291




291




200

Additional paid-in capital



4,674,593




4,674,593




2,674,693

Reserves



415,041




257,785




-

Accumulated other comprehensive loss



(75,888)




(41,671)




(55,250)

Retained earnings (accumulated deficit)



3,598,383




4,907,617




(1,918,972)

Stockholder's equity attribute to parent's shareholders



8,612,430




9,798,625




700,671

Noncontrolling interest



5,705,618




5,689,985





TOTAL STOCKHOLDERS' EQUITY



14,318,048




15,488,610




700,671

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY  


$

32,284,692



$

23,212,445



$

1,838,635

 

SOURCE China United Insurance Service, Inc.

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