China United Insurance Service Reports 2014 Second Quarter Financial Results

ZHENGZHOU, China and TAIPEI, Taiwan, Aug. 15, 2014 /PRNewswire/ -- China United Insurance Service, Inc. (CUIS) (OTCBB: CUII), a leading insurance intermediary company with operations in the People's Republic of China, Hong Kong and Taiwan, on August 11^th, 2014 reported financial results for the three-month and six-months ended June 30, 2014.

2014 Second Quarter Results

Revenues for the quarter ended June 30, 2014 increased 24.7% to $12.3 million, from $9.9 million in the same period last year. The increase was related, in part, to $1.2 million in persistency awards received from two principal insurance companies in which CUIS acts as an agent in Taiwan, as well as increased sales through the Company's strategic alliance with AIA International Limited Taiwan Branch ("AIATW"). Beginning in 2014, persistency award payments were instituted on a quarterly basis. There was no persistency awards received in the second quarter of 2013.

Revenues by geography were as follows:

Cost of revenue for the second quarter of 2014 increased 33.0% to $8.3 million, compared with $6.3 million for the same period a year ago. The increase was primarily due to the grant of several kinds of bonuses and awards to sub-agents in Taiwan. In 2013, such bonuses and awards were granted in the quarter ended September 30, 2013.

Gross profit for the quarter was $4.0 million versus $3.6 million for the comparable quarter in 2013. Operating expenses for the 2014 second quarter were $3.3 million, compared with $2.8 million in the same quarter a year ago.

Income before income taxes for the second quarter of 2014 was $722,000, compared with $970,000 for the same quarter of 2013. Income tax expense for the quarter was $941,000, versus $240,000 in the comparable quarter last year. The increase was due to an income tax law in Taiwan which provides that a company is taxed at an additional 10% on any undistributed earnings to its shareholders. In June 2014, CUIS elected not to distribute its earnings accumulated as of December 31, 2013 in lieu of investing in future growth, which resulted in approximately $619,000 in additional income tax.

Net loss for the quarter ended June 30, 2014 was $219,000, compared with net income of $729,000 for the same quarter last year. Net loss attributable to CUIS' shareholders for the quarter was $316,000, or $0.01 per share, versus net income of $318,000, or $0.01 per diluted share, in the same period of 2013.

"Strategic alliances with AIATW, along with our sales and marketing efforts in Taiwan, propelled our top line growth in the quarter," said Yi Hsiao Mao, Chairman and Chief Executive Officer. "We are also optimistic about our opportunity to expand in China, and are pleased that that our former Chief Executive Officer, Chung-Mei Lo, will be now heading up our China operations.

"With a strong balance sheet, we are well capitalized to achieve our growth objectives, recruiting motivated insurance agents, improving service quality, investing in educating agents, and evaluating M&A opportunities," Mao added.

Six Month 2014 Financial Results

Revenues for the first six months of 2014 were $21.2 million, compared with $21.5 million a year ago. Persistency awards received for the first six months of 2014 were $1.8 million versus $2.4 million received in the first quarter of 2013.

Revenues by geography were as follows:

Cost of the revenue for the first half of 2014 was $13.7 million, compared with $11.5 million for the same period a year ago.

Gross profit for first half of 2014 was $7.5 million versus $9.9 million for the comparable period in 2013. Operating expenses for the first six months of 2014 were $6.1 million, compared with $5.2 million in the same period last year. The increase was primarily due to larger general and administrative expenses, including relocation of the Company's headquarters, higher salary and benefits, and professional service fees.

Income before income taxes for the six months ended June 30, 2014 was $1.6 million, compared with $5.1 million in the same period 2013. Income tax expense for the first half of 2014 was $1.2 million, versus $788,000 in the comparable period last year.

Net income for the six months ended June 30, 2014 was $432,000, compared with $4.3 million in the same period last year. Net loss attributable to CUIS' shareholders for the six months was $121,000, or $0.004 per share, versus net income of $2.7 million, or $0.09 per diluted share, in the same period 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. On April 23, 2014, CUIS invested Prime Financial Asia Ltd ("PFAL") which is a re-insurance company resided in Hong Kong. Upon the investment, CUIS would own 51% of PFAL's equity interest. The transaction was completed on April 30, 2014.

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)

SOURCE China United Insurance Service, Inc.

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