China INSOnline Corp. (NASDAQ: CHIO), which operates www.soobao.cn,
one of China's leading insurance services web portals, reported
today that while net revenues in its first quarter ended September
30, 2009 declined 6% to $5,126,875 from $5,471,449 in the year ago
quarter, net income in the first quarter of the current fiscal year
increased 27% to $3,120,617, or $0.08 per share, from $2,462,064,
or $0.06 per share, in the same period last year on 40 million
shares outstanding in both periods.
The Company reported that the decline in first quarter revenues
was primarily a consequence of a 79% decline in revenues from
Online Insurance Advertising which decreased from approximately
$3.55 million in the year ago quarter to $756,201 in the first
quarter this year. This reflected the fact that insurance agents
failed to renew online advertising agreements with the Company.
A much stronger performance in the quarter was recorded by the
Company's Software Development segment which saw revenues grow 127%
to $4,356,025 in the first quarter this year from $1,919,196 in the
first three months ended September 30, 2008. The $2,436,829
increase in Software Development revenue was the primary reason for
the 27% increase in net income in the quarter. The Company
attributed the gain in Software Development revenues to the
completion of 5 projects in this year's first quarter, reflecting
newly developed software packages that were successfully delivered
and tested by customers during the period.
The Company reported further that Insurance Agency services
revenue in the first quarter ended September 30, 2009 decreased 39%
to $42,599 from $70,012 during the same period last year primarily
due to unfavorable market conditions.
Ms. Betty Xu, CEO of China INSOnline, commented, "While we were
quite disappointed with the decline in internet advertising, it was
not entirely unanticipated in the current financial environment, as
reflected in our decision to curtail advertising and promotion
expenses in this year's first quarter compared to an approximately
$914,171 ad expenditure in the same period last year."
"Going forward," she stated, "our primary focus will be on
building our insurance services utilizing our well known site,
www.soobao.cn, which continues to be an important part of the
insurance landscape, at a time when internet usage in China
continues to grow very substantially."
"In 2008," Ms. Xu noted further, "we acquired GHIA to qualify
our Company to be an insurance agent throughout China, and this
remains a significant element in the growth plans we have
formulated."
Mr. Zhenyu Wang, Chairman of the Company, stated, "We are
pleased with the continuing growth in net income and the success of
our Software Development activities-- especially in what has been a
markedly turbulent financial environment-- and we will continue to
build on the customer relationships we have developed. However, the
long term success of the Company will rest with the progress we
make in developing our internet services and the extent to which we
can support these services with the chain insurance supermarket
entity we continue to envision."
SEE ATTACHED TABLES
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,
the impact of competitive products, pricing and new technology;
changes in consumer preferences and tastes; and effectiveness of
marketing; changes in laws and regulations; fluctuations in costs
of production, and other factors as those discussed in the
Company's reports filed with the Securities and Exchange Commission
from time to time. In addition, the Company disclaims any
obligation to update any forward-looking statements to reflect
events or circumstances after the date hereof.
CHINA INSONLINE CORP.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
(UNAUDITED)
Three Months Three Months
Ended Ended
September 30, September 30,
2009 2008
------------- -------------
REVENUES, NET $ 5,126,875 $ 5,471,449
COST OF SALES 561,470 437,471
------------- -------------
GROSS PROFIT 4,565,405 5,033,978
Selling expenses 15,733 85,193
Advertising expenses - 914,171
General and administrative expenses 348,700 678,333
------------- -------------
INCOME FROM OPERATIONS 4,200,972 3,356,281
Loss on disposal of fixed assets (2,473) -
Interest income (expense), net 266 (42)
------------- -------------
INCOME FROM OPERATIONS BEFORE INCOME TAXES 4,198,765 3,356,239
Income taxes 1,078,148 894,175
------------- -------------
NET INCOME 3,120,617 2,462,064
OTHER COMPREHENSIVE INCOME
Foreign currency translation (loss) gain (17,817) 57,825
------------- -------------
COMPREHENSIVE INCOME $ 3,102,800 $ 2,519,889
============= =============
NET INCOME PER SHARE
- BASIC AND DILUTED $ 0.08 $ 0.06
============= =============
WEIGHTED AVERAGE SHARES OUTSTANDING
- BASIC AND DILUTED 40,000,000 40,000,000
============= =============
Contacts: Ken Donenfeld DGI Investor Relations Tel: 212-425-5700
Email: donfgroup@aol.com
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