Health & Fitness
Health and Fitness
Health and Fitness
Thu, February 19, 2009
Wed, February 18, 2009 China INSOnline Corp. : China INSOnline Reports Second Quarter and Six Month Revenues Advanced 31% and 77% Respectively as Onli
BEIJING--(Marketwire - February 18, 2009) - China INSOnline Corp. (
According to the Company, revenues in the second quarter this year grew 31% from $2,954,064 in the same period in the last fiscal year to $3,876,754, primarily as a result of a more than doubling of revenues from online insurance advertising sales in the quarter to $3,565,037 from $1,751,511 in the second quarter last year. The Company said that this growth was spurred by the growth in insurance teams and agents that placed ads in the period, resulting in 186 ad contracts being in effect compared with 134 contracts in the second quarter of the prior fiscal year.
The Company also saw a small (8%) but significant contribution to revenues in the period from its insurance agency operations following the acquisition of the GHIA Company in October 2008, with revenues in the quarter of about $297,000 compared with $57,685 in the same quarter last year.
The Company's software development operations, however, contributed $14,649 to this year's second quarter revenues compared with $1,144,868 in the same period last year, as it was engaged on only one small project during the period.
While gross profits in the second quarter ended December 31, 2008 increased 17% to $3,225,744, the Company said net income in the period declined 64% to $788,870 or $0.02 per share, as compared with $2,205,567 or $0.08 per share, in the prior year's second quarter. The Company said EPS figures reflect an increase in weighted average shares outstanding from 28,394,270 at December 31, 2007 to 40,000,000 as of December 31, 2008.
In addition to the small contribution to net income from software operations compared to the prior quarter, the Company cited the following as key reasons for the decline in net income in the quarter:
-- In the quarter, the Company incurred a $991,134 cost for advertising expenses. This expense relates to the successful campaign launched in May 2008 to build awareness of the Company and its industry leading insurance portal. Though costs of the campaign were incurred over several months, the cost was recorded in the second quarter on completion of the campaign. In last year's second quarter there was no advertising expense. -- In view of the current economic environment, in the second quarter this year the Company created a bad debt provision of $646,740 for customers affected by the global financial crisis.
Six Month Results
For the six months ended December 31, 2008 the Company said revenues grew 77% to $9,397,053, compared with revenues of $5,300,753 in the same period last year. This reflected a significant contribution from its software segment in the first quarter of 2008 and a $7,098,892 contribution through the first six months of the year from online insurance advertising.
In the current year's first half the Company said gross profits grew 64% compared to the same period last year. Net income in the first half this year, however, was down approximately 20% compared to the same period last year, reaching $3,245,270 or $0.08 per share, compared with $4,038,203 or $0.16 per share in the first half of the prior fiscal year. (EPS figures are computed on the basis of 40,000,000 average weighted shares outstanding in the first half of the year ended December 31, 2008 compared with 26,712,035 average weighted shares outstanding in the period ended December 31, 2007).
The Company said these results were mainly a consequence of the same factors that reduced net income in the second quarter. Specifically, the advertising expense recorded by the Company in the second quarter, the reduced contribution in the second quarter from the software segment, and a provision for bad debt of $932,338 in the first six months of 2008. Additionally, in the first half this year, there was an 80% increase in income taxes compared with the prior year first half.
Continuing Confidence
Mrs. Betty Xu, Chief Executive Officer of the Company, stated: "While we were not happy to report a decline in net income, clearly the Company made substantial progress in the quarter. This was reflected, in particular, in our strong online advertising sales gains as well as in the underlying reason for this, namely, the continued strong growth in insurance agency groups from which ads were placed."
She added, "While the current environment may have some impact on our business, at this time it would be difficult to quantify. However, we remain very confident in our long term growth model."
Mr. Zhenyu Wang, Chairman of the Board of China INSOnline Corp., added, "We believe the decision to post a substantial bad debt provision was appropriate in this environment and will take all steps necessary to collect past due amounts. Meanwhile, we continue to see growth in China, and a population that is vastly underinsured compared to the rest of the world, which creates an outstanding growth opportunity for us."
About China INSOnline Corp.
China INSOnline Corp., incorporated in Delaware and headquartered in Beijing, is a rapidly growing licensed insurance agency in The People's Republic of China. Representing major insurance underwriting firms in China, the Company offers online automobile, property and life insurance services through its industry web portal, [ www.soobao.cn ]. The Company's online platform also provides consumers, agents and insurance companies with online transaction capabilities, advertising, online inquiry, news circulation, statistical analysis and software development services. For more information, please visit [ www.china-insonline.com ].
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations or beliefs, including, but not limited to, statements concerning the Company's operations, financial performance and condition. For this purpose, statements that are not statements of historical fact may be deemed to be forward-looking statements. The Company cautions that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, but not limited to, market competition, pricing and new technology; effectiveness of marketing; changes in laws and regulations; risks inherent in our operations and other factors such as those discussed in the Company's reports filed with the Securities and Exchange Commission. In addition, the Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof. No securities regulatory authority has either approved or disapproved the contents of this news release.
TABLES China INSOnline Corp. Results of Operations For the Three Months Ended December 31, 2008 Compared To Three Months Ended December 31, 2007
Our operating results are presented on a condensed consolidated basis for the three months ended December 31, 2008, as compared to the three months ended December 31, 2007.
The following table sets forth the amounts and the percentage relationship to revenues of certain items in our condensed consolidated statements of income for the three months ended December 31, 2008 and 2007.
2008 2007 Variance --------------- --------------- ----------------- REVENUES $ 3,876,754 108% $ 2,954,064 102% $ 922,690 31% DISCOUNTS 296,453 8% 61,779 2% 234,674 380% ----------- ----------- ------------ REVENUES, NET 3,580,301 100% 2,892,285 100% 688,016 24% COST OF SALES 354,557 10% 129,729 4% 224,828 173% ----------- ----------- ------------ GROSS PROFIT 3,225,744 90% 2,762,556 96% 463,188 17% Selling expenses 81,619 2% 35,227 1% 46,392 132% Advertising expenses 991,134 28% 0 0% 991,134 100% General & administrative expenses 348,978 10% 136,864 5% 212,114 155% Bad debts 646,740 18% 0 0% 646,740 100% ----------- ----------- ------------ OPERATING INCOME 1,157,273 32% 2,590,465 90% (1,433,192)(55)% Financial income, net 22,932 1% 5,204 0% 17,728 341% ----------- ----------- ------------ INCOME BEFORE TAXES 1,180,205 33% 2,595,669 90% (1,415,464)(55)% Income tax expense 391,335 11% 390,102 13% 1,233 0% ----------- ----------- ------------ NET INCOME $ 788,870 22% $ 2,205,567 76% $ (1,416,697)(64)% =========== =========== ============ China INSOnline Corp. For the Six Months Ended December 31, 2008 Compared To Six Months Ended December 31, 2007
Our operating results are presented on a condensed consolidated basis for the six months ended December 31, 2008, as compared to the six months ended December 31, 2007.
The following table sets forth the amounts and the percentage relationship to revenues of certain items in our condensed consolidated statements of income for the six months ended December 31, 2008 and 2007.
2008 2007 Variance --------------- --------------- ----------------- REVENUES $9,397,053 104% $5,300,753 101% $ 4,096,300 77% DISCOUNTS 363,388 4% 61,779 1% 301,609 488% ---------- ---------- ----------- REVENUES, NET 9,033,665 100% 5,238,974 100% 3,794,691 72% COST OF SALES 790,413 9% 222,833 4% 567,580 255% ---------- ---------- ----------- GROSS PROFIT 8,243,252 91% 5,016,141 96% 3,227,111 64% Selling expenses 165,893 2% 55,943 1% 109,950 197% Advertising expenses 1,901,068 21% 0 0% 1,901,068 100% General & administrative expenses 738,371 8% 214,962 4% 523,409 243% Bad debts 932,338 10% 0 0% 932,338 100% ---------- ---------- ----------- OPERATING INCOME 4,505,582 50% 4,745,236 91% (239,654) (5)% Financial income, net 22,818 0% 6,475 0% 16,343 252% ---------- ---------- ----------- INCOME BEFORE TAXES 4,528,400 50% 4,751,711 91% (223,311) (5)% Income tax expense 1,283,130 14% 713,508 14% 569,622 80% ---------- ---------- ----------- NET INCOME $3,245,270 36% $4,038,203 77% $ (792,933) (20)% ========== ========== ===========
